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H  POKILAND  CptKT  CaMP.W 


THE  LIBRARY 
OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 


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cy 


A  TREATISE 


LAW  OF  MORTGAGES 


REAL  PROPERTY 


BY 

LEONARD  A.  JONES 

AUTHOR   OF   LEGAL  TREATISES  AND  JUDGE  OF  THE   COURT  OF   LAND   REGISTRATION 
OF  MASSACHUSET'TS 


IN    TWO    VOLUMES 

:•       Vol.  II 


SIXTH  EDITION 


INDIANAPOLIS 

THE  BOBBS-MERRILL  COMPANY 

PUBLISHERS 


T 


Copyright,  1878,  1879.  1882,  1889,  189*  and  1904 
By  LEONARD  A.  JONES 

All  riehts  reserved 


THE  HOLLENBECK  PRESS 


TABLE  OF  CONTENTS 


CHAPTEE  XXII. 


REDEMPTION    OF   A   MORTGAGE. 


/.  Redemption  a  Necessary  Incident 
of  a  Mortgage. 

1038.  Generally. 

1039.  An  express  stipulation  not  to 

redeem  does  not  bind  the 
mortgagor. 

1040.  The  time  of  redemption  may, 

by  the  terms  of  the  mort- 
gage, be  postponed. 

1041.  An   agreement  to   confine   the 

right  of  redemption  to  the 
mortgagor  alone. 

1042.  Any     arrangement    which    is 

merely  an  evasion  of  the 
equitable  rule. 

1043.  An    agreement    that,     if    the 

money  be  not  paid  by  a  cer- 
tain day,  the  mortgagee 
shall  have  the  estate  abso- 
lutely upon  the  payment  of 
a  further  sum,  is  open  to 
the  same  objection. 

1044.  Neither   is   the   mortgagee   al- 

lowed to  obtain  a  collateral 
advantage. 

1045.  An    agreement    in    the    mort- 

gage itself,  or  executed  sep- 
arately, but  contemporane- 
ously with  the  mortgage. 

1046.  Redemption  may  be  had  after 

a  release  of  the  equity  of 
redemption. 


II. 


1047. 


Circumstances    affecting   Re- 
demption. 


The  right  of  redemption  is 
barred  by  a  foreclosure. 
1047a.  Redemption  may  be  had 
after  foreclosure  if  the 
mortgagee  or  other  holdef 
of  the   title   recognizes  the 


mortgage  as  a  continuing 
obligation. 

1048.  Redemption  may  be  had  after 

foreclosure  by  any  person 
entitled  to  it  who  was  not 
made  a  party  to  the  suit. 

1049.  The       mortgagor       may       be 

estopped  by  his  own  acts. 

1050.  The  owner  of  the  equity  of  re- 

demption may  maintain  a 
bill  to  redeem  one  only  of 
two  mortgages. 

1051.  In  several   States  a  period  is 

allowed  after  a  foreclosure 
sale  for  redemption  by  the 
mortgagor. 

1051a.  A  right  of  redemption  after 
foreclosure,  given  by  stat- 
ute in  any  State,  becomes  a 
rule  of  property. 

1051aa.  No  right  of  redemption  is 
allowed  after  a  foreclosure 
sale  of  the  property  of  a 
public  corporation. 

1051b.  The  right  of  possession  dur- 
ing the  period  of  redemp- 
tion. 

1051c.  Redemption  after,  a  fore- 
closure sale  by  a  purchaser 
of  the  equity  of  redemption 
extinguishes  the  mortgage 
lien. 


///. 


When  Redemption  may  be 
made. 


1052.  There  can  be  no  redemption 
till  the  mortgage  is  due. 

1053.  The  time  of  redemption  may, 
by  agreement  of  the  par- 
ties,  be   extended. 

1054.  Advantage  of  an  irregular 
foreclosure  must  be  taken 
within    a    reasonable    time. 

(iii) 


687/43 


IV 


TABLE    OF    CONTENTS. 


IV,  Who  may  redeem. 

1055.  In  general  any  party  in  inter- 

est may  redeem. 
1055a.  To  entitle  one  to  redeem  he 
must    have    an    interest    in 
the    land    derived    through 
the    mortgagor. 

1056.  A    mortgagor    who    has    con- 

veyed the  equity  of  re- 
demption. 

1057.  A  mortgagor  whose  equity  of 

redemption  has  been  fore- 
closed by  a  second  mort- 
gagee. 

1058.  Where    a    mortgage    is    condi- 

tioned for  the  support  of 
the  mortgagee. 

1059.  In    general    only    the   mortga- 

gor and  those  who  hold  a 
legal  title  under  him  can 
redeem. 

1060.  The    grantor   by    an    absolute 

deed. 
1060a.  The  grantor  in  an  absolute 
deed  which  is  in  fact  a 
mortgage  may  have  a  judg- 
ment for  redemption  in 
money  against  the  grantee. 

1061.  An  assignee  of  the  equity  of 

redemption. 

1062.  Upon  the   death   of  the  mort- 

gagor or  owner  of  the 
equity  of  redemption  his 
heir  at  law  or  devisee  may 
redeem. 

1063.  A    part    owner    or    tenant    in 

common   or  joint   tenant. 

1064.  A  subsequent  mortgagee  may 

redeem  from  a  prior  mort- 
gagee. 

1065.  A  tenant  for  life,  or  a  tenant 

in   tail,    may   redeem. 

1066.  A    tenant    for    years    may    re- 

deem. 

1067.  A  widow  or  a  married  woman 

who  has  joined  in  a  mort- 
gage in  release  of  dower 
may  redeem. 

1068.  A  surety. 

1069.  A  judgment  creditor. 

V.  The  Sum  payable  to  effect  Re- 
demption. 

1070.  Tender    or     payment    of    the 

amount  due. 

1071.  The    mortgagee    after    default 

is  said  to  be  erititle^  "^ 
notice  of  paymen^ 


SEC. 

1072.  It   is   a    general    rule    that    a 

mortgage  is  an  entire 
thing,  and  must  be  re- 
deemed entire. 

1073.  The   fact   that  the   mortgagee 

has  proved  against  the  in- 
solvent estate. 

1074.  When      the      mortgagee      has 

foreclosed  a  part  of  the 
premises. 

1075.  One     who     redeems     after     a 

foreclosure  sale  must  pay 
the  whole  amount  of  the 
mortgage  debt. 

1076.  Under    special    circumstances 

redemption  of  a  portion  of 
the  mortgaged  estate  may 
be  made. 

1077.  When   part    only   of   the    debt 

is  due. 

1078.  Sometimes    it    is    provided    in 

the  mortgage  that  upon  de- 
fault the  whole  sum  shall 
become  due  immediately. 
107^.  If  a  mortgage  be  given  to  se- 
cure advances  to  be  made 
to  the  mortgagor. 

1080.  A  mortgagee  who  has  paid   a 

prior  mortgage  or  other  in- 
cumbrance. 

1081.  A  subsequent  mortgagee  may 

redeem  a  prior  mortgage 
without  paying  any  other 
claim. 

1082.  The  English  doctrine  of  tack- 

ing. 

1083.  Consolidating  mortgages. 

1084.  Costs  of  previous  foreclosure. 

1085.  Overpayment  to  prevent  fore- 

closure; 

1086.  A  mortgagee   cannot  be  com- 

pelled to  assign. 

1087.  In  some  states,  however. 

1088.  A  tender  made  after  breach. 

VI.  Contribution  to  redeem. 

1089.  In  general. 

1090.  The  general  rule,  therefore,  as 

to  contributions,  is. 

1091.  If  a  mortgagor  sells  portions 

of  the  mortgaged  premises 
in  different  parcels  at  dif- 
ferent times  by  warranty 
deed,  that  which  he  retains 
is  in  equity  primarily  lia- 
ble. 

1092.  Portions     of     the     mortgaged 

premises  sold  to  different 
persons  are  chargeable  in 
the   inr'^rse  order. 


TABLE    OF    CONTENTS. 


SEC. 

VII.  Pleadings  and  Practice  on  Bills 
to  redeem. 


1093. 
1094. 
1095. 

1096. 
1097. 
1098. 
1099. 
1100. 
1101. 

1102. 

1103, 


1104. 
1105. 
1106. 
1107, 


In  general. 

The  bill. 

The  bill  to  redeem  must  make 
a  tender. 

Exceptions  to  the  rule. 

The  parties. 

Proper  parties  plaintiff. 

Heirs   of  mortgagor. 

The  parties  defendant. 

Upon  the  death  of  a  mortga- 
gee. 

When  a  junior  mortgagee 
seeks  to  redeem. 

A  person  to  whom  the  mort- 
gage note  has  been  trans- 
ferred without  an  assign- 
ment of  the  mortgage. 

Reference  to  state  account. 

Defences. 

The  decree. 

The  decree  should  fix  a  time 


within    which   the    redemp- 
tion is  to  take  place. 

1108.  If     a     mortgagor     who     has 

brought  a  bill  to  redeem 
fails  to  pay  the  .amount 
found  due  within  the  time 
ordered. 
1108a.  The  mortgagee  may  by  his 
agreement  or  acts  open  or 
suspend  a  decree  of  re- 
demption. 

1109.  Abandonment   of    suit. 

1110.  Redemption    does    not    neces- 

sarily extinguish  the  mort- 
gage title. 

1111.  The  general  rule  in  regard  to 

costs. 

1112.  Under     a     statute     providing 

that  the  plaintiff  bringing 
a  suit  to  redeem  without  a 
previous  tender  shall  pay 
the  costs  of  suit. 
1113.'  In  exceptional  cases  the  mort- 
gagee is  liable  for  costs. 


CHAPTEE  XXIII. 


MORTGAGEE  S   ACCOUNT. 


I.  Liability  to  Account. 

1114.  In  general. 

1115.  This  is  a  matter  of  equitable 

jurisdiction. 

1116.  The   mortgagee    is   chargeable 

only  upon  redemption. 

1117.  A  grantee  in  possession. 

1118.  A  mortgagee  is  equally  liable 

to  account  whether  his  pos- 
session be  before  or  after 
the  law  day. 
1118a.  A  junior  mortgagee  redeem- 
ing from  a  senior  mortga- 
gee who  has  been  in  pos- 
session may  compel  an  ac- 
counting. 

1119.  An    assignee    stands    in    the 

place  of  his  assignor. 

1120.  So  long  as  the  mortgagee  re- 

frains  from   taking  posses- 
sion. 

II.  What  the  Mortgagee  is   charge- 
able with. 

1121.  A    mortgagee    allowing    the 

mortgagor  to  remain  in  oc- 
cupation. 


SEC. 

1122.  Where     the     mortgagee     has 

himself  occupied. 

1123.  As   a    general    rule   the    mort- 

gagee in  possession  is  held 
to  the  exercise  of  such  cai'e 
and  diligence  as  a  provi- 
dent owner. 

1123a.  A  qualification  of  the  general 
rule  arises  when  one  goes 
into  possession  in  another 
character. 

1123b.  The  mortgagee  must  account 
for  waste  committed  while 
he  is  personally  in  posses- 
sion. 

1124.  If  the  mortgagee  has  kept  no 

proper  accounts. 

1125.  A    mortgagee     may     work    a 

mine. 

III.   Allowances    for    Repairs    and 
Improvements. 

1126.  The  rule  as  to  repairs. 

1127.  The   ordinary   rule  in  respect 

to  improvements. 

1128.  Exception  to  the  rule. 

1129.  Allowance  for  repairs. 


VI 


TABLE   OF    CONTENTS. 


SEC.  .     ^ 

1130.  If  the  mortgagee  so  intermin- 

gles   the    mortgaged    prop- 

erty-    '      .  .        . 

1131.  A  mortgagee  m  possession  or 

a  church  edifice. 

IV.  Alloivance   for  Compensation. 

1132.  A  mortgagee  in  possession  is 

not    entitled    to    compensa- 
tion. 

1133.  In  Massachusetts. 

y.  Alloivances    for    Disbursements. 

1134.  Taxes. 

1135.  Insurance  Premiums. 

1136.  The  amount  of  insurance  re- 

covered. 


SEC. 

1137.  A     mortgagee     in     possession 

who  is  compelled  to  pay  a 
prior  mortgage. 

1138.  The      mortgagee      should      he 

credited       for       reasonable 
counsel  fees. 

TI.  Annual    Rests. 

1139.  Rule  for  annual  rests  in  stat- 

ing account. 

1140.  If  the  rents  and  profits  exceed 

the   sums   properly   charge- 
able. 

1141.  As  to  the  rate  of  interest. 

1142.  The  account  binds  subsequent 

incumbrancers. 

1143.  An  account  may  be  opened. 


CHAPTEK  XXIV. 


WHEN   THE   RIGHT   TO    REDEEM    IS   BARRED. 


7.  The    Statute   of   Limitations    ap- 
plies by  Analogy. 


In  general. 

The     time     conforms    to     the 
statute  in  force. 

The    right    to    foreclose    and 
the    right    to    redeem    are 
reciprocal. 
1147.  The    right    of    redemption    in 
New  York. 

In  Tennessee. 

The  mortgagee's  possession 
must  be  unequivocally  ad- 
verse during  the  whole  pe- 
riod. 
1150.  The  mortgagee's  possession, 
when  adverse,  operates 
equally  against  a  married 
woman. 

Successive        disabilities        of 
mortgagor. 


1144. 
1145. 

1146. 


1148 
1149 


1151. 


II.  When  the  Statute  begins  to  run. 

1152.  So    long    as    the    relation    of 

mortgagor    and    mortgagee 
exists. 

1153.  As  to  a  Welsh  mortgage. 

1154.  The     mortgagee's     possession 

runs  against  those  entitled 
to  the  estate  in  remainder. 


1155.  If  the  mortgagor  retains  pos- 

session of  a  part. 

1156.  The   cause    of    action    accrues 

when  the  mortgagee  enters 
into  possession. 

1157.  After  twenty  years'  possession 

by  the  mortgagee  it  lies 
with  the  mortgagor  to  show 
that  the  effect  is  not  a  bar. 

1158.  Mere   constructive   possession. 

1159.  After  a  mortgagee  in  posses- 

sion has  received  payment 
of  the  debt. 

1160.  The  right  to  redeem  a  junior 

mortgage  accrues  at  its  ma- 
turity. 

1161.  After    a    foreclosure    sale   the 

statute  runs  from  the  ex- 
piration of  the  year  of  re- 
demption. 
1161a.  A  lapse  of  time  less  than 
that  prescribed  by  the  stat- 
ute of  limitations  may  be  a 
bar  to  redemption. 

Ill,  What  prevents  the  Running  of 
the   Statute. 

1162.  An    acknowledgment   will    not 

be  inferred  from  equivocal 
expressions. 


TABLE   OF    CONTENTS. 


Vll 


SEC. 
1163. 


1164. 
1165. 


1166. 
1167. 
1168. 


1169. 


An  acknowledgment  made 
after  the  expiration  of  the 
twenty  years. 

Acknowledgment  to  a  third 
person. 

The  mortgagee's  acknowledg- 
ment is  binding  upon  all 
who  hold  under  him. 

By  rendering  an  account. 

Acknowledgment    by    letter. 

Acknowledgment  may  be 
made  by  an  assignment  of 
the  mortgage. 

By  recital  in  deed. 


SEC. 

1170.  By    commencing    proceedings 

to  foreclose  the  mortgage 
the  mortgagee  recognizes  it 
as  a  subsisting  lien. 

1171.  A   verbal   acknowledgment. 
1171a.  The  fact  that  the  mortgagee 

was  the  mortgagor's  attor- 
ney. 

1172.  The  filing  of 

stops    the 
statute. 

1173.  The     statute 


a  bill  to  redeem 
running    of    the 

of     limitations 


must  be  pleaded. 


CHAPTER  XXV. 

WHEN   THE    RIGHT   TO    ENFORCE   A    MORTGAGE   ACCRUES. 


SEC. 

1174.  In  general. 

1175.  The  right  to  foreclose  may  be 

made  to  depend  upon 
events  other  than  the  lapse 
of  time. 

1176.  A    failure    to    pay    an    instal- 

ment of  interest  or  prin- 
cipal when  due  is  a  de- 
fault. 

1177.  Default  in  the  payment  of  the 

yearly  or  half-yearly  inter- 
est at  the  times  stipulated. 

1178.  But  the  agreement  in  respect 

to  the  payment  of  the  prin- 
cipal may  be  such. 

1179.  It   is   competent   for   the   par- 

ties to  so  provide  that  the 
continuance  of  the  loan 
shall  depend  upon  the 
promptness. 

1179a.  It  is  not  essential  that  this 
provision  shall  be  con- 
tained in  both  the  mort- 
gage and  note. 

1179b.  Demand  after  default  is  not 
necessary  to  support  an  ac- 
tion for  the  entire  sum. 

1179c.  Corporate  mortgages  gener- 
ally provide  for  a  continu- 
ance of  default  for  a  pe- 
riod   of   time. 

1180.  There  is  almost  always  some 

provision  in  the  mortgage 
under  which  the  right  to 
foreclose  accrues  upon  a 
breach  of  any  of  the  stipu- 
lations. 

1181.  Such  a  provision  in  the  mort- 

gage is  not  considered  a 
penalty. 


SEC. 

1182.  Default   at    election    of   mort- 

gagee. 
1182a.  Generally    no    notice    of    the 
mortgagee's  election  to  con- 
sider   the    whole    debt    due 
is  necessary. 

1183.  A    provision    forfeiting    credit 

may  affect  foreclosure  pro- 
ceedings only. 
1183a.  The  mortgagor  cannot  take 
advantage  of  a  stipulation, 
that  the  whole  mortgage 
shall  become  due  upon  a 
default. 

1184.  Provisions  against   forfeiture. 

1185.  The    court    has    no    power    to 

relieve  a  mortgagor  from 
a  forfeiture. 

1186.  Waiver  of  default  of  credit. 
1186a.  A   foreclosure    for    a    breach 

of  the  condition  in  respect 
to  the  payment  of  interest. 

1187.  When  a  guarantor,  or  surety, 

or  indorser,  is  secured  by 
a  mortgage,  he  cannot  fore- 
close until  he  has  paid  the 
obligation. 

1188.  When  the  condition  is  to  pay 

or  to  save  harmless. 

1189.  A  mortgagee  may  be  estopped 

from  foreclosing  his  mort- 
gage by  an  agreement  with 
the  mortgagor. 

1190.  If  the  time  of  payment  of  a 

mortgage  be  extended. 

1191.  If    the    time    of    payment    of 

such  a  mortgage  be  extend- 
ed by  a  parol  agreement. 


Vlll 


TABLE   OF    CONTENTS. 


CHAPTER  XXVI. 

WHEN    THE   RIGHT    TO    FORECLOSE   IS   BARRED. 


SEC 

1192.  Statutes  of  limitation  are,  as 

a  general  rule,  only  applic- 
able as  such  to  proceedings 
at  law. 

1193.  The    tendency    of    legislation 

has  been  to  reduce  the  pe- 
riod  of   limitation. 

1194.  In    some    early    cases    it    was 

declared  that  the  presump- 
tion of  payment  arising 
from  the  lapse  of  time. 

1195.  This   doctrine  of  presumption 

has  been  one  of  frequent 
application. 

1196.  The   presumption  of  payment 

is  not  conclusive. 

1197.  Presumption    of     payment    is 

repelled    by    circumstances. 

1198.  A  payment  of  interest  or  part 

of   the   principal. 

1199.  If  land  subject  to  a  mortgage 

be  sold  to  different  pur- 
chasers, one  of  whom  pays. 

1200.  To  payment  of  taxes. 

1201.  A     purchaser     assuming    the 

payment  of  a  mortgage  rec- 
ognizes. 

1202.  The   mortgagor's   grantee   has 

no  greater  rights  against 
the  mortgagee  than  the 
mortgagor    himself. 

1203.  The     statute     of     limitations 

does  not  discharge  the 
debt. 

1204.  Though    the    debt    be    barred 

the  lien  may  be  enforced. 

1205.  The     mortgagee     may     retain 


SEC. 

1206. 
1207. 
1208. 

1209. 
1210. 

1211. 

1211a 

1212. 
1213. 
1214. 

1214a, 
1214b 


possession   till   the   debt   is 
paid. 

There  can  be  no  decree  for 
the  deficiency  after  the 
debt  is  barred. 

In  several  states  the  mort- 
gage lien  is  discharged 
when  the  debt  is  barred. 

It  is  immaterial  whether  the 
adverse  possession  be  that 
of  one  person  for  the  whole 
period,  or  that  of  several 
persons. 

An  action  to  enforce  an  equit- 
able lien  for  purchase- 
money. 

The  statute  runs  in  favor  of 
the  mortgagor  from  the 
time  the  mortgagor's  right 
of  action  accrues. 

The  possession  of  the  mort- 
gagor or  his  grantees  is 
presumed  to  be  subordinate 
to  the  mortgage. 
To  constitute  a  disseisin  of 
the  mortgagee  by  the  mort- 
gagor. 

If  the  mortgagor  has  not  been 

in  possession. 
If  the  mortgage  be  one  of  in- 
demnity to  a  surety. 
The  same  rule  applies  in  case 
of  a  debt  barred  by  a  spe- 
cial   statute    of    limitations. 

.  A  bill  in  equity  to  have  the 
mortgage  cancelled. 
The  privilege  of  the  plea. 


CHAPTEE  XXVII. 

REMEDIES  FOR  ENFORCING  A  MORTGAGE. 


SEC. 


I.  Are  Concurrent. 


1215.  The  mortgagee  may  pursue  all 

his    remedies    concurrently 
or  successively. 

1216.  This   rule  is   an   exception  to 

the  general  principle. 

1217.  A  mortgagee  may  maintain  a 

creditor's  bill  in  equity. 

1218.  The  right  to   foreclose  is  not 

waived  or  impaired  by  the 


recovery  of  a  judgment  at 
law. 

1219.  Subsequent  payment. 

II.  Personal    Remedy    before    Fore- 
closure. 

1220.  The   holder   of   the   noLe   and 

mortgage  is  not  required 
first  to  foreclose  the  mort- 
gage. 


TABLE   OF    CONTENTS. 


IX 


SEC. 

1221.  The    holder    of   the    mortgage 

need  not  wait  to  ascertain 
the  amount  of  the  defici- 
ency by  a  sale  under  the 
power. 

1222.  Neither  is  the  pendency  of  a 

suit  to  foreclose  the  mort- 
gage any  bar. 

1223.  By  statute  in  some  states  no 

proceedings  at  law  can  be 
had. 

1224.  A  decree  of  foreclosure  before 

sale  is  no  bar  to  a  suit. 

1225.  Express  covenant  to  pay. 
1225a.  Where   a   mortgage   is   made 

by  a  husband  and  wife 
upon  her  land  to  secure 
their  joint  and  several 
promissory    note. 

1226.  Circumstances     that     exclude 

personal   remedy. 

///.  Personal    Remedy    after    Fore- 
closure. 

1227.  Suit  for  deficiency  after  a  sale 

under  power. 

1228.  Suit  at  law  may  be  maintained 

for  a  deficiency  after  a  sale 
under  a  decree  in  equity. 


SEC. 

IV.  Sale  of  Mortgaged  Premises  on 
Execution    for    Mortgage    Debt. 

1229.  Generally    a     mortgagee  can 

not. 

1230.  But  an  execution  for  the  mort- 

gage   debt    may    be    levied 
upon   any  other  land. 

V.  Remedy    as    affected    by    Bank- 

ruptcy. 

1231.  Although  a  discharge  in  bank- 

ruptcy. 

1232.  In    what    court   the    mortgage 

lien    may   be   enforced. 

1233.  Proceedings      in      bankruptcy 

against  the  owner  of  the 
equity  do  not  suspend  a 
suit  already  commenced  in 
a  state  court. 
^234.  If  the  bankruptcy  proceedings 
are  pending  in  a  state 
other  than  that  in  which 
the  mortgaged  property  is 
located. 

1235.  The     bankruptcy     court    may 

order  a  sale  subject  to  the 
mortgage. 

1236.  If    the    mortgagee    desires    to 

prove   his   claim. 


CHAPTER  XXVIII. 


FOEECLOSURE   BY    ENTRY   AND   POSSESSION. 


/.    Nature   of   the   Remedy. 

1237.  Foreclosure  by  means  of  the 

mortgagee's  entering  upon 
the  premises. 

1238.  Where  used. 

II.  Statutory  Provisions. 

1239.  Maine. 

1240.  Maine — foreclosure    by    adver- 

tisement. 

1241.  In  New  Hampshire. 

1242.  New    Hampshire- — Foreclosure 

may  also  be  effected  by  a 
mortgagee  already  in  pos- 
session. 

1243.  New    Hampshire — The    provi- 

sions of  the  statute  must 
be  strictly  followed. 


SEC. 

1244.  In  Massachusetts. 

1245.  In  Rhode   Island. 


///.    The  Entry. 


1246. 
1247. 


In   general. 

The  entry  should  be  made  by 

the  person  holding  the  legal 

title. 

1248.  Upon  the  death  of  the  mort- 

gagee. 

1249.  It  is  the  mortgagee's  right  to 

foreclose  the   whole   estate. 

1250.  Assignment  of  the   entry. 

1251.  A  second  mortgagee  may  enter 

and    take   possession. 

1252.  A     married     woman      cannot 

enter  to  foreclose  a  mort- 
gage of  land,  the  equity  of 
redemption  of  which  is  held 
by  her  husband. 


TABLE   OF    CONTENTS. 


1253.  The  mortgagee  may  enter  at 

any    time    after    breach    of 
the  condition. 

1254.  An  entry  upon  a  part  of  the 

land. 

1255.  In  making  the  entry. 

1256.  An  entry  is  peaceable. 

1257.  The  entry  is  sufficiently  open. 

IV.    The  Possession. 

1258.  The  possession  taken  is  a  con- 

structive rather  than  a  lit- 
eral one. 

y.  The  Certificate  of  Witnesses. 

1259.  What   it  must   state. 

1260.  The  certificate  duly  made  and 

recorded   is   conclusive   evi- 
dence. 

VI.  The    Certificate   of   the 

Mortgagor. 

1261.  When  the  mortgagor  consents 

to  the  entry. 

VII.  When   the  Limitation 

Commences. 

1262.  The  limitation  of  three  years 

commences. 

VIII.  Record  of  the  Certificate. 

1263.  The  certificate,  whether  made 

by  the  mortgagor  or  by  the 


vi^itnesses, 
corded. 


must      be      re- 


IX.  Effect   of   the   Foreclosure 
upon  the  Mortgage  Debt. 

1264.  The    foreclosure,    when    com- 
plete, operates  as  payment. 

X.  Waiver  of  Entry  and 
Foreclosure. 


1265. 

1266. 
1267. 


1268. 


1269. 
1270. 


1271. 


1272. 
1273. 


1274, 
1275, 


By  express  or  implied  agree- 
ment. 

An  assignment  of  a  mortgage. 

The  waiver,  to  be  effectual, 
must  be  by  the  holder  of 
the  mortgage. 
An  entry  does  not  waive 
rights  acquired  under  a 
previous  purchase  at  a  sale 
under  a   power. 

Payment  works  a  waiver. 

If  the  payment  be  made  and 
received  under  an  express 
understanding  that  the 
foreclosure  is  to  be  opened. 

The  entry  is  not  waived  by 
the  mortgagee's  rendering 
an  account. 

Conditional  waiver. 

The  entry  is  not  waived  by 
the  mortgagee's  bringing  a 
writ  of  entry. 

A  recovery  of  judgment. 

If  by  accident  or  mistake  the 
time  01  redemption  goes  by. 


CHAPTER  XXIX. 


PORECLOSUEE   BY    WRIT   OF   ENTRY. 


SEC. 

I.  Nature  of,  and  where  used. 

1276.  The  process  of  foreclosure  by 

a  writ  of  entry  as  used  in 
Massachusetts    and    Maine. 

1277.  In   Massachusetts   and   Maine. 

1278.  In  New  Hampshire. 

1279.  In  Rhode  Island. 

II.  Who  may  maintain. 

1280.  A  legal  interest  in  the  realty 

is  essential. 


1281.  After  assignment. 

1282.  A   mortgagee   who    has   made 

an  assignment  absolute  in 
form,  but  really  intended  as 
security. 

1283.  One    of    two    or    more    joint 

mortgagees   or   assignees. 

1284.  Two    mortgages   of    the   same 

land. 

1285.  A  second  mortgagee. 

1286.  Homestead  right. 

1287.  A  mortgagee  who  has  entered 

to  foreclose. 


TABLE   OP    CONTENTS. 


XI 


1288.  If  the  holder  of  the  mortgage 

die  before  entry. 

1289.  When  right  of  action  accrues. 

III.  Against   whom   the  Action 

may  he  brought. 

1290.  The  action  is  brought  against 

the     tenant     of     the     free- 
holder. 

1291.  A  wife. 

1292.  The  mortgagor. 

IV.  The  Pleadings  and  Evidence. 

1293.  The  declaration. 

1294.  Answer. 

1295.  Evidence. 

Y.  The  Defences. 

1296.  Equitable     defences     are     al- 

lowed. 

1297.  Want   of    consideration. 

1298.  Payment     of     the     mortgage 

debt. 

1299.  Surrender  obtained  by  fraud. 

1300.  Usury. 

1301.  That   no   right  of  action   has 

accrued. 

1302.  A  defence  may  be  maintained 

as  to  a  part  of  the  prem- 
ises. 

1303.  A  purchaser  subject  to  a  mort- 

gage   cannot    set   up    fraud 
in  obtaining  the  mortgage. 

1304.  That  the  mortgagee  has  ver- 


bally promised  not  to  en- 
force the  mortgage. 

1305.  The  defendant  is  not  allowed 

to  set  up  any  title  acquired 
by  him  after  the  commence- 
ment of  the  action. 

YI.  The  Conditional  Judgment. 

1306.  The    judgment,    after    deter- 

mining the  amount  due  on 
the   mortgage. 

1307.  The  fact  that  the  demandant 

in  a  writ  of  entry  is  a  mort- 
gagee. 

1308.  To  obtain  a  conditional  judg- 

ment the  plaintiff  must  pro- 
duce the  bond  or  note. 

1309.  The  judgment  should  include 

the  whole  amount  due  and 
payable  on  the  mortgage. 

1310.  When    the    condition    of    the 

mortgage  is  not  for  pay- 
ment of  a  sum  of  money. 

1311.  Payments  made  by  the  mort- 

gagee for  protection  of  the 
estate. 

1312.  Indemnity  mortgage. 

1313.  In    ascertaining    the    amount 

of  the  judgment,  claims  in 
set-off  may  be  allowed. 

1314.  Joint  tenants. 

1315.  If  nothing  is  due  to  the  plain- 

tiff upon   the  mortgage. 

1316.  The  judgment,  with  all  bene- 

fit of  the  security  and  of 
the  possession  taken  under 
it,  may  be  assigned. 


CHAPTER  XXX. 


STATUTORY   PROVISIONS   RELATING   TO   FORECLOSURE   AND  REDEMPTION. 


1317.  The  statutes  generally. 

1318.  Codes  of  procedure. 

1319.  In    this    chapter    a    statement 

will  be  given  of  the  statu- 
tory provisions. 

1320.  A    mortgage    cannot   be    fore- 

closed by  a  special  statute. 

1321.  The    law    in    force    when    the 

mortgage  was  executed 
must  be  followed  in  fore- 
closing it. 

1322.  Alabama. 
1322a.  Alaska  T. 
1322b.  Arizona  T. 


SEC. 

1323.  Arkansas. 

1324.  California. 

1325.  Colorado. 

1326.  Connecticut. 

1328.  Delaware. 

1329.  District  of  Columbia. 

1330.  Florida. 

1331.  Georgia. 
1331a.  Hawaii  T. 

1332.  Idaho. 

1333.  Illinois. 
1333a.  Indian  T. 

1334.  Indiana. 

1335.  Iowa. 


Zll 


TABLE   OP    CONTENTS. 


SEC. 

1336.  Kansas. 

1337.  Kentucky, 

1338.  Louisiana. 

1339.  Maine. 

1340.  Maryland. 

1341.  Massachusetts. 

1342.  Michigan. 

1343.  Minnesota. 

1344.  Mississippi. 

1345.  Missouri. 

1346.  Montana. 

1347.  Nebraska. 

1348.  Nevada. 

1349.  New  Hampshire. 

1350.  New  Jersey. 
1350a.  New  Mexico. 

1351.  New  York. 

1352.  North  Carolina. 


SEC. 

1352a.  North     Dakota 
Dakota. 

1353.  Ohio. 

1353a.  Oklahoma  T. 

1354.  Oregon. 

1355.  Pennsylvania. 

1356.  Rhode  Island. 

1357.  South  Carolina. 
1357a.  South  Dakota. 

1358.  Tennessee. 

1359.  Texas. 

1360.  UtahT. 

1361.  Vermont. 

1362.  Virginia. 

1363.  Washington. 

1364.  West  Virginia. 

1365.  Wisconsin. 

1366.  Wyoming. 


and     South 


CHAPTER  XXXI. 

THE  PARTIES  TO  AN  EQUITABLE  SUIT  FOR  FORECLOSURE. 


PART    I. 


Of  Parties  Plaintiff. 


Wlio  are  the  Proper  Parties. 


1367.  General  principles. 

1368.  All  those   who   are  interested 

in  the  mortgage  debt. 

1369.  Joinder  of  plaintiff. 

1370.  Real  party  in  interest. 

1371.  The  plaintiff  must  have  some 

interest. 

1372.  It  is  apparent,  therefore,  that 

a   formal   legal   assignment 
is  not  requisite. 

1373.  If  the  mortgage  has  been  in 

legal    form    assigned    abso- 
lutely. 

1374.  A  mortgagee  who  has  assigned 

his   mortgage   as   collateral 
security. 

1375.  One  who  holds  the  mortgage 

as  a  collateral  security. 
1375a.  If  a  mortgage  has  been   as- 
signed, the  assignee  should 
maintain  the  suit. 

1376.  The   assignee   of   a  mortgage, 

without   the   bond    or    note 
secured  by  it. 

1377.  Assignee   of  mortgage  note. 
1377a.  The  assignee   in   bankruptcy 

of   the   holder   of   a   mort- 
gage. 


SEC. 

1378. 


The  holder  of  one  of  several 
notes  secured. 

1379.  A  partner. 

1380.  A  surety  or  guarantor. 

1381.  Joint  mortgagees. 

1382.  When  a  mortgage  secures  an 

indebtedness  due  to  the 
mortgagees  jointly. 

1383.  It    is   a   general    rule    that   a 

nominal  trustee  cannot 
bring  the  suit. 
1383a.  A  foreign  receiver  or  trus- 
tee may  maintain  an  ac- 
tion to  foreclose  a  mort- 
gage. 

1384.  If  a  cestui  que  trust,  or  other 

holder  of  the  mortgage 
debt,  brings  a  bill  to  fore- 
close. 

1385.  A  holder  of  bonds  secured  by 

a  mortgage  may  file  a  bill 
to  foreclose  in  behalf  of 
himself  and  the  other  bond- 
holders. 

1386.  Trustee    for   creditors. 

1387.  Upon   the  death  of  the   mort- 

gagee or  of  a  mortgage 
trustee. 


TABLE   OF   CONTENTS. 


Xlll 


SEC. 

1388.  The     personal     representative 

of  the  mortgagee. 

1389.  A  foreign  executor  or  admin- 

istrator. 

1390.  Mortgage  to  executor  or  guard- 

ian. 


1391.  When    one    person    holds    two 

mortgages    upon    the    same 
premises. 

1392.  A  mortgage   executed   to   per- 

sons in  an  official  capacity. 

1393.  A  wife  owning  a  mortgage  as 

her  separate  property. 


PART  II. 

Of  Parties  Defendant. 
Who  are  the  Necessary  or  Proper  Parties. 


SEC. 

1394.  General  principles. 

1395.  When    a    party    in    interest, 

other  than  the  owner  of 
the  equity  of  redemption, 
is  not  made  a  party. 

1396.  All  parties  in  interest  should 

be  joined. 

1397.  Trustees  and  beneficiaries. 

1398.  When     beneficiaries     are    nu- 

merous. 

1399.  Trustee. 

1400.  Equitable  interest. 

1401.  Remaindermen. 

1402.  The  mortgagor,  if  he  remains 

the  owner  of  the  equity  of 
redemption,  is  a  necessary 
party. 

1403.  If   the   mortgagor   retains   an 

interest  in  the  property. 
14.04.  The   mortgagor,   after  he   has 
conveyed  the  whole  of  the 
premises  mortgaged,  is  not 
a  necessary  party. 

1405.  If    the    mortgagor    has    con- 

veyed away  only  a  portion 
of  the  premises. 

1406.  The   owner   of   the   equity   of 

redemption. 

1407.  If    the    purchaser    from    the 

mortgagor  has  assumed  the 
payment  of  the  mortgage 
debt. 

1408.  Intermediate   purchasers. 

1409.  Tenants  in  common  and  joint 

tenants  of  the  equity  of  re- 
demption must  all  be 
joined. 

1410.  Objection   that   the    owner   of 

the  equity  is  not  made  a 
party. 

1411.  Purchaser  pendente  lite. 

1412.  If  the  deed  to  the  purchaser 


SEC. 

of  the  equity  has  not  been 
recorded. 

1413.  A  mere  occupant. 

1414.  Mortgagor's  heirs. 

1415.  Heir  of  purchaser. 

1416.  Heirs  of  partner. 

1417.  Although  the  mortgage  be  of 

a  term  of  years. 

1418.  Devisees. 

1419.  Legatees. 

1420.  Mortgagor's  wife. 

1421.  If  the  wife  did  not  join  her 

husband  in  his  mortgage  in 
release  of  her  dower. 

1422.  In     those     states     where    the 

common  law  doctrine  of 
dower  is  changed. 

1423.  If  the  premises  mortgaged  are 

subject  to  a  homestead 
right,  the  wife  should  be 
made  a  party. 

1424.  Husband. 

1425.  All    subsequent   mortgagees. 

1426.  A  subsequent  mortgagee   who 

has  assigned  the  mortgage. 

1427.  Assignee  of  note. 

1428.  Upon    the   death   of 

mortgagee       his 


representative 
party. 

1429.  After  default. 

1430.  After  payment. 

1431.  The    only    right 


a   junior 
personal 
is    a   proper 


of 


a  junior 
mortgagee,  who  has  not 
been  made  a  party  to  the 
foreclosure  of  a  prior  mort- 
gage, is  to  redeem. 
1431al  A  joint  and  several  maker 
of  the  note  secured. 

1432.  A  guarantor. 

1433.  Collateral  to  guaranty. 

1434.  Indorser  of  note. 


XIV 


TABLE   OF    CONTENTS. 


SEC. 

1434a, 


1435. 
1436. 
1426a 


1437. 
1438. 
1438a 


,  In  proceedings  to  foreclose 
a  mortgage  given  by  a  trus- 
tee, his  cestui  que  trust  is 
not  ordinarily  a  necessary 
party. 

Joint  mortgagees. 

Judgment  creditors. 

,  A  general  creditor  having  no 
lien  upon  the  property  is 
not  a  proper  party  to  a 
foreclosure  suit. 

Judgment  after  decree. 

Bankrupt. 

,  A  receiver. 


1439.  Persons    having    interests    in 

the  property  paramount  to 
the  mortgage. 

1440.  Adverse    claimants    cannot   be 

made  parties  to  a  foreclo- 
sure suit  for  the  purpose 
of   litigating   their   titles. 

1441.  Priority     between     mortgages. 

1442.  New  parties. 

1442a.  A  guardian  ad  litem  should 
be  appointed  if  a  defendant 
is  under   legal  disability. 

1442b.  Provision  is  made  in  some 
States  for  service  by  publi- 
cation. 


CHAPTEE  XXXII. 


FORECLOSURE   BY    EQUITABLE    SUIT. 


I.  Jurisdiction,    and   the   Object   of 
the  Suit. 

1443.  Jurisdiction. 

1444.  Venue. 

1445.  It  is  not  proper  in  a  foreclo- 

sure suit  to  try  a  claim  of 
title  paramount. 

1446.  It  is  proper  in  a  foreclosure 

suit  to  determine  the  right 
of  the  mortgagor  to  re- 
move a  building. 

1447.  A  court  of  equity  will  prevent 

an  improper  use  of  its  pro- 
cess, even  in  a  legal  way. 

1448.  A    trust    deed    made    for    the 

security  of  all  the  creditorr; 
of  the  grantor. 

1449.  In   the    foreclosure    of   a   title 

bond. 

1450.  A  tender   of  payment  not  ac- 

cepted. 

II.  The  Bill  or  Complaint. 

1451.  General  principles. 

1452.  The  general  requisites  of  the 

complaint. 

1453.  Facts    not    inconsistent    with 

the  bill  may  be  proved. 

1454.  An  allegation  of  the  execution 

and  delivery  of  the  mort- 
gage. 

1455.  Proof  of  execution. 

1456.  The    complainant    must    show 

by  his  bill  either  that  he  is 
the  mortgagee. 


SEC. 

1457.  Assignee's  title. 

1458.  A    mortgagee    having    two    or 

more  mortgages  upon  the 
same  premises. 

1459.  Foreclosure    for   instalment. 

1460.  When  the  bill  is  filed  by  the 

holder  of  one  of  s.everal 
mortgage  notes. 

1461.  When    one    mortgagor    is    not 

liable  for  the  debt. 

1462.  The  bill  should  so  describe  the 

mortgaged  property. 

1463.  May  omit  part. 

1464.  Reforming. 

1465.  Record. 

1466.  The  debt  secured  by  the  mort- 

gage must  be  set  out  and 
described. 

1467.  Reference       to       determine 
amount  of  debt. 

1468.  A  renewal  of  the  note  should 

be  alleged. 

1469.  Proof  of  note. 

1469a.  The    note    or    bond    must    be 
produced. 

1470.  It   is   not  generally   necessary 

to  prove  payment  of  the 
consideration  money. 

1471.  The    bill    must    show    that    a 

right  of  action  has  accrued. 

1472.  A  bill  to  foreclose  a  mortgage 

given  to  indemnify  a 
surety. 

1473.  An  allegation  in  the  bill  that 

a  person  made  a  defendant 
has,  or  claims  to  have,  a 
lien. 


TABLE   OF    COXTENTS. 


XV 


SEC.  SEC. 

1474.  The  bill   must  show  that  de-     1496. 

fendant's  interest  is  subject     1497. 
to  the  mortgage. 

1475.  All    the    relief    sought    for    in 

the  action  should  be  prayed 

for  in  the  bill.  1498. 

1476.  The  essential  grounds  for  re- 

lief. 

1477.  A  personal  judgment  for  a  de- 

ficiency. 

1478.  When    the    mortgage    secures     1499. 

several  notes  some  of  which     1500. 
are  not  due. 

III.  The  Answer  and  Defence. 

1479.  In  general.  1501. 

1479a.  A  cross-bill  is  generally  con- 
fined  to   the  subject-matter    1502. 
of   the   bill. 

1480.  An    answer    founded    upon    a 

release. 

1481.  The    denial    of    an    allegation     1503. 

must  be  explicit. 

1482.  The   mortgagee's   title   cannot     1504. 

be  questioned. 

1483.  A    mortgagor    is    estopped    to 

deny  his  title.  1505. 

1484.  The    mortgagor    may    be    es- 

topped by  his  declarations. 

1485.  Defences   against   assignee.  1506. 

1486.  Assignee  for  value. 

1487.  When  assignee  takes  free  from     1506a 

equities. 

1488.  It   is   a    good    objection    to   a 

suit    that    the    complainant 

has   parted    with   his  inter-     1507. 

est. 

1489.  Indemnity. 

1490.  Want  of  consideration.  1508. 

1491.  Failure  or  want  of  considera- 

tion as  between  the  parties 
to    a    mortgage    cannot    be     1509. 
set  up   as   a,  defence   by   a     1510. 
purchaser  of  the  land  sub-     1511. 
ject  to  the  mortgage. 

1492.  Fraud  is  a  good  defence.  1511a 
1492a.  A  fraudulent  alteration  of  a 

mortgage. 
1492b.  Fraud     as     against    mortga- 
gor's creditors.  1512. 

1493.  Usury  is  a  defence. 

1494.  Usury  cannot  be  set  up  as  a     1513. 

defence    by    one    who    has 
purchased      land      and      as- 
sumed the  mortgage,  or  has     1514. 
purchased      subject      to      a 
mortgage. 

1495.  Accordingly  a  mortgagor  may 

be  estopped  from  setting  up 

the  defence  of  usury.  1515. 


Set-off  and   counter-claim. 

If  the  suit  to  foreclose  be 
brought  in  the  name  of  a 
person  other  than  the  real 
owner. 

In  New  Jersey,  however,  a 
foreclosure  suit  is  regarded 
as  so  far  a  proceeding  in 
rem  as  to  exclude  the  de- 
fence of  set-off. 

Illegal  interest. 

To  a  foreclosure  suit  on  a 
purchase-money  mortgage, 
it  is  no  defence  that  there 
is  an  outstanding  para- 
mount title. 

The  defence  is  founded  on  the 
covenants. 

If  the  mortgagor  is  in  undis- 
turbed possession,  and  no 
suit  is  pending  for  the  pos- 
session. 

Cases  exceptional  to  general 
rule. 

When  the  covenant  is  broken 
at  the  time  the  suit  is 
brought. 

The  breach  by  the  mortgagee 
of  an  independent  covenant 
is  no  defence. 

But  if  the  sale  was  effected 
by  the  vendor's  fraud. 
A  mere  mistake  of  both  par- 
ties as  to  the  quantity  of 
land  conveyed  is  no  ground 
of  defence. 

An  assignee  of  a  mortgage  not 
due  is  not  subject  to  this 
defence. 

Validity  of  title  may  be  made 
a  condition  precedent  to  the 
payment   of    tne    mortgage. 

Statute   of  limitations. 

Insanity    of    mortgagor. 

A  recovery  of  judgment  on  the 
mortgage  note. 

.  The  defendant  may  set  up 
his  liability  to  a  creditor 
of  the  plaintiff  in  a  gar- 
nishee or  trustee  process. 
If  the  defendant  sets  up  satis- 
faction. 

An  agreement  by  the  parties 
subsequent  to  the  mort- 
gage. 

As  a  general  rule,  a  defend- 
ant cannot  object  to  an  in- 
sufficient service,  or  the 
want  of  service,  upon  an- 
other defendant. 
Bill  of  interpleader. 


XVI 


TABLE   OF    CONTENTS. 


CHAPTER  XXXIII. 


THE  APPOINTMENT   OF   A   RECEIVER. 


SEC. 


I.  When    a    Receiver    will    &e    Ap- 
'pointed. 


1516. 

1517. 


1518. 


1519. 
1520. 
1521. 
1522. 

1523, 


1524, 
1525, 


1526, 


1527, 
1528, 

1529, 


General  principles. 

A  receiver  may  be  appointed 
on  the  application  of  the 
mortgagor. 

This  remedy  is  regarded  as 
peculiarly  appropriate  in 
cases  of  mortgages  of  lease- 
hold estates. 

The  English  rule. 

In  the  United  States. 

The  prevailing  rule. 

The  appointment  as  affected 
by  statutes. 

A  subsequent  mortgagee  can- 
not have  a  receiver  ap- 
pointed to  the  prejudice  of 
a  prior  mortgagee. 

Consent  of  prior  mortgagee. 

So  long  as  anything  is  due  the 
prior  mortgagee,  however 
small  the  amount,  the  pos- 
session will  not  be  taken 
from  him. 

As  a  general  rule,  the  appoint- 
ment cannot  be  made  until 
a  bill  has  been  filed  for 
foreclosure. 

Defences  to  the   application. 

The  application  should  show 
the  defendant  in  possession. 

The  plaintiff  must  show  by 
affidavit  the  amount  due. 


SEC. 

1530.  Generally   the   mortgage   debt 

must  be  already  due. 

1531.  Under   circumstances  showing 

an  urgent  occasion  for  it, 
a  receiver  has  been  ap- 
pointed after  the  decree 
for  foreclosure. 
1531a.  A  receiver  may  be  appointed 
after  a  foreclosure  sale  to 
protect  the  rents  and  prof- 
its during  the  time  al- 
lowed for   redemption. 

1532.  To    warrant    an    appointment 

of  a  receiver  it  must  be 
shown  both  that  the  prop- 
erty itself  is  an  inadequate 
security. 

1533.  There  may  be  other  and  addi- 

tional grounds  for  the  ap- 
plication. 

1534.  In    determining    whether    the 

security    is    adequate. 

n.  Duties  and  Powers  of  a  Receiver. 

1535.  A  receiver  is  the  representa- 

tive of  all  parties  in  inter- 
est. 

1536.  Receiver's  claim  to  the  rents. 

1537.  Payment  discharges. 

1537a.  Whether  a  mortgagee  who 
nominates  and  procures  the 
appointment  of  a  receiver 
is  responsible  for  his  de- 
fault. 


CHAPTER  XXXIV. 


DECREE   OF   STRICT   FORECLOSURE. 


SEC.  SEC. 

I.  Nature  and  Use  of  this  Remedy.  II.  In  what  States  it  is  Used. 


1538.  Historical. 

1539.  Nature  of  this  remedy. 

1540.  Foreclosure  is  proper. 

1541.  Land  contract. 


1542.  Alabama. 

1543.  California. 
1543a.  Colorado. 

1544.  Connecticut. 


TABLE   OF    CONTENTS. 


XVll 


SEC. 

1544a 

.  Florida. 

1545. 

Illinois. 

1545a 

.  Indiana. 

1546. 

Iowa. 

1547. 

Kentucky. 

1547a 

.  Massachusetts. 

1547b 

.  Michigan. 

1548. 

Minnesota. 

1549. 

Missouri. 

1550. 

Nebraska. 

1550a 

.  New  Jersey, 

1551. 

New  York. 

1552. 

North  Carolina, 

1553. 

Ohio. 

1553a 

.  Pennsylvania. 

1553b 

.  Rhode  Island, 

1554. 

Tennessee. 

1555. 

Vermont. 

1556. 

Wisconsin. 

in.  Pleadings  and  Practice. 

1557.  Until  the  whole  debt  becomes 

due. 

1558.  The  rule  as  to  parties. 

1559.  In  a  bill  in  equity  for  a  strict 

foreclosure  after  the  death 
of  the  mortgagee,  his  heirs 
at  law  are  necessary  par- 
ties. 


SEC. 

1560.  The  pleadings  and  practice. 

1561.  The  judgment. 

1562.  Delivery   of    possession. 

1563.  On    a    strict    foreclosure    the 

time  allowed  for  redemp- 
tion, 

1564.  When   a   Strict   foreclosure   is 

had  against  an  infant  heir 
of  the  mortgagor. 

1565.  As  already  noticed,  a  time  for 

redemption  is  always  al- 
lowed. 

1566.  A   foreclosure   in   equity   may 

result  from  the  dismissal 
of  a  bill  to  redeem. 

1567.  The  effect  of  a  strict  foreclo- 

sure is  not  to  extinguish 
the  debt, 

1568.  Costs. 

lY.  Setting  aside  and  opening  the 
Foreclosure. 

1569.  A    strict   foreclosure    may    be 

set  aside  for  many  of  the 
same  causes  for  which  a 
foreclosure  sale  is  set 
aside. 

1570.  In    any     case    where    proper 

service  has  not  been  made 
on  a  defendant. 


CHAPTEE  XXXV. 


DECREE   OF    SALE. 


/.  A  Substitute  for  Foreclosure, 

1571.  Generally. 

1572.  In  England  the  usual  practice 

formerly. 

1573.  Independently  of  all  statutory 

provisions  a  court  of  equity 
has  jurisdiction  to  order  a 
sale. 

77.    The    Form    and    Requisites    of 
the  Decree. 

1574.  In  general. 

1575.  The  decree  and  order  of  sale 

may  properly  follow  the 
terms  of  the  mortgage. 

1576.  Order  of  sale. 

1577.  Where  only  part  of  the  debt 

or  an  instalment  of  inter- 
est is  due. 


1577a.  A  decree  of  sale  in  an  action 
to  foreclose  several  mort- 
gages upon  the  same  prop- 
erty may  include  a  mort- 
gage not  due  when  the  ac- 
tion was  commenced. 

1578.  The     decree     should    not    at- 

tempt to  give  any  relief  not 
sought  for. 

1579.  The     decree     should     not     at- 

tempt to  interfere  with  the 
rights  of  any  who  are  in- 
terested in  the  property, 
but  are   not   made   parties. 

1580.  When     a     junior     mortgagee 

forecloses  his  mortgage  by 
bill  in  equity. 

1581.  After-acquired   title. 

1582.  When     several    persons    have 

acquired  undivided  inter- 
ests. 


XVlll 


TABLE   OF    CONTENTS. 


SEC. 

1583. 
1584. 
1585. 
1586. 


One  decree  for  entire  debt. 
Death  of  mortgagor. 
Death  of  plaintiff. 
A  day  for  payment,  before  the 
sale,  is  allowed. 


III.  The  Conclusiveness  of  the  De- 
cree. 

1587.  The    validity    of    the    decree 

cannot  be  attacked  collat- 
erally. 

1588.  A   judgment   directing   a    sale 

of  the  mortgaged  premises 
is  conclusive  as  to  all  par- 
ties to  the  suit  so  long  as  it 
remains  unreversed. 

1589.  Prior  and  adverse  rights. 
1589a.  A  decree  for  closing  a  junior 

mortgage  cannot  affect  the 
lien  of  a   senior  mortgage. 

lY.  The  Amount  of  the  Decree. 

1590.  The  decree  directing  a  sale  of 

the  premises  should  find 
the  exact  amount  due. 

1591.  Ordinarily   the    decree    cannot 

include  any  instalment  of 
the  mortgage  debt  not  due. 

1592.  Collateral  mortgage. 

1593.  If    the    mortgage    secures     a 

bond  the  decree  may  be 
entered  for  the  full 
amount. 


SEC. 

1594.  Interest. 

1595.  Exchange. 

1596.  Insurance. 

1597.  Taxes. 

1598.  Costs   incurred   in  a  previous 

action. 

1599.  The    disbursements    made    by 

the  plaintiff. 

1600.  Final  judgment. 

1601.  No  stay  of  proceedings  can  be 

had  on  account  of  a  contro- 
versy between  subsequent 
incumbrancers. 

Y.  Costs. 

1602.  In  general. 

1603.  The   matter   of  costs   depends 

very  much  upon  the  stat- 
utes and  practice  of  the 
several  States. 

1604.  If    subsequent   incumbrancers. 

1605.  Defendants    who   properly   ap- 

pear. 

1606.  Attorney's  fees. 

1606a.  A  stipulation  to  pay  a  rea- 
sonable attorney's  fee  for 
foreclosure,  to  be  taxed  in 
the  judgment,  is  not  usuri- 
ous. 

1606b.  An  allowance  may  be  made 
to  a  mortgagee  for  ex- 
penses incurred. 

1607.  An  irregular  attempt  at  fore- 

closure. 


CHAPTEK  XXXVI. 


FORECLOSURE   SALES    UNDER   DECREE   OF    COURT. 


SEC. 

7.  Mode  and  Terms  of  Sale. 

1608.  A  sale  under  a  decree  of  court 

is  in  contemplation  of  law 
the  act  of  the  court. 

1609.  What  may  be  sold. 

1610.  Subsequent  incumbrances. 

1611.  Questions  of  priority  of  right 

to  the  proceeds  of  sale  or 
of  equities  as  to  the  order 
of  sale. 

1612.  The  notice  of  sale. 

1613.  Terms   of   sale. 

1614.  Deposit  required. 

1615.  Sale  on  credit. 

II.  Sale  in  Parcels. 

1616.  A  sale  in  parcels  may  be  re- 


SEC. 

quired  by  statute  or  by 
court. 
1617.  The  wishes  of  the  mortgagor 
in  respect  to  the  mode  and 
order  of  sale  should  be  fol- 
lowed. 

Whether  the  property  shall 
be  sold  entire  or  in  parcels. 

Sale  on  subsequent  default. 

III.  Order  of  Sale. 

When  the  mortgagor  has 
made  successive  sales  of 
distinct  parcels. 

Rule  of  inverse  order. 

This  rule  is  generally  held  to 
apply  to  subsequent  mort- 
gages. 


1618. 
1619. 

1620. 


1621. 
1622. 


TABLE   OF    CONTENTS. 


XIX 


1623.  When    portions    of    the    prop- 

erty have  been  sold  under 
judgment. 

1624.  The    record    of    a    subsequent 

deed  is  not,  however,  no- 
tice to  the  prior  mortgagee. 

1625.  But  this  rule  does  not  apply. 

1626.  Contribution       according       to 

value. 

1627.  Valuation    to   be   made   as   of 

what  time. 

1628.  As  a  general  rule,  if  a  mort- 

gagee has  other  security. 

1629.  So     also     when    two     persons 

have  mortgages  upon  the 
same  piece  of  property. 

1630.  If  one  holds  two  mortgages. 
1630a.  The    same    rule    applies     in 

case  of  a  mortgage  by  ten- 
ants in  common. 

1631.  If  the  mortgagee,  having  no- 

tice of  successive  aliena- 
tions of  parts  of  the  mort- 
gaged premises,  has  re- 
leased a  part. 

1632.  Homestead. 

1632a,  But  this  is  a  right  which  the 
mortgagor  must  seasonably 
assert  for  himself. 


IV.  Conduct  of  Sale. 


1633. 

1634. 
1635. 
1636, 


1637. 

1638. 

1639. 
1640, 

1641. 


the 


SEC. 

1646.  Defects    in   the   title    prior   to 

the  mortgage. 
1646a.  A   purchaser  will  not  be   re- 
lieved by  reason  of  his  own 
mistake. 

1647.  Errors  in  the  decree  or  in  the 

proceedings. 

1648.  Reference  as  to  title. 

1649.  Taxes. 

1650.  A  purchaser  may  by  his  con- 

duct  preclude   the   opening 
of  the  sale. 

1651.  An    irregularity    in    the    fore- 

closure   proceedings    which 
is  merely  formal. 

VII.  The  Deed,  and  passing  of  Title. 


The     officer     conducting 
sale  should  be  present. 

Adjournment. 

A  sale  may  be  kept  open. 

The  objection  to  the  mortga- 
gee's buying. 

V.  Confirmation  of  Sale. 

Until  confirmed  by  the  court 
the  sale  is  incomplete. 

It  rests  wholly  in  the  discre- 
tion of  the  court. 

A  resale  may  be  asked  for. 

Before  confirmation  of  the 
sale. 

Great  inadequacy  of  price 
may  be  urged. 


VI.  Enforcement  of  Sale  against 
Purchaser. 

1642.  One  who  bids  off  property  at 

a  foreclosure   sale  becomes 
a  quasi  part^. 

1643.  Performance    is    enforced    by 

attachment. 

1644.  Forfeiture  of  deposit. 

1645.  If   there   be   a   defect   in   the 

title. 


1652. 


1653. 
1654. 

1655. 
1656. 
1657. 
1658. 

1659, 
1660, 
1661, 


1662, 


It  is  a  recognized  practice  to 
allow  another  person  to  be 
substituted. 

Delivery  of  deed. 

As  the  title  of  the  purchaser 
relates  back. 

Errors  in  deed. 

After-acquired   title. 

Fixtures. 

The  purchaser  is  entitled  to 
the  crops. 

The  rents  accruing. 

When  a  mortgagee  purchases. 

The  purchaser  has  no  legal 
title  until  the  time  allowed 
for  redemption  has  ex- 
pired. 

An  appeal  does  not  affect  a 
sale  previously  made. 


VIII.  The  Delivery  of  Possession  to 
Purchaser. 

1663.  Possession    delivered    to    pur- 

chaser. 

1664.  Possession    will    be    given    to 

the  purchaser  not  only  as 
against  all  the  parties  to 
the  suit. 

1665.  If    the    person    in    possession 

shows  a  right  paramount 
to  the  mortgage. 

1666.  Until  the  purchaser  has  com- 

plied with  the  terms  of 
sale,  and  a  deed  has  been 
executed  to  him. 

1667.  These    summary    proceedings 

do  not  preclude  remedy  by 
suit  at  law  in  ejectment. 

IX.  Setting  aside  of  Sale. 

1668.  A  sale  under  a  decree  of  fore- 

closure may  be  set  aside 
by  a  bill  in  equity. 


XX 


TABLE   OF    CONTENTS. 


SEC. 

16,69.  An  application  for  a  resale 
can  be  made. 

1669a.  A  sale  will  not  be  set  aside 
at  the  instance  of  a  party 
whose  own  misconduct  has 
been  the  occasion  of  an  ir- 
regularity. 

1670.  A  sale  will  not  be  set  aside  on 

account     of      mere      inade- 
quacy of  price. 
1670a.  A  sale   may  be  set  aside  at 
the    instance    of    the    mort- 
gagee. 

1671.  When    the    complainant    him- 

self becomes  the  pur- 
chaser. 

1672.. Neglect   of   officer   selling. 

1673.  Upon  an  application  for  a  re- 
sale the  rights  of  the  pur- 
chaser will  be  taken  into 
account. 


SEC. 

1674.  Waived  by  delay. 

1675.  When  mistake  or  accident. 
1675a.  The  purchaser  may  have  the 

sale  set  aside  on  account. 

1676.  A   sale   will   not   be    set  aside 

without  some  pressing  rea- 
son. 
1676a.  The  insanity  of  the  mortga- 
gor at  the  time  of  the  sale 
would  be  a  ground  for  set- 
ting it  aside. 

1677.  Few  bidders. 

1678.  When  a  foreclosure  sale  is  in- 

valid. 

1679.  A  second   action  to  foreclose. 

1680.  Redemption  in  such  case  can 

only  be  effected. 

1681.  When  a  sale   is   set  aside  by 

order  of  court  the  title  of 
the  purchaser  is  vacated. 


CHAPTER  XXXVII. 


APPLICATION    OF   PEOCEEDS   OF    SALE. 


I.  Payment  of  the  Mortgage  DeM. 

1682.  In  general. 

1683.  If    a    mortgagee    in    order   to 

preserve  his  security  has 
been  obliged  to  pay  taxes. 
1683a.  The  rule,  that  a  creditor  may 
apply  a  payment  made  by 
his  debtor  without  special 
direction  to  any  one  of  sev- 
eral debts. 

II.  Disposition  of  the  Surplus. 

1684.  Usually  the  surplus  money  is 

paid  into  court. 

1685.  The  court  may  appoint  a  mas- 

ter or  referee. 

1686.  Upon  the  filing  of  the  report 

of  the  referee. 

1687.  In  general  no  claim  which  has 

not  become  an  absolute  lien 
upon  the  property  can  be 
considered. 

1688.  When  there  are  several  liens 

upon  the  premises. 

1689.  So    if    there    be    simultaneous 

mortgages. 

1690.  The  complainant  himself  may 

present     and     establish     a 


SEC. 

claim       to       the       surplus 
moneys. 

1691.  The  equities  of  subsequent  in- 

cumbrances of  part  of  the 
premises  are  to  be  re- 
garded. 
1691a.  In  a  proceeding  for  the  dis- 
tribution of  surplus 
moneys,  there  is  no  room 
for  the  application  of  the 
doctrine  of  marshalling  se- 
curities. 

1692.  A  prior  unrecorded  mortgage. 

1693.  Dower  and  homestead  in  sur- 

plus. 

1694.  Inchoate  right  of  dower. 

1695.  The   surplus   of   a   sale   made 

after  the  death  of  the  mort- 
gagor. 

1696.  A    lessee     for    years    of    the 

mortgagor    is   not   entitled. 

1697.  An  attachment. 

1698.  Upon    a    sale    under   a   junior 

mortgage. 

III.  Priorities   'between    Holders    of 
several  Notes  secured. 

1699.  Priority  of  maturity. 

1700.  Payment  of  notes  not  due. 


TABLE   OF    CONTENTS. 


XXI 


SEC. 
1701, 
1701a 
1702. 


1703. 

1704. 
1705. 


Priority  of  assignment. 

.  Pro  rata  division. 

It  is  competent,  however,  for 

the  parties  to   change  this 

general  rule. 
When   the  mortgage   provides 

that  upon   any  default  the 

whole  mortgage   debt  shall 

become  due. 
If  the  mortgagor  has  a  right 

of  set-off. 
When    the    mortgage    secures 


SEC. 

debts  due  to  different  per- 
sons. 

1706.  Rights  of  sureties. 

1707.  Sale  for  instalment. 

IV.  Costs  of  Subsequent  Mortgagees. 

1708.  When    proceeds    of    fthe    sale 

under  a  decree  in  equity 
are  insufficient  to  pay  all 
the  incumbrances. 


CHAPTER  XXXVIII. 

JUDGMENT   IN   AN   EQUITABLE   SUIT   FOR  A   DEFICIENCY. 


SEC. 

1709.  Generally. 

1709a.  The  judgment  contemplated 
is  one  for  the  balance  of 
the  debt  after  applying  the 
proceeds  of  the  sale. 

1709b.  The  deficiency  contemplated 
is,  moreover,  such  as  has 
been  ascertained  by  a  sale. 

1710.  Third   persons   liable   for   the 

mortgage  debt  may  be 
joined   as   defendants. 

1711.  A  court   of   equity   cannot  in 

some  States,  independently 
of  any  provisions  of  stat- 
ute. 

1712.  One   who  has  bought   subject 

to  the  debt  merely  is  not 
liable  for  it. 

1713.  If    there    are    wiords    in    the 

deed  importing  that  the 
grantee  is  to  pay  the  mort- 
gage. 


SEC. 

1714.  Though    the    conveyance    was 

merely  for  security. 

1715.  If  there  be  no  bond,  note,  or 

other    separate    agreement. 

1716.  A   judgment    for    a    deficiency 

cannot  be  rendered  against 
a  non-resident. 

1717.  Upon  the  decease  of  the  mort- 

gagor. 

1718.  A  personal  judgment  against 

the  wife. 

1719.  No  judgment  can  be  rendered 

for  such  parts  of  the  debt 
as  are  not  due. 
1719a.  In  ascertaining  the  amount 
of  the  deficiency,  unpaid 
taxes  and  assessments  upon 
the  property  should  be  de- 
ducted. 

1720.  When  it  becomes  a  lien. 

1721.  The  personal  remedy  may  be 

enforced     without     foreclo- 


CHAPTER  XXXIX. 

STATUTORY  PROVISIONS  RELATING  TO  POWER  OF  SALE  MORTGAGES  AND 

TRUST   DEEDS. 


SEC. 

I.   Introductory. 

1722.  In  England. 

II.  Statutory  Provisions  in  the  sev- 
eral  States. 

1723.  Alabama. 
1723a.  Arizona  T. 


SEC. 

1724.  Arkansas. 

1725.  California. 

1726.  Colorado. 

1727.  Connecticut. 

1729.  Delaware. 

1730.  District  of  Columbia. 

1731.  Florida. 

1732.  Georgia. 


XXll 


TABLE   OF    CONTENTS. 


SEC. 

1732a.  Hawaii  T. 
1732b.  Idaho. 

1733.  Illinois. 
1733a.  Indian  T. 

1734.  Indiana. 

1735.  Iowa. 

1736.  Kansas. 

1737.  Kentucky. 

1738.  Louisiana. 

1739.  Maine. 

1740.  Maryland. 

1741.  Massachusetts. 

1742.  Michigan. 

1743.  Minnesota. 

1744.  Mississippi. 

1745.  Missouri. 

1746.  Montana. 

1747.  Nebraska. 

1748.  Nevada. 


SEC. 

1749.  New  Hampshire. 

1750.  New  Jersey. 

1751.  New  York. 

1752.  North  Carolina. 
1752a.  North     Dakota 

Dakota. 

1753.  Ohio. 

1754.  Oregon. 

1755.  Pennsylvania. 

1756.  Rhode  Island. 

1757.  South  Carolina. 

1758.  Tennessee. 

1759.  Texas. 

1760.  Vermont. 

1761.  Virginia. 

1762.  West  Virginia. 

1763.  Wisconsin. 
1763a.  Wyoming. 


and     South 


CHAPTEE  XL. 


POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS. 


I.  The  Nature  and  Use  of  Powers 
of  Sale. 

1764.  In  general. 

1765.  In    some    of    the    early    cases 

both  in  England  and  Amer- 
ica. 

1766.  The  powers  generally  inserted 

in  mortgages  used  in  Eng- 
land. 

1767.  It  is  not  possible  to  say  when 

powers  of  sale  in  mort- 
gages were  first  used  in 
this  country. 

1768.  The  use  of  power  of  sale  mort- 

gages, however,  has  not  yet 
become  so  universal  here. 

1769.  Deeds  of  trust. 

1770.  A  deed  of  trust  is  often  pre- 

ferred to  a  mortgage. 

1771.  The  trustee  in  a  deed  of  trust 

is   the   agent   of   both   par- 
ties. 
1771a.  The  trustee  may  divest  him- 
self of  the  legal  title  by  a 
conveyance    to    another. 

1772.  The  debt  secured  by  a  deed  of 

trust. 


//. 


The  Power  of  Sale  Is  a 
Cumulative  Remedy. 


1773.  Generally. 


1774.  The  court  will  appoint  a  new 

trustee. 
1774a.  A  trust  regarding  realty  will 
be    enforced    regardless    of 
the   situation   of   the   prop- 
erty. 

1775.  The  sale  is  by  virtue  of  the 

power  and  not  of  the  de- 
cree. 

1776.  When  debt  is  unliquidated. 

III.  Construction  of  Power. 

1777.  The    power    to    sell    may    not 

only  be  made  by  an  instru- 
ment separate  from  the 
mortgage. 

1777a.  A  power  of  sale  may  in  gen- 
eral be  conferred  by  any 
owner  of  lands. 

1777b.  The  mortgage  must  provide 
upon  what  event  the  power 
may  be  exercised. 

1777c.  The  payment  of  taxes  may 
be  made  a  condition,  for 
breach  of  which  foreclosure 
may  be  had. 

1777d.  A  condition  attached  to  a 
power  of  sale  that  the  trus- 
tee shall  sell  only  by  and 
with  the  consent  of  the 
grantor. 


TABLE   OF    CONTENTS. 


XXlll 


SEC. 

1778.  The    parties    may    also    make 

such  provisions  and  regu- 
lations. 

1779.  What  is  a  sufficient  power. 

1780.  Acceptance  of  trust. 

1781.  An  obvious  error  on  the  face 

of  the  power. 

1782.  Under  a   power  in   default  of 

payment  to  "enter  and  take 
possession  of  said  prem- 
ises." 

1783.  The  fact  that  a  mortgagee  has 

made  an  entry  for  foreclo- 
sure. 

1784.  As    against   the    mortgagor    a 

sale  under  a  power  is  good 
although  the  mortgage  or 
the  power  has  not  been  re- 
corded. 

1785.  Who  may  exercise  the  power. 

1786.  A  power  of  sale  may  be  exe- 

cuted by  the  executor  or 
administrator  of  the  mort- 
gagee. 

1787.  A    legal     assignment    of    the 

mortgage  passes  the  power 
of  sale. 

1788.  In   respect  to  the  assignment 

of   deeds    of    trust. 

1789.  An   equitable   assignee  cannot 

execute  the  power. 

1790.  A  power  in  a  mortgage  or  a 

trust  deed  to  two  or  more 
jointly. 
1790a.  When    by    a   trust    deed    the 
power   of   sale   is   given   to 
the  trustee. 

1791.  A  first  and  second  mortgagee 

may  concur. 

lY.  Revocation  or  Suspension 
of  the  Power. 

1792.  The    death    of   the   mortgagor 

does  not  revoke  a  power  of 
sale. 

1793.  The    insanity    of    the    mortga- 

gor. 
1793a.  Effect    of   barring   action    on 
debt. 

1794.  In   some  States. 

1795.  A  power  may  be  modified  and 

extended. 

1796.  A  conveyance  by  the  mortga- 

gee of  a  part  of  the  prem- 
ises is  no  waiver. 

1797.  The    right    to    sell    under    a 

power  is  suspended  by  the 
mortgagor's  bringing  a  bill 
to  redeem. 

1798.  A  tender  of  the  amount   due 


and  payable  upon  a  mort- 
gage, after  breach  of  the 
condition. 

1799.  A  different  rule  is  adopted  in 

the  English  courts. 

1800.  The    power    is   not   suspended 

by  reason  that  the  mort- 
gagor is  within  the  lines  of 
an  enemy  at  war  with  his 
country. 

V.  When  the  Exercise  of  the  Power 
may  he  enjoined. 

1801.  Generally. 

1801a.  A  court  of  equity,  having 
once  acquired  jurisdiction 
of  the  parties  and  of  the 
subject  matter. 

1802.  Legitimate  exercise  of  power. 

1803.  A  use  of  the  power  to  obtain 

an  advantage  under  an- 
other mortgage. 

1804.  Grounds  of  interference  must 

be  alleged. 

1805.  The   court  will   enjoin  a  sale 

only  when  the  petitioner's 
rights  are  clear. 
1805a.  All  the  parties  interested  In 
the  subject  matter  must  be 
made  parties  to  the  injunc- 
tion suit. 

1806.  Payment  of  the  amount  justly 

due  under  the  mortgage 
must  be  tendered. 

1807.  When  the  mortgage  was  void 

in  its  inception  on  account 
of  fraud. 

1807a.  There  may  also  be  an  in- 
junction against  the  exe- 
cution of  the  power  by  rea- 
son of  circumstances  aris- 
ing after  the  making  of  the 
mortgage. 

1807b.  But  it  is  no  ground  for  en- 
joining a  foreclosure  under 
a  power  that  the  mort- 
gage was  made  for  the  pur- 
pose of  defrauding  the 
mortgagor's  creditors. 

1807c.  The  mere  fact  that  the  mort- 
gagor was  insane  at  the 
time  of  the  execution  of  the 
mortgage. 

1807d.  Where  there  is  a  question 
whether  there  has  been  a 
default. 

1808.  Usury. 

1809.  Unconscionable   penalty. 

1810.  A  want  of  notice  of  the  sale 

is  no  ground  for  enjoining. 


XSIV 


TABLE   OF    CONTENTS. 


SEC. 

1811.  Not  enjoined  to  allow  set-off. 

1812.  Time   for   contribution   to   re- 

deem. 

1813.  When    amount   of   debt   is   in 

dispute. 
1813a.  That  the  mortgage  has  been 
satisfied    is    a    ground    for 
enjoining  a  sale. 

1814.  Where     one     purchased     land 

subject  to  a  mortgage, 
which  he  supposed  was  in 
the  common  form. 

1815.  Clouding  title. 

1815a.  A  pending  suit  throwing 
doubt  on  the  grantor's 
right  to  execute  a  deed  of 
trust. 

1816.  The    insolvency    of    the    trus- 

tee. 

1817.  Scarcity  of  money  or  business 

depression. 
1817a.  Real   and    personal   property 
covered  by   a  trust  deed. 

1818.  A   referee   or   master  may  be 

associated  with  the  mort- 
gagee. 

1819.  Recovery  back  of  money  paid 

under  duress. 

1820.  The  mortgagee's  damages  and 

costs  when  wrongfully  en- 
joined. 

YI.  Personal  Notice  of  Sale. 

1821.  No  notice  at  all  is  necessary 

unless  made  so. 
1821a.  A     junior     incumbrancer     is 
not  entitled  to  a  notice  of 
the  sale. 

1822.  All  the  essential  requisites  of 

the  power  must  be  strictly 
complied  with. 

1823.  When    the   notice    required    is 

a  personal  notice. 

1824.  A     mortgagor     cannot     waive 

notice  for  others. 

1825.  If     a    mortgagee    voluntarily 

promises  the  mortgagor 
not  to  sell. 

1826.  Neglect  to  give  notice  may  be 

ground  for  setting  aside  a 
sale. 

YII.  Pul)lication  of  Notice. 

1827.  Trie    notice    usually    required. 

1828.  Statutes   regulating   the    fore- 

closure of   mortgages. 

1829.  Fairness  required. 

1830.  Burden  of  proof  as  to  notice. 

1831.  A    notice    of    sale    published 


before  any  default  has  oc- 
curred. 
1832.  An  assignment  of  the  mort- 
gage, or  of  any  interest  in 
it,  after  the  first  advertise- 
ment. 

Change  of  statute  as  to  length 
of  notice. 

How    long    after    publication 
sale   may   be. 

Selection  of  newspaper. 

Place  of  publication. 

Posting   in   public    places. 

Length    of    time    of    publica- 
tion. 


1833. 

1834. 

1835. 
1836. 
1837. 
1838. 


VIII.  What  the  Notice  should  con- 
tain. 

1839.  The  advertisement  of  the  sale 

should  fully  comply  with 
the  terms  of  the  power. 

1840.  It  must  properly  describe  the 

premises. 

1841.  Notices  of  distinct  lots  should 

be  separate. 

1842.  Where  the  advertisement  gave 

only  a  short  and  incom- 
plete description. 

1843.  The    notice    must    show    who 

orders  the  sale. 

1844.  The   notice   of   sale   need    not 

name  the  owners  of  the 
equity   of   redemption. 

1845.  It  must  specify  definitely  the 

time  and  place. 

1846.  If   the   power   makes   no   pro- 

vision as  to  the  time,  place, 
or  terms  of  sale,  or  the 
manner  of  advertising  it. 

1847.  Sale    fixed    for    Sunday    or    a 

legal  holiday. 

1848.  Sale   at  ruins   of   court-house. 

1849.  Under  a  deed  of  trust  provid- 

ing that  the  sale  shall  take 
place    at    the    "court-house 
door." 
1849a.  Sale    in    newly    incorporated 
town  or  county. 

1850.  Sale  at  city  hall. 

1851.  If  a  mistake  be  made  in  the 

advertisement. 

1852.  Any    error    in    the    notice    of 

sale  which  would  naturally 
mislead  the  public. 

1853.  Sale  of  equity  of  redemption. 

1854.  Unimportant  omissions. 

1855.  A  statutory   requirement  that 

the  notice  shall  state  the 
amount  claimed  to  be  due. 


TABLE   OF    CONTENTS. 


XXV 


SEC. 

1856.  In  advertising  a  sale  under  a 

second  mortgage  it  is  not 
essential  to  state  the 
amount  due  upon  the  first 
mortgage. 

IX.  Sale  in  Parcels. 

1857.  Generally  there  is  no  obliga- 

tion to  sell  in  parcels. 

1858.  Under    a    statute    requiring   a 

sale  in  parcels  a  mortgagee 
is  not  justified  in  selling 
the  entire  property  in  one 
lot. 

1859.  A    trustee    under    a    deed    of 

trust  is  bound  to  render 
the  sale  as  beneficial  as  pos- 
sible to  tne  debtor. 

1860.  Sale  of  sufficient  only  to  pay 

the  debt. 

X.  Conduct  of  Sale,  Terms, 
and  Adjournment. 

1861.  Mortgagee   may   act  by  attor- 

ney. 

1862.  But  a  trustee  under  a  deed  of 

trust  should  be  personally 
present  at  the  sale. 

1863.  The  power  generally  provides 

that  the  sale  shall  be  by 
public  auction,  and  in  such 
case  there  can  be  no  valid 
private  sale. 

1864.  The  terms  of  sale. 

1865.  The  acquiesence  of  the  mort- 

gagor in  the  conduct  of  the 
sale. 

1866.  Payment  at  time  of  sale. 

1867.  Time  for  examination  of  title. 

1868.  Giving  credit. 

1869.  When  the  power  does  not  pre- 

scribe the  terms  of  sale, 
the  sale  may  properly  be 
for  cash. 

1870.  If  the  mortgagee  may  sell  for 

cash  or  credit  he  must  use 
his  discretion   fairly. 

1871.  The  mortgagee  may,  in  mak- 

ing the  sale,  take  all  the 
risk  of  the  credit. 

1872.  When    the    mortgagee    is    ex- 

pressly authorized  to  sell 
for  cash  or  on  credit. 

1873.  Adjournment. 

1874.  The   notice  by   publication  of 

an  adjournment  of  a  sale. 

1875.  There  is  no  obligation  to  de- 

lay sale  to  a  more  favor- 
able time. 


SEC. 

XI.  Who  may  purchase  at  Sale 
under  Power. 

1876.  The  mortgagee  is  not  usually 

allowed  to  purchase. 
1876a.  If     the     mortgagor     or     the 
owner  of  the  equity  of  re- 
demption   elects    to    disaf- 
firm the  sale. 

1877.  It  is  not   necessary   in   order 

to  avoid  the  sale  to  show 
that  there  was  any  actual 
fraud. 

1878.  The    rule    applies    equally    to 

the  mortgagee's  solicitor. 

1879.  Mortgagee's  agent. 

1880.  Under   the   same   rule  a  trus- 

tee in  a  deed  of  trust. 

1881.  Perhaps   there    is   less    strict- 

ness in  applying  the  rule 
to  the  case  of  a  mortgagee. 

1882.  When  the  sale  is  made  by  ju- 

dicial process,  there  is  usu- 
ally no  restraint. 

1883.  A  provision  in  express  terms 

that  the  mortgagee  may 
purchase. 

1884.  This  rule   has  no  application 

to  a  subsequent  mortgagee. 

1885.  The  right  to  avoid  such  a  sale 

is  waived  by  delay. 

1886.  If    the    title    acquired    by    a 

mortgagee  in  this  way  has 
passed  into  the  hands  of  a 
bona  fide  purchaser. 

1887.  A  mortgagor  may  purchase. 

1888.  The    wife    of    the    mortgagor 

may  become  a  purchaser. 

XII.    The   Deed   and   Title. 

1889.  The     holder     of     legal     title 

should   make  the  deed. 

1890.  If  the  mortgagee  be  a  married 

woman. 

1891.  When    the    power    authorizes 

the  donee  to  execute  a  deed 
in  the  name  of  the  mort- 
gagor. 

1892.  A  mortgagee  purchasing  may 

make  a  deed  to  himself. 

1893.  In   New    York   by   statute   no 

deed  is  necessary. 

1894.  After   a   sale    under   a   power 

the  title  as  a  general  rule 
remains  unaffected  until  a 
deed  is  executed. 

1895.  The   deed    is   not   evidence   of 

recitals  in  it. 

1896.  The  deed   may  be  made  to  a 

person  other  than  the  pur- 
chaser. 


XXVI 


TABLE   OF    CONTENTS. 


SEC. 

1897.  The  purchaser  takes  the  mort- 

gagor's title  divested  of  all 
incumbrances. 
1897a.  Taxes   are    a   lien    upon   the 
land. 

1898.  Bona  fide  purchaser. 

1899.  The  title  of  one  purchasing  in 

good  faith  under  a  power 
of  sale  is  unaffected  by  any 
agreement  between  the  par- 
ties to  the  mortgage. 

1900.  Under    the    English    practice 

of  conveyancing. 

1901.  Covenant  for  further   convey- 

ance. 

1902.  An   invalid   sale   may   operate 

as  an  assignment  of  the 
mortgage  under  the  princi- 
ple of  subrogation. 
1902a.  The  purchaser  at  the  sale 
may  recover  possession  of 
the  land  by  an  action  at 
law. 

1903.  The    remedy    against    a    pur- 

chaser who  declines  to  com- 
plete a  purchase. 

Xni.    The  Affidavit. 

1904.  Neglect  to   make   and   file   an 

affidavit  of  sale. 

1905.  In     order    that    the     affidavit 

may  have  the  force  of  pre- 
sumptive evidence. 


XIV.  Setting  Aside  and  Waiving 
Sale. 

1906.  A    mortgagee    or    trustee,    in 

the  exercise  of  a  power  of 
sale,  must'  act  fairly. 
1906a.  Military    occupation    of    the 
mortgaged   premises  at  the 
time  of  the  sale. 

1907.  Whether    a    sale    is    void    or 

voidable  only  by  reason  of 
any  irregularity. 

1908.  When  the  owner  of  the  equity 

of       redemption       becomes 
bankrupt. 

1909.  Allowing   property   to   be   sac- 

rificed. 

1910.  The  sale  is  avoided  by  a  se- 

cret   arrangement    to    pre- 
vent competition. 

1911.  Any  fraud  or  deception  prac- 

ticed upon  the  owner. 

1912.  The  conduct  of  the  purchaser 

at  the  sale  may  avoid. 


SEC. 

1913.  If  a  purchaser  buys  at  a  sale 

under  a  power  with  knowl- 
edge of  circumstances  suf- 
ficient to  invalidate  the 
sale. 

1914.  Purchase     by     agent     without 

authority. 
1914a.  The  fact  that  there  was  only 
one  bidder  at  the  sale  is  no 
ground  for  setting  it  aside. 

1915.  Mere    inadequacy    of    price    is 

no   ground    for   vacating   a 
sale. 
1915a.  The  fact  that  the  auctioneer 
who  makes  the  sale  is  not 
duly    licensed. 

1916.  Sale     waived     by     extending 

time  of  redemption. 

1917.  A  promise  to  allow  the  mort- 

gagor to  repurchase  does 
not  waive  the  sale. 

1918.  A    suit    for    a    second    instal- 

ment does  not  open  fore- 
closure. 

1919.  Not     waived     by     subsequent 

entry  to  foreclose. 

1920.  Waiver  by  agreement. 

1920a.  A  mortgagor  who  has  re- 
ceived the  surplus  pro- 
ceeds of  sale  is  estopped 
from  denying  the  pur- 
chaser's title. 

1921.  Relief    by    setting    aside    the 

sale  must  be  sought  in 
equity  only. 

1922.  Delay. 

XV.  Costs,  Expenses,  and  Proceeds 
of  Sale. 

1923.  The  mortgagee  is  not  entitled 

to  compensation. 

1923a.  Attorneys'  fees  are  not  al- 
lowed unless  provided  for 
in  the  mortgage. 

1923b.  A  stipulation  for  the  pay- 
ment of  an  attorney's  fee 
may  have  reference  only 
to  a  sale  under  the  power. 

1924.  Reasonable   expenses  incurred 

in  advertising. 

1925.  If    the    power    provides    that 

the  mortgagee  may  retain 
all  costs  and  expenses. 

1926.  When    the    bankruptcy    court 

orders  the  mortgaged  prop- 
erty to  be  sold. 

1926a.  The  proceeds  of  the  sale. 

1926b.  Payment  of  prior  liens  upon 
the  property. 


TABLE   or    CONTEXTS. 


XXYH 


XVI.  The  Surplus. 

1927.  Generally. 

1928.  If  the  surplus  in  the  hands  of 

the  mortgagee  remains  un- 
productive. 

1929.  The  surplus  proceeds  must  be 

applied  according     to  the 

title  of  the   respective  par- 
ties. 

1930.  Notice   of  claims   to   the  sur- 

plus money. 

1931.  A  surplus  arising  on  the  sale 

of     real     estate     under  a 

power    after    the    death  of 
the  mortgagor. 

1932.  In  case   of  the   insolvency  or 

bankruptcy     of    the     mort- 
gagor. 

1933.  Dower  in  surplus. 


SEC. 

1934.  When    the    equity    has    been 

sold  under  execution  or  is 
attached. 

1935.  Judgment  lien. 

1936.  Where  the  payment  of  a  mort- 

gaged debt  has  been 
charged  upon  a  portion  of 
the    mortgaged    premises. 

1937.  When   property  is  sold   under 

a  mortgage  or  deed  of 
trust  to  satisfy  one  instal- 
ment of  the  debt. 

1938.  Payment  of   whole   debt  on   a 

sale  for  an  instalment. 

1939.  If  a   sale  is  made  when  only 

part  of  the  mortgage  notes 
have  matured. 
1940o  The  rights  of  different  claim- 
ants of  the  surplus  money 
may  be  determined. 


THE  LAW  OF  MORTGAOES 
OF  REAL  PROPERTY. 

redemptiojSf  and  foreclosure. 

CHAPTEIR  XXII. 


REDEMPTION  OF  A  MORTGAGE. 


I.  Redemption  a  necessary  inci- 
dent of  a  mortgage,  1038-1046. 
II.  Circumstances      affecting      re- 
demption,   1047-1051. 

III.  When      redemption     may      be 

made,  1052-1054. 

IV.  Who  may  redeem,  1055-1069. 


VI 


VII 


V.  The  sum  payable  to  effect  re- 
demption, 1070-1088. 

Contribution  to  redeem,  1089- 
1092. 

Pleadings  and  practice  on  bills 
to  redeem,  1093-1113. 


I.     Redemption  a  Necessary  Incident  of  a  Mortgage. 

§  1038.  Generally. — As  already  observed/  mortgages  of  land  were 
at  fir&t  estates  upon  condition,  and  the  mortgagor  not  performing  the 
condition  upon  the  day  stipulated  lost  his  estate  forever.  Tlie  idea  of 
redemption  after  breach  of  the  condition  is  said  to  have  been  intro- 
duced into  English  jurisprudence  from  the  Roman  law,  under  which 
default  in  the  payment  of  mortgage  debt  at  the  time  stipulated  did 
not  work  a  forfeiture  of  the  property,  but  the  creditor  thereupon  had 
the  authority  to  sell  the  property  and  reimburse  liimself  out  of  the 
proceeds.  Redemption  is  purely  a  creature  of  courts  of  equity.^ 
Adopting  the  principle  of  the  civil  law,  that  a  mortgage  is  merely  a 
security  for  the  payment  of  a  debt,  they  interposed  to  prevent  the 
hardship  and  inju.stice  which  resulted  at  common  law  from  the  failure 
of  the  mortgagor  to  strictly  comply  with  the  conditions  of  the  mort- 
gage. Although  the  mortgagor  had  forfeited  his  estate  at  law,  courts 
of  equity  allowed  him  to  redeem  his  estate  within  a  reasonable  time, 
upon  payment  of  the  debt  and  all  proper  charges,  and  this  right  was 
called  an  equity  of  redemption.  The  courts  impose  such  terms  upon 
the  party  deeding  as  the  equities  of  the  case  require.^ 

1  §§  6-11.  '  Hannah  v.  Davis,  112  Mo.  599,  20 

'  Poston  v.  Miller,  60  Wis.  494,  19    S.  W.  686. 
N.  W.  540. 


g    1039.]  REDEMPTION    OF    A    MORTGAGE.  2 

The  owner  of  the  equity  of  redemption,  or  the  party  entitled  to  re- 
deem, must  seek  the  mortgagee,  or  the  party  hokling  the  lien  on  the 
land,  in  the  forum  where  jurisdiction  in  personam  can  be  obtained 
over  such  onortgagee  or  party,  without  reference  to  the  situs  of  the 
land.  The  subject  of  controversy  is  immediately  the  mortgage  or  trust 
security  from  under  which  the  land  is  sought  to  be  redeemed.  That 
is  personal  property  and  follows  its  owner.*  It  is  usual,  however,  to 
provide  by  statute  that  the  suit  for  redemption  shall  be  brought  in  the 
county  where  the  land  lies.^ 

§  1039.  An  express  stipulation  not  to  redeem  does  not  bind  the 
mortgag^or. — So  fully  recognized  and  protected  are  the  equitable  rights 
of  the  mortgagor,  that  he  is  relieved  from  his  own  express  agreement 
that  upon  his  failure  to  pay  the  mortgage  debt  at  the  time  stipulated 
his  estate  shall  be  forfeited,  such  agreement  being  held  utterly  void  in 
equity.®  He  cannot,  by  any  form  of  words,  give  the  mortgage  the  • 
conditional  character  it  had  in  the  time  of  Littleton,  and  which  it 
still  has  in  law;  for  jurisdiction  of  the  subject  will  always  be  taken 
by  a  court  of  chancery,  which,  looking  to  the  object  of  the  transaction 
to  give  security  for  a  debt,  will  always  relieve  the  mortgagor  from  the 
consequences  of  his  failure  to  perform  the  condition,'^  and  will  pro- 
tect him  against  his  own  covenants  not  to  redeem,  because  his  neces- 
sities as  a  debtor  may  have  forced  him  into  this  inequitable  agree- 
ment. It  matters  not  how  strongly  the  parties  may  express  their 
agreement  that  there  shall  be  no  redemption ;  the  intent  being  contrary 
to  the  rules  of  equity,  it  cannot  be  carried  into  effect.* 

The  right  of  redemption  is  the  creature  of  the  law.  It  is  not  in 
terms  expressed  by  the  parties  in  the  mortgage.  But  whatever  be  the 
form  of  the  transaction,  if  intended  as  a  security  for  money,  it  is  a 
mortgage,  and  the  right  of  redemption  attaches  to  it.  Although  a 
deed  contain  a  condition  that  it  shall  be  absolute  and  without  redemp- 

*  Kanawha  Coal   Co.   v.   Kanawha  111.  494;   Preschbaker  v.  Feaman,  32 

&  Ohio  Coal  Co.  7  Blatchf.  391,  per  111.  475;  Wynkoop  v.  Cowing,  21  111. 

Blatchford,  J.  ^70;  Cherry  v.  Bowen,  4  Sneed,  415; 

=  As  in  Massachusetts:    P.   S.   1882,  Baxter  v.  Child,  39  Me.  110;  Henry  v. 

ch.  181,  §  31.  Davis,    7    Johns.    Ch.    40;    Clark    v. 

"  §  251;    2  White  &  Tudor's  Lead.  Henry,  2  Cow.  324;   Holridge  v.  Gil- 

Cas.  in  Eq.  1042.     In  East  India  Co.  lespie,   2   Johns.    Ch.    30;    Linnell   v. 

V.  Atkyns,  Comyns,  347,  349,  it  is  said  Lyford,  72  Me.  280,  per  Appleton,  C. 

that  if  a  man  makes  a  mortgage  and  J.;  Bearss  v.  Ford,  108  111.  16;  Fields 

covenants  not  to  bring  a  bill  to  re-  v.    Helms,    82    Ala.    449,    3    So.    106; 

deem,  nay,  if  he  goes  so  far,  as  in  Parmer  v.  Parmer,  74  Ala.  285. 

Stisted's  case,  to  take  an  oath  that  'Jackson  v.  Lynch,  129  111.  72,  22 

he  will  not  redeem,  yet  he  shall  re-  N.  E.  246,  21  N.  E.  580,  quoting  text. 

deem.      See    2    Story's    Eq.    Juris.    §  **  Bayley    v.    Bailey,    5    Gray,    505, 

1019,  and  cases  cited;  Peugh  v.  Davis,  510,  per  Chief  Justice  Shaw. 
96  U.  S.  332;   Willets  v.  Burgess,  34 


3  REDEMPTION    A    NECESSARY    INCIDENT.  [§    1040, 

tion  if  a  certain  sum  be  not  paid  by  the  grantor  at  a  fixed  time,  and 
the  condition  is  not  punctually  performed,  there  is  a  right  of  redemp- 
tion.^ "At  law,"  says  Lord  Eldon,^"  "the  mortgagee  is  under  no  obli- 
gation to  reconvey  at  that  particular  day ;  and  yet  this  court  says  that, 
though  the  money  is  not  paid  at  the  time  stipulated,  if  paid  with  in- 
terest at  the  time  a  reconveyance  is  demanded,  there  shall  be  a  recon- 
veyance, upon  this  ground :  that  the  contract  is  in  this  court  consid- 
ered a  mere  loan  of  money  secured  by  a  pledge  of  the  estate.  But  that 
is  a  doctrine  upon  which  this  court  acts  against  what  is  the  prima  facie 
import  of  the  terms  of  the  agreement  itself,  which  does  not  import  at 
law  that  once  a  mortgage  always  a  mortgage ;  but  equity  says  that ;  and 
the  doctrine  of  this  court  as  to  redemption  does  give  countenance  to 
that  strong  declaration  of  Lord  Thurlow,  that  the  agreement  of  the 
parties  will  not  alter  it ;  for  I  take  it  to  be  so  in  the  case  of  a  mortgage 
that  you  shall  not,  by  special  terms,  alter  what  this  court  says  are  the 
special  terms  of  that  contract." 

The  right  of  redemption  applies  to  a  mortgage  made  in  the  form  of 
an  absolute  conveyance.^^ 

§  1040.  The  time  of  redemption  may,  by  the  terms  of  the  mort- 
gage, be  postponed  for  a  term  of  years,  or  even  during  the  lifetime  of 
the  mortgagor  or  of  any  other  person,  and  this  arrangement  is  gen- 
erally for  the  benefit  and  convenience  of  both  parties ;  the  m'ortgagor 
by  this  means  securing  the  use  of  the  loan  for  a  fixed  period,  and  the 
mortgagee  obtaining  at  the  same  time  a  continuing  security  and  in- 
come for  his  loan.  If  the  mortgaged  property  is  ultimately  and  within 
a  reasonable  period  to  be  restored  to  the  mortgagor,  there  is  no  objec- 
tion to  a  mortgage  which  postpones  the  payment  and  redemption  for 
a  period  of  considerable  length ;  and  it  will  be  enforced  according  to  its 
terms.  It  is  only  in  case  of  an  irredeemable  mortgage,  'or  one  which 
is  such  in  effect,  that  courts  of  equity  will  disregard  its  terms,  and 
annex  to  it  a  right  of  redemption  as  an  indispensable  requisite  of  every 
mortgage. 

How  long  the  right  to  redeem  may  be  postponed  must  depend  upon 
the  circumstances  of  the  case.  It  may  be  postponed  so  long  by  the 
terms  of  the  mortgage  as  to  become  oppressive  to  the  mortgagor,  and 

"See  §  241;  Mooney  v.  Byrne,  163  453;  Jackson  v.  Lynch,  129  111.  72,  22 

N.    Y.    86,   92,   57   N.    E.    163;    Clark  N.  E.  246,  quoting  text, 

v.     Henry,     2    Cow.     (N.    Y.)      324,  ^^  In  Seton  v.  Slade,  7  Ves.  265, 273. 

331;    Hart    v.    Ten    Eyck,    2    Johns.  See,    also,   numerous   cases   cited   in 

Ch.      (N.    Y.)     62,    100:      Rogan     v.  note  a;  Spurgeon  v.  Collier,  1  Eden, 

Walker,    1    Wis.    527;    Knowlton    v.  55,  60. 

Walker,  13  Wis.  264;  Orton  V.  Knab,  "Jones    v.    Matkin,    118    Ala.    341, 

3   Wis.    576;    Plato  v.    Roe,   14  Wis.  24  So.  242;  Cline  v.  Robbins,  Cal.  55, 

Pac.  150. 


§§  1041,  1042,]    REDEMPTION  OF  A  MORTGAGE.  4 

thus  give  equitable  ground  for  relief  by  an  earlier  redemption.  In  one 
case  such  relief  was  given  more  than  twenty-five  years  after  the  date 
of  the  mortgage,  though  it  had  a  still  longer  period  to  run,  the  estate 
having  increased  greatly  in  value,  and  the  mortgagee  having  entered 
and  retained  possession  of  it  from  the  beginning  ;^-  and  in  another  case 
it  was  afforded  against  a  mortgage  made  by  the  mortgagor  to  his  solic- 
itor, and  in  which  there  was  a  restraint  upon  redemption  for  twenty 
years,  with  twelve  months'  notice  after  that  time.^^  These  are  excep- 
tional cases. 

§  1041.  An  agreement  to  confine  the  right  of  redemption  to  the 
mortgagor  alone,  or  to  any  specified  persons  or  class  of  persons,  is  a 
restraint  which  may  be  only  a  little  less  than  providing  against  any 
exercise  at  all  of  the  right,  and  is  relieved  against  upon  the  same 
ground."  It  is  not  every  such  arrangement,  however,  that  is  open  to 
objection.  Where  the  mortgagor  limited  redemption  to  his  own  life- 
time for  the  purpose  of  benefiting  the  mortgagee,  a  near  relative,  by 
way  of  settlement,  and  reserved  to  himself  the  right  to  redeem  at  any 
time  during  his  own  life,  the  mortgage  was  upheld.^^  In  like  manner 
a  stipulation  in  the  mortgage  limiting  the  time  within  which  redemp- 
tion may  be  had  does  not  affect  the  right  to  redeem.^^ 

§  1042.  Any  arrangement  which  is  merely  an  evasion  of  the 
equitable  rule  that  every  mortgage  is  redeemable,  or  which  is  designed 
to  enable  the  mortgagee  to  wrest  the  property  from  the  mortgagor,  is 
open  to  the  same  objection  ;^'  as,  for  instance,  an  agreement  not  upon 
any  event  or  condition  to  sue  for  redemption  or  for  the  discharge  of 
the  mortgage;  or  an  arrangement  by  which  the  equity  of  redemption 
is  conveyed  absolutely  to  the  mortgagee,  but  without  intending  an  ab- 
solute sale  of  it.^^    The  court  always  looks  with  disfavor  and  distrust 

"  Talbot  V.  Braddill,  1  Vern.  183,  a  note  to  the  case  it  is  said  there 

394  was    a   covenant   that   no   one    else 

"Cowdry  v.  Day,  1  Gif.  316.  should  redeem.)     The  question  was, 

"Howard   v.    Harris,   1   Vern.    33;  whether  his  assignee  should  redeem 

Newcomb    v.    Bonham,    1    Vern.    8;  it,  and  it  was  decided  he  should. 

Freem.  Ch.  67;  Spurgeon  v.  Collier,  1  '=  Bonham  v.  Newcomb,  1  Vern.  8, 

Eden    55.  2  Vent.  364. 

In  Newcomb  v.  Bonham,  the  Lord  '"  Stover  v.  Bounds,  1  Ohio  St.  107. 

Chancellor    said    it    was    a    general  "Vernon  v.  Bethell,  2  Eden,  110; 

rule,    once    a    mortgage    always    a  East  India  Co.  v.  Atkyns,  1  Comyns, 

mortgage,  and  as  the  estate  was  ex-  347,  349;    Toomes  v.   Conset,  3  Atk. 

pressly  redeemable  during  the  mort-  261.     And  see  Jennings  v.   Ward,  2 

gagor's  lifetime,  it  must  continue  so  Vern.    520;    Willett     v.    Wmnell,    1 

afterwards.     The  case  of  Howard  v.  Vern.    488.      And    see,    also,    2    Eq. 

Harris,  1  Vern.  33,  was  as  follows:  Cas.  Abr.  599. 

Howard    mortgaged    land,    and    the  '*  Vernon  v.  Bethell,  2  Eden,  110. 

proviso    for    redemption    was:    Pro-  Lord   Chancellor   Northington   said: 

vided    that    I    myself,    or    the    heirs  "This  court,  as  a  court  of  conscience, 

male  of  my  body,  may  redeem.     (In  is    very    jealous    of    persons    taking 


5  REDEMPTION    A    NECESSARY    INCIDENT.    [§    1043,    1044. 

upon  any  arrangement  by  which  it  is  proposed  to  transfer  the  equity 
of  redemption  absolutely  to  the  mortgagee.^'* 

§  1043.  An  agreement  that,  if  the  money  be  not  paid  by  a  certain 
day,  the  mortgagee  shall  have  the  estate  absolutely  upon  the  pay- 
ment   of    a    further  sum,   is   open  to  the  same  objection,    and  the 

mortgage  is  redeemable  notwithstanding.-"  Such  an  agreement  is  to 
be  distinguished  from  one  accompanying  a  transaction  which  is  not  a 
mortgage  but  an  absolute  sale,  whereby  the  grantor  is  allowed  to  re- 
purchase upon  certain  terms.'^  If  the  transaction  was  really  a  mort- 
gage under  the  form  of  an  absolute  sale,  any  agreement  respecting  it 
which  would  be  objectionable  in  case  of  a  formal  mortgage  is  equally 
objectionable  here.  But  there  may  be  a  valid  sale  with  an  agreement 
for  repurchase.  "That  this  court,"  says  Lord  Cottenham,^-  "will  treat 
a  transaction  as  a  mortgage,  although  it  was  made  so  as  to  bear  the 
appearance  of  an  absolute  sale,  if  it  appears  that  the  parties  intended 
it  to  be  a  mortgage,  is  no  doubt  true ;  but  it  is  equally  clear  that  if  the 
parties  intended  an  absolute  sale,  a  contemporaneous  agreement  for  a 
purchase,  not  acted  upon,  will  not  of  itself  entitle  the  vendors  to 
redeem." 

§  1044.  Neither  is  the  mortgagee  allowed  to  obtain  a  collateral 
advantage,  under  the  color  of  a  mortgage,  which  does  not  strictly  be- 
long to  the  contract.  Of  this  character  is  a  stipulation  that  if  interest 
is  not  paid  at  the  end  of  the  year  it  shall  be  converted  into  principal  ;^^ 
an  agreement  for  the  payment  of  a  commission  upon  the  amount  ad- 
vanced,^*  or  upon  the  rents  collected  by  the  mortgagee,^^  or  for  man- 
agement while  in  possession,"*'  or  as  auctioneer  for  a  sale.^^  "A  man 
shall  not  have  interest  for  his  money,  and  a  collateral  advantage  be- 

securities  for  a  loan  and  converting  '» Sheckell  v.  Hopkins,  2  Md.  Ch. 

such  securities  into  purchases.     And  89. 

therefore  I  take  it  to  be  an  estab-  ="  Price  v.  Perrie,  Freem.  Ch.  258; 

lished    rule,    that    a    mortgagee    can  Bowen    v.    Edwards,    1    Ch.    R.    222. 

never  provide  at  the  time  of  making  See  Re  Edward's  Estate,  11  Ir.  Ch. 

the  loan  for  any  event  or  condition  367. 

on  which  the  equity  of  redemption  "  §§  256-279. 

shall    be    discharged,    and    the    con-  "  In  Williams  v.  Owen,  5  Myl.  & 

veyance  absolute.   And  there  is  great  Cr.    303.      And    see,    also,    Ward    v. 

reason  and  justice  in  this  rule,  for  Wolverhampton    Water    Works    Co. 

necessitous  men  are  not,  truly  speak-  L.  R.  13  Eq.  243;   Davis  v.  Thomas, 

ing,  freemen,  but  to  answer  a  pres-  1  Russ.  &  My.  506. 

ent    exigency    will    submit    to    any  "  §   650;    Chambers  v.   Goldwin,   9 

terms   that   the   crafty   may   impose  Ves.  254,  271. 

upon   them.     The   present  case  ...  "  Chappie  v.  Mahon,  5  Ir.  Eq.  225. 

is  not  that;   but  ...  it  seems  to  be  "  Leith  v.  Irvine,  1  Myl.  &  K.  277. 

very  much  within  the  mischief  which  ^^  Comyns  v.  Comyns,  5  Ir.  Eq.  583. 

the    rule    intended    to    prevent,    of  "  Broad  v.  Selfe,  11  W.  R.  (M.  R.) 

making  an  undue  use  of  the  influ-  1036,    9    Jur.    N.    S.    885;    Barrett   v. 

ence  of  a  mortgagee."  Hartley,  L.  R.  2  Eq.  789,  795. 


§8    1045,    1046.1         KEDEMPTION   OF    A    MORTGAGE.  6 

sides,  for  the  loan  of  it,  or  clog  the  redemption  with  any  by-agree- 
ment."'« 

§  1045.  An  agreement  in  the  mortgage  itself,  or  executed  sep- 
arately, but  contemporaneously  with  the  mortgage,  that  upon  de- 
fault the  mortgagor  shall  forthwith  release  the  equity  of  redemption, 
under  the  rule  already  stated,  is  void,  and  redemption  will  be  allowed 
notwithstanding.^*  An  agreement  executed  subsequently  to  the  mort- 
gage, by  which  the  forfeiture  is  to  be  absolute  if  the  debt  is  not  paid 
at  the  day  stated,  laay  be  void  as  well.^"  It  has  sometimes  been  said 
that  such  a  contract  will  not  be  positively  disregarded  in  a  court  of 
equity,  though  it  will  be  viewed  suspiciously  and  watched  narrowly.^^ 

But  a  conveyance  after  default  by  the  mortgagor  to  the  mortgagee, 
made  for  the  purpose  of  saving  the  expense  ^of  foreclosure,  is  valid ;  as 
is  also  a  further  agreement  that  the  mortgagor  may  redeem  within 
two  years  upon  the  same  terms  as  if  the  land  had  been  sold  under  a 
foreclosure  decree. ^^ 

§  1046.  Redemption  may  be  had  after  a  release  of  the  equity  of 
redemption  to  the  mortgagee,  when  it  appears  that  he  availed  himself 
of  his  possession  of  the  property  and  of  the  embarrassed  condition  and 
physical  debility  of  the  mortgagor  to  obtain  the  release  f^  or  that  he 
obtained  the  release  by  misrepresentation  or  fraud  ;^*  or  if  it  appears 
that  the  mortgagor,  induced  by  threats,  conveyed  the  equity  of  redemp- 
tion to  the  mortgagee  for  a  grossly  inadequate  price. ^°  The  intention 
of  the  parties  that  the  conveyance  by  the  mortgagor  should  have  the 
effect  of  barring  his  equity  of  redemption  should  clearly  appear.^^  If, 
however,  the  release  of  the  equity  of  redemption  was  made  in  good 
faith  without  undue  influence,  for  a  new  and  adequate  consideration, 
it  will  be  sustained. ^^     A  release  having  been  made  for  a  substantial 

"  Per  Master  of  the  Rolls  in  Jen-  .566,  44  N.  E.  870;  Jones  v.  Foster,  175 

nings  V.  Ward,  2  Vern.  520.  111.  459,  51  N.  E.  862 

-*§    251;    Clark  v.    Henry,   2   Cow.  "Thompson    v.    Lee,    31    Ala.    292. 

324;    Bradbury     v.     Davenport,     114  And  see  Russell  v.  Southard,  12  How. 

Cal.  593,  46  Pac.  1062,  55  Am.  St.  92.  139. 

'"  Tannery  V.  Nicholson,  87  111.  464;  =**  Shouler    v.    Bonander,    80    Mich. 

Batty   V.    Snook,    5    Mich.    231.      Per  531,    45    N.    W.     487;     Bradbury     v. 

Manning,  J.:  "To  allow  the  equity  of  Davenport,    114    Cal.    593.    46    Pac. 

redemption  to  be  cut  off  by  a  for-  1062,  55  Am.  St.  92. 

feiture    of    it    in    a    separate     con-  ^'  Brown  v.  Gaffney,  28  111.  149. 

tract  would  be  a  revival  of  the  com-  ^°  Ennor  v.  Thompson,  46  111.  214. 

mon    law    doctrine,    using    for    that  "  Fallis    v.    Conway    Mut.    F.    Ins. 

purpose  two  instruments,  instead  of  Co.    7    Allen,    46;    Trull   v.    Skinner, 

one,  to  effect  the  object."  17   Pick.    213;    Vennum   v.    Babcock 

"  Hyndman  V.  Hyndman,  19  Vt.  9,  13    Iowa,    194;    Green    v.    Butler.    26 

46  Am.  Dec.  171;  Linnell  v.  Lyford,  Cal.     595;     Prltchard     v.    Elton,    38 

72  Me.  280.  Conn.   434;    Wynkoop  v.  Cowing,  21 

"  Stoutz  v.  Rouse,  84  Ala.  309,  4  So.  111.    570;     Marshall    v.    Stewart,    17 

170;    Robertson  v.  Wheeler,  162   111.  Ohio,  356;   Holdridge  v.  Gillespie,  2 


7  CIRCUMSTANCES    AFFECTING   REDEMPTION.  [    §1047. 

consideration,  parol  evidence  is  not  admissible  to  show  that  the  sole 
purpose  of  the  release  was  to  enable  the  releasee  to  give  a  perfect  title 
to  such  portions  of  the  lands  as  he  might  be  able  to  sell,  applying  the 
proceeds  to  the  credit  of  the  releasor,  and  that  the  equity  of  redemp- 
tion in  the  portions  not  so  sold  should  remain  unaffected  by  the  re- 
lease. 

II.     Circumstances  affecting  Bedemption. 

§  1047.     The   right    of   redemption   is   barred   by   a   foreclosure 

properly  made,^^  except  when  a  further  right  is  given  by  statute. 
Though  the  mortgagee  holds  two  mortgages  upon  the  premises^ 
the  foreclosure  of  one  of  them  extinguishes  the  mortgagor's 
equitable  interest.^^  But  the  right  of  redemption  belonging  to 
every  person  claiming  under  the  mortgagor,  and  being  an  incident 
to  every  interest  in  the  land  mortgaged,  the  right  cannot  be  extin- 
guished without  due  process  of  law,  which  shall  afford  every  one  having 
such  interest  an  opportunity  of  exercising  his  right  to  redeem;  and 
consequently  the  foreclosure  bars  the  rights  of  redemption  of  those 
only  who  are  made  parties  to  the  action.  As  to  those  having  this  right 
who  are  not  made  parties,  the  proceeding  is  a  nullity.*" 

A  purchaser  at  a  sale  under  a  foreclosure  suit  in  equity,  to  which 
a  junior  mortgagee  was  by  oversight  not  made  a  party,  may  maintain 
a  suit  against  such  mortgagee  to  compel  him  to  redeem  within  a  rea- 
sonable time  or  to  be  foreclosed.  In  a  recent  case  in  New  Jersey  it 
was  decreed  that  if  such  junior  incumbrancer  should  elect  to  redeem, 
lie  should  pay  not  only  the  principal  and  interest  of  the  mortgage  fore- 
closed, but  also  the  amount  paid  by  the  purchaser  upon  any  lien  prior 
to  such  junior  mortgage ;  and  that  the  junior  mortgagee  should,  upon 
election  to  redeem,  give  notice  to  that  effect  within  thirty  days,  where- 
upon a  decree  should  be  entered  that  an  account  be  stated  by  a  master ; 
but  if  he  should  fail  or  neglect  to  give  such  notice  of  his  election 
within  the  time  prescribed,  a  decree  of  strict  foreclosure  should  be  en- 
tered."   By  a  bill  to  redeem  in  such  case,  the  person  not  made  a  party 

Johns.    Ch.    30;    Remsen    v.    Hay,    2  Martin  v.  Ward,  60  Ark.  510,  30  S. 

Edw.  535;  Odell  v.  Montross,  6  Hun,  W.  1041. 

155,    68    N.    Y.    499;    Shaw    v.    Wal-  ^»  Weiss  v.  Ailing,  34  Conn.  60. 

bridge,    33    Ohio    St.    1;    Linnell    v.  *"  Miner    v.    Beekman,    50    N.    Y. 

Lyford,  72  Me.  280;  Stoutz  v.  Rouse,  337,   14   Abb.    Pr.    N.   S.   1;    42   How. 

84  Ala.   309,  4   So.   170.  Pr.    33;    Murdock    v.    Ford,    17    Ind. 

•■'•^Weiner    v.    Heintz.    17    111.    259;  52;  Bates  v.  Ruddick,  2  Iowa,  423,  65 

Willis    V.    M'Intosh,    Ga.    Dec.    162;  Am.   Dec.  774;    Johnson  v.   Harmon, 

Stoddard    v.    Forbes,    13    Iowa,    296;  19    Iowa,    56;    Sellwood   v.    Gray,    11 

Bal linger    v.    Bourland,    87    111.    513,  Oreg.  53*,  5  Pac.  196. 

29  Am.  Rep.  69;   Evans  v.  Kahr,  60  "Parker  v.  Child,  25  N.  J.  Eq.  41. 
Kan.  719,  57  Pac.   950,  58  Pac.  467; 


§§  1047a,  1048.]     redemption  of  a  mortgage.  8 

cannot  obtain  a.  judgment  dispossessing  the  purchaser  at  the  foreclo- 
sure sale,  for  such  purchaser  at  least  occupies  the  place  of  the  mort- 
gagee, against  whom  no  one  interested  in  the  equity  of  redemption 
can  maintain  aii  action  at  law.*^ 

§  1047a.  Redemption  may  be  had  after  foreclosure  if  the  mort- 
gagee or  other  holder  of  the  title  recognizes  the  mortgage  as  a  con- 
tinuing obligation.  Thus  where  the  owner  of  a  farm  mortgaged  it  to 
a  bank  to  secure  a  loan,  and  afterwards  the  bank  foreclosed  the  mort- 
gage, and  obtained  the  title  under  a  decree  of  strict  foreclosure,  but 
the  mortgagor  still  continued  to  make,  and  the  bank  to  receive,  pay- 
ments on  the  mortgage  debt,  such  pa}iments  had  tlie  effect  to  rehabili- 
tate the  mortgagor  with  the  right  to  redeem  as  fully  as  if  the  decree 
of  foreclosure  had  never  been  made.*^ 

The  mortgagor  may  agree  with  the  mortgagee  who  is  about  to  fore- 
close the  mortgage  that  the. latter  may  buy  at  the  sale,  and  that  the 
former  may  at  his  option  redeem  within  a  limited  time.  In  such  case 
the  foreclosure  sale  does  not  change  the  relations  of  the  parties  until 
the  expiration  of  that  period.** 

§  1048.  Redemption  may  be  had  after  foreclosure  by  any  person 
entitled  to  it  who  was  not  made  a  party  to  the  suit.*^  This  rule  has 
been  extended  to  give  the  purchaser  of  the  equity  from  the  mortgagor 
the  right  to  redeem,  because  not  made  a  party  to  the  suit,  even  though 
his  deed  was  not  on  record  at  the  time  of  the  decree  of  foreclosure.*® 
A  purchaser  of  a  part  of  the  mortgaged  premises  has  a  right  to  redeem 
under  like  circumstances,*''  and  an  attaching  creditor  has  the  same 
right.*^ 

A  wife  who  owns  a  part  of  the  mortgaged  premises,  but  was  not 
made  a  party  to  the  foreclosure  suit,  is  allowed  to  redeem,  although  her 

"Evans    v.    Pike,    118    U.    S.    241,  N.  W.  527;  Bunce  v.  West,  62  Iowa, 

6  Sup.  Ct.  1090.  80,    17   N.    W.    179;    Gower   v.    Win- 

"  Lounsbury  v.    Norton,   59   Conn.  Chester,  33  Iowa,  303;   Smith  v.  Sin- 

170,  22  Atl.  153.  Clair,    10    III.    108;    Strang  v.    Allen, 

"Heald    v.    Jardine    (N.    J.    Eq.),  44    111.    428;    Nesbit    v.    Hanway,    87 

21  Atl.  586.     See  this  case,  also,  as  111.    400;    Mulvey  v.   Gibbons   87   111. 

to    what    evidence    is    sufficient    to  ;^67;   Walker  v.  Warner,  179  111.   16, 

show  a  waiver  of  such  option.  23,  53  N.  E.  594;   Seaman  v.  Bisbee, 

"Bryan    v.    Kales,    162   U.    S.    411,  163  111.  91,  45  N.  E.  208;   Barrett  v. 

16  S.  Ct.  802;   Farwell  v.  Murphy,  2  Hinckley,   124  111.  32,  14  N.  E.  863; 

Wis.  533;  Murphy  v.  Farwell.  9  Wis.  Rose  v.  Walk,  149  III.  60,  36  N.  E. 

102;    Pratt   v.    Frear,    13    Wis.    462;  555;    Taylor  v.   Adams,   115  111.   570, 

Wiley  V.  Ewing,  47  Ala.  418;    Hod-  4  N.  E.  837. 

gen  V.   Guttery,  58  111.   431;    Ameri-  "  Hodson  v.  Treat,  7  Wis.  263. 

can    Buttonhole    Co.    v.    Burlington  *'  Green  v.  Dixon,  9  Wis.  532. 

Mut.    Loan    Asso.    61    Iowa,    464,    16  "Chandler  v.  Dyer,  37  Vt.  345. 


{)  CIRCUMSTANCES    AFFECTING   REDEMPTION.  [    §1049. 

husband  was  made  a  party  to  the  suit,  and  was  foreclosed  of  all  his 
rights  in  the  remainder  of  the  land.*^ 

Not  only  the  purchaser  at  the  foreclosure  sale  with  notice  that  one 
interested  in  the  estate  was  not  made  a  party  to  the  foreclosure  suit, 
but  also  any  grantee  of  such  purchaser,  with  like  notice,  takes  the  title 
subject  to  the  right  of  such  person  to  redeem.^" 

A  first  mortgagee  brought  a  foreclosure  suit  to  which  he  did  not 
make  a  second  mortgagee  a  party.  Pending  this  suit  the  second  mort- 
gagee brought  a  foreclosure  suit  without  making  the  first  mortgagee 
a  party  to  it.  Each  suit  proceeded  to  judgment  and  sale  in  this  order. 
It  was  held  that  the  purchaser  under  the  first  decree  and  sale  took  the 
entire  fee,  subject  only  to  the  second  mortgage,  the  payment  of  which 
having  been  tendered,  the  purchaser  at  the  foreclosure  sale  under  that 
mortgage  was  not  allowed  to  redeem. ^^  But  a.  prior  mortgagee  has  no 
right  to  redeem  a  subsequent  mortgage  although  he  has  barred  all 
other  interests  in  the  equity  of  redemption  by  foreclosure.^^ 

One  who  has  obtained  an  interest  in  the  property  pending  a  fore- 
closure suit  is  not  generally  permitted  to  redeem. ^^ 

On  a  bill  to  redeem  from  an  invalid  foreclosure,  the  decree  should 
provide  for  redemption  from  an  unforeclosed  security,  and  not  from 
a  void  sale ;  and  in  determining  the  amount  to  be  paid,  it  is  erroneous 
to  make  a  rest  in  computing  interest  at  the  date  of  the  sale.^* 

§  1049.     The  mortgagor  may  be  estopped  by  his  own  acts.      If 

the  owner  of  an  equity  of  redemption  encourages  a  person  to  purchase 
the  mortgage  by  promising  that  he  would  never  redeem,  a  court  of 
equity  will  not  allow  him  to  violate  his  engagements  and  redeem  from 
such  purchaser,  who  has  made  expensive  improvements  on  the  land;^^ 
nor  will  he  be  allowed  to  redeem  after  having  joined  the  mortgagee 
in  selling  the  premises  at  public  auction  under  an  engagement  to  give 
a  title  of  warranty,  and  he  has  received  the  purchase-money  from  one 
who  purchased  in  good  faith,  and  made  large  improvements  f^  nor  will 
a  second  mortgagee  be  allowed  to  redeem  after  having  informed  the 
first  mortgagee  that  he  should  not  redeem,  and  the  latter  relying  upon 
such  statement,  does  not  foreclose  his  mortgage,  but  obtains  from  the 
owner  of  the  equity  of  redemption  a  release,  and  makes  valuable  im- 
provements.^^ 

"Green  v.  Dixon,  9  Wis.  532.  "  Grover  v.  Fox.  36  Mich.  461. 

''"Hoppin    V.    Doty,    22    Wis.    621;  "Fay    v.    Valentine,    12    Pick.    40, 

Hodson  V.  Treat,  7  Wis.  263.  22  Am.  Dec.  397. 

"  Murphy  v.   Farwell,  9  Wis.   102.  ''>  Wright    v.  Whithead,  14  Vt.  268. 

"  Goodman     v.    White,     26    Conn.  "  Hardy   v.    Keene,   67   N.    H.   166, 

317.  32  Atl.  759. 

'"^  Cook  V.  Mancius,  5  Johns.  Ch.  89. 


1050,    1051.]     .     REDEMPTION    OF    A    MORTGAGE. 


10 


§  1050.  The  owner  of  the  equity  of  redemption  may  maintain  a 
bill  to  redeem  one  only  of  two  mortgages  held  by  the  same  person  as 
assignee;  and  the  fact  that  the  other  mortgage  has  apparently  been 
fully  foreclosed  will  not  prevent  a  decree  in  favor  of  the  owner  as  to 
the  mortgage  he  seeks  to  redeem.^® 

But  if  two  mortgages  be  given  to  secure  the  same  debt,  as  part  of 
one  and  the  same  transaction,  the  mortgagor  must  redeem  from  both. 
He  has  no  right  to  separate  the  transaction  into  two  parts  when  it  was 
entire  in  its  origin.^** 

A  purchaser  at  an  execution  sale  of  the  mortgagor's  right  in  equity 
having  redeemed  the  mortgage,  the  mortgagor  may  redeem  from  the 
execution  sale  within  the  year  allowed  for  this,  by  paying  the  amount 
required  for  the  redemption  of  that  interest  alone,  and  may  after- 
wards redeem  from  the  mortgage  within  the  time  in  which  he  might 
have  redeemed  the  estate  of  the  mortgagee  had  no  sale  been  made.^° 

§  1051.  In  several  States  a  period  is  allowed  after  a  foreclosure 
sale  for  redemption  by  the  mortgagor. — A  brief  statement  of  the  fact, 
whether  redemption  is  allowed  or  not,  and  of  the  time  allowed  after 
sale,  is  given  in  a  note  f^  but  a  fuller  statement  of  the  law  in  this  re- 


=«Milliken   v.    Bailey,   61   Me.    316. 

"  Stinchfield  v.  Milliken,  71  Me. 
567. 

«"  Atkins  V.  Sawyer,  1  Pick.  351, 
354,  11  Am.  Dec.  188. 

"'  Alabama:  For  two  years  after 
sale. 

Alaska:     Sixty   days. 

Arkansas:    One  year. 

California:  For  six  months  by 
owner. 

Colorado:  For  six  months  by 
owner. 

Connecticut:      None. 

Delaware:     None. 

Florida:    None. 

Georgia:     None. 

Illinois:  For  twelve  months  by 
owner. 

Indiana:    For  one  year  after  sale. 

Iowa:     For    one    year    after    sale. 

Kansas;      None. 

Kentucky:     None. 

Louisana:     None. 

Maine:  None  after  sale,  but  three 
years  after  possession  taken  for 
foreclosure    or    first    advertisement. 

Massachusetts:  None  after  sale, 
but  three  years  after  possession 
taken  for  foreclosure. 

Maryland:     None. 

Michigan:    None,  but  no  sale  can 


be  made  within  one  year  after  filing 
the  bill  to  foreclose. 

Minnesota:     One    year    after   sale. 

Mississippi:     None. 

Missouri:  One  year  after  sale 
under  a  trust  deed  and  purchase  by 
the  cestui  que  trust. 

Nebraska:     None. 

Nevada:     Six  months  after  sale. 

New  Hampshire:  One  year  after 
entry  to  foreclose. 

New  Jersey:    None. 

New  Mexico:    One  year  after  sale. 

New  York:     None. 

North    Carolina:     None. 

North   Dakota.     One  year. 

Ohio:    None. 

Oregon:     Four  months  after  sale. 

Pennsylvania:  None;  but  suit  by 
scire  facias  to  foreclose  cannot  be 
commenced  until  the  lapse  of  one 
year  after  default. 

Rhode  Island:  None  after  sale; 
but  three  years  after  possession 
taken  and  continued  either  by 
peaceable  entry  or  by  action. 

South  Carolina:     None. 

South  Dakota:    One  year. 

Tennessee:     Two  years  after  sale. 

Texas:    None. 

Vermont:  Time  limited  by  the 
court,  not  exceeding  one  year  from 
judgment. 


11  CIRCUMSTANCES    AFFECTING    REDEMPTION.  [§    1051. 

spect  is  given  with  the  statutory  provisions  of  the  several  States  in 
relation  to  foreclosure  and  redemption."^ 

This  is  a  right  of  redemption  as  distinguished  from  an  equity  of 
redemption.®'  A  bill  in  equity  is  not  generally  needed  to  enforce  this 
right.®*  The  right  is  statutory,  and  is  to  be  enforced  as  the  statute 
provides,  and  not  otherwise.®^ 

As  already  noticed,  the  law  existing  at  the  time  of  the  execution  of 
a  mortgage  is  that  which  governs  as  to  its  validity.®®  It  is  equally 
true  that  the  law  existing  at  the  time  of  the  making  of  the  mortgage 
governs  in  respect  to  foreclosure  and  redemption  after  a  foreclosure 
sale.®^  If,  upon  petition  of  a  second  mortgagee,  the  whole  estate  be 
sold  to  discharge  the  mortgages  in  the  order  of  their  priority,  and  there 
was  no  right  of  redemption  when  the  first  mortgage  was  given,  a  third 
mortgagee  cannot  redeem,  though  he  might  have  done  so  had  the  sec- 
ond mortgagee  merely  foreclosed  his  own  mortgage.  The  third  mort- 
gagee cannot  complain,  because  he  is  chargeable  with  notice  of  the  con- 
tents of  the  petition.®^  A  statute  giving  a  right  of  redemption  for 
two  years  after  sale  is  unconstitutional  and  void,  as  ionpairing  the  ob- 
ligation of  the  contract,  when  applied  to  mortgages  executed  prior  to 
the  enactment  of  the  statute.®**  In  like  manner  it  has  been  held  that 
a  law  shortening  the  time  of  redemption  from  two  years  to  one  year 
after  sale  is  unconstitutional  in  respect  to  mortgages  existing  at  the 
time  it  took  effect;  and  that  redemption  must  be  allowed  upon  such 
mortgages  for  two  years,  in  accordance  with  the  law  existing  when  they 
were  executed. ■^^'  There  is,  however,  strong  authority  that  the  right  to 
redeem  after  sale  is  something  pertaining  to  the  remedy,  and  is  not  so 
essentially  and  intrinsically  a  contract  right  as  to  be  entirely  beyond 
legislative  control.''^ 

Virginia:     None.  455;    Sea   Grove   B.    &    L.    Asso.    v. 

Washington:     One  year.  Stockton,    148    Pa.    St.    146,    23    Atl. 

West  Virginia:     None.  1063. 

Wisconsin:     None;    but  a  year   is  "' Gargan  v.  Grimes,  47  Iowa,  180. 

allowed    after    the    decree    before    a  See,  also,  Mayer  v.  Farmers'  Bank, 

sale.  44  Iowa,  212. 

"-See   §§    1322-1366.  "'^Howard  v.  Bugbee,  24  How.  461; 

°^  Mayer     v.     P"'armers'     Bank,     44  Bugbee    v.    Howard,    32    Ala.    713; 

Iowa,  212.  Goenen   v.    Schroeder,   8   Minn.    387; 

"McHugh  V.  Wells,  39  Mich.  175.  Hey  ward  v.  Judd,  4  Minn.  483;   Car- 

"  Scobey    v.    Kiningham,    131    Ind.  roll  v.   Rossiter,  10  Minn.   174. 

552,     31     N.     E.     355;     Herdman    v.  '"  Cargill  v.  Power,  1  Mich.  369. 

Cooper,  138  111.   583,  28  N.   E.   1094:  "Anderson  v.   Anderson,   129  Ind. 

Thornley    v.    Moore,    106    111.    496;  573,  29  N.  E.  35.     And  see  Connecti- 

Littler  v.  People,  43  111.  188;   Woot-  cut    Mut.    L.    Ins.    Co.    v.    Cushman, 

e      v.  Joseph,  137  111.  113,  27  N.  E.  108  U.   S.   51,  2  Sup.   Ct.  236;    Davis 

80;    Hyman  v.  Bogue,   135   111.   9,  26  v.  Rupe,  114  Ind.  588,  17  N.  E.  163; 

N.    E.    40;    Durley   v.   Davis,    69   111.  Hervey  v.   Krost,  116   Ind.   268,  277, 

133;   Stilliman  v.  Wing,  7  Hill,  159.  19  N.  E.  125;   Parker  v.  Dacres,  130 

«"  §§    663,    1145.    1321.  U.  S.  43,  9  Sup.  Ct.  433. 

"§  1822;   Smith  v.  Green,  41  Fed. 


§    1051.]  REDEMPTION    OF    A    MORTGAGE.  13 

A  mortgage  of  land  in  one  State  to  a  building  and  loan  association 
organized  in  another  State,  where  payment  and  performance  are  also 
to  be  made,  is  a  contract  under  the  laws  of  the  latter  State,  and  is  gov- 
erned by  the  laws  of  that  State.'^- 

Redemption  may  be  allowed  after  the  expiration  of  the  statutory 
period  if  it  appears  that  the  mortgagor  understood  that  the  purchaser 
at  the  foreclosure  sale  took  the  title  in  order  to  allow  him  to  redeem, 
and  that  therefore  he  gave  up  efforts  to  obtain  the  money  elsewhere." 
But  if  the  mortgagor  afterwards  abandons  his  design  to  redeem,  and 
takes  leases  of  the  property  from  the  purchaser  at  the  foreclosure  sale 
his  right  to  redeem  is  lost.'^* 

A  mistake  by  the  officer  who  made  the  sale,  in  certifying  the  time  of 
redemption  to  be  one  year  instead  of  two,  as  allowed  by  law,  does  not 
avoid  the  foreclosure ;  but  in  order  to  redeem,  a  tender  should  be  made 
within  the  two  years.'^^ 

Tlie  statutory  time  of  redemption  cannot  be  extended  to  await  the 
determination  of  a  suit  in  equity  for  an  accounting.  The  statute  fixes 
the  terms  of  redemption,  and  the;  amount  due  must  be  paid  or  ten- 
dered within  the  time  fixed,  unless  waived  or  extended.  The  parties 
may  extend  the  time  by  agreement.'^® 

When  the  holder' of  the  certificate  of  purchase,  after  the  expiration 
of  the  time  for  redemption,  allows  the  grantee  of  the  equity  of  re- 
demption to  redeem,  and  indorses  and  delivers  the  certificate  to  him, 
this  is  a  redemption,  and  the  certificate  becomes  null  and  void.  It 
does  not  amount  to  a  transfer  of  the  certificate,  or  enable  the  holder 
of  it  to  use  it  as  a  basis  of  title.'^^  A  purchaser  of  the  premises  at  a 
sheriff's  sale  under  execution  stands  in  the  place  of  the  mortgagor  as 
regards  the  time  within  which  he  may  redeem  from  a  subsequent  fore- 
closure sale,  and  cannot  redeem  after  the  time  within  which  the  latter 
may  redeem  has  expired,  and  during  the  time  beyond  that  allowed  to 
judgment  creditors  of  the  mortgagor  for  redemption.'^^  The  right  of 
a  second  mortgagee  to  redeem  cannot  be  prejudiced  by  an  extension  of 
the  statutory  time  of  redemption  by  arrangement  between  the  first 
mortgagee  and  the  mortgagor.^" 

''■  Home    Sav.    &    Loan    Asso.     v.  pel  in  pais  constitute  such  waiver, 

Mason,  127  Mich.  676.  Tice  v.   Russell,  43  Minn.  66,  44  N. 

"  Newman  v.   Locke,  66  Mich.  27,  W.   886,  yet  the  redemptioner  must 

36  N.  W.  166.  act    promptly    while    the    option    is 

"  Iowa  State   Sav.   Bank  v.   Coon-  open, 

rod,  97  Iowa,  106,  66  N.  W.  78.  "  Frederick   v.   Ewrig,   82   111.   363. 

'=  Johnstone  v.  Scott,  11  Mich.  232.  See    McRoberts   v.    Conover,    71    111. 

"Hoover    v.    Johnson,    47    Minn.  524;  Brooks  v.  Keister,  45  Iowa,  303. 

434,  50  N.  W.   475.     If  sufficient  be  "McRoberts    v.    Conover,    71    111. 

shown  to  establish  a  waiver  of  the  524. 

time,    and       acts  relied  on    by    the  "  Sager  v.  Tupper,  35  Mich.  134. 
debtor  which   amount  to   an   estop- 


13  CIRCUMSTANCES    AFFHCTIXG    REDEMPTION.  [§    1051a. 

§  1051a.  A  right  of  redemption  after  foreclosure,  given  by  statute 
in  any  State,  becomes  a  rule  of  property  l)inding  upon  the  courts  of 
the  United  States  sitting  in  such  State;  and  the  rules  of  practice  of 
such  courts  must  he  made  to  conform  to  the  law  of  the  State  so  far  as 
may  be  necessary  to  give  full  effect  to  the  right.^*^  But  although  a  de- 
cree of  a  court  of  the  United  States  sitting  in  Illinois  for  a  foreclosure 
sale,  without  providing  for  a  redemption,  according  to  the  statute  of 
that  State,  is  erroneous,  yet  it  is  not  void ;  and  a  mortgagor  entitled  to 
redeem  must  exercise  his  right  within  a  year,  or  his  right  will  be 
lost.*^  The  defect  in  such  a  decree  is  merely  in  its  failing  to  provide 
for  a  right  to  redeem.  The  court  having  jurisdiction  of  the  cause,  its 
decree  is  not  void,  and  it  cannot  be  questioned  collaterally.^^  The  right 
of  redemption  exists  by  force  of  the  statute ;  and  must  be  exercised  ac- 
cording to  the  terms  of  the  statute.^^  The  deed  was  prematurely  exe- 
cuted and  delivered  to  the  purchaser,  but  the  right  to  redeem  was  not 
thereby  impaired.  As  affecting  the  sale  itself,  it  would  seem  that  a 
sale  without  redemption  would  insure  a  better  price  than  a  sale  with 
a  right  to  redeem ;  so  that  the  mortgagor  has  nothing  to  complain  of 
in  that  respect.  Had  all  been  in  regular  form,  and  a  certificate  of 
purchase  only  given  on  the  sale,  the  purchaser  would,  after  the  lapse 
of  the  statutory  period,  be  entitled  to  a  deed,  there  having  been  no  ef- 
fort for  the  exercise  of  the  right  of  redemption.  Now,  after  the  lapse 
of  that  time,  the  purchaser  having  the  deed,  although  it  was  prema- 
turely executed,  the  purchaser  may  hold  it,  there  being  no  equitable 
ground  for  the  interposition  of  a  court  of  equity  to  set  the  sale  aside. 

*»  Barnitz  V.  Beverly,  163  U.  S.  118,  say:      "The     case     of     Connecticut 

16  S.    Ct.    1042;    Brine   v.    Insurance  Mut.  L.  Ins.  Co.  v.  Cushman    108  U 

Co.   96  U.   S.   627,  6   Reporter,  33,   7  S.  51,  2  S.  Ct.  236,  does  not  collide 

Am.  L.  Rec.  85,  2  South.  L.  J.  185;  with    the    previous    and    subsequent 

Orvis  v.  Powell,  98  U.  S.  176,  8  Cent,  cases.     There,   the   new   statute   did 

L.  J.   74;    Swift  v.   Smith,  102  U.   S.  not    lessen    the    duty    of    the    mort- 

442.     For   a  decree   giving  substan-  gagor    to    pay    what    he    had    con- 

tial  effect  to  the  equity  of  redemp-  tracted    to    pay,  nor  affect  the  time 

tion    secured    by   statute   in    Minne-  of  payment,  nor,  affect  any  remedy 

sota,   pee  Allis  v.    Insurance   Co.   97  which  the  mortgagee  had  by  exist- 

U.  S.  144;  Burley  v.  Flint,  105  U.  S.  ing  law  for  the  enforcement  of  his 

247;    Blair  v.    Chicago  &   Pacific  R.  contract."       See,     also,     Haynes     v. 

Co.   12  Fed.   Rep.  750;    Mason  v.   N.  Tredway,  133  Cal.   400,  404    65   Pac 

W.  Ins.  Co.  106  U.  S.  163,  1  Sup.  Ct.  892. 

165.       The     Circuit     Court    of    the  *'  Suitterlin  v.   Conn.  Mut.   L.  Ins. 

United    States    has    power,    by    rule  Co.  90  111.  483,  11  Chicago  L.  N.  193. 

or    otherwise,    to    require    a    party,  «- Ehrsam   v.    Smith,   61   Kan.    699, 

exercising   the   right   of   redemption  60  Pac.  740;    Spencer  v.   McGonagle, 

given  by  statute,  to  pay  to  the  clerk  107   Ind.  410,  8  N.  E.  266;    Traer  v. 

of   the   court   one   per   cent,    on    the  Whitman,    56    Iowa,    443,    9    N.    W. 

money    received    and    paid    out    by  339;    Lutes  v.   Alpaugh,  23  N.   J.   L. 

him    as    redemption-money.      Blair  165. 

V.  Chicago  &  Pacific  R.  Co.  12  Fed.  ^'  Gosmont  v.  Gloe,  55  Neb,  709,  76 

750.       In     Barnitz     v.     Beverly     163  N.  W.   424;    Over  v.   Carolus    71  111 

U.   S.   118,   16  S.  Ct.   1042,  the  court  552,  49  N.  E.  514. 


§§  lOolaa,  1051b.]    redemption  of  a  mortgage  14 

§  1051aa.  No  right  of  redemption  is  allowed  after  a  foreclosure 
sale  of  the  property  of  a  public  corporation,  or  of  a  quasi  public  cor- 
poration, such  as  a  canal,  a  railroad,  telegraph,  telephone,  electric 
light,  gas  or  water  company.  A  mortgage  of  the  property  of  such  a  cor- 
poration covers  not  only  its  real  property,  but  also  its  franchise  and 
personal  property  as  an  entirety.  The  statutorv^  provisions  in  regard 
to  redemption  from  foreclosure  sales  are  not  applicable  to  a  sale  of  the 
property  of  such  a  corporation  under  a  mortgage  of  its  property  as  an 
entirety,  for  if  redemption  of  the  real  property  were  allowed,  there 
being  no  redemption  of  the  franchise  and  personal  property,  it  would 
result  in  the  practical  destruction  of  the  value  of  the  whole.®* 

§  1051b.     The  right  of  possession  during  the  period  of  redemption 

usually  remains  with  the  mortgagor.  But  where  the  legal  estate  in  the 
mortgaged  premises  passes  by  mortgage  to  the  mortgagee,  the  right 
of  possession  is  generally  held  to  follow  the  legal  title,  and  the  mort- 
gagee or  the  purchaser  at  the  foreclosure  sale  is  entitled  to  the  posses- 
sion during  the  period  allowed  by  statute  for  redemption.*''  Where 
the  mortgage  does  not  pass  the  legal  title,  but  is  merely  a  security,  the 
right  of  possession  during  the  period  allowed  for  redemption  is  in  the 
mortgagor.** 

In  some  States  the  statutes  expressly  provide  that  the  mortgagor  is 
entitled  to  possession  during  the  redemption  period.®^  Under  statutes 
allowing  the  owner  of  the  equity  of  redemption  the  right  of  posses- 
sion, and  the  right  to  redeem  for  a  limited  time  after  a  foreclosure 
sale,  he  is  entitled  to  the  crops  harvested  on  the  land  during  that  time, 
though  these  are  pledged  by  the  mortgage.*®  The  rights  of  the  mort- 
gagor and  purchaser  are  measured  by  the  statute,  and  not  by  anything 
in  the  mortgage. 

The  mortgagor  may,  however,  by  a  provision  in  the  mortgage,  bar- 
gain away  his  right  of  possession  after  foreclosure,  and  his  statutory 
light  to  redeem.*^ 

""Jones    on    corporate   Bonds    and  ^'Wagar   v.    Stone,    36   Mich.    364; 

Mortg.   §§   335,  336  and  cases  cited;  Taliaferro  v.  Gay,  78  Ky.  496. 

Farmers'  Loan  &  Trust  Co.  v.  Iowa  "  White  v.  Griggs,  54  Iowa,  650,  7 

Water     Co.      78     Fed.      Rep.      881;  N.  W.  125;    My  ton  v.  Davenport,  51 

National  Foundry  &  Pipe  Works  v.  Iowa,  583,  2  N.   W.   402. 

Oconto  Water  Co.   52   Fed.   Rep.   43,  ''Second    Nat.  Bank    v.    Swan,    2 

aff'd   7   C.    C.    A.    603,    59   Fed.    Rep.  N.    D.    225,    50    N.    W.    357;    Pioneer 

20;     Columbia  Finance  &  Trust  Co.  Loan  Co.  v.  Farnham,  50  Minn.  315, 

v.    Kentucky    R.    Co.    60    Fed.    Rep.  52  N.  W.  897;    Harrington  v.  Foley, 

794,    9    C.    C.    A.    264;    McKenzie    v.  108  Iowa,  287,  79  N.  W.  64. 

Bismark  Water  Co.  6  N.  D.  361,  71  N.  ""  Paine   v.    McElroy,   73   Iowa,   81, 

W.  008.  34  N.  W.  615;    Swan  v.  Mitchell,  82 

'^  Vaughan  v.  Walton,  66  Ark.  572,  Iowa,    307,    47    N.    W.    1042.      See    § 

52  S.  W.   437;   Danenhauer  v.  Daw-  1521. 
son.   65    Ark     129.    46    S.    W.    131; 
Whittington  v.  Flint,  43  Ark.  504. 


15  CIRCUMSTANCES    AFFECTING    REDEMPTION.  [§    1051c. 

If  the  purchaser  at  a  foreclosure  sale  has  paid  the  purchase  money 
and  there  is  a  subsequent  redemption,  his  rights  are  determined  by 
treating  him  as  a  mortgagee  in  possession  to  the  extent  of  the  price 
paid  by  him  with  interest,  and  must  account  for  the  rents  and  profits. 
"But  if  no  redemption  is  made,  then  at  the  end  of  the  period  allowed 
for  redemption  the  title  of  the  purchaser  becomes  absolute,  and  when 
the  conveyance  is  made  it  relates  back  to  the  time  of  sale,  and  he  can 
retain  the  rents  and  profits  received  by  him  subsequent  to  the  sale."®" 
The  mortgagor,  in  order  to  recover  possession  and  call  the  purchaser 
to  account  for  the  rents  and  profits,  must  redeem."^ 

By  statute  in  some  States,  as  in  California  and  North  Dakota,  the 
purchaser  from  the  time  of  the  sale  until  a  redemption,  and  a  redemp- 
tioner  from  the  time  of  his  redemption  until  another  redemption,  is 
entitled  to  receive  from  the  tenant  in  possession  the  rents  of  the  prop- 
erty sold,  or  the  value  of  the  use  and  occupation  thereof.  Therefore 
where  farm  lands,  which  are  being  operated  under  a  contract  with  the 
owner  which  reserves  the  title  and  possession  of  a  fixed  portion  of  the 
grain  grown  thereon  in  the  owner  as  compensation  for  its  use  are  sold 
at  foreclosure  sale,  the  purchaser  thereof  at  such  sale  is  entitled  to 
such  share  as  falls  during  such  redemption  period,  and  has  the  same 
rights  thereto  as  the  owner  of  the  land  had,  and  may  invoke  the  same 
remedies  to  enforce  them.®'-^ 

If -a  mortgagor  in  ignorance  of  his  right  to  redeem  allows  improve- 
ments to  be  made  before  the  expiration  of  the  period  of  redemption,  he 
is  not  estopped  to  assert  his  right  to  redeem,  but  he  must  pay  the  value 
of  the  improvements.'^ 

§  1051c.  Redemption  after  a  foreclosure  sale  by  a  purchaser  of 
the  equity  of  redemption  extinguishes  the  mortgage  lien  in  case  such 
purchaser  has  not  assumed  the  payment  of  the  mortgage  debt.***    The 

""Danenhauer  v.  Dawson,  65  Ark.  Cal.   113;   Walls  v.  Walker,  37  Cal. 

129,  133,  46  S.  W.  131.  424;    Webster  v.    Cook,   38   Cal.   423. 

"  Danenhauer  v.  Dawson,  65  Ark.  "^  Wood    v.    Holland,    64    Ark.    104, 

129,  134,  46  S.  W.  131,  citing  Ruck-  4    S.    W.    704. 

man  v.  Astor,  9  Paige  Ch.    (N.   Y.)  "*  Willis    v.    Miller,    23    Oreg.    352, 

517;    Lathrop    v.    Nelson,    4    Dillon,  3i    Pac.    827;     Moody    v.    Funk,    82 

194;    Burk    v.    Bank    of    Tennessee,  Iowa,   1,   47  N.   W.   1008;    Bevans  v. 

3    Head    (Tenn.)    686;    Champion    v.  Dewey,  82  Iowa,  85,  47  N.  W.  1009; 

Hinkle,  45  N.  J.  Eq.  162,  16  Atl.  701;  Clayton  v.  Ellis,  50  Iowa,  590;   Hay- 

Childress    v.    Monette,    54    Ala.    317;  den  v.   Smith,  58  Iowa,  285.  287,   12 

Powers   V.    Andrews,   84   Ala.   289,   4  N.  W.  289;  Todd  v.  Davey,  60  Iowa, 

So.  263.  532,    534,    15    N.    W.    421;    Harms   v. 

"^Whithed  v.  St.  Anthony  &  Da-  Palmer,  73  Iowa,  446,  35  N.  W.  515; 
kota  Elevator  Co.  9  N.  D.  224,  227,  Campbell  v.  Maginnis,  70  Iowa, 
citing  Clement  v.  Shipley.  2  N.  D.  589,  31  N.  W.  946;  Peckenbaugh  v. 
430,  51  N.  W.  414;  Walker  v.  Mc-  Cook,  61  Iowa,  477,  16  N.  W.  530, 
Cusker,  71  Cal.  594,  12  Pac.  723;  The  earlier  case  of  Crosby  v.  El- 
Hill  V.  Taylor,  22  Cal.  191;  Page  v.  kader  Lodge,  16  Iowa,  400,  is  over- 
Rogers,  31  Cal.  294;  Kline  v.  Chase,  ruled. 
17    Cal.    596;    Knight    v.    Truett,    18 


§    1051c.]  REDEMPTION    OF   A    MORTGAGE.  10 

foreclosure  sale  itself  exhausts  the  decree  as  to  the  property  sold,  leav- 
ing the  mortgage  subject  to  redemption  under  the  statute;  and  the 
mortgage  creditor  cannot,  after  redemption  by  a  junior  incumbrancer, 
resell  the  land  to  enforce  pa}Tnent  of  an  unsatisfied  part  of  his  judg- 
ment.®^ The  mortgage  creditor  who  forecloses  is  not  allowed  to  buy 
in  the  property  for  a  small  sum,  and,  in  the  event  of  redemption,  to 
subject  the  property  again  to  sale.  The  right  of  redemption  is  cre- 
ated for  the  benefit  of  the  debtor  and  junior  incumbrancer.  When  a 
junior  incumbrancer  redeems,  he  does  so,  in  contemplation  of  law,  for 
his  own  benefit,  and  not  for  that  of  the  creditor  upon  whose  judgment 
the  sale  was  made.®'' 

But  if  redemption  is  made  by  a  person  primarily  liable  for  the  mort- 
gage debt,  and  a  judgment  for  a  deficiency  is  entered  against  him,  the 
judgment  constitutes  a  lien  on  the  redeemed  land,  which  may  be  sold 
again  on  execution  based  upon  such  judgment.  Upon  this  point  the 
Supreme  Court  of  Illinois,  in  a  recent  case,  say :  "A  mortgage,  or,  as 
in  this  case,  a  deed  of  trust  in  the  nature  of  a  mortgage,  vests  in  the 
party  secured  a  lien  upon  the  mortgaged  premises.  By  virtue  of  that 
lien  the  mortgagee  is  entitled  to  have  the  mortgaged  property  sold 
under  a  decree  of  foreclosure,  and  the  proceeds  of  the  sale  applied  to 
the  payment  of  the  debt  secured.  This  is  the  mode  provided  by  law 
for  the  enforcement  of  the  lien ;  and,  when  the  lien  has  been  once  en- 
forced by  the  sale  of  the  property,  it  has,  as  to  such  property,  expended 
its  force  and  accomplished  its  purpose,  and  the  property  is  no  longer 
sul)ject  to  it.  When  the  redemption  is  made  by  a  party  primarily 
liable  on  the  mortgage  debt,  it  may  be  that  the  same  property  may  be 
resorted  to  again  for  the  purpose  of  subjecting  it  to  the  payment  of  an 
unpaid  balance  due  on  the  mortgage,  but  it  is  not  because  of  any  right 
to  enforce  the  mortgage  lien  against  the  property  a  second  time,  but 
because  of  the  rule  of  law  which  subjects  all  the  property  of  the  debtor 
to  the  payment  of  his  debts,  until  they  are  satisfied  in  full ;  but  where 
the  redemption  is  made  by  a  party  not  lialile  upon  the  mortgage  debt, 
the  mortgage  lien  having  been  exhausted,  the  property  cannot  be  sub- 
jected a  second  time  to  the  satisfaction  of  the  same  lien."" 

"'  Anderson  v.  Anderson,  129  Ind.  '"'  Anderson  v.   Anderson,  129  Ind. 

573     29    N     E.    35,    ciiing    Horn    v.  573,  29  N.  E.  35;  Porter  v.  Steel  Co. 

Bank     125    Ind.    381,    25    N.    E.    558;  122  U.   S.   267,  7  Sup.   Ct.   1206. 

Green  v.   Stobo,  118  Ind.  332,  20  N.  ''^  Ogle    v.    Koerner,    140    111.    170, 

E.    850;    Hervey   v.    Krost,    116    Ind.  29    N.    E.    563.     There   Is   a   marked 

268,  277,  19  N.  E.   125;     Simpson  v.  difference    between    the    case    of    a 

Castle,  52  Cal.  644;    People  v.  Eas-  redemption  by  the  judgment  debtor 

ton,  2  Wend.  297;   Russell  v.  Allen,  and    that    of    a    redemption    by    his 

10   Paige    249;    Clayton   v.   Ellis,   50  grantee.     Moody  v.   Funk,  82  Iowa, 

Iowa,  590;    Lightcap  v.  Bradley,  186  1,  47  N.  W.  1008. 
111.    510,   58  N.   E.  221. 


17  WHEN    REDEMPTION    CAN    BE    MADE.  [§    1052. 

The  personal  judgment  for  a  deficiency  becomes  a  general  lien  upon 
the  debtor's  real  property,  and  the  debtor  may  redeem  from  a  sale  by 
virtue  of  this  lien  without  redeeming  from  the  mortgage  sale. 


III.     When  Redemption  may  he  made. 

§  1052.     There  can  be  no  redemption  till  the  mortgage  is  due. 

A  mortgage  payable  at  a  fixed  time  cannot  be  redeemed  until  that  time 
has  arrived  f^  and  even  if  the  mortgagor  tenders  the  interest  for  the 
whole  period  the  mortgage  has  to  run,  a  suit  to  redeem  cannot  be 
maintained  against  the  objection  of  the  mortgagee  until  the  mortgage 
is  due  by  its  terms.  The  courts  cannot  substitute  another  contract  for 
that  made  by  the  parties.'''*  A  mortgage  payable  on  demand,  or  at  or 
before  a  day  certain,  may  be  redeemed  at  any  time.^'**' 

But  if  a.  bill  to  redeem  be  brought  before  the  debt  is  due,  and  no  ob- 
jection be  taken  that  the  bill  is  premature,  and  the  debt  is  overdue 
Avhen  the  whole  case  is  before  the  court  for  decision  upon  its  merits, 
the  objection  may  be  considered  as  waived.  It  may,  however,  be  a 
cause  for  denying  costs  for  the  complainant.^"^ 

The  right  of  redemption  continues  until  lost  by  laches,"^  barred  by- 
lapse  of  statutory  time,  by  strict  foreclosure,  or  by  deed  given  in  com- 
pletion of  a  foreclosure  sale."^  It  is  not  barred  by  any  proceeding  at 
law  other  than  a  foreclosure  suit,  as,  for  instance,  a  judgment  for 
waste  against  the  owner  of  the  equity  for  cutting  trees  on  the  mort- 
gaged land.^***  There  is  no  remedy  for  obtaining  redemption  other 
than  a  bill  in  equity."^  Even  in  case  the  mortgage  debt  has  been 
wholly  paid,  if  the  mortgagee  claims  that  something  is  still  due,  a  bill 
in  equity  is  the  proper  remedy."^  In  such  a  suit  he  may  demand  that 
the  mortgage  be  discharged,  but  must  offer  to  pay  any  sum  that  may  be 
adjudged  to  be  still  due."^    So  long  as  the  mortgage  remains  in  force 

"Brown   v.    Cole,   14   Sim.   427,   14  son  v.   Craig,   179   111  395,   53  N.   E. 

L.    J.    N.    S.    Ch.    167;    Burrowes    v.  736. 

Molloy,   2   Jo.   &   Lat.    521;    Abbe  v.  ><"  Hull    v.    McCall,    13    Iowa,    467; 

Goodwin,    7    Conn.    377.     See   Moore  Weiner  v.  Heintz,  17  111.  259;  Heim- 

v.  Cord,  14  Wis.  213.  berger  v.  Boyd,  18  Ind.   420. 

^■'  Abbe  v.  Goodwin,  7  Conn.  377.  "*  Paulling   v.    Barron,   32    Ala.    9. 

^°"In    re    John    &    Cherry    Streets.  ^"^  Pearce    v.    Savage,    45    Me.    90; 

19  Wend.  659.  Douglass    v.    Woodworth,    51    Barb. 

i"!  Stinchfield    v.    Milliken,    71    Me.  79. 

567.  '""  Pratt   v.    Skolfield,    45    Me.    386. 

'"•Walker  v.   Warner,   179   111.    16,  '"Beach  v.   Cooke,  28  N.   Y.   508; 

53  N.  E.  594,  70  Am.   St.   85:    East-  86  Am.  Dec.  260;    Hill  v.  Payson,  3 

man,   v    Littlefield,    164   111.   124,   45  Mass.    559;    Parsons    v.    Welles.    17 

N.   B.    135;    Cockriil   v.   Hutchinson,  Mass.  419. 
135  Mo.  67,  36  S.  W.   375;    Hender- 


§    1053.]  REDEMPTION    OF    A    MORTGAGE.  18 

and  unsatisfied  at  law,  the  mortgagor  cannot  maintain  ejectment 
against  the  mortgagee."^  The  mortgagee  cannot  be  compelled  to  take 
the  mortgaged  property  at  an  appraised  value.^'^®  He  cannot  be  com- 
pelled to  take  anything  but  money  in  payment,  and  that  only  by  a  bill 
in  equity  properly  framed  for  the  purpose."" 

As  a  general  rule,  when  a  suit  to  redeem  by  the  mortgagor  would  be 
barred  by  the  statute  of  limitations  a  suit  by  any  one  claiming  under 
him  would  be  barred  also.^^^ 

Eede<mption  is  not  barred  under  a  decree  of  foreclosure  and  sale 
until  the  sale  is  consummated  by  the  confirmation  of  the  master's  re- 
port and  the  delivery  of  the  deed.^^^ 

§  1053.  The  time  of  redemption  may,  by  agreement  of  the  parties, 
"be  extended  beyond  the  period  at  which  it  might  otherwise  be  barred 
by  forec-losure;^^^  as  by  an  agreement  to  allow  six  months  to  redeem 
after  the  regular  time  for  redemption  would  expire.^"  If  the  promise 
be  to  reconvey  or  to  allow  the  premises  to  be  redeemed  within  a  rea- 
sonable time,  the  mortgagor  must  be  ready  to  tender  his  money  within 
a  reasonable  time  or  he  will  be  allowed  no  relief.^^^  Such  a  promise 
made  after  the  time  limited  for  redemption  has  passed  will  have  no 
effect  unless  made  on  a  legal  and  sufficient  consideration.^^®  But  an 
agreement  made  before  the  time  of  redemption  has  expired,  to  allow 
further  time,  though  made  without  consideration,  cannot  be  disre- 
garded after  the  time  of  redemption  has  passed,  but  will  be  enforced 
by  the  court."''  But  if  the  contract  be  oral,  and  moreover  be  incom- 
plete in  a  material  part,  a  court  of  equity  will  not  specifically  enforce 

108  Pell    V.    Ulmar,    18    N.    Y.    139;  soneau   v.    Pulliam,   47    111.    58;    Au- 

Chase  v.  Peck,  21  N.  Y.  581.  dretsch  v.   Hurst,   126  Mich.   301,  85 

""Craft   v.    Billiard,    1    Sm.    &   M.  N.   W.   746;    Cameron  v.   Adams,  31 

Ch.   866.  Mich.   426. 

'">  Craft   V.    Bullard,    1    Sm.    &    M.  After  a  mortgage  had  been  fore- 

Ch.   366.  closed,  and  the  property  bought  by 

I'l  Tucker  v.   White,  2   Dev.   &   B.  the  mortp;agee,  he  agreed  to  assign 

Eq.  289.  the  certificate  of  sale  to  the  mort- 

"2  Brown  v.  Frost,  Hoffm.  41.  gagor    on    payment    of    the    amount 

"'Nichols  V.  Otto,  132  111.  91,  99;  necessary     to     redeem.       The     time 

Union  Mut.  L.  Ins.  Co.  v.  White,  106  within  which  the  mortgagor  had  a 

111.   67;    Allison  v.   Loomis,   9  N.   Y.  legal  right  to  redeem  had  then  ex- 

Supp.    33,    55    Hun,    612;    Sebree    v.  pired,    but    his    judgment    creditors 

Green,    —    Ky.    — ;    41    S.    W.    290;  still    had    a    right    to    redeem,    and 

Taylor    v.    Dillenberg,    168    111.    235,  some    of   them    were    willing   to    do 

48  N.   E.  41.  so.    It  was  held  that  there  was  suffi- 

"*  Chase  v.   McLellan,  49  Me.   375.  cient  consideration  for  such   agree- 

"=McNew  V.  Booth,  42  Mo.  189.  ment  in  the  mortgagor's  promise  to 

"'  Smalley  v.   Hickok,   12  Vt.   153.  pay  the  amount  necessary  for  a  le- 

"^  Davis  V.   Dresback,   81   111.   393;  gar  redemption  by  a  judgment  cred- 

Union  Mut.  Life  Ins.  Co.  v.  Kirchoff,  itor.      Chytraus    v.    Smith,    141    111. 

133  111.  368,  27  N.  E.  91,  93;  Schoon-  231,  30  N.  E.  450. 

hoven    v.    Pratt,    25    111.    457;    Pen- 


19  WHEN    REDEMPTION    CAN    BE    MADE.  [§    1053. 

it;  it  will  merely  allow  redemption  within  a  reasonable  time,  if  it  be 
shown  that  the  debtor,  relying  upon  the  agreement,  refrained  from 
exercising  the  right  of  redemption  until  it  had  expired. ^^^  There  is 
nothing  in  the  relation  of  the  parties  to  prevent  their  freely  contracting 
with  each  other,  or  to  prevent  the  mortgagee  or  the  purchaser  at  a 
foreclosure  sale  from  imposing  his  own  terms  as  a  condition  of  extend- 
ing the  time  for  redeeming.^^**  If  the  arrangement  is  such  that  the 
foreclosure  is  opened,  as  would  usually  be  the  case,  then  the  failure  of 
the  mortgagor  to  pay  the  debt,  or  to  perform  his  agreement,  whatever 
it  may  be,  strictly  within  the  extended  time  agreed  upon,  does  not 
work  an  absolute  forfeiture  of  his  right,  but  he  may  still  redeem  within 
a  reasonable  time.^^'* 

If  the  legal  holder  of  a  note  secured  by  trust  deed  entrusts  the  note 
to  the  possession  of  the  trustee  after  maturity,  he  is  bound  by  the  trus- 
tee's extension  of  the  time  of  payment,  especially  where  the  extension 
agreement  was  acted  upon  by  the  parties.^^^ 

An  extension  of  the  time  of  payment  of  a  note  secured  by  trust  deed 
is  binding  upon  the  trustee  although  signed  only  by  the  makers  of  the 
deed  and  note  where  the  trustee  endorses  an  extension  upon  the  note 
as  per  the  agreement  attached,  and  accepts  interest  during  part  of  the 
period  of  extension.^^^ 

Where  a  time  of  redemption  is  allowed  by  statute  after  a  sale  under 
a  power,  payments  made  after  the  foreclosure,  and  received  with  the 
clear  understanding  tl^at  the  redemption  should  be  completed  by  pay- 
tnent  of  the  whole  sum  necessary  for  that  purpose  within  the  year  al- 
lowed by  the  statute,  are  in  affirmance  and  not  in  avoidance  of  the  sale, 
and  their  acceptance  does  not  operate  to  open  the  sale  and  extend  the 
time  of  redemption. ^^^  Moreover,  a  court  of  equity  has  no  power  to 
extend  the  time  for  redemption  on  a  statutory  foreclosure,  although 
redemption  within  the  time  allowed  for  it  by  statute  has  been  prevented 
by  accident  and  misfortune,  or  by  unavoidable  mental  and  physical 
disorder.^^*    A  mortgagor  who,  through  misapprehension  and  mistake, 

"'Williams   v.    Stewart,    25    Minn.  ""Dodge  v.  Brewer,  31  Mich.  227; 

516.     Where  the  holder  of   a  sher-  Ramsdell  v.  Maxwell,  32  Mich.   285. 

iff's  certificate  of  sale  of  real  estate  "'  Kransz    v.    Uedelhofen,    193    111. 

by    fraud    and    fpise    promises    pre-  477,  62  N.  E.  239. 

vented    the    owner   from    redeeming  ^"  Kransz    v.    Uedelhofen,    193    111. 

within  the  statutory  period,  and  in  477,  62  N.  E.  239. 

violation   of   his  oral   agreement   to  ^-^  Cameron    v.    Adams,    31    Mich, 

extend    the    period    of    redemption,  426. 

took  a  sheriff's  deed,  such  facts  en-  "*  Cameron    v.    Adams,    31    Mich, 

title  the  aggrieved  party  to  relief  in  426.       Mr.    Justice    Campbell     said: 

equity.      Prondinski    v.    Garbutt,    8  "Where  a   valid   legislative  act  has 

N.  D.  191,  77  N.  W.  1012.  determined  the  conditions  on  which 

""  Ross  v.  Sutherland,  81  111.  275.  rights    shall    vest    or    be    forfeited, 


§    1054.]  REDEMPTION    OF    A    MORTGAGE.  20 

has  acted  upon  a  belief  that  the  time  for  redemption  had  been  extended, 
may  be  permitted  to  redeem  after  a  foreclosure  when  no  other  rights 
have  intervened. ^^^ 

§  1054.  Advantage  of  an  irregular  foreclosure  must  be  taken 
within  a  reasonable  time.^"''  Eedemption  may  be  made  after  a  fore- 
closure sale  has  been  set  aside  and  a  resale  ordered  and  made.^-^  After 
a  lapse  of  sixteen  years,  during  which  time  the  mortgagor  has  had 
knowledge  of  the  facts,  he  will  not  be  allowed  to  redeem. ^-^  Any  long 
delay  in  bringing  a  bill  to  redeem  must  be  satisfactorily  explained,  or 
the  right  will  be  adjudged  to  have  been  lost.^^^  The  statute  of  limita- 
tions does  not  govern  the  question  of  laches.^^** 

Where  a  mortgagee,  just  previous  to  the  completion  of  a  foreclosure 
by  possession,  promised  the  mortgagor  that  "he  would  give  him  soone 
time,  but  that  he  must  not  wait  long,  as  he  might  take  advantage  of 
the  mortgage,"  after  the  lapse  of  five  years  without  payment  or  tender, 
the  right  of  redemption  was  held  to  be  no  longer  remaining.^^^  If  a 
mortgagor  wishes  to  take  advantage  of  an  irregularity  in  a  foreclosure 
sale  made  in  a  suit  in  equity,  to  which  he  was  a  party,  his  remedy  is 
by  application  to  have  the  sale  set  aside  and  a  new  sale  granted :  he  has 
no  power  to  redeem,  although  the  mortgagee  was  the  purchaser  at  the 
sale.^^^ 

Where  a  mortgagor  was  insane  at  the  time  of  a  sale  under  a  power 
of  sale,  and  remained  insane  till  after  the  expiration  of  the  period  of 
redemption,  he  was  permitted  by  a  court  of  equity  to  redeem,  the  mort- 
gagee and  the  purchaser  having  acted  in  bad  faith. ^^^ 

The  mortgagor's  right  to  redeem  is  unaffected  by  an  entry  to  fore- 
close made  by  the  heirs  of  the  mortgagee  and  possession  thereunder  for 
more  than  three  years,  as  the  mortgage  is  personal  assets,  and  goes  to 
the  administrator.  And  the  mortgagor  may,  on  a  bill  in  equity  against 
them  and  an  administrator  of  the  mortgagee's  estate,  redeem  the  land 
from  the  mortgage,  and  compel  the  heirs  at  law  to  account  for  the 

and  there  has  been  no  fraud  in  con-  '"  Bruschken    v.    Wright,    166    111. 

ducting  the  legal  measures,  no  court  183,  46  N.  E.  1813,  57  Am.  St.  125. 

can   interpose  conditions  or  qualifl-  "**  Bergen    v.     Bennett,    1    Caines 

cations   in   violation  of  the  statute.  Cas.   1,   2   Am.   Dec.   281;    Mulvey  v. 

The   parties  have  a   right  to   insist  Gibbons,  87  111.  367. 

upon  the  terms  of  the  law."  '-"  Askew  v.   Sanders,   84   Ala.   356, 

'-■•Felker  v.  Mowry,  69  N.  H.  164,  4  So.  167;  Sanders  v.  Askew,  79  Ala. 

38   Atl.   726.  433;  Williams  v.  Rhodes,  81  111.  571. 

'=»§§  1161a,  1922;  Clark  v.  Clough,  ""Walker  v.   Warner,   179   111.    16, 

65   N.   H.   43,  23   Atl.    526;    Meier  v.  53  N.  E.  594. 

Meier,    105   Mo.    411,    16   S.   W.    223;  "' Danforth  v.  Roberts,  20  Me.  307. 

Walker  v.  Warner,  179  111.  16,  53  N.  "■  Brown  v.    Frost,   10  Paige,  243, 

E.    594.      McDearmon    v.    Burnham,  reversing  Hoff.  Ch.  41. 

158  111.  55,  62,  41  N.  E.  1094.  "''  Lundberg  v.  Davidson,  68  Minn. 

328,  71  N.  W.  395. 


21  WHO    MAY    REDEEM.  [§    1055. 

rents  and  profits  to  the  administrator,  to  be  applied  by  him  on  the 
mortgage  debt.^^* 

IV.     Who  may  redeem. 

§  1055.  In  general  any  party  in  interest  may  redeem.  To  sustain 
a  bill  to  redeem,  the  plaintiff  must  have  either  the  mortgagor's  title  or 
some  subsisting  interest  under  it.^^^  It  is  not  necessary  that  he  should 
be  interested  in  the  whole  of  the  mortgaged  premises ;  if  he  owns  the 
equity  of  redemption  of  a  portion  of  them  only,  he  may  redeem  the  en- 
tire premises.^'^"  Neither  is  it  necessary  to  entitle  one  to  redeem  that 
he  should  have  an  interest  in  fee  in  the  premises ;  the  right  may  be  ex- 
ercised by  a  tenant  for  years.^"  In  general  any  one  who  has  an  interest 
in  the  land,  and  would  be  a  loser  by  a  foreclosure,  is  entitled  to  re- 
deem.^^^  His  interest  must  be  derived  directly  or  indirectly  from  or 
through  the  right  of  the  mortgagor,  so  that  he  is  in  privity  of  title  with 
the  mortgagor,  and  an  owner  of  a  part  of  his  original  equity,  or  of  some 
interest  in  it.  If  he  is  affected  by  the  mortgage,  he  may  redeem ;  if  he 
is  not  affected  by  it,  there  is  no  occasion  for  his  redeeming,  and  he  is 
not  allowed  to  do  so.^^** 

The  performance  of  a  contract  to  pasture  cattle  was  secured  by  a 
mortgage  given  to  the  owner  of  the  cattle  by  the  owner  of  the  rancho 
where  they  were  pastured.  A  creditor  of  the  mortgagee  levied  upon 
the  cattle,  and  purchased  them  at  the  sale  under  the  execution,  but 
there  was  no  seizure  or  sale  of  the  contract  to  pasture ;  therefore  it  was 
held  that  he  had  no  right  to  redeem  the  rancho  from  a  prior  mort- 
gage."° 

"^Haskins   v.    Hawkes,    108   Mass.  Butts    v.    Broughton,    72    Ala.    294; 

379.  Jones  v.  Matkin,  118  Ala.  341,  24  So. 

"'Lomax    v.    Bird,    1    Vern.    182;  242;   Ross.  v.  Leavitt,  70  N.  H.  602, 

Ross     v.     Leavitt,     70     N.     H.     602,  50  Atl.  110;  Moore  v.  Beasom,  44  N. 

50    Atl.    110;    Grant     v.     Duane,     9  H.  215;  Thompson  v.  Paris,  63  N.  H. 

Johns.    591;     Chamberlin    v.    Cham-  421,  425. 

berlin,     12    J.    &    Sp.    116;    Boarman  '"  Averill  v.  Taylor,  8  N.  Y.  44. 

V.   Catlett,   21   Miss.    149;    Powers  v.  "'' Pearce    v.    Morris,    L.    R.    5    Ch. 

Golden    Lumber    Co.    43    Mich.    468,  App.  227,  229;    Boqut  v.   Coburn,  27 

5   N.    W.    656;    Rapier   v.    Gulf   City  Barb.   230;    Scott  v.   Henry,  13  Ark. 

Paper    Co.    64    Ala.    330;     Butts    v.  112;    Piatt   v.    Squire,    12    Met.    494; 

Broughton,  72  Ala.  294;  Union  Mut.  Farnum    v.    Metcalf,    8    Cush.     46; 

L.    Ins.    Co.    v.    White,    106    111.    67;  Frisbee    v.    Frisbee,    86    Me.    444,    29 

Dawson   v.   Overmyer,   141   Ind.   438,  Atl.  1115. 

40  N.  E.  1065;  Frisbee  v.  Frisbee,  86  ""Moore  v.  Beasom,  44  N.  H.  215; 
Me.  444,  29  Atl.  1115;  Pitts  v.  Ameri-  Brewer  v  Hyndman,  18  N.  H.  9; 
can  Freehold  Land  Mortg.  Co.  123  Smith  v.  Austin,  9  Mich.  465;  Boar- 
Ala.  469;  26  So.  286;  Howser  v.  man  v.  Catlett,  21  Miss.  149;  Purvis 
Cruikshank,  122  Ala.  256,  25  So.  206.  v.  Brown,  4  Ired.  Eq.  413;   Sellwood 

""Boqut  V.  Coburn,  27  Barb.  230;  v.  Gray.  11  Oreg.  534,  5  Pac.  196. 

In  re  Willard,  5  Wend.  94;  Howser  v.  ""  Abadie  v.  Lobero,  36  Cal.  390. 
Cruikshank,  122  Ala.  256,  25  So.  206; 


§    1055a.]  REDEMPTION    OF    A    MORTGAGE.  23 

A  bill  to  redeem,  filed  by  several  persons  jointly,  cannot  be  main- 
tained if  the  ground  of  their  joint  claim  fails,  whatever  any  one  of 
them,  claiming  title  from  another  source,  might  be  entitled  to  in  a 
separate  proceeding.^*^ 

§  1055a.  To  entitle  one  to  redeem  he  must  have  an  interest  in 
the  land  derived  through  the  mortgagor,  so  that  in  effect  his  interest 
constitutes  a  part  of  the  mortgagor's  equity  of  redemption.  If  his  in- 
terest has  no  connection  with  the  title  held  by  the  mortgagor  at  the 
time  the  mortgage  was  foreclosed,  it  cannot  be  made  the  basis  of  a 
right  to  redeem.  Thus  the  purchaser  of  a  tax  title  has  no  right  to  re- 
deem.^*^  But  a  purchaser  from  the  mortgagor  pending  redemption  has 
the  right  to  redeem. ^*^  The  mortgagee's  acceptance  of  the  amount  due 
from  one  who  has  no  right  to  redeem  is  in  effect  a  redemption  or  sale 
of  the  mortgagee's  interest.^**  The  mortgagor  may  redeem  through  an 
agent,  or,  if  the  mortgagor  be  not  living,  his  heir  may  redeem.  Thus 
where  a  mortgagor  had  left  home  some  months  before  his  mortgage 
was  foreclosed,  and  his  father,  who  was  his  heir,  being  unable  to  get 
any  trace  of  his  son,  executed  a  deed  of  the  land  to  another  son  that 
he  might  redeem  it,  and  on  the  last  day  of  the  year  for  redemption  he 
paid  the  necessary  amount  to  the  register  of  deeds,  saying  that  he  re- 
deemed for  his  brother,  if  living ;  if  not,  for  himself, — in  a  suit  by  the 
purchaser,  praying  that  the  deposit  of  money -be  decreed  to  effect  no 
redemption,  it  was  held  that  the  redemption  was  effectual;  for  if  the 
mortgagor  was  living  his  brother  had  a  right  to  redeem  for  him,  and, 
if  not,  to  redeem  for  himself  as  grantee  of  the  mortgagor's  heir.^*" 

One  who  has  taken  a  second  mortgage  as  security  for  a  new  debt, 
knowing  that  it  has  been  paid  before  its  maturity,  cannot  maintain  a 
bill  to  redeem  against  the  holder  for  value  of  a  prior  mortgage  given 
by  the  same  mortgagor  upon  the  same  property.  The  reissue  of  the 
note  and  redelivery  of  the  satisfied  mortgage,  do  not  change  the  title. 
"Xothing  less  than  a  new  deed  can  create  a  new  title."^*^ 

A  purchaser  at  an  abortive  foreclosure  sale  who  has  gone  into  pos- 

>"  Bigelow  V.  Booth,  39  Mich.  622.  made  for  or  in  the  interest  or  at 
'"  Pitts  v.  American  Freehold  the  request  of  the  mortgagor.  It 
Land  Mortg.  Co.  123  Ala.  469,  473,  was  therefore  made  by  one  who,  as 
26  So.  286,  quoting  text.  Sinclair  v.  between  the  mortgagor  and  mort- 
Learned,  51  Mich.  335,  16  N.  W.  672.  gagee,  was  a  stranger  to  their  deal- 
Mr.  Justice  Cooley  said:  "He  was  ings  and  an  intermeddler." 
not  mortgagor,  or  the  grantee  of  the  "'  Dodge  v.  Kennedy,  93  Mich.  547, 
mortgagor,    or    in    any    manner    at  53  N.  W.  795. 

that  time  interested  in  the  equity  of  "*  Smith   v.    Jackson,   153    111.    399, 

redemption.     He  had  tax-titles,  it  is  39  N.  E.  130. 

true,  but  these  were  not  subject  to  "'  Squire  v.  Wright,  85  Mich.  76,  48 

the    mortgage.      There    was    no    of-  N.  W.  286. 

fer    to    show    that    the    tender   was  "°  Flye  v.  Berry,  181  Mass.  442. 


23  WHO    MAY    REDEEM.  [§§    1056.    1057. 

session  by  consent  of  the  mortgagor  believing  the  foreclosure  to  be 
valid,  and  has  remained  in  possession  until  the  mortgagor's  right  of 
redemption  has  expired,  has  a  subsisting  interest  under  the  mort- 
gagor's title,  and  may  redeem  from  the  foreclosure  of  a  senior  mort- 
gage."^ An  attorney  knowing  his  client's  right  and  wish  to  redeem 
may  in  his  behalf  redeem."® 

§  1056.     A  mortgagor  who  has  conveyed  the  equity  of  redemption 

by  a  warranty  deed  to  a  third  person  cannot  maintain  a  bill  to  re- 
deem ;'^*®  nor  can  a  mortgagor  whose  right  in  equity  has  been  sold  on 
execution  redeem  the  land,  unless  he  has  first  redeemed  it  from  the 
execution  sale  within  the  time  allowed,  even  though  the  purchaser  of 
the  equity  does  not  redeem  ;^^°  but  if  the  purchaser  redeems  the  mort- 
gage within  the  time  allowed  the  judgment  debtor  to  redeem  from  the 
execution  sale,  the  latter  may  then  within  that  time  redeem  from  the 
execution  sale  by  paying  the  amount  which  may  have  been  satisfied 
upon  the  execution  by  the  sale,  and  may  afterwards,  at  any  time  be- 
fore the  right  to  redeem  is  barred  by  lapse  of  time,  redeem  from  the 
mortgage  in  the  same  way  that  he  might  have  redeemed  from  the  orig- 
inal mortgagee  had  there  been  no  sale  on  execution.^^^  A  sale  of  the 
equity  of  redemption  upon  an  execution  obtained  by  the  holder  of  the 
mortgage  for  the  mortgage  debt  is  void,  and  the  mortgagor  may  redeem 
as  if  no  such  sale  had  been  made.^^^ 

But  a  mortgagor  who  has  conveyed  the  land  subject  to  the  mortgage, 
and  has  expressly  reserved  a  lien  for  the  purchase-money,  may  redeem 
by  virtue  of  such  interest. ^^^ 

§  1057.  A  mortgagor  whose  equity  of  redemption  has  been  fore- 
closed by  a  second  mortgagee  cannot  redeem  the  first  mortgage,  be- 
cause his  title  is  then  wholly  extinguished  and  vested  in  the  second 
mortgagee,  who  alone  is  entitled  to  redeem  the  first  mortgage. ^^*  But 
if  the  first  mortgagee  forecloses  the  mortgage  without  making  the  sec- 
ond mortgagee  a  party  to  the  proceeding,  the  second  mortgagee  may 
redeem  the  first  mortgage,^^^  and  the  mortgagor  still  having  the  right 

"'Law  v.  Citizens'  Bank,  85  Minn.  11  Am.  Dec.  188;  Washburn  v.  Good- 

411,  89  N.  W.  320.  win,  17  Pick.  137. 

"^  Rogers  v.  Rogers,— Tenn.— ,35  S.  '"  Pearcy    v.    Tate,    91    Tenn.    478, 

W.  890.  19  S.  W.  S2S. 

""Philips  v.   Leavitt,   54  Me.   405;  ">^  Colwell  v.  Warner,  36  Conn.  224. 

True  v.  Haley,  24  Me.  297.  '■'^  Loomis  v.   Knox,  60  Conn.   343, 

'*<' Ingersoll  v.  Sawyer,  2  Pick.  276.  22  Atl.  771;  Beers  v.  Broome,  4  Conn. 

See  Peabody  v.  Patten,  2  Pick.  517;  247;     Smith    v.    Chapman.    4    Conn. 

Bigelow  v.  Wilson,  1  Pick.  485.  344;    Swift   v.   Edson,   5   Conn.    531; 

'=' Atkins   V.    Sawyer,   1   Pick.   351,  Mix  v.  Cowles,  20  Conn.  420;  Thomp- 

354,  11  Am.  Dec.  188.  son  v.  Chandler,  7  Me.  377;  Moore  v. 

•"Atkins   V.   Sawyer,   1   Pick.   351,  Beasom,  44  N.   H.  215. 


§§  1058,  1059,  lOCO.]  REDEMPTION  OF  A  MORTGAGE.  24 

to  redeem  the  second  mortgage  may,  by  so  doing,  acquire  the  right  of 
the  second  mortgagee  to  redeem  the  first.^^'' 

§  1058.  Where  a  mortgage  is  conditioned  for  the  support  of  the 
mortgagee  for  life,  a  grantee  of  the  mortgagor,  in  order  to  redeem, 
must  allege  and  prove  that  the  transfer  to  him  was  made  with  the  con- 
sent of  the  mortgagee;  though  it  need  not  appear  that  such  consent 
was  in  writing.^^"^  Tlie  purchaser  of  an  estate  subject  to  such  a  mort- 
gage is  sometimes  allowed  to  redeem  on  paying  a  compensation  in 
money  for  the  past  neglect  of  the  mortgagor,  and  an  allowance  in 
money  for  the  future. ^^® 

§  1059.  In  general  only  the  mortgagor  and  those  who  hold  a 
legal  title  under  him  can  redeem.^^®  An  equitable  title  does  not  give 
this  right ;  and  therefore  one  holding  a  bond  for  a  conveyance  of  land 
by  the  mortgagor  cannot  maintain  a  bill  to  redeem.^*^-^  He  may  be 
authorized,  however,  to  use  the  name  of  the  holder  of  the  legal  title  to 
pursue  the  remedy  in  his  name. 

A  trustee  who  holds  the  legal  estate,  or  some  interest  in  it,  is  the 
proper  party  to  redeem ;  though  the  persons  beneficially  interested  may 
redeem  upon  the  refusal  of  the  trustee  to  do  so.^**^ 

One  who  has  assigned  a  mortgage  as  security  for  his  debt  has  a  right 
to  redeem  it  on  paying  the  debt.  If  his  assignee  has  foreclosed  the 
mortgage  and  purchased  the  premises,  he  may  still  redeem. ^"^^  But  the 
mortgagee  may  insist  that  the  assignee,  who  holds  the  legal  title  to  the 
property,  shall  be  made  a  party  to  the  suit  ;^*'^  though  the  suit  may  be 
brought  in  the  name  of  the  assignee  for  the  benefit  of  both. 

§  1060.  The  grantor  by  an  absolute  deed  which  is  merely  security 
for  a  debt,  and  therefore  a  mortgage,  has  the  same  right  to  redeem  as 

""  Goodman    v.    White;    26    Conn,  lien   on   the   mortgaged   tract,   thus 

317;   Loomis  v.  Knox,  60  Conn.  343,  giving   the   mortgagor   the   right   to 

22  Atl.  771.  redeem  from  the  mortgage. 

A  judgment  lien  may  be  regarded  '^' See  §§  380-395;  Bryant  v.  Jack- 
as  a  statutory  mortgage.  The  owner  son,  59  Me.  165;  Bryant  v.  Erskine, 
of  two  tracts  of  land  mortgaged  one  55  Me.  153. 

of     them.       Afterward     a     creditor  ''^  See  §   395;    Austin  v.   Austin,  9 

placed    a    judgment    lien    on    each  ^'*"  Lomax    v.    Bird,    1    Vern.    182; 

tract.     The  mortgagee  foreclosed  his  Grant  v.  Duane,  9  Johns.  591. 

mortgage  without  making  the  judg-  i'="  McDougald    v.    Capron,   7    Gray, 

ment   creditor   a   party   to   the   pro-  278.    The  statute  limits  the  power  of 

ceedings.     Loomis  v.  Knox,  60  Conn,  the    court   to   those   having   a   legal 

343,    22     Atl.     771.      The    judgment  right. 

creditor  then  foreclosed  his  lien  on  '"  Fray  v.  Drew,  11  Jur.  N.  S.  130. 

the  tract  of  land  not  covered  by  the  '"-  Slee  v.  Manhattan  Co.  1  Paige, 

mortgage,    which    was    worth    more  48;   Hoyt  v.  Martense,  16  N.  Y.  231, 

than    the    judgment    debt.      It    was  reversing  8  How.  Pr.  196 

held  that  such  foreclosure  operated  "■'  Winterbottom  v.  Tayloe,  2  Drew, 

as  a  redemption  from  the  judgment  279. 


25  WHO    MAY    REDEEM.  [§    lOGO. 

a  mortgagor  in  a  formal  mortgage,  so  long  as  the  grantee  retains  the 
property^"*  and  the  money  secured  by  the  deed  is  payable  ;^''^  and  after 
he  has  sold  it  to  a  bona  fide  purchaser  from  whom  redemption  cannot 
be  made,  he  is  still  liable  to  account  to  the  grantor  for  the  value  of  the 
land  at  the  time  it  should  have  been  restored  to  him.^*'*'  Redemption 
may  also  be  had  against  the  assignee  of  the  grantee,  in  case  he  had  no- 
tice that  the  delivery  of  the  defeasance  was  evaded  l)y  fraud  or  other- 
wise, or  that  the  transaction  was  in  fact  a  mortgage. ^^' 

If  it  appears  that  the  absolute  deed  was  really  a  sale,  or  that  by 
agreement  of  parties,  and  upon  an  adequate  consideration,  what  was 
really  a  mortgage  at  first  was  afterwards  changed  into  a  sale,  no  re- 
demption will  be  permitted.  Evidence  of  the  acts  and  declarations  of 
the  parties  is  admissible  to  show  the  original  intention  and  the  sub- 
sequent agreement  as  well.^*'^  But  by  some  courts  it  is  held  in  such 
case  that  the  plaintiff  cannot  be  relieved  on  the  mere  proof  of  the 
grantee's  declarations.  There  must  be  proof  of  fraud,  ignorance,  or 
mistake,  or  of  facts  inconsistent  with  the  idea  of  an  absolute  pur- 
chased®^ It  has  been  shown  elsewhere  that  the  rule  in  the  several 
States  as  to  the  admission  of  parol  evidence  to  establish  the  relation 
of  mortgagor  and  mortgagee,  where  the  transaction  is  in  the  form  of  an 
absolute  deed,  is  not  uniform;^'"  and  there  is  the  same  want  of  uni- 
formity as  to  the  admission  of  parol  evidence  to  show  that  this  rela- 
tion, once  established,  has  been  given  up  by  a  surrender  of  the  right  of 
redemption.  In  general  it  may  be  said  that  the  same  degree  of  evi- 
dence is  required  to  establish  the  surrender  of  the  right  that  is  required 
in  the  same  State  to  establish  the  existence  of  the  right. 

A  conveyance  by  a  debtor  in  trust  to  secure  his  debt  is  a  mortgage, 
to  which  the  right  of  redemption  is  incident.^'^ 

In  case  of  a  mortgage  in  the  form  of  an  absolute  deed  in  a  suit  to 
redeem,  the  court  will  decree  a  reconveyance  of  the  property  upon  the 
payment  of  the  debt.^''^  If  the  conveyance  was  to  secure  a  general  in- 
debtedness, and  neither  party  supposed  the  land  would  be  redeemed, 

"*  Vanderhaise    v.    Hugues,    13    N.  "'"  Sowell     v.     Barrett,    Busb.     Eq. 

J.     Eq.     410;     Ballard    v.    Jones,    6  50;   Lewis  v.  Owen,  1  Ired.  Eq.  290; 

Humph.  455;   Still  v.  Buzzell,  60  Vt.  Allen  v.  McRae,  4  Ired.  325. 

478.                     •  '"§§   282-342. 

""  Ganceart  v.  Henry,  98  Cal.  268,  '"'  Chewing   v.    Cox,    1    Rand.    306, 

33  Pac.   92;    IJbby  v.   Clark,  88  Me.  10    Am.     Dec.    530;     Pennington    v. 

32,  33  Atl.  657.  Hanby,  4  Munf.  140.     See  §  332. 

""Meehan  v.  Forester,  52  N.  Y.  277.  '"  Sherwood  v.  Wilson,  2  Sweeny, 

"'Daniels  v.  Alvord,  2  Root,  196;  684;    Skinner  v.    Miller,   5   Litt.    84; 

Belton  v.  Avery,  2  Root,  279,  1  Am.  Thompson  v.  Campbell,  6  T.  B.  Mon. 

Dec.  70.     See,  also.  Minor  v.  Wood-  120.    As  to  form  of  decree,  see  L.  R. 

bridge,  2  Root,  274.  5  Ch.  App.  229. 

"*  Watkins  v.  Stockett,  6  Mar.  &  J. 
435. 


§    1060a.]  REDEMPTION   OF   A   MORTGAGE.  20 

upon  a  redemption  by  an  execution  creditor  of  the  mortgagor  the  mort- 
gagee should  be  allowed  also  for  the  value  of  improvements  made  by 
him.1'3  The  grantee  by  an  absolute  deed,  apparently  having  an  abso- 
lute title,  may  convey  the  property  to  a  bona  fide  purchaser,  discharged 
of  all  right  of  redemption,  and  in  such  case  the  only  remedy  of  the 
mortgagor  is  a  personal  one  against  the  mortgagee."*  The  estate  is 
discharged  of  the  right  to  redeem.  The  length  of  time  that  has  elapsed 
after  the  making  of  an  absolute  deed,  before  any  steps  are  taken  to- 
wards redeeming,  is  an  important  element  in  determining  whether  the 
grantor  has  the  right  to  redeem. ^^^ 

On  redemption  of  property  so  conveyed,  the  grantor  redeeming  will 
be  allowed  credit  for  the  purchase-price  of  a  portion  of  the  land  sold 
by  his  grantee,  which  it  was  contemplated  was  to  be  applied  on  the 
debt,  although  only  a  part  of  such  purchase-price  was  received  by  the 
grantee,  and  he  was  obliged  to  foreclose  his  mortgage  for  a  part  of  the 
purchase-price  and  buy  in  the  land."^ 

§  1060a.  The  grantor  in  an  absolute  deed  which  is  in  fact  a 
mortg-ag-e  may  have  a  judgment  for  redemption  in  money  against 
the  grantee  in  case  the  latter  has  conveyed  the  land  to  a  bona  fide  pur- 
chaser, so  that  it  cannot  be  reached,  and  although  an  action  against  the 
grantee  to  recover  for  money  had  and  received  would  be  barred  by  the 
statute  of  limitations ;  and  the  court  will  substitute  a  judgment  for  re- 
demption in  money  to  the  amount  of  the  actual  value  of  the  land,  for 
a  judgment  of  redemption  in  land.  The  Court  of  Appeals  of  New 
York,  deciding  to  this  effect  in  a  recent  case,  said :  "Guided  by  the 
cardinal  principle  that  the  wrong-doer  shall  make  nothing  from  his 
wrong,  equity  so  moulds  and  applies  its  plastic  remedies  as  to  force 
from  him  the  most  complete  restitution  which  his  wrongful  act  will 
permit."^  When  he  cannot  restore  the  land  it  will  compel  him  to  re- 
store that  which  stands  in  his  hands  for  the  land,  and  will  not  permit 
him  to  assert  that  it  is  not  land  when  the  assertion  would  be  profitable 
to  himself  but  unjust  to  the  one  whom  he  wronged.  He  cannot  escape 
by  offering  to  pay  what  he  received  on  selling  the  lands,  but  must  pay 
the  value  at  the  time  of  the  trial It  is  the  wrongful  conveyance 

'"  Blair   v.    Chamblin,    39   111.    521,        "« Clark  v.  Woodruff,  90  Mich    83 

89  Am.  Dec.  322.  51  N.  W.  357.  '       ' 

"^Whittick  V.  Kane,  1  Paige,  202;         "'Citing  May  v.  LeClair    78  U    S 

White  V.  Moore,  1  Paige,  551;   Ber-  217;   Van  Dusen  v.  Worrell    4  Abb 

dell  v.  Berdell,  33  Hun,  535;  Meehan  Ct.    App.    Dec.    473;    Miller'  v     Mc- 

v.   Forrester,   52   N.   Y.   277;    Minton  Guckin,  15  Abb.  N.  C    204-    Hart  v 

I^o-^xJ-  ^^evated  R.   Co.  130  N.   Y.  Ten  Eyck,  2  Johns.  Ch.  62,  108;  Enos 

I'J^  .^-  '^-  ^^^-     See  §§  339-342.  v.    Sutherland,    11    Mich.    538,    542; 

Mellish  V.  Robertson,  25  Vt.  603.  Budd  v.  Van  Orden,  33  N.  J.  Eq.  143, 

bee  &  330.  g.  c.  33  N.  J.  Eq.  564. 


27  WHO    MAY    REDEEM.  [§§    1061,    1062. 

by  the  mortgagee  in  possession,  under  a  deed  absolute  on  its  face,  that 
enables  a  court  of  equity  to  hold  on  to  the  case  after  ordinary  redemp- 
tion has  been  shown  to  be  impossible,  and  to  allow  such  a  redemption 
against  the  wrong-doer  as  will  prevent  him  from  gaining  by  his  wrong, 
and  will  give  the  plaintiff  her  due  as  nearly  as  may  be."^'^* 

§  1061.  An  assignee  of  the  equity  of  redemption  may  gener- 
ally redeem,  whether  he  holds  under  a  voluntary  assignment  or  by  an 
assignment  in  law  ;^^*  and  it  is  immaterial  that  the  land  is  in  the  pos- 
session of  a  disseisor.^^"  It  is  not  necessary  for  such  assignee  to  move 
that  the  assignment  was  made  on  a  valuable  consideration.  He  estab- 
lishes prima  facie  his  right  to  redeem  by  alleging  and  proving  the  ex- 
istence of  the  mortgage  and  his  ownership  of  the  equity  of  redemp- 
tion.i" 

The  mortgagor's  assignee  is  under  no  obligation  to  redeem  from  a 
prior  mortgage,  unless  he  has  expressly  or  impliedly  agreed  to  do  so. 
If  he  has  bought  subject  to  the  mortgage  without  assuming  it,  or  if  he 
has  purchased  the  equity  of  redemption  at  an  execution  sale,  he  has  the 
right,  if  he  chooses  to  do  so,  to  redeem,  but  he  cannot  be  compelled  to 
do  so.^*- 

§  1062.  Upon  the  death  of  the  mortgagor  or  owner  of  the 
equity  of    redemption    his  heir  at    law  or    devisee  may  redeem. ^^^ 

Where  the  mortgagor  has  devised  the  equity  of  redemption,  the  devisee 
is  the  proper  party  to  redeem/^*  and  in  that  case  the  heir  at  law  need 
not  be  made  a  party  unless  he  contests  the  will.  During  the  pendency 
of  a  suit  to  establish  the  will,  an  heir  cannot  make  a  sale  of  the  equity 
which  will  be  valid  against  a  devisee,  or  which  will  prevent  his  re- 
deeming after  his  right  under  the  will  is  established.^^^  A  legatee  whose 
legacy  is  made  a  charge  upon  the  mortgaged  estate  may  redeem.  If 
land  be  specifically  devised,  it  is  presumed,  in  the  absence  of  an  ex- 
pressed intention  to  the  contrary,  that  the  land  is  to  be  exonerated  from 
all  mortgages  placed  upon  it  by  the  testator ;  and  the  general  rule  pre- 

"*  Mooney  v.  Byrne,  163  N.  Y.  86,  against  the  mortgagor  as  well  as  the 

97,  98  per  Vann,  J.  mortgagee.     Medley  v.  Mask,  4  Ired. 

'"Thorne  v.  Thorne,  1  Vern.  182;  Eq.   339. 

White  V.  Bond,  16  Mass.  400;    Dun-  '"Barnard  v.  Cushman,  35  III.  451. 

lap  v.  Wilson,  32   111.   517;    Scott  v.  '«=  Rogers  v.  Meyers,  68  111.  92. 

Henry,  13  Ark.   112;    Cohn  v.    Hoff-  '*' Pym    v.    Bowreman,    3    Swanst. 

man,    56    Ark.    119,    19    S.    W.    233.  241,  n.;  Zaegel  v.  Kuster,  51  Wis.  31; 

The  redemption  of  a  homestead  by  Hunter  v.  Dennis,  112  111.  568;  Butts 

an  assignee  in  bankruptcy  does  not  v.  Broughton,  72  Ala.  294;    Chew  v. 

inure  to  the  benefit  of  the  bankrupt.  Hyman,  10  Biss.  240. 

Swenson  v.   Halberg,  1  Fed.  444.  '^*  Lewis    v.    Nangle,    2    Ves.    Sen. 

'*"' Wellington  v.  Gale,  13  Mass.  483,  431;  Philips  v.  Hele,  Ch.  R.  190. 

488,  per  Parker,  C.  J.  Otherwise  in  "=  Finch  v.  Newnham,  2  Vern.  216. 
North     Carolina    when    the   bill    is 


§    lUGli.]  REDEMPTION    OF    A    MORTGAGE.  28 

vails  even  when  several  parcels  are  devised  to  different  persons,  and 
the  testator  has  directed  the  removal  of  the  incumbrances  as  to  some 
of  the  parcels  and  not  as  to  others.^®®  Consequently  in  such  case  the 
executor  should  redeem. 

The  guardian  of  an  infant  heir  may  redeem,  and  so  may  the  guard- 
ian of  an  insane  person.^" 

§  1063.     A   part-owner   or   tenant   in   common    or   joint   tenant 

of  an  equity  of  redemption  may  redeem/^^  but  he  cannot  require  other 
part-owners  to  join  with  him  in  redeeming  from  the  mortgage.^^®  If 
he  elects  to  redeem,  he  must  pay  the  whole  amount  due  on  the  mort- 
gage, and  hold  it  to  his  own  use,  unless  the  other  part-owners  come  in 
and  pay  their  proper  contributory  shares. ^^"  Nor  does  it  make  any 
difference  that  the  holder  of  the  mortgage  is  also  a  part-owner  of  the 
equity  of  redemption  in  common  with  the  mortgagor.  Such  mort- 
gagee is  not  l)ound  to  receive  a  part  of  the  mortgage  debt,  and  he  may 
wholly  decline  paying  anything  toward  the  redemption;  though  he 
may,  like  any  part-owner,  at  his  election,  contribute  to  the  payment  of 
the  redemption-money  and  -share  the  benefits  of  the  payment. ^^^ 

A  mortgage  of  a  railroad  company  covering  the  whole  line  of  its 
road  lying  in  two  States  may  be  redeemed  ])y  a  purchaser  upon  exe- 
cution of  the  equity  of  redemption  of  the  part  of  the  road  situate  in 
one  State.i«2 

One  tenant  in  common  or  joint  tenant  of  an  equity  of  redemption 
may  redeem  in  order  to  protect  his  own  interest  ;^^^  but  by  so  doing  he 
is  not  entitled  to  the  whole  property  to  the  exclusion  of  his  co-tenant. 
The  redemption  by  one  inures  to  the  benefit  of  the  other  so  far  as  to 
save  a  forfeiture.  The  co-tenant  may  be  compelled  to  pay  his  propor- 
tion of  the  debt.  The  tenant  who  redeems  becomes  subrogated  to  the 
right  of  the  mortgagee,  and  if  his  co-tenant  does  not  pay  his  share,  he 
may  be  foreclosed  of  his  right  to  redeem.^"*    The  tenant  in  possession, 

i^"  Richardson    v.    Hall,    124   Mass.        •»"  Taylor  v.   Porter,  7  Mass.   355; 

228.  Calkins  v.  Munsel,  2  Root,  333;    Lyon 

187  Powell  Mort.  285  a,  note;    Par-  v.  Robbins,  45  Conn.  513;    McQueen 

dee  V.  Van  Anken,  3  Barb.  534.  v.    Whetstone,    127    Ala.    417,   30   So. 

>»«  Howard   v.   Harris,   1  Vern.   33;  548. 
Pearce  v.  Morris,  L.  R.   5  Ch.   App.        ""  Merritt  v.  Hosmer,  11  Gray,  27G, 

227;    Taylor  v.  Porter,  7  Mass.  355;  71  Am.  Dec.  713;    Lyon  v.   Robbins, 

McPherson  v.  Hayward,  81  Me.  329,  45  Conn.  513. 

17   Atl.   164;    Connell   v.   Welch,   101        '"=  Wood   v.    Goodwin,   49   Me.    260, 

Wis.  8,  76  N.  W.  596.  77  Am.  Dec.  259. 

'«°Ex  parte  Willard,  5  Wend.  94;  '■'^  Wynne  v.  Styan,  2  Ph.  303,  306. 
Boqut  v.  Cobiirn,  27  Barb.  230;  Hub-        ''^Warner  v.   Freud,   138  Cal.   651, 

bard   v.   Ascutney  Mill   Dam   Co.   20  72  Pac.  345. 
Vt.    402,   1   Am.    Dec.   41;    Gibson  v. 
Crehore,  5  Pick.  146. 


29  WHO    MAY    REDEEM.  [§    1064. 

and  in  receipt  of  the  whole  of  the  rents,  is  subject  to  account  with  his 
co-tenant. ^^^  But  neither  has  an  equitable  right  to  redeem  the  whole 
and  keep  the  other  from  sharing  in  the  redemption. ^^*^ 

In  like  manner,  where  land  is  conveyed  to  two  persons,  one  of  whom 
pays  his  half  of  the  purchase-money,  and  joins  with  his  co-tenant  in 
a  mortgage  of  the  whole  estate  to  secure  the  payment  of  the  other 
half,  and  afterwards  releases  his  interest  to  the  mortgagee,  his  co- 
tenant  cannot  redeem  without  paying  the  whole  amount  of  the  mort- 


Neither  can  one  tenant  in  common  redeem  his  share  only  of  the 
estate,  as  this  would  be  in  violation  of  the  principle  that  a  mortgage 
must  be  w^holly  redeemed  or  not  at  all;^^*  and  a  partition  of  the  es- 
tate with  his  co-tenant,  unless  consented  to  by  the  mortgagee,  does  not 
affect  him,  and  his  consent  cannot  be  demanded.^^^ 

A  person  who  has  an  interest  as  a  partner  in  the  mortgaged  prop- 
erty may  maintain  an  action  to  redeem,  and  he  is  entitled  to  do  so 
under  the  general  principles  of  equity  jurisprudence.^''" 

If  one  tenant  in  common  pays  off  a  mortgage  after  it  has  been  dis- 
charged, his  remedy  is  not  against  his  co-tenant,  but  against  the  person 
to  whom  he  made  payment.^"^ 

§  1064.  A  subsequent  mortgagee  may  redeem  from  a  prior 
mortgagee  at  any  time  after  the  maturity  of  the  prior  mortgage  ;^''^ 
but  if  he  brings  a  bill  to  redeem  within  the  time  limited  by  statute 

"'Bentley  v.  Bates,  4  Y.  &  C.  Exch.  534;  Jenkins  v.  Continental  Ins.  Co. 

182;   Gibson  v.  Crehore,  5  Pick.  146,  12    How.    Pr.    66;    Frost   v.    Yonkers 

152;    Young   v.    Williams,    17    Conn.  Sav.  Bank,  70  N.  Y.  553,  26  Am.  627; 

393;  Lyon  v.  Bobbins,  45  Conn.  513;  Dings  v.  Parshall,  7  Hun,  522;  Scott 

Kingsbury   v.    Buckner,   70   111.    514;  v.   Henry,  13   Ark.   112;    Kimmell  v. 

McLaughlin  v.   Curtis,  27  Wis.  644;  Willard,  1  Dougl.  (Mich.)  217;  Sager 

Carithers  v.  Stuart,  87  Ind.  424.  v.    Tupper,    35    Mich.    134;     Hill    v. 

'""Seymour  v.  Davis,  35  Conn.  264.  White,    1    N.    J.    Eq.    435;    Wiley    v. 

'"Crafts  v.   Crafts,   13   Gray,   360;  Ewing,  47  Ala.  418;   Mims  v.  Cobbs, 

Laylin  v.  Knox,  41  Mich.  40,  1  N.  W.  110   Ala.    577,    18   So.    309;    Morse   v. 

913.  Smith,  83  III.  396;  Lamb  v.  Jeffrey,  41 

'"•'Powell  Mort.  342  a,  n.  Mich.    719,    3    N.    W.    204;    Spurgin 

""Watkins  v.  "Williams,  3  Mac.  &  v.     Adamson,   62   Iowa,    661,    18    N. 

G.  622,  16  Jur.  181.     See  §  706.  W.     293;     Kalscheuer    v.    Upton,     6 

=""  Emerson  v.  Atkinson,  159  Mass.  Dak.     449,     43     N.    W.    816;    Ander- 

356,  34  N.  E.  516;    Dyer  v.  Clark,  5  son,     v.     McCloud-Love   Live    Stock 

Mete.   562;    Shanks  v.   Klein,  104  U.  Com.  Co.  58  Neb.  670;  Todd  v.  John- 

S.  18;   Davis  v.  Wetherell,  13  Allen,  son,  56  Minn.  60,  57  N.  W.  320;   Mc- 

60;   Briggs  v.  Davis,  108  Mass.   322;  Cormick    Harvesting    Mach.    Co.    v. 

Lamb   v.    Montague,   112   Mass.   352;  Llewellyn,  96  Iowa,  745,  65  N.  W.  412. 

Bacon    v.    Bowdoin,    22    Pick.    401;  In  South  Carolina  it  is  provided  by 

May  V.  Gates,  137  Mass.  389,  391.  statute     that     subsequent     mortga- 

-"'  Rentz  V.  Eckert,  74  Conn.  11,  49  gees,      although      they      have      not 

Atl.  203.  recorded    their  mortgages,   may  re- 

""  Bigelow  v.  Wilson,  1  Pick.  493;  deem     prior     mortgages:     but    that 

Haines  v.   Beach,  3  Johns.   Ch.   459,  any     person     who     shall     mortgage 

460;   Pardee  v.  Van  Anken,  3  Barb,  the  same  lands  a  second  time,  while 


§    10G4.]  REDEMPTION    OF    A   MORTGAGE.  30 

and  fails  to  prosecute  it,  the  owner  of  the  equity  of  redemption  can- 
not, after  that  time  has  expired,  maintain  a  bill  to  bo  let  in  to  prose- 
cute the  bill  to  redeem  brought  by  such  mortgagee.  The  junior  mort- 
gagee is  under  no  obligation  to  redeem  the  prior  mortgage,  or  to  prose- 
cute a  suit  for  the  purpose,  or  to  do  any  act  to  prevent  the  first  mort- 
gagee from  foreclosing.^**^  But  a  junior  mortgagee  will  not  be  allowed 
to  redeem  when  it  appears  that  no  consideration  was  given  for  his 
mortgage,  so  that  it  is  not  a  valid  security. ^°* 

The  language  of  most  of  the  cases  is  broad  enough  to  establish  the 
doctrine  that  a  junior  mortgagee,  simply  as  such  and  under  all  cir- 
cumstances, has  the  absolute  right  to  pay  off  or  redeem  from  a  senior 
mortgage  past  due.  But  it  is  intimated  in  a  few  cases  that  such  a 
right  may  not  exist  when  the  senior  mortgagee  desires  to  hold  his 
mortgage  as  an  investment,  and  does  not  seek  or  threaten  to  enforce 
its  collection.  In  such  case  the  junior  mortgagee  may  be  in  no  dan- 
ger of  loss  or  embarrassment,  and  thus  may  not  have  any  equitable 
right  to  disturb  or  interfere  with  the  senior  mortgage  to  which  he  is 
not  a  party,  and  for  the  payment  of  which  he  is  in  no  way  liable. ^"^^ 
This  question  would  rarely  arise,  because  generally,  if  the  property  is 
ample  to  satisfy  the  junior  mortgagee,  he  will  foreclose  his  mortgage 
instead  of  making  a  further  investment  in  the  first  mortgage.  If  the 
holder  of  the  first  mortgage  is  seeking  to  enforce  his  security,  there 
can  be  no  question  of  the  right  of  the  holder  of  the  junior  mortgage 
to  redeem.^°^ 

This  right  of  a  junior  mortgagee  to  redeem  is  a  common  law  right, 
and  is  entirely  independent  of  a  right  of  redemption  given  to  cred- 
itors and  limited  to  a  specified  time.  It  applies  to  deeds  of  trust  to 
secure  the  payment  of  debts  as  well  as  to  mortgages  proper.^"^  The 
junior  mortgagee  may  redeem  although  his  mortgage  be  of  an  estate 
subject  to  a  homestead  right,  and  therefore  only  a  reversionary  interest 
after  the  expiration  of  that  right.^"^  He  may  redeem  although  the 
prior  mortgagee  has  since  the  making  of  the  second  mortgage  obtained 
a  conveyance  of  the  mortgagor's  equity  of  redemption. ^°^ 

the  former  mortgage  is  in  force  and  N.   Y.  553,  557;    Ellsworth  v.   Lock- 
not  discharged,  shall  have  no  power  wood,  42  N.  Y.  89;    Norton  v.  War- 
or  liberty  of  redemption,  in  equity  ner,  3  Edw.  Ch.  106. 
or  otherwise.     R.  S.  1873,  p.  424.  '"'Wiley    v.    Ewing,    47    Ala.    418; 

'"^  Mclntier  v.  Shaw,  6  Allen,  83.  Beach  v.  Shaw,  57  111.  17;  Hodgen  v. 

="*  Skinner  v.  Young,  80  Iowa,  234,  Guttery,  58  111.  431;   American  Loan 

45  N.  W.  889.  &  Trust  Co.  v.  Atlantic  Electric  R. 

=»=  Frost  v.  Yonkers  Sav.  Bank,  70  Co.  99  Fed.  313;  McCormick  v.  Knox, 

N.  Y.  553,  557,  per  Earl,  J.,  26  Am.  105   U.    S.    122;    Howard   v.    Railway 

627.     And  to  like  effect  see  Bigelow  Co.  101  U.  S.  837;  Terrell  v.  Allison, 

v.  Cassedy,  26  N.  J.  Eq.  557,  562,  per  21  Wall.  289. 

Van  Syckel,  J.  '"'  Smith  v.  Provin,  4  Allen,  516. 

^o"  Frost  V.  Yonkers  Sav.  Bank,  70  ~«  Rogers  v.  Herron,  92  111.  583. 


31  WHO    MAY    REDEEM.  [§    1065. 

A  junior  mortgagee  who  has  not  been  made  a  party  to  foreclosure 
proceedings  by  which  a  senior  mortgage  is  foreclosed  may  redeem  after 
a  sale  under  the  senior  mortgage. ^^°  Under  a  contract  with  a  prior 
mortgagee  a  suljsequent  mortgagee  may  redeem  after  foreclosure.^" 

As  between  several  persons  entitled  to  redeem,  redemption  will  be 
decreed  according  to  the  priority  of  the  claimants. ^^- 

A  subsequent  mortgagee,  who  has  assigned  his  mortgage  as  collateral 
security  for  a  debt  of  his  own,  may  redeem  the  mortgaged  premises 
from  a  sale  under  a  prior  mortgage ;  and  his  redemption  inures  to  the 
benefit  of  his  assignee.  He  has  such  an  interest  in  the  property  as, 
with  the  consent  of  the  holder  of  the  certificate  of  foreclosure  sale, 
gives  him  the  right  to  re'deem  in  order  to  protect  that  claim. ^^^ 

Where  a  third  mortgagee  forecloses  his  mortgage  and  bids  in  the 
property  at  the  sale,  and  then  redeems  from  a  first  mortgagee  who 
also  holds  the  second  mortgage,  and  had  foreclosed  under  the  first 
mortgage  and  had  bid  in  the  property  at  the  sale,  the  third  mortgagee 
redeems,  not  as  a  junior  creditor,  but  as  owner,  standing  in  the  shoes 
of  the  mortgagor;  and  his  redemption  does  not  cut  out  the  second 
mortgage,  but  this,  if  not  redeemed,  is  advanced  to  the  rank  of  a  first 
lien."* 

§  1065.  A  tenant  for  lif e,^^^  or  a  tenant  in  tail,"^  may  redeem ;  as 
may  also  a  remainder-man,  or  reversioner,^^ ^  though  the  life  tenant  is 
entitled  to  the  first  option,^^^  and  by  taking  an  assignment  of  the 
mortgage  himself  may  prevent  a  redemption  by  the  remainder- 
man ;^^®  but  he  cannot  compel  the  remainder-man  to-  redeem  him.  So, 
also,  one  who  has  a  life  estate  in  remainder,  or  other  contingent  inter- 
est, may  redeem.^^*' 

A  tenant  for  life  of  a  portion  of  an  estate  covered  by  a  mortgage 
may  redeem  his  interest  by  paying  a  proportional  part  of  the  mort- 
gage debt,  if  the  mortgagee  consents.     If  he  redeems  the  entire  estate 

""American  Loan  &  Trust  Co.  v.  Lamson    v.    Drake,    105    Mass.    564; 

Atlanta  Electric  Co.  99  Fed.  313.  Ohmer  v.   Boyer,  89  Ala.  273,  7  So. 

^1'  Brown  v.  Burney,  128  Mich.  205,  663;  Butts  v.  Broughton.  72  Ala.  294. 
87  N.  W.  221.  ^'^Playford    v.    Playford,    4    Hare, 

='^  Moore  v.  Beasom,  44  N.  H.  215;  546. 
Brewer  v.  Hyndman,  18  N.  H.  9.  -"  Stevenson    v.    Edwards,    98    Mo. 

="  Manning    v.    Markel,    19    Iowa,  622,  12  S.  W.  255. 
103.  -''*  Ravald  v.  Russell,  Younge,  9. 

'"  Dickerman    v.    Lust,    66    Iowa,        -'^  Rafferty  v.  King,  1  Keen.  601. 
444,  23  N.  W.  916.  ""Davis    v.    Wetherell,    13    Allen, 

=""  Wicks  V.    Scrivens,   1   Johns.   &  60,  90  Am.  Dec.  177;  Ravald  v.  Rus- 
H.  215;  Aynsly  v.  Reed,  1  Dick.  249;  sell,    Younge,    9;    Stevenson    v.    Ed- 
Evans   v.   Jones,   Kay,  29;    Kerse  v.  wards,  98  Mo.  622,  12  S.  W.  255. 
Miller,   169  Mass.   44,  47  N.  E.   504;' 


§§  1066,  1067.]    REDEMPTION  OF  A  MORTGAGE.  32 

he  is  entitled  to  the  possession  of  tlie  whole  until  the  amount  above 
his  proportion  is  reimbursed  to  hini.^-^ 

§  1066.  A  tenant  for  years  may  redeem-^^  although  his  lease,  be- 
ing made  after  the  mortgage,  and  good  against  the  mortgagor,  is  not 
good  against  the  mortgagee  ;'^^  and  although  the  lessor,  being  also  the 
mortgagor,  has  released  his  equity  of  redemption  to  the  holder  of  the 
mortgage.^^*  A  lessee  of  the  mortgagor  having  a  lease  valid  against 
him,  though  not  binding  upon  the  mortgagee  for  the  reason  that  it 
was  made  after  the  mortgage,  has  a  redeemable  interest/^^  and  it 
does  not  matter  that  the  leasehold  premises  are  only  a  part  of  the 
mortgaged  estate. ^^® 

It  has  been  held,  also,  that  a  person  in  possession  of  the  land  under 
a  verbal  contract  to  buy  it  may  redeem  ;^^'^  and  a  person  having  only 
an  easement  in  the  land  may  redeem.^^^ 

§  1067.  A  widow  or  a  married  woman  who  has  joined  in  a 
mortgage  in  release  of  dower  may  redeem,  for  she  is  entitled  to  dower 
as  against  every  person  except  the  mortgagee  and  those  claiming  under 
him.^^^  It  is  only  when  the  mortgage  debt  is  paid,  or  when  the  mort- 
gagee does  not  object,  that  her  dower  can  be  assigned.  But  she  can  re- 
deem without  a  legal  assignment  of  it.^^"  If  any  person  claiming  under 
her  husband  redeems,  she  may  repay  her  proportion  of  the  amount  so 
paid,  and  have  her  dower  in  the  whole  estate.  But  if  she  herself  re- 
deems from  the  mortgagee,  or  from  his  assignee,  she  must  pay  the 
whole  amount  due  on  the  mortgage. -^^    She  has  an  undoubted  right  to 

="  Kerse   v.    Miller,    169   Mass.    44,  Mass.     44;     McArthur     v.  Franklin, 

47  N.  B.   504;    Gibson  v.   Crehore,  5  16  Ohio  St.   193;    Denton  v.   Nanny, 

Pick.  146;  Van  Vronker  v.  Eastman,  8     Barb.    618;     Trenholm     v.     Wil- 

7  Met.  157.  son,  13  S.  C.  174;   Butts  v.  Brough- 

"=  Hamilton  v.  Dobbs,  19  N.  J.  Eq.  ton,   72   Ala.   294;    Posten   v.    Miller, 

227;    Averill  v.  Taylor,  8  N.   Y.  44;  60  Wis.  494,   19  N.  W.   540;    Phelan 

Bacon  v.  Bowdoin,  22  Pick.  401.  v.  Pitzpatrick,  84  Wis.  614,  54  N.  W. 

"' Keech  v.  Hall,  1  Doug.  21.  614;    Roberts   v.   Meighen,   74   Minn 

"*  Bacon  &  Bowdoin,  2  Met.  591.  273,    77    N.    W.    139;     McGough    v. 

"^Keech  v.  Hall,  1  Doug.  21,  per  Sweetzer,    97    Ala.    361,    12    So.    162; 

Lord  Mansfield;  Averill  v.  Taylor,  8  Union   Nat.    Bank   v.    McConaha,   14 

N   Y   44.  Ind.  App.  82,  42  N.  E.  495;  Phelan  v. 

'■■"  Averill  v.  Taylor,  8  N.  Y.  44.  Fitzpatrick,   84  Wis.   240,   54   N.   W. 

="    Lowry  v.  Tew,  3  Barb.  Ch.  407.  614. 

"'Bacon  V.  Bowdoin,  22  Pick.  401,        -'"Henry's     case,     4     Gush.     257; 

405,    2   Met.    591.      See,    however,     §  Eaton  v.  Simonds,  14  Pick.  98;   Gib- 

1059     and   McDougald    v.    Capron,   7  son  v.  Crehore,  5  Pick.  146;  Peabody 

Gray   278  v.  Patten,  2  Pick.  517,  519;   Kerse  v. 

"^"Opdyke  v.  Parties,  11  N.  J.  Eq.  Miller,  169  Mass.  44,  47  N.  E.  504. 
133;      Smith     v.     Hall,       67    N.    H.        ='•  See      §      1075.        Massachusetts: 

200 '   30    Atl.    409;    Merselis    v.    Van  Newton  v.  Cook,  4  Gray,  46;  Gibson 

Riper,    55     N.   J.  Eq.  618,     38     Atl.  v.   Crehore,  5  Pick.   146;    McCabe  v. 

196;     Gibson     v.     Crehore,    5     Pick.  Bellows.    7   Gray,    148,    66   Am.    Dec. 

(Mass.)     146;   Kerse     v.     Miller,  169  467;   Brown  v.  Lapham,  3  Cush.  551, 


33  WHO    MAY    REDEEM.  [§    1067. 

do  this  although  she  has  released  her  dower  in  the  mortgage.^^-  And 
even  a  wife  having  only  an  inchoate  right  of  dower  may  redeem  land 
from  a  mortgage  in  which  she  has  joined  with  her  husband  to  release 
dower.^^^  A  foreclosure  of  the  mortgage  in  the  lifetime  of  the  hus- 
band, by  a  suit  in  equity  to  which  she  was  not  made  a  party,  does  not 
cut  off  her  right  of  redemption  ;^^*  though  when  the  foreclosure  is  by 
a  writ  of  entry,  or  by  scire  facias,  it  is  not  necessary  to  join  the  wife 
as  a  party  in  order  to  bar  her  right  of  redemption.-^^  A  widow  in 
bringing  a  bill  m  equity  to  redeem  should  show  that  she  has  no  remedy 
in  law  to  recover  her  dower,  and  should  therefore  set  forth  that  her 
husband  was  seised  during  coverture  of  only  an  equity  of  redemption, 
or  that  if  he  was  seised  of  the  legal  estate  she  joined  him  in  the  mort- 
gage.^^" 

A  widow  is  not  entitled  to  have  lands  which  are  assigned  to  her  as 
dower  redeemed  from  a  mortgage  which  she  joined  her  husband  in 
executing,  unless  a  statute  provides  that  the  mortgage  shall  be  re- 
deemed by  her  husband's  estate  in  exoneration  of  her  dower.  A  stat- 
ute which  merely  provides  that  the  probate  court  may  order  the  ad- 
ministrator to  redeem  such  property,  if  it  would  be  beneficial  to  the  es- 
tate and  not  injurious  to  creditors,  does  not  entitle  the  widow  to  de- 
mand such  redemption.  The  general  rule  is  that  the  widow  who  has 
relinquished  her  right  of  dower  in  a  mortgage  is  entitled  to  dower 
only  in  the  equity  of  redemption.^^^ 

Under  a  statute  making  it  the  duty  of  an  administrator  to  pay  liens 
and  mortgages  upon  the  estate  of  the  deceased  in  preference  to  his 
general  debts,  if  the  administrator,  having  in  his  hands  sufficient  per- 
sonal property  for  the  purpose,  suffers  a  mortgage  to  be  foreclosed,  the 
widow  of  the  deceased  is  entitled  to  recover  of  the  administrator  the 

554.  The  decisions  in  Gibson  v.  Cre-  112  Mass.  352;  Taggart  v.  Wade,  1 
here,  5  Pick.  146,  151,  Van  Vronlter  N.  Y.  Supp.  900;  Gatewood  v.  Gate- 
v.  Eastman,  7  Met.  157,  and  Kerse  v.  wood,  75  Va.  407,  quoting  text; 
Miller,  169  Mass.  44,  47  N.  B.  504,  are  Buser  v.  Shepard,  107  Ind.  420,  8  N. 
not  in  conflict  witli  the  doctrine  E.  280;  Vaughan  v.  Dowden,  126  Ind. 
stated,  as  in  those  cases  the  mort-  406,  26  N.  E.  74,  quoting  text, 
gagee  did  not  object  to  a  redemption  -•'*  Mills  v.  Van  Voorhies,  20  N.  Y. 
on  the  payment  of  a  proportional  412,  10  Abb.  Pr.  152;  Sheldon  v. 
part.  New  Jersey:  Chiswell  v.  Mor-  Hoffnagle,  51  Hun,  478;  Wheeler  v. 
ris,  14  N.  J.  Eq.  101.  New  York:  Morris,  2  Bosw.  524;  Barr  v.  Van- 
Ross  v.  Boardman,  22  Hun,  527;  alstyne,  120  Ind.  590,  22  N.  E.  965. 
Wheeler  v.  Morris,  2  Bosw.  524;  -^^  Pitts  v.  Aldrich,  11  Allen,  39. 
Denton  v.  Nanny,  8  Barb.  618.  Ohio:  ^^^  Messiter  v.  Wright,  16  Pick. 
McArthur  v.  Franklin,  16  Ohio  St.  151;  Davis  v.  Wetherell,  13  Allen,  60, 
193.  Alabama:  McGough  v.  Sweet-  90  Am.  Dec.  177;  Whitcomb  v. 
zer  97  Ala.  361,  12  So.  162.  Sutherland,  18  111.  578. 

'^-  McCabe    v.     Bellows,    1    Allen,  =^'  Hawley    v.    Bradford,    9    Paige, 

269.  200;    Hewett  v.  Cox,  55  Ark.  225,  15 

="  Davis  V.  Wetherell,  13  Allen,  60,  S,  W.  1028. 
90  Am.  Dec.  177;  Lamb  v.  Montague, 


§§    1068,    1069.]         REDEMPTION    OF    A   MORTGAGE.  34 

same  proportion  of  the  personal  assets  she  wouhl  have  had  in  the  land 
had  these  assets  been  applied  in  discharge  of  the  mortgage.  It  is  im- 
material in  this  respect  that  the  mortgage  was  given  for  purchase- 
money  and  the  wife  did  not  join  in  the  mortgage.-^*  Her  joining  in 
the  mortgage  operates  as  a  waiver  of  her  right  only  in  favor  of  the 
mortgagee;  and  her  right  to  her  share  in  the  real  estate  is  absolute 
against  general  creditors  of  her  husband.^^^ 

An  estate  of  homestead  entitles  the  holder  of  it  to  redeem.^"  A 
married  woman  may  redeem  from  a  mortgage  executed  by  her  hus- 
band, in  which  she  joined,  releasing  the  right  of  homestead,  and  after 
so  redeeming  she  is  entitled  to  hold  the  whole  estate  until  a  second 
mortgagee,  in  whose  mortgage  the  married  woman  did  not  join,  shall 
repay  the  amount  of  the  prior  mortgage  redeemed,  when  she  will  be 
entitled  to  have  a  homestead  assigned  without  contribution.^*^ 

A  tenant  by  the  curtesy  may  in  like  manner  redeem. 

A  jointress  having  a  jointure  in  the  whole  or  any  part  of  the  mort- 
gaged estate  has  a  redeemable  interest  in  it.^*^  And  although  she 
grants  a  term  for  years  out  of  her  estate  for  life,  so  long  even  as 
ninety-nine  years,  "there  rests  a  reversion  in  her  which  naturally  at- 
tracts the  redemption."^*^ 

§  1068.  A  surety  of  a  debt  secured  by  a  junior  mortgage  upon 
payment  of  the  debt  is  entitled  by  subrogation  to  the  rights  of  such 
mortgagee  to  redeem  from  a  prior  mortgagee.^**  It  is  his  right  to 
avail  himself  of  the  security  held  l:)y  the  creditor.  He  thereupon 
stands  in  the  place  of  the  creditor,  and  may  enforce  the  security 
against  the  property  mortgaged  and  the  person  primarily  liable  with- 
out any  assignment  to  himself  of  the  mortgage.'*^ 

§  1069.  A  judgment  creditor  of  the  mortgagor  may  redeem.^*^  It 
is  not  necessary  that  an  execution  should  first  be  issued,  or  the  land 

^^^  Morgan  v.  Sackett,  57  Ind.   580,  Ex  parte  Crisp,  1  Atk.  133;  Mayhew 

2  R.  S.  of  Ind.  1876,  p.  534.  v.  Crickett,  2  Swanst.  185;   Wade  v. 

""Perry    v.    Borton,    25    Ind.    274;  Coope,  2  Sim.  155;    Green  v.  Wynn, 

Newcomer  v.  Wallace,   30  Ind.   216;  L.    R.    4    Ch.    App.    204;    Averill    v. 

Hunsucker  v.  Smith,  49  Ind.  114.  Taylor,  8  N.  Y.  44. 

="  Jones    V.    Meredith,    Bunb.    346;  -"Averill  v.  Taylor,  8  N.  Y.  44. 

Casborne  v.  Inglis,  2  Jac.  &  W.  194,  1  -«  England:     Mildred  v.  Austin,  L. 

Atk.   603;    Stone  v.  Godfrey,  18  Jur.  R.  8  Eq.  220;  Stonehewer  v.  Thomp- 

162;  Butts  v.  Broughton,  72  Ala.  294;  son,  2  Atk.  440.    New  York:    Bank  of 

Kirby  v.  Reese,  69  Ga.  452;  Erwin  v.  Niagara    v.    Roosevelt,    9    Cow.    409, 

Blanks,  60  Tex.  583;    Richardson  v.  Hopk.   Ch.   579;   Van  Buren  v.   01m- 

Baker,  68  N.  H.  43,  297,  34  Atl.  671.  stead,  5  Paige,  9;  Quinn  v.  Brittain, 

-"Smith  v.  Hall,  67  N.  H.  200,  30  Hoff.    Ch.    353;    Auger    v.    Winslow, 

Atl.  409.  Clarke,     258;     Brainard    v.     Cooper, 

="  Howard  v.  Harris,  1  Vern  35.  10     N.     Y.     356;     Benedict     v.     Gil- 

"'Brend  v.  Brend,  1  Vern.  213.  man,   4   Paige,   58;    Dauchy   v.    Ben- 

"' Wright   V.   Morley,    11   Ves.    12;  -nett,     7     How.     Pr.     375.      Illinois: 


35  WHO    MAY    REDEEM.  [§    1069. 

sold.-*^  But  a  general  creditor  wliose  claim  is  not  a  charge  upon  the 
mortgaged  estate  has  no  right  of  redemption.^*^  A  judgment  cred- 
itor has  no  right  to  redeem  after  his  lien  has  expired. ^*^  A  judgment 
creditor  has  no  lien  upon  his  debtor's  homestead,  and  he  has  therefore 
no  right  to  redeem  the  same  from  a  prior  mortgage.^^"  A  mortgagee 
who  has  sold  the  mortgaged  premises  under  a  decree  of  court,  having 
a  personal  judgment  for  a  deficiency,  has  been  deemed  a  judgment 
creditor  entitled  to  redeem  from  the  purchaser  at  the  foreclosure  sale, 
where  redemption  after  such  sale  is  allowed  by  statute.^^^ 

The  purchaser  of  an  equity  of  redemption  sold  on  execution  has  a 
right  to  redeem,^^^  though  such  purchaser  be  the  mortgagor,  himself 
and^^^  although  the  land  be  in  the  possession  of  a  disseisor.^^*  And 
so  has  a  judgment  creditor  to  whom  the  premises  have  been  set  off  by 
extent  and  appraisement,  without  any  deduction  on  account  of  the 
incumbrance.^^'''  An  assignee- in  bankruptcy,^^*'  or  a  trustee  appointed 
by  the  court  or  under  an  assignment  from  the  debtor,  may  also  re- 
deem.^'^^  One  having  a  vendor's  lien  for  purchase-money  may  re- 
deem a  prior  mortgage.^^^    The  holder  of  a  tax  title  may  redeem.^^^ 

Redemption  by  a  grantee  of  the  judgment  debtor  operates  the  same 
as  if  made  by  the  judgment  debtor  himself.^^'* 

A  creditor  of  the  mortgagor  having  an  attachment  upon  the  mort- 

Keller     v.     Coman,     162      111.     119,  Nelson  v.  Rodgers,  65  Minn.  246,  68 

44    N.    E.    434.       Indiana:      Milburn  N.  W.  18. 

V.  Phillips,  143  Ind.  93,  42  N.  E.  461.  '*^  Long  v.  Mellet,  94  Iowa,  548,  63 

Colorado:     Floyd  v.   Sellers,  7   Colo.  N.  W.  190. 

App.    491,    44    Pac.    371.     Minnesota:  ""  Spurgin    v.    Adamson,    62    Iowa, 

Sprandel    v.    Houde,    54    Minn.    308,  661,   18  N.   W.  293. 

56    N.    W.    34.      Washington:     Prior  "'Greene   v.    Doane,    57    Ind.    186; 

to   Laws   1897,   p.    75,    §    15,   a  judg-  See   §    1334. 

ment     creditor     could     not     redeem  "=  Coombs    v.    Carr,    55    Ind.    303; 

from     a     foreclosure     sale.      Geddis  Watson  v.    Steele,   78  Ala.   361. 

v.    Packwood,    30   Wash.    270.      Ken-  -■=' De  Silver  v.   Turner,   166  Mass. 

tucky:      Hitt     v.     Holliday,    2    Litt.  407,    44    N.    E.    532;    Bowen    v.    Van 

332.     North   Carolina:     Stainback  v.  Gundy,  133  Ind.  670,  33  N.  E.  687. 

Geddy,   1  Dev.   &  B.   Eq.   479.     New  "'Wellington    v.    Gale,    13    Mass. 

Jersey:     Mallalieu    v.    Wickham,    42  483,  488;    Atkins  v.  Sawyer,  1  Pick. 

N.  J.  Eq.  297,  10  Atl.  880;   Connecti-  351,   354,   11   Am.   Dec.   188. 

cut  Mut.  L.  Ins.  Co.  v.  Crawford.  21  -"White  v.  Bond,  16  Mass.  400. 

Fed.  281.    Alabama:    Cramer  v.  Wat-  '^'^'^  Lloyd  v.  Hoo  Sue,  5  Sawyer,  74. 

son,  73  Ala.   127;    Norton  v.  British  "' Francklyn  v.  Fern,  Barnard,  30. 

Am.  Mortg.  Co.  113  Ala.  110,  20  So.  "« Pearcv    v.    Tate,    91    Tenn.    478, 

968.  19  S.  W.  323. 

'"  Cases    above,    and    Brainard    v.  ="  Allen    v.    Swoope,    64    Ark.    576, 

Cooper,  10  N.  Y.  356.  44  S.  W.  78. 

"^Story's  Eq.  Jur.  §1023;   Grant  v.  ="»  De  Roberts  v.  Stiles,  24  Wash. 

Duane,  9  Johns.  591,  611;  Walden  v.  611. 
Speigner,  87  Ala.  379,  390,  6  So.  80; 


§    1070.]  REDEMPTION    OF    A   MORTGAGE.  36 

gaged  premises  may  bring  a  bill  in  equity  to  redeem.^®^  The  mort- 
gagor has  a  paramount  right  to  redeem,  and,  if  he  brings  a  bill  to  re- 
deem pending  a  bill  by  the  creditor  for  the  same  purpose^  he  is  en- 
titled to  a  decree  for  redemption  in  preference ;  but  he  ■wall  not  be  al- 
lowed in  this  manner  to  unreasonably  delay  the  redemption.  A 
divorced  woman  who  has  attached  the  land  of  her  former  husband  to 
secure  his  payment  of  alimony  to  her  is  entitled,  like  any  attaching 
creditor,  to  redeem.^^^ 


y.     The  Sum  payable  to  effect  Redemption. 

§  1070.  Tender  or  payment  of  the  amount  due  on  the  mortgage 
is  a  necessary  condition  precedent  to  redemption. ^^^  "A  suit  to  redeem 
is  a  suit  in  equity,  and  is  subject  to.  the  rule  that  he  who  seeks  equity 
must  do  equity."^®*  If  the  holder  of  the  mortgage  has  paid  prior  in- 
cumbrances for  the  protection  of  the  estate,  the  person  redeeming  is 
required  to  add  the  amounts  so  paid  to  the  mortgage  debt,  both  be- 
cause the  estate  is  benefited  to  that  amount,  and  because  the  holder  of 
the  mortgage  by  paying  such  incumbrance  is  subrogated  to  the  claim, 
and  holds  it  as  a  charge  upon  the  property  as  much  as  he  does  the 
mortgage  to  which  he  has  direct  title.^'^^  Where  a  prior  mortgage  upon 
payment  by  a  junior  mortgagee  was  discharged  of  record,  and  the 
plaintiff  afterward  acquired  his  title  while  the  defendant's  mortgage 
was  apparently  the  only  incumbrance,  the  defendant  was  allowed  the 
amount  so  paid  by  him,  inasmuch  as  the  whole  amount  claimed  by 
him  was  less  than  the  amount  of  his  own  mortgage  as  it  appeared  of 
record.^*"'  But  a  piortgagor  is  not  required  to  pay  any  demands  of  the 
mortgagee  not  embraced  in  or  covered  by  the  mortgage.^^^ 

If  the  mortgage  be  for  an5i;hing  else  than  the  payment  of  money, 

="1  Chandler   v.   Dyer,   37   Vt.    345;  of     payment     or     of     performance; 

Bridgeport  v.  Blinn,  43  Conn.  274.  as   in  Maine.     Munro  v.   Barton,   95 

In  New  Hampshire  it  is  provided  Me.    262,    49    Atl.    1069;    and   Massa- 

by  statute  that  an  attaching  credit-  chusetts.      Putnam     v.     Putnam,    13 

or,  either  before  or  after  execution.  Pick.   129. 

may    redeem.      P.    S.    1891,    ch.    219,        "'*  Emerson  v.  Atkinson,  159  Mass. 

§  8.  356,  34  N.  E.  516,  519,  per  Allen,  J.; 

^"^Briggs  V.  Davis,  108  Mass.  322.  Fay  v.  Valentine,  12  Pick.  40;   Dary 

^"  Fogal  V.  Pirro.  17  Abb.  Pr.  113,  v.    Kane,    158    Mass.    376,    33    N.    E. 

10  Bosw.   100;    Childs   v.   Childs,   10  527;   Shaw  v.  Abbott,  61  N.  H.  254; 

Ohio  St.  339,  75  Am.  Dec.  512;  Cow-  Higman  v.  Humes,  133  Ala.   617,  32 

les  V.  Marble,  37  Mich.  158;    Munro  So.   574. 

V.  Barton,  95  Me.  262,  49  Atl.  1069.        -"^  Long   v.    Long,    111   Mo.    12,    19 

By  statute  in  some  States  an  offer  S.  W.  537. 

by  the  plaintiff  in  his  bill  to  pay  or        -'"  Davis  v.  Winn,  2  Allen,  111. 
perform  the  conditions  of  the  mort-        *'"  Parmer  v.  Parmer,  74  Ala.  285. 
gage  has  the  same  force  as  a  tender 


37  SUM    PAYABLE    TO    EFFECT    REDEMPTION.  [§    1070. 

the  oondition  of  the  mortgage,  whatever  it  l)o,  must  be  fulfilled;  and 
when  the  condition  is  fulfilled  the  mortgagor  is  entitled  to  an  entry  of 
satisfaction.2^^  The  mortgagor  may  also  be  required  to  perform  a 
condition  not  contained  in  the  mortgage ;  as  where  the  mortgagee  con- 
veyed the  estate  to  the  mortgagor  by  a  deed  imposing  a  condition,  and 
took  back  a  purchase-money  mortgage,  the  mortgagor  was  not  allowed 
to  redeem  except  upon  performing  the  condition  of  the  mortgage  and 
that  of  the  deed  as  well.^^^ 

The  sum  payal)le  to  effect  a  redemption  must  include  not  only  the 
principal  debt  and  interest,  but  whatever  else  is  by  the  contract  a  part 
of  the  mortgage  debt,  as,  for  instance,  an  attorney's  fee  or  insurance 
premiums.^^" 

If  the  contract  as  to  interest  was  deceptive  and  unconscionable  a 
court  of  equity  may  disregard  the  contract  and  decree  redemption 
upon  payment  of  the  principal  sum  and  interest  at  a  reasonable 
rate."i 

In  redeeming  from  a  purchase-money  mortgage,  the  mortgagor  may 
make  "deductions  in  the  mortgage  debt  for  any  defects  in  the  title,  if 
it  was  so  agreed  between  the  parties.  Where,  however,  such  defects 
existed,  but  were  cured  before  the  bringing  of  the  suit  to  redeem,  no 
deductions  should  be  made  on  account  of  such  defects. ^^^ 

Under  the  statutes  of  some  States  redemption  from  a  foreclosure 
sale  within  the  time  allowed  may  be  made  by  paying  the  purchaser  the 
amount  of  his  bid  with  interest.^^^  This  rule  applies  although  the 
purchaser  be  the  senior  mortgagee,  and  the  amount  of  his  bid  be  less 
than  the  amount  of  the  mortgage  debt,  and  redemption  is  sought  by 
one  interested  in  the  equity  of  redemption  who  was  made  a  party  to 
the  foreclosure  suit.  Such  a  redemption- is  not  a  redemption  from  the 
mortgage,  but  a  redemption  from  the  sale,  and  is  a  statutory  right.^^* 

"If  the  effect  of  a  redemption  under  these  statutes,  when  the  prop- 
erty has  sold  for  less  than  the  mortgage  debt,  is  to  restore  the  mortgage 
lien,  it  is  obvious  that  there  is  no  limit  to  the  number  of  sales  that 
may  be  made  under  the  same  mortgage.  So  long  as  any  balance  of  the 
debt  remained  unpaid,  and  the  mortgagor  redeems,  the  mortgagee 

=»*Goldbeck's  App.  (Pa.)  8  Atl.  29.  "^  State    v.    Carpenter,    19    Wash. 

=«»  Stone  v.  Ellis,  9  Custi.  95.  378,  53  Pac.  342. 

"9  Hosford  V.  Johnson,  74  Ind.  479;  "^Fields   v.    Danenhower,   65   Ark. 

Dayton  v.  Dayton,  68  Mich.   437,  36  392,  46  S.  W.  938;  Wood  v.  Holland, 

N.   W.   209.  64   Ark.    104,   40   S.   W.    704;    Day   v. 

"^  Means    v.    Anderson,    19    R.    I.  Cole,  44  Iowa,  452;  Tiittle  v.  Dewey, 

118,  32  Atl.  82.  44   Iowa,   306,   distinguished  on  this 

'"  Dooley  v.  Potter,  146  Mass.  148,  ground    from    Johnson    v.    Harmon, 

15   N.   E.   499.  19  Iowa.  56:    State  v.   Carpenter,  19 

Wash.  378,  53  Pac.  342,  quoting  text. 


§§    lOTl,    1072.]         REDEMPTION   OF    A    MORTGAGE.  38 

may,  if  this  be  the  meaning  of  the  act,  continue  to  sell  the  property, 
thus  piling  up  the  costs  against  the  mortgagor."^^^ 

§  1071.  The  mortgagee  after  default  is  said  to  be  entitled  to 
notice  of  payment,  on  the  ground  that,  redemption  being  a  matter  of 
equity  only,  the  person  seeking  to  redeem  should  do  equity  by  allow- 
ing a  reasonable  time  to  the  mortgagee  to  find  a  new  investment  for 
his  money.  According  to  the  English  practice,  six  months  is  the 
proper  time  of  notice ;  and  if  the  notice  be  not  given,  six  months'  in- 
terest is  paid  in  lieu  of  notice.-^®  Although  some  notice  is  always 
proper,  there  is  no  established  rule  or  custom  regulating  it  in  this 
country.  Of  course,  if  the  mortgagee  demands  his  money  no  notice 
is  necessary ;  nor  is  there  when  he  has  taken  proceedings  to  enforce  his 
claim  which  amount  to  a  demand. ^^'^ 

§1072.  It  is  a  general  rule  that  a  mortgage  is  an  entire  thing, 
and  must  be  redeemed  entire,  and  that  the  mortgagee  cannot  be  com- 
pelled to  divide  his  debt  and  his  security.^^^  He  performs  his  whole 
duty  when  he  releases  the  entire  estate  upon  receiving  payment  of  the 
whole  debt  in  one  payment.  The  fact  that  the  mortgaged  premises 
have  subsequently  become  divided,  and  are  held  in  separate  parcels  by 
different  owners,  does  not  concern  him,  or  put  him  under  any  obliga- 
tion to  receive  payment  of  his  mortgage  in  parts  from  the  different 
owners. -^^  Eedemption  can  be  had  only  upon  paying  the  whole 
amount  of  the  mortgage  debt.  "This  is  requisite  to  redemption  by 
the  owner  of  a  portion  only  of  the  mortgaged  premises.  The 
mortgagee  cannot  as  a  rule  be  required  upon  the  basis  of  an 
apportionment  to  take  a  sum  less  than  the  whole  amount  due  him,  and 

"^Fields  v.   Danenhower,   65   Ark.  Hampton,    13    Iowa,    259;    Street    v. 

392,  395,  46  S.  W.  938,  per  Reddick,  Beal,  16  Iowa,  68,  85  Am.  Dec.  504; 

J.;   Anderson  v.   Anderson,   129   Ind.  Douglass    v.    Bishop,    27    Iowa,    214; 

573,  29  N.   E.   35;    Hervey  v.   Krost,  Spurgin   v.   Adamson,   62   Iowa,   661, 

116  lud.  268,  19  N.  E.  125;   Todd  v.  18  N.  W.  293;    Boqut  v.   Coburn,  27 

Davey,  60  Iowa,  532,  15  N.  W.  421;  Barb.  230;   Robinson  v.  Fife,  3  Ohio 

Makibben  v.   Arndt,   88  Ky.    180,   10  St.    551;    Lanning  v.    Smith,   1   Par- 

S.  W.   642.  sons    Sel.     Cas.    13;      Meacham     v. 

="»  Fisher     Mort.     §1272,     3d    ed.;  Steele,  93   111.   135;    Casler  v.   Byers, 

Browne    v.    Lockhart,    10    Sim.    420,  129   111.   657,  22  N.   E.  507;    Andreas 

424;   Bartlett  v.  Franklin,  15  W.  R.  v.  Hubbard,  50  Conn.  351. 
1077.  '''Johnson  v.  Candage,  31  Me.  28; 

="  Letts  v.  Hutchins,  L.  R.  13  Eq.  Smith  v.  Kelley,  27  Me.  237,  46  Am. 

176  Dec.   595;    Mullanphy  v.   Simpson,   4 

"'Palk    v.    Clinton,    12     Ves.    48;  Mo.  319;   Lyon  v.  Robbins,  45  Conn. 

Cholmondeley   v.    Clinton,   2   Jac.    &  513;   Meacham  v.  Steele,  93  111.  135; 

W.   1,   189;    Lamb  v.   Montague,   112  Andreas   v.   Hubbard,   50  Conn.   351. 

Mass.    352;    Merritt    v.    Hosmer,    11  But  see  Morse  v.  Smith,  83  ill.  396; 

Gray,  276,  71  Am.  Dec.  713;  Gliddon  Mutual  L.  Ins.  Co.  v.  Easton  &  Am- 

v.  Andrews,  14  Ala.  733;  Knowles  v.  boy  R.  Co.,  38  N.  J.  Eq.  132. 
Rablin,    20    Iowa,    101;        White    v. 


39  SUM    PAYABLE    TO    EFFECT    REDEMPTION.  [§    1073. 

release  the  lien  of  liis  mortgage  upon  any  of  such  premises.  The  re- 
lief of  such  owner  redeeming  is  in  his  remedy,  founded  upon  the  prin- 
ciple of  subrogation  to  the  rights  of  the  mortgagee,  against  the  other 
portions  of  the  mortgaged  premises,  and  to  thus  seek  or  compel  con- 
tribution." Therefore  a  decree  cannot  be  entered  that  on  payment  of 
the  declared  proportionate  share  of  any  lot  it  shall  be  released  from 
the  lien  of  the  mortgage.-**'  There  may  be  a  redemption  of  a  portion 
of  the  mortgaged  land  with  the  consent  of  the  mortgagee.^*^ 

On  a  bill  to  redeem,  a  prior  conditional  judgment  on  a  writ  of  entry 
to  foreclose  is  conclusive  evidence  of  the  amount  then  due  on  the 
mortgage.^*^ 

The  rule  is  the  same  although  two  separate  estates  are  mortgaged 
by  distinct  deeds,  in  case  the  condition  of  each  is  to  pay  one  and  the 
same  mortgage  debt.  A  creditor  who  levies  an  execution  upon  one  es- 
tate becomes  entitled  to  redeem  both  estates  upon  payment  of  the 
whole  mortgage  debt;  but  he  cannot  be  permitted  to  redeem  only  the 
estate  levied  upon,  by  paying  such  proportion  of  the  mortgage  debt 
as  that  estate  bears  to  the  value  of  the  whole  mortgaged  premises. 
The  debt  being  one,  the  mortgage  is  one  also.  The  unity  of  the  debt 
makes  the  equity  of  redemption,  though  created  by  two  instruments, 
one  and  indivisible.^®^ 

Where  two  mortgages  are  made,  each  upon  an  individed  half  in- 
terest, a  purchaser  who  has  assumed  the  payment  of  both  mortgages 
cannot  redeem  one  without  the  other.  By  force  of  his  agreement  the 
two  mortgages  are  consolidated  into  one.^** 

§1073.  The  fact  that  the  mortgagee  has  proved  against  the 
insolvent  estate  of  a  deceased  mortgagor  the  mortgage  debt,  less  the 
full  estimated  value  of  the  land,  and  has  received  a  dividend  on  that 
amount,  does  not  preclude  his  claiming  the  full  amount  remaining 
due  on  the  mortgage  upon  a  bill  to  redeem  subsequently  brought 
against  him  by  one  who  has  purchased  the  equity  of  redemption  from 
the  heirs  at  law.-*^  And  the  fact  that  the  mortgagor  has  obtained  a 
(discharge,  under  bankruptcy  or  insolvency  proceedings,  from  his  per- 
sonal liability  for  the  mortgage  debt,  does  not  in  any  way  relieve  him 
from  paying  the  debt  in  full  upon  redemption,  whatever  may  be  the 
value  of  the  property.^®'^ 

=«"  Coffin  V.  Parker,  127  N.  Y.  117,  -^'  Franklin  v.  Gorham,  2  Day,  142, 

27  N.  E.  814.  2  Am.  Dec.  86. 

-"'  Kerse    v.    Miller.    169    Mass.    44,  "^  Wells  v.  Tucker,  57  Vt.  223. 

47  N.  E.  504;  Van  Kronker  v.  East-  -"^  Davis  v.  Winn,  2  Allen  (Mass.), 

man,  7  Met.  157;  Gibson  v.  Crehore,  111. 

5  Pick.   146.  ^""Childs    v.    Childs,    10    Ohio    St. 

-'-Stevens   v.    Miner,    5   Gray,   429,  3;^9,  75  Am.  Dec.  512;   Kezer  v.  Clif- 

n.;   Sparhawk  v.  Wills,  5  Gray,  423.  ford,  59  N.  H.  208. 


§    1074.]  REDEMPTION    OF    A    MORTGAGE.  40 

§  1074.     When  the  mortgagee  has  foreclosed  a  part  of  the  premises, 

redemption  may  be  made  of  the  remaining  portion  of  the  premises 
upon  payment  of  the  remaining  part  of  the  debt.^®^  Land  subject  to 
a  mortgage  was  sold  with  full  covenants  of  warranty  in  two  lots  to 
different  persons  at  different  times,  and  the  mortgagee  afterwards  en- 
tered upon  both  lots  for  foreclosure,  and  the  foreclosure  became  ab- 
solute as  to  the  lot  last  sold ;  whereupon  the  O'wner  of  the  lot  first  sold 
brought  a  bill  to  redeem,  and  was  allowed  to  do  so  upon  paying  the 
balance  due  upon  the  mortgage  debt,  after  deducting  the  full  value 
of  the  other  lot  with  the  buildings  upon  it;  and  it  was  regarded  as 
immaterial  that  the  buildings  were  erected  after  the  sale  by  the  mort- 
gagor.^®^ The  mortgagee  having  appropriated  one  lot  to  the  pay- 
ment of  the  mortgage  debt,  the  other  tract  is,  to  the  extent  of  the 
v,alue  of  the  lot  appropriated,  relieved  from  the  burden  of  the  mort- 


A  mortgagor  may  redeem  any  parcel  which  has  been  sold  separately 
by  paying  the  amount  for  which  such  parcel  sold  with  taxes,  interest 
and  costs.^®*^ 

And  so  redemption  may  be  made  of  a  part  where  the  mortgage  has 
been  foreclosed  without  making  all  of  the  several  owners  of  the  land 
parties  to  the  suit,  and  the  mortgagee  has  purchased  at  the  sale,  be- 
cause he  has  by  such  proceeding  and  purchase  voluntarily  severed  his 
right,  and  obtained  an  indefeasible  title  to  part  of  the  land  and  only 
a  defeasible  title  to  another  part.  The  owner  not  made  a  party  may 
redeem  the  portion  owned  by  him  on  paying  a  part  of  the  mortgage 
debt  bearing  such  a  proportion  to  the  whole  as  the  value  of  his  land 
bears  to  that  of  the  whole  mortgaged  premises. '^^  Two  persons  own- 
ing land  in  common  made  a  mortgage  of  it,  and  one  of  them  after- 
wards mortgaged  his  undivided  half  to  another  person.  The  first 
mortgagee  obtained  a  decree  of  foreclosure  and  sale  in  a  suit  in  which 
the  second  mortgagee  was  not  made  a  party.  It  was  held  that  the 
second  mortgagee,  not  being  bound  by  the  foreclosure,  might  redeem 

^*"  Dukes  V.   Turner,  44  Iowa,  575,  land    foreclosed,    with    interest    on 
579,    distinguished    from    Street    v.  such  costs  from  the  date  of  the  de- 
Beal,  16  Iowa,  68,  85  Am.  Dec.  504,  cree  of  foreclosure.     Dooley  v.  Pot- 
where    the    mortgagee    retained    all  ter,  140  Mass.   148,  15  N.  E.  499. 
the  property.  "*"  Dooley  v.   Potter,  140  Mass.  49, 

^«'*  George   v.   Wood,   11    Allen,    41.  2  N.  E.   935. 

See    Fogal    v.    Pirro,    10    Bosw.    100.  2"'' State    v.    Carpenter,    19    Wash. 

The  mortgagee  may  deduct  the  costs  378,  53  Pac.  342. 

of    the    foreclosure    suit    from    the  ='' Green  v.  Dixon,  9  Wis.  532;  Wil- 

amount    to    be    credited    upon    the  son  v.  Tarter,  22  Oreg.  504,  30  Pac. 

mortgage  debt  for  the  value  of  the  499,  quoting  text. 


A^  41  SUM  PAYABLE  TO  EFFECT  REDEMPTION.      [§  1075. 

an  undivided  half  upon  payment  of  the  wliole  mortgage,  less  one-half 
the  proceeds  of  the  foreclosure  sale  of  the  whole  land.^"- 

The  authorities  on  this  suhject  are  not,  however,  altogether  uni- 
form.^"^  In  some  cases  the  general  rule  in  regard  to  redeeming  the 
entire  interest  is  so  far  adhered  to  that  the  mortgagee  is  allowed  to 
elect  whether  the  part  owner  seeking  to  redeem  shall  pay  the  entire 
amount  due  under  the  mortgage,  and  so  redeem  all  the  property  sold, 
or  shall  pay  a  proportional  part  of  that  amount,  and  redeem  merely 
the  piece  of  which  he  was  the  owner. ^^■^ 

§  1075.  One  who  redeems  after  a  foreclosure  sale  must  pay  the 
whole  amount  of  the  mortgage  debt,  although  the  land  sold  for 
a  less  sum.^"^  The  grounds  for  this  rule  are  clearly  stated  by  Mr. 
Justice  Bradley  of  the  United  States  Supreme  Court:  "To  redeem 
property  which  has  been  sold  under  a  mortgage  for  less  than  the 
mortgage  debt,  it  is  not  sufficient  to  tender  the  amount  of  the  sale. 
The  whole  mortgage  debt  must  be  tendered  or  paid  into  court.  The 
party  offering  to  redeem  proceeds  upon  the  hypothesis  that,  as  to  him, 
the  mor.tgage  has  never  been  foreclosed  and  is  still  in  existence.  There- 
fore he  can  only  lift  it  by  paying  it.  The  money  will  be  subject  to 
distribution  between  the  mortgagee  and  the  purchaser  in  equitable 
proportions,  so  as  to  reimburse  the  latter  his  purchase-money,  and  pay 
the  former  the  balance  of  his  debt."-^*^  In  case  the  mortgagee  has  bid 
in  the  property  and  afterwards  sold  portions  of  it  to  others,  the  money 
paid  in  redemption  should  be  distributed  among  the  grantees  on  the 
basis  of  the  prices  paid  by  them  for  their  purchases,  and  in  the  order 
of  the  conveyances  to  them.^^^ 

A  junior  incumbrancer  who,  not  having  been  made  a  party  to  a 
foreclosure  of  a  prior  mortgage,  afterwards  redeems,  redeems  not  the 
premises,  strictly  speaking,  but  the  prior  incumbrance;  and  he  is  en- 
titled, not  to  a  conveyance  of  the  premises,  but  to  an  assignment  of 

='*'Kirkham  v.  Dupont,  14  Cal.  559.  Y.  320;    Gage  v.  Brewster,  31  N.  Y. 

And   see   Frink   v.    Murphy,   21    Cal.  218;    Bradley  v.   Snyder,   14   111.   263, 

108,    81    Am.    Dec.    149;    Grattan    v.  58  Am.  Dec.   564;    Baker  v.  Pierson. 

Wiggins,  23  Cal.   16.     See,  however,  6  Mich.  522;  Johnson  v.  Harmon,  19 

Lauriat  v.   Stratton,  6   Sawyer,  339.  Iowa,     56;     Martin    v.     Pridley,     23 

="'' In   Pitts  V.    American   Freehold  Minn.  13;  Powers  v.  Golden  Lumber 

Land  Mortg.   Co.,  123  Ala.   469,  472,  Co.,  43  Mich.  468,  5  N.  W.  656;  Hos- 

26  So.  286.     The  question  was  raised  ford  v.  Johnson,  74  Ind.  479;    Wey- 

but  not  decided.  ant  v.  Murphy,  78  Cal.  278,  20  Pac. 

^"^  Wilson  V.  Tarter,  22  Oreg.  504,  568,  12  Am.  St.  Rep.  50;  McGough  v. 

30    Pac.    499;    Boqut    v.    Coburn,    27  Sweetzer,    97    Ala.    361,    12    So.    162; 

Barb.  230.  Evans  v.  Kahr,  60  Kan.  719,  57  Pac. 

'"'See  §1067;  Benedict  v.  Gilman,  950,  58  Pac.  467. 

4    Paige,    58;    Vroom    v.    Ditmas,    4  -'"Collins   v.    Riggs,   14  Wall.   491. 

Paige,     526;     Raynor  v.   Selmes,    52  -"''Davis  v.  Duffle,  18  Abb.  Pr.  360. 
N.  Y.  579;  Robinson  v.  Ryan,  25  N. 


§    107G.]  REDEMPTION    OF    A   MORTGAGE.  42 

the  securit3\^''®  Therefore  if  the  prior  mortgagee  in  such  case  has  be- 
eome  the  purchaser  at  the  foreclosure  sale,  and  has  thus  acquired  the 
equity  of  redemption  of  the  mortgaged  premises,  the  junior  mort- 
gagee upon  redeeming  is  not  entitled  to  a  conveyance  of  the  estate, 
bul  to  an  assignment  of  the  prior  mortgage;  whereupon  the  prior 
mortgagee,  as  owner  of  the  equity  of  redemption,  may,  if  he  choose, 
pay  the  amount  due  upon  the  junior  mortgage,  redeeming  that.^^®  The 
decree  in  such  case  would  he  that  the  junior  mortgagee  redeem  the 
first  mortgage ;  that  the  first  mortgagee,  as  owner  of  the  equity  of  re- 
demption, redeem  from  the  junior  mortgage,  and  if  he  fail  to  do  so 
that  the  premises  be  sold,  and  out  of  the  proceeds  there  be  paid,  first, 
the  first  mortgage  and  interest,  together  with  any  claim  for  repairs 
the  prior  mortgagee  may  have  made  upon  the  premises  while  in  pos- 
session ;  second,  the  remainder  to  the  payment  of  the  second  mortgage 
and  interest  upon  it,  and,  in  case  there  be  a  surplus,  this  to  be  paid  to 
the  first  mortgagee  as  owner  of  the  equity  of  redemption.^"" 

In  case  a  mortgagor  or  owner  of  the  equity  of  redemption  redeem 
after  a  foreclosure  sale  to  which  he  was  not  made  a  party,  and  the  pur- 
chaser has  entered  into  possession,  the  amount  to  be  paid  in  order  to 
effect  a  redemption  is  the  amount  of  the  mortgage  debt  with  interest, 
and  the  value  of  improvements  made  by  the  purchaser,  less  the  rents 
and  profits  received  by  him.^°^ 

§  1076.  Under  special  circumstances  redemption  of  a  portion  of 
the  mortgaged  estate  may  be  made  without  paying  the  mortgage  debt, 
or  even  contributing  towards  it ;  as,  for  instance,  where  the  owner  of 
such  portion  held  under  a  warranty  deed,  and  the  remaining  portion, 
which  was  sufficient  to  satisfy  the  mortgage  debt  in  full,  was  owned  by 
the  assignee  of  the  mortgage.^"^ 

Another  exception  is  made  in  favor  of  a  railway  or  other  corpora- 
tion to  which  a  right  to  take  land  has  been  granted  by  a  general  law 
or  a  special  act.  In  such  case  the  corporation,  upon  taking  the  land 
necessary  for  its  right  of  way,  may  redeem  such  part  of  a  mortgage  as 
covers  the  land  so  taken  without  paying  the  whole  mortgage  debt.^"^ 

By  agreement  one  may  be  entitled  to  redeem  a  part  of  the  mortgaged 

sospgii  y   Brown,  2  Bro.  C.  C.  276;  ^"'Barrett   v.    Blackmar,    47    Iowa, 

Pardee  v.   Van  Anken,  3  Barb.  534,  565;    Van  Duyne  v.  Shann,  39  N.  J. 

537;    Renard  v.  Brown,  7  Neb.  449;  Eq.   6;    Walton  v.   Bagley,  47   Mich. 

Coughanour  v.  Hutchinson,  41  Oreg.  385,  11  N.  W.  209. 

419,  69  Pac.  68;  Poole  v.  Johnson,  62  "'=  Bradley  v.  George,  2  Allen,  392. 

Iowa,  611,  17  N.  W.  900.  ^"^  Dows  v.   Congdon,   16  How.  Pr. 

='"  Smith  V.  Shay,  62  Iowa,  119,  17  571;  North  Hudson  County  R.  Co.  v. 

N.  W.  444,  quoting  text.  Booraem,  28  N.  J.  Eq.  450. 

^""Renard   v.   Brown,   7   Neb.    449; 
Catterlin  v.  Armstrong,  79  Ind.  511. 


43  SUM  PAYABLE  TO  EFFECT  KEDEMI'TIOX.       [g  1077. 

land.  Thus  where,  pending  a  foreclosure,  the  owner  conveyed  the 
land  to  the  mortgagee  upon  consideration  of  the  mortgagee's  agreeing 
to  allow  the  owner  to  redeem  part  of  the  land  for  a  certain  sum,  and 
thereupon  a  decree  of  foreclosure  was  entered  to  cut  off  subsequent 
incumbrancers,  the  owner  was  entitled  to  redeem  according  to  the 
agreement,  regardless  of  the  decree  of  foreclosure.  The  courts  will  en- 
force such  an  agreement.^"* 

When  a  mortgagee  enters  to  foreclose  for  a  breach  of  condition  in 
the  non-payment  of  interest,  and  the  mortgagor  brings  a  bill  to  redeem, 
pending  which  the  principal  becomes  due,  he  is  not  entitled  to  a  de- 
cree except  upon  paying  the  whole  sum  then  due,  both  principal  and 
interest.^°^ 

§  1077.  When  part  only  of  the  debt  is  due. — When  an  entry  has 
been  made  for  a  breach  of  condition  in  the  non-payment  of  one  of 
several  sums  secured  by  the  mortgage,  and  the  mortgagor  wishes  to  re- 
deem, the  mortgagee  is  not  obliged  to  accept  the  .amounts  not  yet  due ; 
but  to  avoid  the  manifest  injustice  of  a  foreclosure,  the  court  will 
make  a  special  decree,  upon  payment  of  the  sum  due,  declaring  that 
the  proceedings  shall  stand  open,  leaving  the  mortgagee  in  possession 
until  the  further  sum  shall  become  due.^^*'  The  mortgagor  on  paying 
all  that  is  due,  and  thus  performing  the  condition  so  far  as  he  is  able, 
regains  the  title  of  the  estate.  But  if  all  the  sums  have  become  pay- 
able before  the  mortgagor  brings  his  bill  to  redeem,  he  must  pay  the 
whole  sum  due  on  the  mortgage,  and  not  merely  the  sum  for  the  non- 
payment of  which  the  entry  was  made,  before  he  is  entitled  to  a  de- 
cree.^""^ 

The  remedy  of  a  mortgagor,  or  of  one  claiming  under  him,  entitled 
to  redemption,  is  by  a  bill  in  equity,  and  cannot  be  obtained  in  a  suit 
at  law.  His  estate  is  only  an  equitable  one.^°*  When,  therefore,  the 
mortgagor  seeks  to  regain  his  legal  estate  and  the  possession  of  it  in  a 
court  of  equity,  he  must  do  equity  to  the  mortgagee  by  paying  all  that 
is  actually  due  upon  the  mortgage  up  to  the  time  of  redemption;  so 
that  if  the  mortgagee  has  entered  for  a  breach  of  the  condition  by  non- 
payment of  interest,  and  the  principal  becomes  due  pending  the  mort- 
gagor's bill  to  redeem,  a  decree  for  redemption  can  only  be  had  upon 
payment  of  both  principal  and  interest.^°^ 

The  rule  is  the  same  when  foreclosure  is  effected  by  suit  in  equity, 

'•^  Union  Mut.  L.  Ins.  Co.  v.  Kirc-  355;    Deming  v.   Comings,   11  N.   H. 

hoff,  133  111.  368,  27  N.  E.  91.  474. 

'"=  Adams  v.  Brown,  7  Cush.  220.  ^""^  Pearce    v.    Savage,    45    Me.    90; 

""•  Saunders  v.   Frost,   5  Pick.  259,  Smith  v.  Anders,  21  Ala.  782. 
16  Am.  Dec.  394.  ='™  Adams   v.   Brown,   7   Cush.   220; 

'"  Mann    v.    Richardson,    21    Pick.  Mann  v.  Richardson,  21  Pick.  355. 


§§    1078,    1079.]         REDEMPTION   OF  A   MORTGAGE.  44 

and  a  decree  is  obtained  upon  one  note  before  the  maturity  of  others. 
Eedemption  may  be  had  by  the  payment  of  this  note  before  completion 
of  the  sale,  leaving  the  premises  subject  to  the  notes  not  due.^^'' 
When  redemption  is  allowed  after  sale,  and  the  holder  of  the 
first  maturing  note  forecloses,  the  holder  of  a  note  subsequently 
maturing  may  redeem  from  the  foreclosure  sale,  and  may  himself  fore- 
close for  the  satisfaction  of  his  own  note,  and  not  for  the  amount  paid 
by  him  to  redeem  from  the  first  foreclosure.  The  holders  of  the  sev- 
eral notes  have  the  same  right  to  redeem  that  they  would  have  if  the 
notes  were  secured  by  separate  mortgages. ^^^  In  the  same  way  if  tlie 
plaintiff  has  two  mortgages  upon  the  same  premises,  one  of  which  is 
due  and  the  other  not  due,  redemption  may  be  had  upon  payment  of 
that  only  which  is  due.^^^ 

§  1078.  Sometimes  it  is  provided  in  the  mortgage  that  upon  de- 
fault the  whole  sum  shall  become  due  immediately,  and  in  such  case 
the  rule  generally  is,  that  the  premises  may  be  foreclosed  or  sold  under 
a  power  for  the  payment  of  the  whole  debt,  and  that  the  mortgagor 
will  not  be  allowed  to  redeem  that  part  of  the  debt  merely  upon  which 
the  default  occurred,  and  to  have  the  mortgage  continue  as  to  the  part 
not  due."*  In  Illinois,  however,  such  a  provision  has  been  regarded 
in  the  nature  of  a  penalty,  and  relief  against  it  is  given  in  equity  upon 
payment  of  the  instalment  due  with  interest,  and  costs  incurred  in 
any  proceeding  to  sell  under  a  power  or  in  a  foreclosure  suit."* 

§  1079.  If  a  mortgage  be  given  to  secure  advances  to  be  made 
to  the  mortgagor,  and  further  advances  are  made  under  an  oral  agree- 
ment tliat  the  mortgage  shall  secure  them,  neither  the  mortgagor  nor 
any  one  having  no  higher  equity  can  redeem  without  allowing  for  such 
advances."^  A  mortgage  cannot,  by  such  an  agreement,  be  continued 
in  force  as  security  for  a  new  indebtedness  not  embraced  in  the  terms 
of  its  condition;  yet  if  the  mortgagee  has  advanced  money  to  the 
mortgagor  on  the  strength  of  such  an  agreement,  a  court  of  equity 
will  not  aid  the  mortgagor,  or  any  one  who  has  purchased  from  him 
with  knowledge  of  the  facts,  in  obtaining  a  discharge  of  the  mort- 
gage.*^^     If  a  mortgagee  holding  the  title  absolutely  make  unauthor- 

""  Hocker  v.  Reas,  18  Cal.  650.  Dickerson,   66   Iowa,   105,   23   N.   W. 

=*>' Davis  V.  Langsdale,  41  Ind.  399;  286;  Stinson  v.  Pepper,  10  Biss.  107. 

State  Bank  v.  Tweedy,  8  Blackf.  447,  '"  Tiernan  v.   Hinman,  16  111.  400. 

46  Am   Dec.  486;  Preston  v.  Hodgen,  =>"  S  360;    Stone  v.   Lane,  10  Allen, 

50  111.  56.  74;  Ogle  v.  Ship,  1  A.  K.  Marsh.  287; 

"^Lamson    v.    Sutherland,    13    Vt.  Reed  v.  Lansdale,  Hardin  (Ky.),  8. 

399.  ■■'I"  Upton   v.   Nat.   Bank,  120  Mass. 

"=•§§76      1176-1186;     Williams     v.  153;   Joslyn  v.  Wyman,  5  Allen,  62; 

Brown  v.  Gaffney,  32  111.  251. 


45  SUM    PAYABLE    TO    EFFECT    REDEMPTION.  [§    1080. 

ized  advances  to  other  persons  for  such  a  purpose  as  cutting  timber 
upon  the  lands,  the  mortgagor  can  redeem  without  pa\ing  them;-''^^ 
but  if  he  make  further  advances  to  the  mortgagor  or  on  his  order, 
these  should  be  allowed  him  on  a  bill  to  redeem. ^^^ 

Where  a  mortgage  is  given  as  security  for  a  loan,  and  future  ad- 
vances agreed  in  writing  to  be  made  on  the  performance  of  certain 
conditions,  it  would  seem  that  the  mortgage  could  not  be  redeemed  by 
payment  of  the  loan  actually  advanced,  so  long  as  the  liability,  under 
the  agreement  to  make  future  advances,  is  outstanding;  and  it  was  so 
decided  in  a  case  where  an  assignee  of  the  equity  of  redemption,  who 
sought  to  redeem  the  mortgage  on  payment  of  the  loan  without  in- 
demnifying against  the  mortgagee's  agreement  to  make  future  ad- 
vances, had  acquired  his  title  by  a  deed  in  which  the  land  was  de- 
scribed as  subject  to  a  mortgage  of  $4,000,  the  whole  amount  of  the 
loan  and  future  advances,  and  the  obligation  for  future  advances  had 
been  assigned  by  the  mortgagor  to  a  person  who  claimed  that  the  mort- 
gagee should  hold  the  mortgage  undischarged  as  security  for  him.^^® 

§  1080.  A  mortgagee  who  has  paid  a  prior  mortgage  or  other 
incumbrance  upon  the  land  is  entitled  to  be  repaid  this  amount,  as 
well  as  his  own  mortgage,  when  the  mortgagor  comes  to  redeem.^-°  In 
addition  to  the  rights  the  mortgagee  had  before,  he  is  subrogated  to 
those  which  were  a  charge  upon  the  land  in  the  hands  of  the  prior 
incumbrancer  whom  he  has  paid,^-^  whether  such  incumbrance  is  a 
mortgage,  a  judgment,^^-  or  a  rent-charge.^-^  If  the  outstanding  in- 
cumbrance embraced  not  only  the  land  covered  by  his  mortgage,  but 
also  other  lands,  he  may  recover  from  the  owner  of  such  other  lands 
his  proportion  of  such  incumbrance.^^'*  In  the  same  way  the  mort- 
gagee is  protected  in  the  payment  of  taxes  upon  the  mortgaged  prem- 
ises, although  the  mortgage  does  not  provide  for  the  repayment  of 
money  paid  by  the  mortgagee  for  this  purpose  f-°  or  in  the  pavment 

^"  Kelly  V.  Falconer,  45  N.  Y.  42.  Wellmuth,  77  Mo.  542;  Kerse  v.  Mll- 

=^*  Williamson  v.   Downs,  34  Miss,  ler,    169    Mass.    44,    47    N.    E.    504; 

402.  Bourgeois  v.  Gapen,  58  Neb.  364,  78 

="='Cox  v.  Hoxie,  115  Mass.  120.  N.  W.  639.     By  statute  in  Indiana: 

='-°See    §§357,    714,    1134;     Harper  Acts  1879,  ch.  79. 

V.  Ely,  70  111.  581;  Mosier  v.  Norton,  ^^^  Jenness  v.   Robinson,   10  N.    H. 

83  111.  519;   Page  v.  Foster,  7  N.  H.  215. 

392;    Weld   v.    Sabin,   20   N.    H.    533,  ===  Silver   Lake   Bank   v.    North,    4 

51  Am.  Dec.  240;    Arnold  v.  Foot,  7  Johns.  Ch.  370. 

B.  Mon.  66;  Grigg  v.  Banks,  59  Ala.  '-'Robinson  v.  Ryan,  25  N.  Y.  320. 

311;  Johnson  v.  Payne,  11  Neb.  269,  '-*  Lyman  v.  Little,  15  Vt.  576. 

9   N.  W.   81;    Whittaker   v.   Wright,  '=' Windett  v.  Union  Ins.  Co.  144  U. 

35    Ark.    511;    Connecticut    Mut.    L.  S.    581,   12    S.    Ct.   751;    Kortright  v. 

Ins.  Co.  V.  Bulte,  45  Mich.  113,  7  N.  Cady,    23    Barb.    490;    Faure   v.    Wi- 

W.    707;     Spurgin    v.    Adamson,    70  nans,   Hopk.   283,   14   Am.   Dec.   545; 

Iowa,  468,  30  N.  W.  806;  Horrigan  v.  Eagle  F.  Ins.  Co.  v.  Pell,  2  Edw.  631; 


g    lUSU.j  EEDEMPTIOX    OF    A   MORTGAGE.  46 

of  any  valid  assessment  for  public  improvement.^^®  Where  the  taxes 
appear  to  have  been  duly  and  legally  assessed,  and  the  mortgagee  has 
no  knowledge  or  notice  of  any  defect  or  illegality  in  the  assessment, 
the  mortgagee  is  justified  in  paying  them,  and  his  claim  of  lien  for 
the  payments  made  cannot  be  defeated  by  showing  an  illegality  or 
irregularity  in  the  assessment.^"  If  there  has  been  a  tax  sale,  and  the 
validity  of  the  deed  to  the  purchaser  is  doubtful,  the  mortgagee  is  en- 
titled to  be  allowed  a  sum  paid  by  him  to  buy  up  the  tax  title,  not 
greatly  exceeding  the  amount  of  the  taxes  and  interest.^^* 

But  although  a  prior  mortgagee  upon  payment  of  the  taxes  due  upon 
the  property  is  subrogated  to  the  lien  of  the  taxes  upon  the  premises 
as  against  subsequent  incrmibrancers,  and  may  have  the  amount  paid 
by  him  decreed  a  lien  on  the  property,  he  is  not  subrogated  to  such 
lien  as  against  a  purchaser  at  the  foreclosure  sale,  even  if  such  pur- 
chaser has  agreed  to  reimburse  the  amount  paid.  The  mortgagee  in 
such  case  must  depend  wholly  upon  the  agreement  to  repay.^^^ 

Taxes  upon  the  mortgaged  premises  paid  by  a  mortgagee  very  gen- 
erally, by  the  terms  of  the  mortgage,  would  become  an  additional  lien 
upon  the  premises  under  the  mortgage.  It  is  provided  by  statute  in 
some  States  that  the  amount  so  paid  by  the  mortgagee  shall  constitute 
a  lien  and  be  collectible  with  the  mortgage  debt.^^"    Such  a  provision, 

Robinson    v.    Ryan,    25    N.    Y.    320;  taxes,    to   prevent   a   tax   sale,    does 

Smith  v.  Roberts,  91  N.  Y.  470;  Ran-  not  constitute  a  lien  apart  from  tlie 

kin  v.  Coar,  46  N.  J.  Eq.  566;  22  Atl.  mortgage,    but    is    discharged    when 

177;   Jackson  v.  Relf,  26  Fla.  465;   8  the  mortgage  is  satisfied,  and  there 

So.  184;  Strong  v.  Burdick,  52  Iowa,  can    be    no    subsequent    proceeding 

630,  3  N.  W.  707;  Walton  v.  Bagley,  to   enforce   the   tax   lien   as   against 

47  Mich.  385,  11  N.  W.  209;  Broquet  the  mortgagor.  Vincent  v.  Moore, 
V.  Sterling,  56  Iowa,  357,  9  N.  W.  51  Mich.  618,  17  N.  W.  81;  Macomb 
301;  Devin  v.  Eagleson,  79  Iowa,  269,  v.  Prentis,  78  Mich.  255,  44  N.  W. 
44  N  W  545;  Pratt  v.  Pratt,  96  111.  324.  But  in  Noeker  v.  Howry,  119 
184;  Stiger  v.  Bent,  111  111.  328;  Mich.  626,  78  N.  W.  669,  it  was  held 
Athens  Bank  v.  Danforth,  80  Ga.  that  a  junior  mortgagee  has  a  lien 
55,  7  S.  E.  546;  Townsend  v.  Case  superior  to  a  senior  mortgage  for 
Threshing   Mach.    Co.    31    Neb.    836,  taxes    paid    by   him    to    protect    his 

48  N.  W.  899;   Ferris  v.  Van  Ingen,  mortgage.     Also  so  held  in  Fischer 
110  Ga.  102,  35  S.  E.  347;    Ringo  v.  v.   'WoodrufE,  25  Wash.   67. 
Woodruff,  43  Ark.  469,  498;  Lester  V.        =-'=  Dale   v.    McEvers,    2    Cow.    118; 
Richardson,  69  Ark.  198,  62  S.  W.  62.  Brevoort   v.    Randolph,   7   How.    Pr. 

As  to  the  personal  liability  of  the  398. 

owner  of  the  equity  of  redemption  ^'-^  Bates   v.    People's,    &c.    Ass.    42 

to    the    mortgagee   for   taxes    which  Ohio  St.   655. 

the  owner  has  omitted  to  pay,  and  =-"^Windett  v.  Union  Mut.  Ins.  Co. 

the  mortgagee  has  been  obliged  to  144  U.  S.  581,  12  Sup.  Ct.  751. 

pay   in   order  to   save   the   property  '-« Manning  v.  Tuthill,  30  N.  J.  Eq. 

from  sale,  see  Hogg  v.   Longstreth,  29. 

97  Pa.  St.  255.  ='=»  New  York:    R.  S.  1889,  8th  ed.  p. 

As  to  taxes  paid  after  the  mort-  2462;  and  Minnesota:   R.  S.  1866,  ch. 

gage  is  merged  in  a  judgment,  see  11.    §152.      But    a    mortgagee    who, 

McCrossen  v.   Harris,  35  Kans.   178.  after  his  foreclosure   sale  and   dur- 

In   Michigan,   however,    it   is   said  ing  the  period  allowed  by  statute  for 

that  money  paid  by  a  mortgagee  for  redemption  after  sale,  has  redeemed 


47  SUM  PAYABLE  TO  EFFECT  KEDEMl'TIOX.      [§  1081. 

however,  does  not  entitle  the  mortgagee  to  add  to  the  mortgage  debt 
in  this  way  the  amount  paid  by  him  in  purchasing  at  a  tax  sale.  Such 
a  purchase  is  not  a  payment  of  taxes,  but  a  purchase  of  a  new  lien  upon 
the  estate  independent  of  his  mortgage.^^^  But  a  mortgagee  by  P'aying 
such  taxes  does  not  acquire  a  right  of  action  against  the  owner  of  the 
equity  of  redemption  as  for  money  paid  to  his  use.^''^^ 

Although  a  mortgagee  has  the  right  to  pay  taxes  and  assessments 
upon  the  mortgaged  property,  and  collect  them  as  part  of  the  mort- 
gage debt,  he  cannot,  by  bidding  in  the  property  at  a  tax  sale,  deprive 
the  mortgagor  of  his  right  to  redeem. ^^^  A  mortgagor  is  also  allowed 
to  redeem  against  a  mortgagee  who  has  bought  in  an  outstanding  title, 
under  an  arrangement  with  the  mortgagor  that  it  is  to  be  held  subject 
to  redemption,  but  after  acquiring  it  insists  that  he  purchased  it  as  a 
stranger.^^* 

If  one  of  several  mortgagees  obtains  an  annulment  of  a  tax  sale  of 
the  mortgaged  property,  this  inures  to  the  benefit  of  all  the  mort- 
gagees, so  far  as  the  vacating  of  the  tax  conveyance  is  concerned, 
though  the  mortgagee  who  obtained  such  annulment  is  entitled  to  be 
reimbursed  out  of  the  mortgaged  property.^^^ 

§  1081.  A  subsequent  mortgagee  may  redeem  a  prior  mortgage 
without  paying  any  other  claim,  such  as  the  amount  of  a  judgment 
the  prior  mortgagee  has  obtained  against  the  mortgagor.^^**  As  against 
a  subsequent  incumbrancer,  any  other  debt  due  from  the  mortgagor, 
not  a  charge  upon  the  mortgaged  premises,  cannot  be  tacked  to  the 
mortgage. ^^^  N  or  can  the  mortgagee,  by  purchasing  a  mortgage  upon 
other  land  of  the  mortgagor,  compel  him  to  redeem  both  mortgages,  if 
either.^^^     The  mortgagee  cannot  require  the  payment  of  any  other 

the  mortgaged  premises  from  a  tax  ^^^  Williams    v.    Townsend,    31    N. 

sale,  is  not  allowed  to  tack  the  sum  Y.  411. 

paid  for  such  redemption  to  the  sum  ^^-  Raj'nsford    v.    Phelps,    43    Mich, 
for  which  the  premises  were  sold  at  342,  38  Am.  Rep.   189,  5  N.  W.   403. 
the  foreclosure  sale,  and  to  require  See,    in    this    connection.    Swan    v. 
a  second  mortgagee,  seeking  to  re-  Emerson,   129  Mass.   289. 
deem,  to  pay  the  amount  of  the  two  ^^^  See    S  714;    Williams    v.    Town- 
sums    as    a    prerequisite    to    his    re-  send,  31  N.  Y.  411. 
demption;  because  redemption  is  al-  ^^*  Moore  v.  Titman,  44  111.  367. 
lowed   by    statute    (ch.    81,    §8  13-16,  ^^^  Weaver  v.  Alter,  3  Woods,  152. 
G.  S.  1891,  §§5376,  5379),  upon  pay-  ■"''■  McKinstry  v.    Mervin,   3   Johns, 
ment  of  the  amount  for  which  the  Ch.    466;    Pardee    v.    Van    Anken,    3 
premises    were   sold,    except   that   a  Barb.    534;    Jenkins    v.    Continental 
creditor,    on    redeeming,    must    pay  Ins.   Co.   12  How.  Pr.   66. 
liens  prior  to  his  own  held  by  the  ^^'  Burnet   v.    Denniston,    5    Johns, 
party    from     whom     redemption     is  Ch.    35;    Benton   v.    Kent,    61    N.    H. 
made.     Nopson  v.  Horton,  20  Minn.  124. 

268.  "'"^  Cleaveland     v.      Clark,     Brayt. 

(Vt.),  165. 


§    1081.]  REDEMPTION    OF    A   MORTGAGE.  48 

debt,  not    a  charge  upon  the  premises,  as  a  condition  of    a  redemp- 
tion.^^^ 

An  oral  agreement  between  the  mortgagor  and  mortgagee  that  the 
mortgage  shall  stand  as  security  for  further  advances  may  be  enforced 
upon  a  bill  by  the  mortgagor  against  the  mortgagee  to  redeem,  though 
where  the  question  of  title  arises  l^etween  the  mortgagee  and  a  subse- 
quent mortgagee,  attaching  creditor  or  bona  fide  purchaser,  the  de- 
fendant can  onl}^  enforce  the  mortgage  for  the  amount  originally  se- 
cured.^*" 

This  is  upon  the  ground  that  it  would  be  inequitable  to  allow  the 
mortgagor  to  redeem  upon  the  payment  of  the  apparent  amount  of  the 
mortgage,  when  the  mortgage  had  been  allowed  to  stand  as  security  for 
a  further  amount  under  an  oral  agreement  made  for  a  valuable  consid- 
eration. A  court  of  equity  may  impose  equitable  terms  for  granting 
relief  to  a  mortgagor.^*^ 

If  the  purchaser  of  a  sale  foreclosing  a  senior  mortgage  in  good 
faith  makes  improvements  thereon,  a  junior  mortgagee  notifies  him  of 
his  claim  and  intention  to  redeem,  such  junior  mortgagee  Has  been  re- 
quired to  pay  the  value  of  such  improvements  in  addition  to  the  debt 
secured  and  interest  thereon,  but  not  for  improvements  made  after 
notice.^*^  One  who  has  made  improvements  or  repairs  necessary  for 
the  preservation  of  the  property  is  entitled  to  repayment  upon  redemp- 
tion.^*^ 

When  a  junior  mortgagee  seeks  to  redeem  a  prior  mortgage,  he  is 
entitled  to  a  decree  upon  paying  the  sum  due  upon  that  mortgage, 
although  the  holder  of  the  prior  mortgage  has  another  claim  upon  the 
mortgaged  property  which  is  subsequent  to  the  plaintiff's  mortgage. 
The  defendant  may,  however,  file  a  cross-bill  to  redeem  the  plaintiff's 
mortgage,  by  virtue  of  the  subsequent  claim,  and  in  that  case  the 
plaintiff  would  not  succeed  in  redeeming  unless  he  paid  both  the  liens 
held  by  the  defendant.^** 

Where  the  holder  of  a  first  mortgage  also  holds  a  third  mortgage  upon 
the  same  premises  as  collateral  to  the  first,  and  sells  the  property  under 
a  foreclosure  of  the  third  mortgage,  inasmuch  as  the  sale  operates  to 
discharge  the  first  mortgage,  the  holder  of  the  second  mortgage  can 

^'"Burnet   v.   Denniston,   5   Johns.  Downs,    34    Miss.    402;    Edwards   v. 

Ch.    35;    Perdue   v.   Brooks,    85    Ala.  Dwight,  68  Ala.  389,  391. 

459,  5  So.  126;   Cohn  v.  Hoffman,  56  "^  Carpenter  v.  Plagge,  192  111.  82, 

Ark.  119,  19  S.  W.  233.  61  N.  E.  530. 

""  Unton    v.    National    Bank,    120  "-  Ensign    v.    Batterson,    68   Conn. 

Mass.   153;    Stone  v.   Lane,  10  Allen  298,  36  Atl.  51. 

(Mass.)     74;     Joslyn    v.    Wyman,    5  ^"  Cosgrove  v.  Merz,  19  R.  I.  278,  37 

Allen,  62;    Carpenter  v.  Plagge,   192  Atl.   704. 

111.  82,  61  N.  E.  530;  Brown  v.  Gaff-  '"Green    v.    Tanner,    8    Met.    411; 

ney,     32     111.  251;      Williamson     v.  Palmer  v.  Fowley,  5  Gray,  545,  548. 


49  SUM  PAYABLE  TO  EFFECT  REDEMPTION.  [§§  1082,  1083. 

redeem  the  propert}^  only  by  paying  the  amount  of  the  first  mortgage 
debt.3^^ 

§  1082.  The  English  doctrine  of  tacking,  whereby  a  junior  mort- 
gagee, by  purchasing  the  first  mortgage,  was  allowed  to  squeeze  out 
an  intermediate  mortgage  or  judgment  lien,  never  gained  any  general 
recognition  in  this  country,  because  at  an  early  day  registry  laws  were 
adopted,  and  under  these  priority  of  registry  gave  priority  of  right. 
Tacking  was  only  allowed  when  the  last  mortgagee  took  his  mortgage 
without  notice  of  the  intervening  incumbrance.  Under  laws,  there- 
fore, making  the  recording  of  the  deed  notice  to  all  who  might  come 
after,  there  was  no  chance  for  the  application  of  this  doctrine;  and 
this  was  so  declared  in  several  early  cases.^*"  In  England  this  doctrine, 
first  established  through  the  influence  of  Sir  Matthew  Hale,^*^  has  now 
been  abolished. 

Neither  can  the  first  mortgagee,  by  purchasing  the  equity  of  redemp- 
tion, squeeze  out  an  intervening  mortgage;  but  the  holder  of  it  may 
still  redeem  the  first  mortgage,  and  compel  the  holder  of  the  equity  of 
redemption  to  i-edeem  or  be  foreclosed. ^*^ 

§1083.  Consolidating  mortgages. —  The  doctrine  in  England  is, 
that  one  holding  several  mortgages  made  by  the  same  mortgagor, 
though  of  different  dates  and  covering  different  parcels  of  land,  may 
consolidate  them  in  one  suit  for  foreclosure,  and  neither  the  mort- 
gagor nor  a  purchaser  of  the  equity  of  redemption  of  a  parcel  covered 
by  one  mortgage  will  be  allowed  to  redeem  this  parcel  without  also 
redeeming  all  other  mortgages  by  the  same  mortgagor  held  by  the 
plaintiff  and  included  in  his  suit,  whether  he  acquired  them  before  or 
since  the  purchase,  and  whether  the  purchaser  had  notice  of  the  ex- 
istence of  the  other  mortgages  or  not.  A  mortgagee  of  a  lot  covered 
by  one  of  such  mortgages  stands  in  the  same  position  as  regards  re- 
demption as  a  purchaser  for  value.^*** 

In  like  manner,  in  a  few  cases  in  this  country  it  has  been  held  that 
a  mortgagor  going  into  equity  to  redeem  is  bound  to  do  equity  and 
therefore  must  pay  all  other  debts,  though  unsecured,  which  he  owes 
to  the  holder  of  the  mortgage. ^^°    Tliis  rule  has  been  held  to  be  espe- 

="'' Strong  V.  Burdick,  52  Iowa,  630,  4  Eq.  5.37;  Tassell  v.  Smith,  2  De  G. 

3  N.  W.  707.  &  J.  713;  Vint  v.  Padget,  2  De  G.  & 

=•*"  Grant  v.   U.   S.   Bank,   1  Caines  J.  fill;    Cummins  v.  Fletcher,  L.  R. 

Cas.  112   (1804).     See  §569.  14  Ch.  D.  699;   Mills  v.  Jennings,  L. 

^"  Marsh  v.  Lee,  2  Vent.  337,  1  Ch.  R.  13  Ch.  D.  639. 
Cas.    162.     And   see   Brace   v.   Marl-        '■''"  Scripture    v.    Johnson,    3    Conn, 

borough,  2  P.  Wms.  491.  211;  Rowan  v.  Sharp's  Rifle  Manuf. 

=^*  Thompson    v.    Chandler,    7    Me.  Co.  33  Conn.  128;  Coombs  v.  Jordan, 

377.  3  Bland    (Md.)    284,   330;    Gelston  v. 

"»§1458;    Beevor   v.    Luck,   L.    R.  Thompson,    29    Md.    595;    Brown    v. 


§    1084.]  REDEMPTION    OF    A   MORTGAGE.  50 

eially  applicable  in  case  a  grantor  who  has  given  an  absolute  deed  as 
security  for  a  debt  invokes  the  aid  of  equity  as  a  protection  against  the 
holder  of  the  legal  title ;  he  will  be  required  to  pay,  not  only  the  debt 
which  the  absolute  conveyance  was  intended  to  secure,  but  also  what- 
ever else  he  may  owe  the  holder  of  such  title.^"  This  principle  has 
sometimes  been  applied  when  the  mortgagor  has  sought  the  recovery 
of  the  surplus  proceeds  of  a  foreclosure  sale  of  the  premises.  But 
where,  on  the  other  hand,  the  mortgagee  seeks  a  foreclosure,  the  mort- 
gagor is  permitted  to  redeem  upon  payment  of  the  mortgage  debt 
alone.^^^  But  the  prevailing  doctrine  is,  that  a  mortgagor  may  always 
redeem  by  paying  the  specific  debt  secured  by  the  mortgage,  together 
with  such  prior  liens  as  the  mortgagee  may  have  been  compelled  to 
pay  for  the  protection  of  the  mortgage.^^^  The  mortgagee  cannot  re- 
quire as  a  condition  of  redemption  the  payment  of  any  other  debt  not 
a  lien  upon  the  land.^^* 

§  1084.  Costs  of  previous  foreclosure.  —  Upon  redemption  after 
foreclosure  by  one  having  an  interest  in  the  estate  who  was  not  made 
a  party  to  the  suit,  the  costs  of  the  previous  foreclosure  cannot  be 
added  to  the  principal  and  interest  of  the  mortgage  debt  in  making  up 
the  amount  to  be  paid  f'^^  nor  can  the  attorney's  fees  of  the  mortgagee 
in  the  foreclosure  suit  be  added.^^® 

In  Maine  one  redeeming  from  a  foreclosure  by  publication  is  re- 
quired to  pay  the  expenses  of  such  foreclosure,  not  including,  however, 
attorney's  fees.^"  But  expenses  necessarily  incurred  by  a  mortgagee 
in  redeeming  a  prior  incumbrance  upon  the  property  are  justly  charge- 
able to  the  owner  of  the  estate  upon  redemption. ^^^ 

In  redeeming  from  one  whom  the  mortgagor  has  induced  to  pur- 
chase the  mortgage,  upon  his  promise  in  writing  to  pay  the  whole  sum 
advanced  with  interest,  an  assignee  of  the  equity  of  redemption  wdth 
notice  must  pay  all  that  the  mortgagor  must  have  paid.^^'' 

Stewart,  56  Md.   421,  431;    Powis  v.  '=' Mahoney    v.    Bostwick,    96    Cal. 

Corbet,  3  Ark.  556;  Walling  v.  Aiken,  53,  30  Pac.  1020. 

1   McMull.   Ch.   1;    Bank  of  S.   C.  v.  ''•'■•Gage  v.  Brewster,  31  N.  Y.  218, 

Rose,    1    Strobh.    Eq.    257;    Siter    v.  reversing    30    Barb.    387;    Moore    v. 

McClanachan,  2  Gratt.   (Va.)   280.  Cord,  14  Wis.  213;    Benedict  v.  Gil- 

^^' Walling  v.   Aiken,   McMull.   Eq.  man,  4  Paige,  58;  Vroom  v.  Ditmas, 

1-    Lake   v.    Shumate,    20    S.    C.    23;  4    Paige,    526;    Hosford    v.    Johnson, 

Levi   v.  Blackwell,   35   S.   C.   511,  15  74  Ind.  479. 

S.  E.  243.     See  §  360.  '^^  Bondurant  v.  Taylor,  3  Greene, 

'•"  Anthony    v.    Anthony,    23    Ark.  561. 

479  ='■  Whitcomb     v.    Harris,    90     Me. 

'^^Beck  V.  Ruggles,   6   Abb.   N.   C.  206,  38  Atl.  138. 

69;   Kipp  V.  Delamater,  58  How.  Pr.  ^-"Miller   v.   Whittier,   36  Me.    577. 

Ig3.  ='"  Holbrook  v.  Worcester  Bank,  2 

Curtis,  244. 


51  SUM  PAYABLE  TO  EFFECT  REDEMPTION.  [§§  1085,  1086. 

§  1085.  Over-payment  to  prevent  foreclosure. —  If  a  mortgagor 
is  compelled  to  pay  to  a  jnortgagee  in  possession  more  than  is  legally 
due,  in  order  to  redeem  and  prevent  a  foreclosure,  the  payment  is  such 
a  compulsory  one  as  entitles  the  mortgagor  to  recover  the  amount 
overpaid  in  an  action  for  money  had  and  received.^^"  In  such  action 
the  same  legal  and  equitalile  rules  are  applied  which  are  applicable  to 
a  settlement  of  the  mortgagee's  account  upon  a  bill  in  equity  to  re- 
deem; and  whether  the  mortgagee's  charges  are  reasonable  is  not  an 
open  question  to  be  left  to  the  jury,  but  a  question  of  law  to  be  decided 
by  the  court,  according  to  the  facts  and  circumstances  found  by  the 
jury. 

In  like  manner  where  redemption  is  allowed  for  a  certain  time  after 
a  foreclosure  sale,  the  person  entitled  to  redeem  may  properly  pay 
under  protest,  in  order  to  save  the  estate,  whatever  the  officer  may  de- 
mand, though  it  be  too  much,  and  recover  the  excess  of  the  payment 
afterwards. ^"^ 

§  1086.  A  mortgagee  cannot  be  compelled  to  assign  the  mort- 
gage upon  receiving  payment  of  it;  he  can  only  be  required  to  release 
or  discharge  it;^**^  much  less  can  a  prior  mortgagee  be  compelled  to 
sell  and  assign  his  mortgage  to  a  junior  mortgagee,  when  the  latter 
does  not  offer  to  pay  or  redeem  the  prior  mortgage ;  and  the  refusal 
of  the  latter  to  assign  his  mortgage  is  no  evidence  of  fraud  on  his  part 
in  foreclosing  his  mortgage. ^"^  If  the  person  who  redeems  is  inter- 
ested in  only  a  portion  of  the  property,  he  becomes  in  equity  an  as- 
signee of  the  mortgage  for  the  purpose  of  compelling  a  contribution 
from  those  who  own  the  other  portions  of  the  equity  of  redemption 
without  any  formal  transfer  of  the  mortgage  to  him.  He  is  subro- 
gated to  the  rights  of  the  mortgagee  by  operation  of  law.  Having  as- 
sumed, for  his  own  protection,  more  than  his  share  of  the  common 
burden,  he  is  fully  protected  under  this  settled  rule  of  equity,  and 
without  any  act  on  the  part  of  the  mortgagee  may  enforce  his  equitable 
rights  to  contributions  against  the  other  parties  in  interest.    He  can 

=""' Close  V.  Phipps,  7  M.  &  G.  586;  Holland   v.   Citizens'   Sav.   Bank,   16 

Fraser  v.  Pendlebury,  10  W.  R.  104;  R.  I.  734,  19  Atl.  654;  Green  v.  Walk- 

Cazenove  v.  Cutler,  4  Met.  246.  And  er,  22  R.  I.  14,  45  Atl.  742;   McCulla 

see    Farwell    v.    Sturdivant,    37    Me.  v.    Beadleston,    17   R.    I.    20,   20    Atl. 

308;    Windbiel    v.    Carroll,    16    Hun,  11;   Hamilton  v.  Dobbs,  19  N.  J.  Eq. 

101.  227;    Bigelow    v.    Cassedy,    26    N.    J. 

'"^McMillan    v.    Richards,    9     Cal.  Eq.  557;   Chedel  v.  Millard,  13  R.  I. 

365,  70  Am.  Dec.  655.  461;    Gatewood  v.  Gatewood,  75  Va. 

'"'See    §792;    Lamb   v.    Montague,  407;    Strasbaugh  v.    Dallam,  93   Md. 

112  Mass.  352;  Lamson  v.  Drake,  105  712.  50  Atl.  417. 

Mass.  564;  Butler  v.  Taylor,  5  Gray,.        ^""^  Chase  v.  Williams,  74  Mo.  429. 
455;  Chedel  v.  Millard,  13  R.  I.  461; 


§    1087.]  REDEMPTION    OF    A    MORTGAGE.  52 

call  upon  them  to  pay  their  shares  of  the  incumbrance,  or  to  be  fore- 
closed of  all  right  of  redemption.^^* 

In  like  manner  when  a  junior  mortgagee  or  other  incumbrancer  re- 
deems from  a  prior  mortgage,  although  he  has  no  right  to  demand  a 
written  assignment  of  the  mortgage,  he  has  the  right  to  have  the  mort- 
gage delivered  to  him  uncancelled,  and  this  in  equity  is  a  complete 
assignment  of  it.  Such  redemption  puts  him  in  the  place  of  the  mort- 
gagee, and  gives  him  all  the  mortgagee's  rights  against  the  mort- 
gagor.'^* He  thereupon  becomes  entitled  to  hold  it  as  an  existing 
mortgage,  until  the  owner  redeems  or  he  himself  forecloses  it. 

The  rule  is  the  same  whether  the  redemption  take  place  before  any 
proceedings  to  foreclose  are  had,  or  after  foreclosure  proceedings  have 
been  commenced,  but  have  not  terminated  in  a  complete  foreclosure 
by  the  expiration  of  the  time  of  redemption.^®®    • 

If  there  be  an  exception  to  this  rule,  it  is  in  case  the  party  making 
the  payment  occupies  such  a  relation  to  the  mortgage  or  the  parties 
in  interest  that  he  is  entitled  to  be  substituted  in  the  position  of  the 
mortgagee  upon  paying  the  mortgage,  for  such  a  person  may  some- 
times in  equity  require  an  assignment  of  the  mortgage  and  other  se- 
curities for  his  protection  and  indemnity;  though  a  court  of  equity 
will  often  treat  the  assignment  as  made  without  an  actual  execution  of 
it.^®^ 

§  1087.  In  some  States,  however,  it  is  an  established  doctrine  that 
a  mortgagee  may  be  compelled,  upon  payment  of  his  mortgage,  to  make 
an  assignment  of  it  when  this  will  afford  a  more  complete  protection 
to  the  person  who  has  paid  the  money,  and  he  is  not  primarily  liable 
to  pay  it,  but  is,  for  instance,  a  surety  or  a  junior  incumbrancer.^"^ 

^^*  Young    v.    Williams,    17    Conn,  property,     can     acquire     an     equity 

393;    Averill   v.  Taylor,   8  N.  Y.  44;  against    him    at    variance    with    his 

Bra'inard   v.    Cooper,    10   N.    Y.    356;  right,    so   long   as   he   himself   does 

Burnet   v.   Denniston,   5   Johns.    Ch.  nothing  to  create  it." 

35;    McLean  v.  Towle,  3  Sandf.  Ch.  ™' Dodge  v.  Fuller,  2  Flip.  603. 

117,  119;   Powers  v.  Golden  Lumber  ="  Gatewood    v.    Gatewood,   75   Va. 

Co.' 43  Mich.  468,  5  N.  W.  656;  Long  407;    Lamb   v.   Montague,   112   Mass. 

V.  Kaiser,  81  Mich.  518,  46  N.  W.  19;  352;  Green  v.  Walker,  22  R.  L  14,  45 

Mattison  v.  Marks,  31  Mich.  421.  Atl.  742. 

=»' Hamilton  v.  Dobbs,  19  N.  J.  Eq.  ^"^  New  York:   Johnson  v.  Zink,  52 

227;  Dodge  v.  Fuller,  2  Flip.  603,  48  Barb.  396;   Pardee  v.  Van  Anken,  3 

Fed.    347;     Mattison    v.    Marks.    31  Barb.    534;    Tompkins    v.    Seely,    29 

Mich.  421;   Holland  v.  Citizens'  Sav.  Barb.  212;  McLean  v.  Tompkins,  18 

Bk.   16  R.   I.   734.  19   Atl.   654.     Per  Abb.  Pr.  24;   Jenkins  v.  Continental 

Durfee,    C.    J.:    "The    right    of    the  Ins.  Co.  12  How.  Pr.  66;   Dauchy  v. 

mortgagee   originates    in    the    mort-  Bennett,  7  How.  Pr.  375;   Ellsworth 

gage;    and  we   do  not  see  how,   on  v.  Lockwood,  42  N.  Y.  89;  Bayles  v. 

principle,    after    the    mortgage    has  Husted,  40  Hun,  376;  Piatt  v.  Brick, 

been  given,  any  other  person,  by  ac-  35  Hun,  121.     See  §  792. 

quiring  an  interest  in  the  mortgaged.  Michigan:     Moore    v.     Smith,     95 


53  SUM    PAYABLE    TO    EFFECT    ItEDiai J'TIOX.  [§    1088. 

This  right  to  an  assignment  rests  wholly  upon  the  assumption  that  the 
person  redeeming  cannot  otherwise  be  protected.  In  other  courts  pro- 
tection is  given  in  all  cases  upon  the  principle  of  subrogation  by  law. 
The  mortgagee  is  not  allowed  to  discharge  the  mortgage  of  record,  but 
is  required  to  deliver  it,  with  tlie  note  or  bond  which  accompanies  it, 
to  the  person  redeeming,  who  may  enforce  the  obligations  if  necessary 
in  the  name  of  the  mortgagee.  An  assignment  of  the  mortgage  and 
debt  assumes  a  sale  of  them,  which  a  mortgagee  cannot  be  compelled 
to  make.  Subrogation,  on  the  other  hand,  assumes  the  payment  of  the 
debt  by  one  not  liable  primarily  to  pay  it ;  but  by  paying  it  the  law  says 
that  the  person  making  the  payment  steps  into  the  place  and  rights 
of  the  mortgagee  who  receives  the  payment. 

To  enable  a  subsequent  mortgagee  to  compel  an  assignment  to  him- 
self of  a  prior  mortgage  paid  by  him,  it  was  formerly  said  that  there 
must  be  some  equitable  reason  for  it,  and  that  the  mere  fact  that  he 
is  a  subsequent  mortgagee  does  not  constitute  such  equitable  rea- 
son;^®" but  the  Court  of  Appeals  in  a  recent  case  has  decided  that  a 
junior  mortgagee,  upon  paying  a  senior  mortgage,  may  compel  an  as- 
signment, although  he  does  not  occupy  the  position  of  a  surety.^^" 

Application  for  an  assignment  may  be  made  in  the  foreclosure  pro- 
ceedings, if  such  are  pending,  accompanied  by  an  offer  to  pay  what- 
ever sum  is  due  upon  the  mortgage  and  for  costs.^'^^  If  no  such  suit 
is  pending,  and  the  mortgagee  declines  a  tender  of  the  amount  due, 
accompanied  by  a  demand  for  an  assignment,  he  may  bring  a  bill  to  re- 
deem in  the  usual  form,  except  in  asking  for  an  assignment  of  the 
mortgage  to  himself  instead  of  a  discharge  of  it.^''^ 


''0"to^ 


§  1088.     A  tender  made  after  breach  of  the  condition,  except  in 
those  States  where  the  common  law  doctrine  has  been  changed,  does  not 

Mich.    71,    54    N.    W.    701;    Lamb    v.  their    interest;    2.    Where    they    are 

Jeffrey,  41  Mich.  719,  3  N.  W.   204;  held  by  will,  or  for  life  with  remain- 

Sager  v.  Tupper,  35  Mich.  134.  der  over;  3.  Where  they  are  held  ia 

In  Iowa  an  assignment  may  be  de-  trust;  4.  Where  they  have  descended 
manded  under  Code  1880,  §  3323.  If  under  the  intestate  law.  The  as- 
the  oenior  mortgage  covers  a  home-  signment  in  such  cases  may  be  en- 
stead,  which  is  not  included  in  the  forced  by  the  Court  of  Common 
junior  mortgage,  the  junior  mort-  Pleas  sitting  as  a  court  of  equity, 
gagee  upon  redeeming  is  entitled  Laws  1885,  No.  123. 
only  to  an  assignment  of  the  part  '""Frost  v.  Yonkers  Savings  Bank, 
not  including  the  homestead.  Grant  8  Hun,  26;  Vandercook  v.  Cohoes 
V.  Parsons,  67  Iowa,  31,  24  N.  W.  bav.  Inst.  5  Hun,  641;  Ellsworth  v. 
578.  Lockwood,  42  N.  Y.  89. 

In    Pennsylvania    it    is    provided  =""  Twombly   v.    Cassidy,    82   N.    Y. 

that  an  assignment  may  be  required  155. 

upon     payment     in     the     following  ="'  Hornby  v.  Cramer,  12  How.  Pr. 

cases:    1.    Where    the    lands    belong  490. 

to  minors  and  an  assignment  is  for  "=  See  Smith  v.  Green,  1  Coll.  555. 


§    loss.]  REDEMPTION    OF    A    MORTGAGE.  54 

reinvest  the  mortgagor  with  the  legal  estate  f^  and  the  effect  of  it  gen- 
erally is  only  to  allow  a  suit  to  be  brought  for  redemption  within  a 
jertain  time  as  provided  by  statute  in  several  States,  or  to  throw  the 
costs  of  the  suit  upon  the  mortgagee  in  case  the  tender  w.as  of  a  suffi- 
3ient  amount  to  fully  satisfy  his  claim.^'^*  Of  course  the  acceptance  of 
i:he  whole  sum  tendered  operates  as  a  Avaive:  of  the  foreclosure,  and  a 
restoration  of  the  mortgagor's  title.^^^ 

A  tender,  to  be  good,  must  be  of  the  whole  amount  due.^^®  It  must 
be  made  to  the  mortgagee  or  his  assignee.^^'^  If  an  assignment  has 
been  made  but  not  recorded,  it  is  the  duty  of  the  person  who  wishes  to 
make  a  tender  to  seek  out  the  assignee,^^^  But  if  the  mortgagee  on  in- 
quiry refuses  to  disclose  the  name  of  his  assignee,  and  the  mortgagor 
has  no  notice  of  the  assignment,  he  may  make  a  tender  to  the  mort- 
gagee and  maintain  .against  him  his  bill  to  redeem. ^^^  A  tender  to 
the  legal  holder  of  the  mortgage  of  the  whole  amount  due  on  it  is  good 
although  only  a  portion  of  it  belongs  to  him^  and  the  balance  to  some 
other  person  for  whom  he  holds  the  mortgage  in  trust.^*'' 

A  tender  must  be  made  unconditionally .^^^  An  offer  to  pay  if  the 
defendant  "would  reassign  and  transfer'^  to  him  is  not  sufficient  ;^^^ 
lor  is  one  conditioned  upon  the  execution  of  a  quitclaim  deed  in  addi- 
tion to  a  discharge.^^^  As  to  the  place  of  tender,  if  no  place  of  pay- 
ment is  mentioned  in  the  mortgage  deed,  and  none  has  been  agreed 
upon  by  the  parties,  the  mortgagor  must  seek  the  mortgagee  and  make 
a  personal  tender.^^*  The  mortgagee  should  be  sought  at  his  place  of 
business,  though  under  many  circumstances  a  tender  at  his  house  is 
proper.^^^ 

A  tender  of  bank  notes  or  bills  which  are  not  made  a  legal  tender 
is  sufficient,  if  not  objected  to  on  that  account  f^^  and  in  like  manner 
a  tender  of  a  larger  sum  than  is  due,  whereby  the  creditor  is  obliged 

"=See  §892;   Smith  v.  Anders,  21  ^''^  Evans  v.  Judkins,  4  Camp.  156; 

Ala.    782;        Patchin    v.    Pierce,    12  Glasscott  v.  Day,  5  Esp.  48;  Cole  v. 

Wend.  61.  Blake,  Peake,  79;    Loring  v.  Cooke, 

^'*  Lamson    v.     Drake,    105    Mass.  3  Pick.  48.     See  §  900. 

i)64,  568;   Brown  v.  Lawton,  87  Me.  ^*- Ferguson    v.     Wagner,   41    Ind. 

33,  32  Atl.  733.  450;     Wendell    v.    New     Hampshire 

"'^  Patchin  v.  Pierce,  12  Wend.  61.  Bank,  9  N.  H.  404. 

3^"  Graham  v.  Linden,  50  N.  Y.  547;  ««=  Dodge  v.   Brewer,  31  Mich.  227. 

Litt.   §§334,  337.     See  §894.  ^'^^  See    §897;    Gyles   v.    Hall,   2   P. 

»"Dorkray  v.  Noble,  8  Me.  278.  Wms.  378;  Sharpnell  v.  Blake,  2  Eq. 

^'«  Mitchell    V.    Burnham,    44    Me.  Gas.   Abr.    604. 

286.  "^'^  Manning  v.  Burges,  1  Ch.   Cas. 

"'Fritz  v.   Simpson,  34  N.  J.  Eq.  29. 

436;    Mitchell    v.    Burnham,    44    Me.  ='^  Austen   v.    Dodwell,    1  Eq.    Cas. 

286.  Abr.  318;    Lockyer  v.  Jones,  Peake, 

»«» Cliff  V.   Wadsworth,  2  Y.   &  G.  180.  n.;    Biddulph  v.  St.  John,  2  Sch. 

G.  G.  598;  Graham  v.  Linden,  50  N.  &  Lef.   521;    Fellows  v.   Dow,  58  N. 

Y.    547;    Lindsay;   v.    Matthews,    17  H.    21;    Rogers    v.    Rogers    (Tenn.) 

J71a.  575.                 ■  35,  ?  S.  W.  890. 


55  SUM  PAYABLE  TO  EFFECT  REDEMPTION.       [§  1088. 

to  make  change  or  to  return  a  part,  is  good  if  no  objection  is  made.^^"' 
The  money  should  be  actually  produced,  for  though  the  creditor  may 
refuse  at  first,  the  sight  of  the  money,  it  is  said,  may  tempt  him  to 
take  it.^^*  But  this  may  be  waived  by  the  mortgagee,  as  by  requesting 
the  mortgagor  not  to  trouble  himself  to  go  to  another  part  of  the  house 
for  it  ;•''*'•  or  by  refusing  to  look  at  it.^"**  A  tender  of  money  in  bags  is 
good,  if  the  money  is  actually  contained  in  them;^'*^  and  so  of  notes, 
twisted  in  a  roll.^^^  A  mistake  in  the  value  of  a  coin  included  in  the 
tender  may  be  relieved  against.^**^ 

The  tender  must  be  made  at  a  proper  time.  If  a  certain  hour  be 
fixed  for  the  payment  of  the  money,  the  mortgagor's  attendance  at 
any  time  before  the  beginning  of  the  next  hour  is  sufficient.  In  a  case 
where  the  hour  was  fixed  at  three  o'clock,  and  the  mortgagor  attended 
before  four  o'clock  to  make  payment,  he  was  not  bound  to  pay  interest 
afterwards,  although  the  mortgagee  had  waited  from  a  quarter  before 
three  till  a  quarter  after  that  hour.^*''* 

If  the  mortgagor  requests  the  rendering  of  an  account  of  the  amount 
due,  the  request  must  be  so  made  in  respect  to  time  and  place  as  to 
give  the  mortgagee  an  opportunity  to  render  an  account.^®^  A  request 
made  upon  the  mortgagee  when  absent  from  home  in  another  town, 
and  a  reply  by  him  that  he  would  give  all  the  information  in  his  power 
if  the  mortgagor  would  call  upon  him  at  home,  do  not  amount  to  a 
demand  for  an  account  and  a  refusal  to  render  it.^®'' 

When,  on  the  day  before  the  expiration  of  the  time  for  redeeming 
land  from  a  mortgage,  a  person  in  behalf  of  the  mortgagor  called  upon 
the  mortgagee  and  asked  him  to  execute  a  quitclaim  deed  and  receive 
the  money  due  on  the  mortgage,  but  he  declined  to  do  so,  and  said  he 
wished  to  see  the  mortgagor,  whom  he  would  meet  in  two  days,  and 
then  would  take  no  advantage  of  the  expiration  of  the  time,  it  was  held 
that  the  tender  was  sufficient  to  entitle  the  mortgagor  to  redeem  if  the 
tender  was  made  by  his  authority.^^^  Oral  authority  from  the  mort- 
gagor, or  a  subsequent  ratification  by  him,  is  sufficient.^"^ 

'*'  Black  V.  Smith,  Peake,  88.     See  Leatherdale  v.  Sweepstone,  3  Car.  & 

§901.  P.  342;   Glasscott  v.  Day,  5  Esp.  48; 

'"*  Douglas  v.  Patrick,  3  T.  R.  683;  Thomas  v.  Evans,  10  East,  101. 

Thomas    v.    Evans,    10    East,    101;  =>"  Abbott  v.  Banfield,  43  N.  H.  152. 

Dickinson  v.  Shee,  4  Esp.  67.  ^»^  See  §898;    Knox  v.  Simmons,  4 

^«»  Douglas  V.  Patrick,  3  T.  R.  683;  Bro.  C.  C.  433. 

Harding  v.  Davies,  2  Car.  &  P.  77.  ^'■'^  Willara   v.    Fiske,    2    Pick.   540; 

'■■"•  Fellows  V.  Dow,  58  N.   H.  21.  Putnam  v.  Putnam,  13  Pick.  129. 

""^  Wade's  case,  5  Rep.   115a.     See  '■''■"'  Fay  v.  Valentine,  2  Pick.  546. 

conflicting  case,  Sucklinge  v.  Coney,  '■"  Walden  v.  Brown,  12  Gray,  102; 

Noy,  74.  Brown  v.  Lawton,  87  Me.  83,  32  Atl. 

^■•^  Alexander  v.   Brown,   1   Car.    &  733. 

P.    288.     For  tenders   held   bad,   see  *■"' Walden  v.  Brown,  12  Gray,  102. 
Harding  v.  Davies,  2  Car.  &  P.  77; 


§    1089.]  REDEMPTION    OF    A    MORTGAGE.  56 

VI.     Contribution  to  redeem. 

§  1089.  In  general. — Wlien  the  estates  of  two  persons  are  subject 
to  a  coanmon  mortgage,  which  one  of  them  pays  for  the  benefit  of  both, 
he  has  a  right  to  hold  the  whole  estate  thus  redeemed  until  the  other 
party  shall  pay  an  equitable  proportion  of  the  sum  paid  to  redeem; 
or  the  party  who  has  paid  the  incumbrance  may  in  equity  enforce  con- 
tribution from  the  other.^^®  But  to  entitle  one  to  contribution  from 
the  other,  their  equities  must  be  equal. **^''  If  there  was  any  obligation 
resting  upon  the  person  Avho  paid  the  incumbrance  to  discharge  it  as  a 
debt  of  his  own,  he  can  of  course  claim  nothing  from  the  other,  al- 
though the  latter  was  benefited  by  the  payment;  and  on  the  other 
hand,  if  it  was  the  duty  of  the  latter  to  pay  the  whole  incumbrance,  the 
payment  of  it  by  the  former  gives  him,  not  a  right  to  contribution, 
but  a  right  to  hold  the  mortgage  as  a  subsisting  security  against  the 
other  part  owner;  in  other  words,  he  is  subrogated  to  the  position  of 
the  mortgagee.  The  right  of  subrogation  has  already  been  spoken  of, 
and  it  remains  to  be  considered  under  what  circumstances  the  right  to 
contribution  arises.*"^ 

The  test  by  which  the  right  to  contribution  is  always  determined 
is  found  in  the  inquiry  whether  the  equities  of  the  parties  are  equal; 
if  they  are  equal,  the  right  to  contribution  exists ;  but  if  they  are  not 
equal,  it  does  not  exist.*^^  A  mortgagor  who  has  sold  a  portion  of  the 
land  covered  by  the  mortgage  by  a  warranty  deed  cannot  claim  con- 
tribution of  the  purchaser,  because  he  is  himself  liable  for  the  whole 
debt.  Neither  can  a  subsequent  purchaser  call  upon  a  prior  one  for 
contribution,  because  such  subsequent  purchaser  acquires  only  the 
rights  the  mortgagor  then  had,  and  therefore  the  equities  of  the  two 
purchasers  are  not  equal.*"'' 

One  tenant  in  common  paying  a  general  incumbrance  upon  the 
common  estate,  for  which  neither  tenant  is  personally  liable,  has  no 
claim  for  contribution  against  his  co-tenant.  His  only  remedy  is  to 
pay  the  incumbrance,  and  then  enforce  that  by  foreclosure  against  his 
co-tenant.    He  cannot  compel  his  co-tenant  to  redeem  his  half  of  the 

''"Chase    v.    Woodbury,    6    Cush.  N.   W.   1069;    Warner  v.   Freud,   138 

143;      Schoenewald      v.      Dieden,     8  Cal.  651,  72  Pac.  345. 

Bradw.    389;    Weed    v.    Calkins,    24  ^o"  Weed  v.  Calkins,  24  Hun.  582. 

Hun,   582;    Coffin   v.   Parker,   127   N.  ^"^  Huber  v.  Hess,  191  111.  305,  316, 

Y.   117,  27  N.  E.   814,  2  N.   Y.   Supp.  61  N.  E.  61,  quoting  text. 

75;    Stevens  v.  Cooper,  1  Johns.  Ch.  *»=  Huber  v.  Hess,  191  111.  305,  316, 

425;   Salem  v.  Edgerly,  33  N.  H.  46;  61  N.  E.  61,  quoting  text. 

Aiken  V.  Gale,  37  N.  H.  501;  Fellows  ^"^  Kilborn    v.    Robbins,    8    Allen, 

V.  Fellows,  69  N.  H.  339,  46  Atl.  474;  466;    Sanford    v.    Hill,   46   Conn.    42; 

Damm   v.    Damm,    91    Mich.    424,    51  Henderson    v.    Truitt,    95    Ind.    309, 

quoting  text. 


57  CONTRIBUTION    TO    REDEEM.  [§    1090. 

land.  The  co-tenant  has  his  option  whether  he  will  redeem  or  let  his 
interest  go.  No  personal  ol)ligation  rests  upon  him  to  redeem,  or  to 
pay  any  part  of  the  mortgage  debt.  The  mortgage  is  a  burden  upon 
the  land,  and  its  payment  not  a  personal  duty;  and  therefore  he  may 
exercise  his  option  whether  he  will  save  his  interest  by  paying  the  debt, 
or  let  his  interest  be  foreclosed.*"* 

If  tenants  in  common  are  jointly  liable  on  the  mortgage  debt  and 
one  has  paid  more  than  his  proper  share  of  the  debt  he  can  maintain  a 
suit  for  contribution  against  his  co-tenant  and  enforce  his  right  against 
his  co-tenant's  interest  in  the  land.**'^ 

When  a  mortgage  is  foreclosed  by  a  suit  in  equity,  or  an  equitable 
suit  under  the  codes  adopted  in  many  States,  the  equities  of  pur- 
chasers of  portions  of  the  mortgaged  estate  are  protected  by  a  direction 
in  the  decree  of  sale  that  the  parcels  be  sold  in  the  inverse  order  of 
alienation.*"®  Where  the  foreclosure  is  effected  in  other  ways,  as,  for 
instance,  by  sale  under  a  power,  by  entry  and  possession,  by  strict  fore- 
closure, by  a  writ  of  entry  or  other  suit  at  law,  the  remedy  of  one  whose 
estate  is  not  primarily  liable  for  the  satisfaction  of  the  mortgage  is  to 
redeem  it,  and  then  enforce  it  against  that  part  of  the  mortgaged  prem- 
ises which  in  equity  should  bear  the  burden.*"' 

§  1090.  The  general  rule,  therefore,  as  to  contribution  is,  that 
where  the  estates  of  two  or  more  persons  are  subject  to  one  common 
incumbrance,  which  one  pays  for  the  benefit  of  all,  he  is  entitled  to 
hold  the  whole  estate  which  he  has  thus  redeemed  until  the  others  pay 
their  proportionate  and  equitable  share  of  the  sum  so  paid  for  the  com- 
mon benefit  of  all.*"^  But  to  entitle  the  several  owners  to  a  pro  rata 
contribution,  they  must  stand  upon  the  same  equal  ground.  If  a 
mortgagor  conveys  the  mortgaged  land  in  separate  parcels  by  warranty 
deeds,  and  afterwards  pays  the  mortgage  debt,  he  is  not  entitled  to  con- 
tribution from  the  purchasers,  because  he  pays  merely  his  own  debt, 
which  his  covenants  bound  him  to  pay.*"^  And  so  any  one  purchasing 
a  part,  while  the  mortgagor  himself  remains  owner  of  another  part, 
has  the  right  to  have  the  part  so  remaining  in  his  grantor  first  applied 
to  satisfy  the  incumbrance.     The  heir  of  the  mortgagor  is  under  the 

*°*  Lyon  v.  Robbins,  45  Conn.  513.  tribution    is    a    principle    of   justice 

^"^Wallcer  v.  Sarven,  41  Pla.  210,  and  equity,  and  when  there  is  equal 
25  So.  885;  Newbold  v.  Smart,  67  equity,  and  there  is  an  incumbrance 
Ala.  326;  Furman  v.  McMillian,  2  on  land  belonging  to  different  par- 
Lea  (Tenn.)  121;  Gee  v.  Gee,  2  ties,  they  ought  each  to  contribute 
Sneed    (Tenn.)    395.  towards    removing    it."       See,    also, 

*'^  Henderson  v.  Truitt,  95  Ind.  309.  Burget  v.  Greif,  55  Md.  518. 

^'''Sanford  v.  Hill,  46  Conn.  42.  ^""Henderson    v.     Truitt,    95     Ind. 

"'"  Gibson  v.  Crehore,  5  Pick.  146;  309;   Huber  v.  Hess,  191  111.  305,  61 

Allen    V.    Clark,    17    Pick.    47,    per  N.  E.  61. 
Wilde,  J.     "The  foundation  of  con- 


§    1091.]  REDEMPTION    OF    A    MORTGAGE.  58 

same  obligation.  In  Harbert's  case  it  is  said  that  if  one  is  seised  of 
three  acres  under  an  incumbrance,  and  enfeoffs  A  of  one  acre,  and  B 
of  another,  and  the  third  acre  descends  to  the  heir,  who  discharges  the 
incumbrance,  he  shall  not  have  contribution,  "for  he  sits  in  the  seat  of 
his  ancestor."*^"  It  is  a  well-settled  rule  that  if  a  mortgagor  conveys 
a  parcel  of  the  mortgaged  premises,  with  covenants  of  warranty,  nei- 
ther he  nor  his  subsequent  grantee  of  the  rest  of  the  land,  with  notice, 
actual  or  constructive,  of  the  prior  deed,  can,  upon  paying  the  mort- 
gage, have  contribution  from  the  prior  grantee. *^^ 

If  the  owner  make  simultaneous  deeds  of  undivided  moieties  of  the 
incumbered  estate,  the  grantees  stand  upon  an  equal  footing  in  rela- 
tion to  the  incumbrance.*^^  But  if  one  of  these  grantees  neglect  to  put 
his  deed  upon  record,  and  the  other  grantee,  after  recording  his  deed, 
sells  his  moiety  to  one  who  has  no  notice  of  the  conveyance  of  the 
other's  moiety,  this  last  purchaser  stands  in  the  same  position  as  if  the 
other  moiety  still  remained  in  the  original  owner,  as  in  fact  the  record 
indicates;  and  therefore  such  purchaser  has  the  right  to  have  the  moiety 
so  remaining  first  applied  to  satisfy  the  incumbrance.  The  grantee 
who  fails  to  put  his  deed  on  record  enables  the  other  grantee  to  make 
an  apparently  good  title  to  the  third  person  purchasing  without  notice 
of  the  incumbrance  of  the  simultaneous  deed.*^^ 

Where  several  persons  own  distinct  parcels  of  the  mortgaged  prem- 
ises, contribution  should  be  made  in  proportion  to  the  present  value  of 
the  several  parcels,  unaffected  by  improvements  made  by  either  of 
them.*i* 

§  1091.  If  a  mortgagor  sells  portions  of  the  mortgaged  prem- 
ises in  different  parcels  at  different  times  by  warranty  deed,  that 
which  he  retains  is  in  equity  primarily  liable  as  against  all  but  the 
mortgagee  for  the  whole  debt,  and  such  grantee  is  not  required  to  con- 
tribute.*^^ As  between  such  purchaser  and  vendor  it  is  well  settled  by 
all  the  decisions,  both  American  and  English,  that  the  purchaser  may 
redeem  the  mortgage,  and  enforce  it  against  that  portion  of  the  estate 

*">^  Co.   lib;    Hall  v.   Morgan,   79  H.  294;  Aiken  v.  Gale,  37  N.  H.  501; 

Mo.  47;  Sargeant  v.  Rowsey,  89  Mo.  Sawyer  v.  Lyon,  10  Johns.  32;  Stev- 

617,  1  S.  W.  823;  Huber  v.  Hess,  191  ens  v.   Cooper,   1   Johns.    Ch.   425,   7 

111.  305,  61  N.  E.  61.  Am.  Dec.  499;  Johnson  v.  White,  11 

*"  Converse    v.    Ware    Sav.    Bank,  Barb.  194;  Bates  v.  Ruddick,  2  Iowa, 
152    Mass.    407,    25    N.    E.    733,    per  423,  65  Am.  Dec.  774;   Beall  v.  Bar- 
Allen,  J.;   George  v.  Wood,  9  Allen,  clay,  10  B.   Mon.  261. 
80;    Beard   v.    Fitzgerald,    105   Mass.  "^  S  1620;    Wallace    v.    Stevens,    64 
134;  Clark  v.  Pontain,  135  Mass.  464.  Me.  225;  Lausman  v.  Drahos,  8  Neb. 

"'See  Adams  v.   Smilie,   50  Vt.  1.  457;    Henderson    v.    Truitt,    95    Ind. 

"'Chase  v.  Woodbury,  6  Cush.  143.  309;  Sargeant  v.  Rowsey,  89  Mo.  617, 

"*S§1626,   1627;   Bailey  v.  Myrick,  1   S.   W.   823. 
50  Me.  171;    Taylor  v.  Bassett,  3  N. 


59  CONTRIBUTION    TO    REDEEM,  [§    1092. 

still  remaining  in  the  hands  of  the  mortgagor.''^^  A  person  having  an 
agreement  for  purchase,  such  that  he  could  enforce  a  specific  perform- 
ance of  it  in  equity,  has  the  same  right  as  an  actual  purchaser  to 
charge  the  burden  of  the  incumbrance  upon  the  part  of  the  estate  re- 
tained by  the  mortgagor.*" 

The  mortgagee  may  generally  enforce  his  security  against  the  whole 
mortgaged  premises ;  but  if  he  become  the  owner  of  the  equity  of  re- 
demption of  the  part  chargeable  with  the  whole  amount  of  the  mort- 
gage, he  is  required  in  equity  to  satisfy  his  mortgage  so  far  as  possible 
out  of  that  part.*^^  Therefore  the  purchaser  by  warranty  deed  of  a 
portion  of  premises  covered  by  a  mortgage  may  redeem  without  con- 
tribution against  a  subsequent  assignee  of  the  mortgage,  when  such  as- 
signee has  also  subsequently  become  the  owner  of  the  equity  of  redemp- 
tion of  the  remaining  portion  of  the  land,  and  that  is  sufficient  to 
satisfy  the  mortgage  debt.  The  deed  of  warranty  exempts  the  land  de- 
scribed in  it  from  contribution  in  favor  of  the  mortgagor  or  any  per- 
son claiming  the  remaining  land  under  him,  with  notice  of  the  prior 
conveyance.*  ^^ 

§  1092.  Portions  of  the  mortgaged  premises  sold  to  different 
persons  are  chargeable  in  the  inverse  order  of  the  conveyances.*^'' 
Upon  a  decree  of  foreclosure  in  such  case  the  portion,  if  any,  still  re- 
maining in  the  hands  of  the  mortgagor,  is  first  subjected  to  sale ;  and 
then  the  portion  last  conveyed  by  him,  and  so  on  in  the  inverse  order 
of  the  conveyances  made  by  him.  This  rule  is  considered  in  a  subse- 
quent chapter,  and  the  authorities  are  collected.*^  ^  Under  the  system 
of  registry  in  general  use  in  this  country,  this  rule  seems  reasonable 
and  just,  as  those  acquiring  a  subsequent  interest  in  the  estate  have  no- 
tice of  the  condition  of  it  when  they  take  it ;  but  the  record  is  not,  in 
general,  notice  to  a  prior  purchaser.*^^  The  want  of  a  general  registry 
system  in  England  is  undoubtedly  the  reason  why  this  rule  has  not 
been  fully  adopted  there. 

But  notice  of  the  equities  of  prior  purchasers  may  be  given  in  other 
ways  than  by  the  registry.  A  purchaser  of  a  portion  of  a  lot  of  land, 
the  whole  of  which  is  subject  to  a  prior  mortgage,  having  notice  of  a 

"'Cheever  v.   Fair,   5   Cal.   337,   2  son,  5  Johns.  Ch.  235,  9  Cow.  403; 

Story's  Eq.,  §  1233;  Hall  v.  Morgan,  Skeel  v.  Spraker,  8  Paige,  182;  Stuy- 

79  Mo.  47.  vesant    v.    Hall,    2    Barb.    Ch.    151; 

*"  Root  v.  Collins,  34  Vt.  173.  Sanford  v.  Hill,  46  Conn.  42,  53,  per 

"''Mclntire  v.  Parks,  59  N.  H.  258.  Pardee,  J.;   Alexander  v.  Welch,  10 

""Bradley  v.  George,  2  Allen,  392.  111.    App.    181;    Huber  v.    Hess,    191 

^^o  Lyman  v.  Lyman,  32  Vt.  79.  76  111.  305,  61  N.  E.  61. 

Am.   Dec.    151;    Root   v.   Collins,    34  *=i  Chapter  xxxvi ;    §§  1620-1632. 

Vt.  173;   Deavitt  v.  Judevine,  60  Vt.  *^  Beard  v.   Fitzgerald,  105   Mass. 

695,    17    Atl.    410;    Gill    v.    Lyon,    1  134. 

Johns.  Ch.   447;    Clowes  v.   Dicken- 


§    1093.]  REDEMrTION   OF    A    MORTGAGE.  60 

prior  unrecorded  deed  of  warranty  of  an  adjoining  portion  of  the  same 
lot  to  a  third  person,  cannot  compel  the  latter  to  contribute.  A  refer- 
ence in  the  mortgage  deed  to  such  owner  of  the  adjoining  lot  amounts 
to  notice  of  the  conveyance. ^^^ 

As  between  purchasers  in  succession  of  different  parts  of  the  equity 
of  redemption  of  lands  there  is  no  contribution,  as  the  parties  do  not 
stand  on  an  equal  footing  in  equity.*^* 

One  holding  a  mortgage  on  two  lots  of  land,  on  one  of  which  there 
is  a  prior  mortgage,  cannot  be  compelled  to  redeem  on  a  foreclosure  of 
such  prior  mortgage,  so  as  to  give  to  a  subsequent  mortgagee  of  the 
other  lot  the  benefit  of  the  security.*^^ 


VII.     Pleadings  and  Practice  on  Bills  to  redeem. 

§  1093.  In  general. —  The  only  remedy  of  the  mortgagor  for  en- 
forcing his  right  to  redeem  after  a  breach  of  the  condition  is  by  a  bill 
in  equity.  If  the  mortgagee  is  in  possession,  he  has  the  right  to  retain 
the  possession  until  his  claim  upon  the  property  is  paid.  So  long  as 
the  mortgage  is  in  fact  not  discharged,  and  is  apparently  a  subsisting 
security,  the  mortgagor  cannot  obtain  possession  by  ejectment.*^''  The 
rule  is  the  same  although  the  mortgagor  claims  that  the  debt  has  been 
paid  in  full.  So  long  as  the  mortgage  is  apparently  unsatisfied,  and 
the  mortgagee  claims  any  interest  under  it,  the  mortgagor  must  resort 
to  a  suit  in  equity  to  redeem;  and  although  he  may  allege  that  the 
mortgage  has  been  paid,  or  was  given  for  the  accommodation  of  the 
mortgagee,  and  may  pray  that  a  decree  be  entered  that  it  be  discharged, 
yet  he  should  at  the  same  time  pray  that  he  be  allowed  to  redeem,  and 
should  offer  to  do  so  if  anything  be  found  due  upon  the  mortgage. *^^ 
Although  the  mortgagor  is  already  in  the  actual  possession  of  the  mort- 
gaged estate,  he  may,  after  a  breach  of  the  condition  and  payment  of 
the  mortgage,  or  a  tender  of  payment,  maintain  a  bill  to  redeem,  for  in 
legal  contemplation  his  possession  is  considered  that  of  the  mort- 
gagee.*^^ 

"'George  v.  Kent.  7  Allen,  16.  "^  Hill    v.    Payson,    3    Mass.    559; 

"*  Gill  V.  Lyon,  1  Johns.  Ch.  447;  Parsons    v.    Welles,    17    Mass.    419; 

Clowes   V.    Dickenson,   5   Johns.    Ch.  Newton    v.    Baker,    125    Mass.    30; 

235,  240.  Beach  v.  Cooke,  28  N.  Y.  508.     See, 

*'-'  Lewis  V.   Hinman,   56  Conn.  55,  however,    Farmers'   F.    Ins.   &   Loan 

13  Atl.  143.  Co.    V.    Edwards,   21   Wend.    467,    26 

""See    §1093;    Chase    v.    Peck,    21  Wend.   540. 

N.  Y.  581;   Pell  v.  Ulmar,  18  N.  Y.  "*  Hicks    v.    Bingham,    11    Mass. 

139;  Van  Dyne  v.  Thayre,  14  Wend.  300. 
233;    Phyfe  v.  Riley,  15  Wend.  248; 
Woods  v.  Woods,  66  Me.  206. 


61  PLEADINGS    AND    J'KACTICE.  [§    1094. 

When  the  condition  of  the  mortgage  has  been  saved  by  performance 
of  it  before  any  breach  has  occurred,  and  the  mortgagee  being  in  pos- 
session refuses  to  surrender  it,  tlie  mortgagor  cannot  maintain  a  bill 
in  equity  to  recover  possession,  because  he  then  has  a  complete  and 
adequate  remedy  &t  law.*^^ 

One  who  has  the  right  to  redeem  cannot  maintain  a  bill  for  this  pur- 
pose after  a  suit  has  been  brought  against  him  for  the  foreclosure  of 
the  mortgage ;  nor  can  he  enjoin  the  prosecution  of  the  foreclosure  suit, 
although  he  at  the  same  time  offers  to  redeem.*^** 

Under  a  power  of  sale  mortgage,  the  mortgagor  may  after  a  breach 
of  the  condition  redeem  at  any  time  before  a  sale  is  actually  made 
under  the  power,  without  making  a  previous  tender,  provided  he  offers 
in  his  bill  to  pay  what  is  due.*^^  Where  the  mortgage  contains  a  power 
■of  sale,  and  the  plaintiff,  in  his  prayer  for  relief,  has  asked  for  a  sale, 
the  mortgagee  may  be  authorized  to  proceed  with  a  sale  under  the 
power  and  under  the  direction  of  the  court,  either  absolutely,  or  unless 
within  a  certain  time  the  plaintiff  should  pay  into  court  a  specified 
sum.*^^ 

§  1094.  The  bill  should  conform  to  the  general  principles  of  equity 
pleading  and  practice,  as  modified  by  the  statutes  and  rules  adopted 
in  the  State  where  the  action  is  brought.  It  should  show  that  the  debt 
secured  is  due  and  payable.*^^  It  should  pray  for  an  accounting  of 
what  is  due  upon  the  mortgage,  and,  where  the  mortgagee  has  been  in 
receipt  of  rents  and  profits,  for  an  accounting  of  these,  and  that  the 
defendant  be  adjudged  to  deliver  up  the  possession  of  the  estate  upon 
payment  of  the  amount  found  due.  A  bill  which  also  asks  for  the 
correction  of  accounts  already  exchanged  between  the  parties  is  not 
open  to  the  objection  of  being  multifarious,  inasmuch  as  the  accounts 
relate  to  the  mortgage  debt,  and  the  correction  asked  for  is  only  a  dif- 
ferent mode  of  asking  for  relief  by  a  true  account  stated.*^* 

The  plaintiff's  bill  should  contain  sufficient  averments  to  meet  the 
case  he  wishes  to  make  out,  and  should  ask  for  all  the  remedy  he  is 
entitled  to  or  wishes  to  obtain.  If  the  mortgagee  has  been  in  posses- 
sion and  has  received  rents  and  profits,  the  bill  should  so  allege,  and 
should  pray  to  have  an  account  of  them  taken ;  otherwise  no  deduc- 
tion will  be  made  upon  the  mortgage  debt  on  account  of  such  rents  and 
profits.*^^ 

""Holman  v.  Bailey,  3  Met.  55.  "' Ganceart  v.  Henry,  98  Cal.  281, 

"'"Kilborn     v.    Robbins,    8     Allen,  33  Pac.  92. 

466.  "^  Greene  v.   Harris,   10  R.   I.   382. 

"'^Way    v.    Mullett,    143    Mass.    49,  See  also  as  to  this  objection  Lyon 

8  N.  E.  881.  V.  Dees,  101  Ala.  700,  14  So.  564. 

"=  Emerson  v.  Atkinson,  159  Mass.  *"  Cree  v.  Lord,  25  Vt.  498. 
356.  34  N.  E.  516.  per  Allen.  J. 


§    1095. J  REDEMPTION    OF    A   MORTGAGE.  63 

A  bill  in  equity  by  a  tenant  for  life  prayed  that  he  might  be  per- 
mitted to  hold  possession  of  the  mortgaged  premises  upon  paying  the 
interest  as  it  might  accrue,  and  that,  upon  paying  the  whole  amount 
due  upon  the  mortgage,  the  mortgagee  might  be  compelled  to  assign  it 
to  him.  But  as  a  bill  for  these  purposes  is  not  allowed,  it  was  never- 
theless maintained  as  a  bill  to  redeem  simply;  inasmuch  as  it  con- 
tained an  averment  that  the  plaintiff  was  ready  and  offered  to  pay  the 
full  amount  due  on  the  mortgage,  upon  an  assignment  of  it  to  him- 
self, "or  in  such  other  way  and  upon  such  other  terms"  as  to  the  court 
should  seem  meet ;  and  although  the  bill  did  not  pray  for  an  account, 
it  alleged  that  an  account  had  been  previously  demanded,  and  prayed 
for  full  answers  to  the  bill,  and  the  answer  alleged  the  defendant's 
readiness  to  account.*^'' 

A  bill  is  not  multifarious  which  seeks  the  cancellation  of  a  mortgage 
upon  the  ground  that  the  mortgage  debt  has  been  fully  paid,  and  which 
prays  in  the  alternative,  to  be  let  in  to  redeem  if  anything  should  be 
found  due  upon  the  statement  of  an  account.  But  where  a  bill  filed 
by  the  wife  avers  that  she  joined  with  her  husband  in  a  mortgage  of 
her  lands  to  pay  his  debt,  and  in  the  alternative,  that  if  mistaken  as 
to  the  debt  being  wholly  her  husband's,  then  so  far  as  she  was  liable 
for  said  debt  it  was  paid,  and  praying  that  the  mortgage  be  cancelled 
as  a  cloud  on  her  title,  and  for  an  accounting,  if  complainant  was  mis- 
taken as  to  the  liability  l)eing  fully  discharged,  and  that  she  be  let  in 
to  redeem  is  multifarious.*^^ 

§  1095.     The  bill  to  redeem  must  make  a  tender   of  the  amount 

the  plaintiff  concedes  to  be  due  on  the  mortgage  debt,  or  must  offer  to 
pay  whatever  may  be  found  to  be  due.*^^    A  tender  before  bringing  a 

♦"Lamson    v.    Drake,     105     Mass.  249;    Coombs   v.    Carr,    55    Ind.    303; 

564.  Nesbit  v.   Hanway,  87  Ind.  400. 

"7  Williams    v.    Cooper,    107    Ala.  Iowa:    Anson   v.    Anson,   20   Iowa, 

246,  18  So.  170.  55,   89  Am.   Dec.   514. 

"*  Harding   v.    Pingey,   10  Jur.    N.  Mississippi:    Hoopes   v.    Bailey,   28 

S.    872;    Dalton   v.    Hayter,    7   Beav.  Miss.  328. 

313,  319;   Tasker  v.  Small,  3  Myl.  &  Nebraska:    Loney  v.   Courtnay,  24 

Cr.  63.  Neb.  580,  39  N.  W.  616. 

Alabama:     Crews  v.  Threadgill,  35  New    Hampshire:     Perry    v.    Carr, 

Ala.    334;    Adams  v.    Sayre,   70   Ala.  41   N.   H.    371;    Eastman  v.    Thayer, 

318;    Fouche  v.   Swain,  80  Ala.   151;  60  N.  H.  408. 

Stocks  v.  Yovmg,  67  Ala.  341;   Smith  New   York:    Silsbee   v.    Smith,    60 

V.    Conner,   65   Ala.   371;    Higman  v.  Barb.   372,   41   How.    Pr.   418;    Beek- 

Humes,  133  Ala.  617;  Lehman  v.  Col-  man  v.  Frost,  18  Johns.  544,  1  Johns, 

lins,  69  Ala.  127;   Thomas  v.  Jones,  Ch.   288,   9   Am.   Dec.   246;    Miner  v. 

84  Ala.  302,  4  So.  270;  Pryor  v.  Hoi-  Beekman,  11  Abb.  Pr.  N.  S.  147,  163. 

linger,  88  Ala.  405,  6  So.  760.  Oregon:    Marshall  v.  Williams,  21 

Georgia:    Turner   v.    Williams,    63  Oreg.  268,  28  Pac.   137;    Coughanour 

Ga.  726.  V.  Hutchinson,  41  Oreg.  419,  69  Pac 

Indiana:  Kemp  v.  Mitchell,  36  Ind.  68.    As  to  withdrawal  of  money  paid 


()3 


PLEADINGS    AXD    PRACTICE 


[§   1095. 


bill  to  redeem  is  not  necessary.'*^"  If  the  bill  be  brought  on  the  ground 
of  a  tender  made  and  refused,  the  tender  should  be  followed  up  by  a 
payment  into  court  at  the  time  of  filing  the  bill,  which  should  contain 
a  proper  averment  of  a  compliance  with  this  requirement.**^  But  al- 
though a  tender  made  by  the  bill  should  be  kept  good,  the  omission  or- 
dinarily only  raises  a  question  of  costs.**^  The  mere  payment  of  the 
money  into  court,  not  made  upon  any  tender  averred  in  the  bill  and 
proved  by  evidence,  does  not  amount  to  a  tender,  and  does  not  affect 
the  case.**'  A  suggestion  of  the  plaintiff's  poverty  and  inability  to 
redeem,  for  which  reason  he  asks  for  a  sale  of  the  premises,  does  not 
excuse  the  omission  of  an  offer  to  redeem.**^ 

Either  an  averment  of  tender  or  an  offer  to  pay  is  a  necessary  part 
of  the  bill,  and  the  omission  is  ground  for  a  demurrer.***     But  al- 

made  before  the  commencement  of 
the  action,  and  an  offer  in  tne  com- 
plaint is,  at  most,  a  technical  mat- 
ter, serving  no  substantial  purpose, 
because,  in  the  judgment  given  in 
such  action,  the  court  always  pro- 
vides that  redemption  can  only  be 
had  upon  payment  of  the  amount 
found  due.  The  tender  and  offer 
are  important  only  as  they  have 
bearing  upon  the  question  of  costs. 
The  mortgagor's  right  of  redemp- 
tion is  not  dependent  upon  his  of- 
fer or  tender  of  payment.  It  ex- 
ists independently  thereof,  and  an- 
tecedently thereto.  The  tender  or 
offer  is  not  needed  to  put  the  mort- 
gagee in  default;  and,  if  made,  no 
relief  can  be  based  thereon,  as  the 
rights  of  the  parties  are  not  changed 
thereby,  and,  independently  thereof, 
are  always  taken  care  of  and  regu- 
lated in  the  judgment.  Payment 
upon  redemption,  and  as  a  condi- 
tion of  redemption,  can  be  enforced 
in  the  action;  and  a  dismissal  of 
the  complaint  in  such  an  action,  on 
default  of  payment  under  the  judg- 
ment, as  a  condition  of  redemption, 
operates  as  a  foreclosure."  See,  also. 
Beach  v.  Cooke,  28  N.  Y.  508;  Miner 
V.  Beekman,  11  Abb.  Pr.  N.  S.  147, 
160. 

'"  Lamb   v.    Jeffrey,   41   Mich.    719. 

'"  Hart  V.  Goldsmith,  1  Allen,  145. 

'"  Goldsmith  v.  Osborne,  1  Edw. 
560. 

"*  Allerton  v.  Belden.  49  N.  Y. 
373;  Silsbee  v.  Smith.  60  Barb.  372, 
41  How.  Pr.  418;  Emerson  v.  Atkin- 
son, 159  Mass.  356.  34  N.  E.  516; 
Way  V.  Mullett,  143  Mass.  49,  8  N. 
E.   881;    Brown   v.   Bank,   148   Mass. 


in  to  court,   see  Dunn  v.    Hunt,   76 
Minn.    196,   78   N.   W.   1110. 

Vermont:  Kopper  v.  Dyer,  59  Vt. 
477,  9  Atl.  4,  59  Am.  Rep.  742;  Still 
v.  Buzzell,  60  Vt.  478. 

A  prayer  in  a  bill  to  redeem  that 
the  plaintiff  "may  be  allowed  to  pay 
such  sum  as  shall  be  found  due" 
on  the  mortgage  is  a  sufficient  of- 
fer to  redeem.  Brown  v.  South  Bos- 
ton Sav.  Bank,  148  Mass.  300,  19  N. 
E.  382. 

"•'  Casserly  v.  Witherbee,  119  N. 
Y.  522,  23  N.  E.  1000;  Beach  v.  Cooke, 
14  N.  Y.  508;  Quin  v.  Brittain,  Hoff. 
Ch.  353;  Aust.  v.  Rosenbaum,  74 
Miss.  593. 

"''Shank  v.  Groff,  45  W.  Va.  543, 
546,  quoting  text;  Daughdrill  v. 
Sweeney,  41  Ala.  310;  Murphee  v. 
Summerlin,  114  Ala.  54,  21  So.  470; 
Vick  V.  Beverly,  112  Ala.  458,  21  So. 
'325.  As  to  what  is  a  stifficient  aver- 
ment of  tender  and  offer  to  redeem, 
see  Edgerton  v.  McRea,  6  Miss.  183; 
Rogers  v.  Tindale,  99  Tenn.  356,  42 
S.  W.  86;  Lanning  v.  Smith,  1  Par- 
sons Sel.  Cas.  13;  Barton  v.  May,  3 
Sandf.  Ch.  450;  Quin  v.  Brittain, 
Hoff.  Ch.  353.  Now  in  New  York 
neither  a  previous  tender,  nor  an 
offer  in  the  complaint  to  pay  the 
amount  which  should  be  found  due, 
is  necessary.  Casserly  v.  Wither- 
bee, 119  N.  Y.  522,  23  N.  E.  1000, 
Earl,  J.,  saying:  "We  think  it  is 
now  the  settled  law  in  this  State, 
under  our  present  system  of  plead- 
ings, that  the  allegation  of  stich  a 
tender  or  offer  is  unnecessary.  It 
certainly  is  not  necessary  to  allege 
that  a  tender  or  offer  to  pay  the 
amount  due  upon  tne  mortgage  was 


§§    1096,    1097.]         REDEMPTION    OF    A    MORTGAGE.  64 

though  no  objection  be  taken  to  this  omission,  relief  will  be  granted 
only  upon  condition  of  payment  of  what  is  justly  due.**^  If  the  mort- 
gagee has  been  in  possession  and  has  received  rents  and  profits,  it  is 
not  practicable  for  the  mortgagor  to  make  an  actual  tender,  or  even  a 
tender  in  writing,  of  the  exact  amount  due.**®  The  offer  in  such  case 
should  be  to  pay  what  may  be  found  to  be  due.  An  averment  of  a  ten- 
der before  the  filing  of  the  bill  is  only  material  as  affecting  the  ques- 
tion of  costs,  and  not  the  equity  of  the  bill,  if  this  makes  a  tender.**^ 
If  the  mortgagee  fraudulently  prevents  the  plaintiff  from  making  a 
tender  by  neglecting  to  render,  upon  request,  an  account  of  the  amount 
due,  the  failure  of  the  plaintiff  to  tender  or  bring  into  court  the 
amount  due  is  no  ground  for  dismissing  the  bill  ;**^  but  the  decree  will 
require  that,  on  payment  within  a  fixed  time,  the  defendant  shall  re- 
lease the  mortgage.**** 

In  like  manner  tender  of  the  debt  should  be  made  in  a  bill  to  have 
an  absolute  deed  declared  a  mortgage;  but  when  the  fact  of  the  loan 
is  established,  the  omission  will  only  affect  the  matter  of  costs.*^" 

§  1096.  Exceptions  to  the  rule.— If  the  mortgage  has  been  paid, 
or  if  the  mortgagee  has  received  rents  and  profits  from  the  estate  suffi- 
cient to  pay  both  the  principal  and  interest  of  the  mortgage  debt,  a 
tender  or  offer  in  the  bill  to  pay  whatever  may  be  due  is  no  longer 
necessary;  but  the  bill  should  in  that  case  allege  the  payment  of  the 
mortgage,  and  demand  an  accounting  by  the  mortgagee. *^^  Upon  the 
refusal  of  the  mortgagee  to  account,  and  proof  that  the  mortgage  is 
paid,  the  plaintiff  is  entitled  to  a  judgment  for  possession  of  the 
premises.*^^  The  suit  in  such  case  is  really  one  to  compel  a  discharge 
of  the  mortgage. *'^^ 

§  1097.  The  parties. — As  a  general  rule,  all  persons  who  have  an 
interest  in  the  mortgage  or  in  the  equity  of  redemption,  which  interest 
is  apparent  of  record  or  known  to  the  plaintiff,  should  be  made  par- 

300,    307,    19    N.    E.    382;    Kopper   v.  ""Marvin  v.  Prentice,  49  How.  Pr. 

Dyer,  59  Vt.  477,  489,  9  Atl.  4;   Gold-  385. 

smith   V.   Osborne,   1   Edw.    Ch.    560.  *^'  Catterlin  v.  Armstrong,  79  Ind. 

*"  Schermerhorn  v.  Talman,  14  N.  514;    Dennis   v.    Tomlinson,   49   Arlc. 

Y.  93.  568,  6  S.  W.  11,  13;  Horn  v.  Indian- 

"*=  Swegle  V.  Belle,  20  Oreg.  323,  25  apolis  Nat.  Bk.   125   Ind.   381,  25  N. 

Pac.  633.  E.  558. 

"'Thomas  v.  Jones,  84  Ala.  302,  4  ^^- Quin  v.  Brittain,  Hoff. 353;  Calk- 
So.  270;  Essley  v.  Sloan,  16  111.  App.  ins  v.  Isbell,  29  N.  Y.  147;  Barton 
63.  v.  May,  3  Sandf.  Ch.  450. 

"'Dinsmore  v.  Savage,  68  Me.  191;  *"  Beach   v.    Cooke,   28   N.    Y.   508, 

Meaher  v.  Howes  (Me.),  10  Atl.  460.  39  Barb.  360,  86  Am.  Dec.  260. 

"'Watkins  v.   Watkins,  57  N.   H. 
462. 


Go  PLEADINGS    AND    lltACTICE.  [§    1098. 

ties  to  the  suit.^'"*  The  phiintiff  must  liave  some  interest  in  the  equity 
of  redemption;  and  if  there  are  others  also  interested  in  it  he  must 
make  them  parties  to  the  suit,  generally  as  defendants.  He  must  also 
make  defendants  all  persons  who  appear  to  be  either  legally  or  equit- 
ably interested  in  the  mortgage  seeurity.*^^  Objection  that  persons 
who  are  necessary  parties  have  not  been  brought  before  the  court  may 
be  taken  by  answer.*^'' 

Where  there  are  conflicting  claims  to  the  mortgage  money,  the  bill 
to  redeem  may  be  in  the  nature  of  a  bill  of  interpleader.  The  bill  may 
pray  for  an  account;  that  the  complainant  be  permitted  to  pay  the 
amount  found  due  into  court ;  and  that  the  defendant  be  required,  to 
interplead,  and  to  cancel  and  surrender  the  mortgage  and  notes.  Such 
a  bill  is  not  demurrable  on  the  ground  that  it  does  not  show  that  it  was 
doubtful  which  of  the  conflicting  claims  was  right,  the  bill  not  being 
strictly  a  bill  of  interpleader.*" 

§  1098.  Proper  parties  plaintiff. — Any  one  who  has  a  right  to  re- 
deem is  a  proper  party  plaintiff.  Upon  the  death  of  one  having  an  in- 
terest in  fee  in  the  land,  his  heirs  or  devisees  are  the  proper  par- 
ties.*^^  If  part  of  the  mortgage  has  been  paid  in  the  lifetime  of  the 
mortgagor,  and  an  account  is  to  be  taken  of  the  amount  due  on  the 
mortgage,  the  personal  representatives  of  the  mortgagor  should  be 
joined  with  the  heir  or  devisee  as  parties  plaintiff;  or,  in  case  of  their 
refusal  to  join  in  the  bill,  they  should  be  made  defendants.*^**  Other- 
wise, and  if  there  are  no  outstanding  debts  against  the  estate,  the  per- 
sonal representatives  are  not  necessary  parties.*^**  If  the  mortgage  be 
of  a  term  of  years  only,  this  being  a  personal  interest,  then  only  the 
personal  representatives  of  the  mortgagor  need  be  made  parties  plain- 
tiff.*" 

A  wife,  in  a  bill  to  redeem  her  own  land,  need  not  join  her  hus- 
band.*®^ If  the  equity  of  redemption  has  been  conveyed,  subject  to  the 
mortgage,  to  different  persons,  or  if  others  have  in  any  way  become 

^^' Calvert     on     Parties,     13,     91;  v.  Hansley,  3  P.  Wms.  333,  n.;  Suth- 

Evans  v.  Jones,  Kay,  29;   Posten  v.  erland  v.  Rose,  47  Barb.  144. 

Miller,   60  Wis.   494,   19  N.   W.   540;  *"  5    Wait's    Prac.    285;    Cholmon- 

Chase  v.  First  Nat.  Bank,  1  Tex.  Cir.  deley  v.   Clinton,  2  Jac.   &  W.   135; 

App.  595,  20  S.  W.  1027;   Hicklin  v.  Rylands  v.  Latouche,  2  Bligh,  566. 

Marco,  56  Fed.  549.  ^^^  Jones    v.     Richardson,    85     Ala. 

*"  Rowell    v.    Jewett,    69    Me.    293,  463,   5   So.   194. 

71  Me.  408,  73  Me.   365.  *"  Story's    Eq.    PI.    8  182;     Suther- 

«°Winslow  V.  Clark,  47  N.  Y.  261;  land  v.  Rose,  47  Barb.   144;    Wilton 

Dias  V.  Merle,  4  Paige,  259.  v.  Jones,  2  Y.  &  C.  C.  C.  244. 

^"  Koppinger   v.    O'Donnell,    16   R.  *'- Hilton   v.   Lothrop,   46  Me.  297; 

I.   417,  16  Atl.   714;    Bedell  v.   Hoff-  see   Sanborn  v.    Sanborn.   104   Mich, 

man,   2   Paige,   199.  180,  62  N.  W.  371,  that  husband  who 

*^^  Story's  Eq.  PI.  §182;  Buncombe  has    left    the    country    need    not    be 

made   a  party. 


g    1099. J  UJ^DEMrXION    OF    A   MORTGAGE.  66 

interested  in  it,  upon  redemption  by  the  owner  of  one  part  of  it  he 
should  join  all  others  having  an  interest  in  it  as  defendants,  because 
they  are  all  interested  in  the  rendering  of  the  mortgagee's  account.*"^ 
The  interest  of  the  others  should  appear  from  the  allegations  of  the 
bill.**'*  If  the  mortgagor  has  conveyed  the  equity  of  redemption  by 
warranty  deed,  so  that  he  is  liable  to  discharge  the  mortgage,  the 
mortgagor  should  be  made  a  party,  so  that  he  may  assist  in  taking  the 
account  and  be  bound  by  the  decree."^  If  in  such  case  the  mortgagor 
claims  that  the  mortgage  is  paid,  but  the  holder  of  it  claims  that  some- 
thing is  still  due  upon  it,  the  purchaser  may  properly  bring  both  of 
them  before  the  court  upon  a  bill  to  redeem.**'^ 

§  1099.  Heirs  of  mortgagor. —  Although  upon  the  death  of  the 
mortgagor,  or  other  owner  of  the  equity  of  redemption,  his  heirs  or 
devisees  should  bring  the  suit  to  redeem;***^  yet  where  the  suit  was 
brought  by  the  administrator,  and  it  was  for  the  first  time  objected  at 
the  hearing  that  the  heirs  should  have  been  joined,  it  was  held  that  as 
the  heirs  were  not  prejudiced,  and  the  administrator's  interest  entitled 
him  to  redeem,  the  decree  in  his  favor  should  be  affirmed.**'*  In  case 
the  mortgage  be  of  a  leasehold  estate  merely,  the  personal  representa- 
tives of  the  deceased  mortgagor  are  the  proper  parties.*"^ 

In  Massachusetts  it  is  provided  by  statute  that,  upon  the  death  of  the 
person  entitled  to  redeem  without  having  made  a  tender  for  that  pur- 
pose, his  executors  or  administrators,  as  well  as  his  heirs  or  devisees, 
may  make  the  tender,  and  commence  and  prosecute  the  suit;  or  they 
may  commence  and  prosecute  a  suit  founded  upon  a  tender  made  by 
the  deceased  in  his  lifetime,  or  they  may  prosecute  a  suit  begun  by 
him.*^« 

As  a  general  rule,  trustees  who  hold  the  equity  of  redemption  are 
the  proper  parties  to  file  a  bill  to  redeem.*^^  Assignees  or  trustees  of 
the  equity  of  redemption  for  the  benefit  of  creditors  may  maintain  an 
action  to  redeem  without  joining  the  creditors.*"  In  case  such  as- 
signees or  trustees  neglect  or  refuse  to  act,  or  are  in  collusion  with 

«=•  Story's    Eq.    PI.    §183;    McCabe  ""^Enos    v.    Sutherland,    11    Mich. 

V.   Bellows,   1   Allen,  269;    Essley  v.  538;    Guthrie  v.   Sorrell,  6  Ired.   Eq. 

Sloan,    16    111.    App.    63;    Kicking   v.  13. 

Marco,  56  Fed.  349.  '"'  Story's  Eq.  PI.  §  170. 

^''^Lovell  v.  Farrington,  50  Me.  239.  "°  G.  S.  1860,  ch.  140,  §§  32,  33. 

"^  Story's  Eq.  PI.  §  183.  "^  Dexter  v.  Arnold,  1  Sumn.  109. 

^''^Wandle  v.  Turney,  5  Duer,  661.  "=  Story's    Eq.    PI.     §184;     Wait's 

«' Sutherland    v.    Rose,    47    Barb.  Prac.  286;    Hanson  v.  Preston,  3  Y. 

144-    Elliott  v.   Patton,   4   Yerg.    10;  &  C.  229;   Cash  v.  Belcher,  1  Hare, 

'Smith  v.  Manning,  9  Mass.  422;  Put-  310;   Hill  v.  Edmonds,  5  De  G.  &  S. 

nam  v.  Putnam,  4  Pick.  139.  603. 


67  PLEADINGS    AND    I'RACTICE.  [§    1100. 

the  mortgagee,  then  the  creditors,  or  one  for  the  benefit  of  all,  may 
bring  the  action,  and  join  the  trustees  or  assignees  as  defendants.*^^ 

A  mortgagor  who  has  conveyed  his  equity  of  redemption  abso- 
lutely,*'^* or  whose  equity  has  been  sold  on  execution,*^^'  or  assigned  in 
banlvruptcy,*^"  need  not  be  made  a  party  to  the  suit  to  redeem. 

§  1100.  The  parties  defendant  to  a  bill  to  redeem  should  be  all 
persons  legally  or  beneficially  interested  in  the  land  subject  to  the 
mortgage.*"  If  there  be  no  outstanding  interest  under  the  mort- 
gagee, he  is  the  only  necessary  party.  If  he  be  dead,  his  heirs  or  devi- 
sees, in  whom  the  legal  estate  is  vested,  must  be  made  parties ;  and  his 
personal  representative  should  also  be  made  a  party,  because  he  is  en- 
titled to  recover  the  money  paid.*'^^  If  the  mortgage  was  given  to  a 
surety,  the  principal  creditor  is  a  necessary  party.*''" 

The  person  who  is  the  legal  holder  of  the  mortgage  at  the  time  the 
action  is  brought  is  always  a  necessary  party,  whether  he  be  a  mort- 
gagee or  assignee  of  the  mortgage  ;****  and  all  holders  of  the  mortgage 
who  have  been  in  possession  of  the  estate,  and  have  received  rents  and 
profits,  should  be  made  parties  for  the  purpose  of  taking  the  account. 
Except  in  such  ease,  the  holders  of  the  mortgage  prior  to  the  holder  at 
the  time  of  the  commencement  of  the  suit,  who  have  no  longer  any  in- 
terest in  the  security,  are  not  necessary  parties  to  it.**^ 

All  the  mortgagees  or  assignees  of  the  mortgage,  in  whom  the  legal 
title  is  vested,  are  necessary  parties.***^ 

When  redemption  is  sought  by  one  who  was  not  made  a  party  to  a 
foreclosure  suit,  and  whose  rights  were  in  consequence  not  barred  by 
it,  he  should  not  join  with  the  purchaser  as  defendant  any  one  who 
was  made  a  party  to  the  foreclosure  suit,  and  whose  rights  are  extin- 
guished.*®^ 

*'^  Troughton    v.     Binkes,     6    Ves.  *'"  Yelverton   v.    Shelden,   2    Sandf. 

573;  Holland  v.  Baker,  3  Hare,  68.  Ch.  481. 

^'*  Hilton   v.   Lothrop,   46  Me.    297.  "*'  Whitney  v.  McKinney,  7  Johns. 

See,    however,     Clark     v.     Long,    4  Ch.    144;    Moon   v.   Jacobs,    103   Ala. 

Rand.    451.  548,  15  So.  866.    Where  the  assignee 

"^  Thorpe   v.   Ricks,    1   Dev.    &   B.  of  a  mortgage  took  from  the  mort- 

Eq.   613.  gagor  a  new  mortgage  on  the  same 

•""  Kerrick  v.   Saffery,  7  Sim.   317;  and  other  property,  and  afterwards 

Lloyd  v.  Lander,  5  Madd.  282;  Jones  assigned  the  latter  mortgage  to  the 

v.    Binns,   33   Beav.    362;    Metropoli-  mortgagor's  wife,  such  assignee  was 

tan  Bank  v.  Offord,  L.  R.  10  Eq.  398.  not  a  proper  party   defendant  to  a 

*"  Stillwell   V.   Hamm,  97  Mo.   579,  bill    by    the    holder    of    a    judgment 

11  S.  W.  252;   Kicking  v.  Marco,  56  lien   which    was   junior   to   the   first 

Fed.    549;    Ensign    v.    Batterson,    68  mortgage,     against     the     mortgagor 

Conn.  298,  36  Atl.  51.  and   his   wife,    to   redeem    from    the 

"''Story's  Eq.  PI.   §188;   Hilton  v.  mortgage    and    enforce    the    lien    of 

Lothrop,  46  Me.  297;   Dexter  v.  Ar-  the  judgment.     Raisin  Fertilizer  Co. 

nold,    1    Sumn.    109;    Wood    v.    Hol-  v.  Bell,   107  Ala.  261,  18  So.  168. 

land,  57  Ark.  198,  21  S.  W.  223.  ■"=  Woodward  v.  Wood,  19  Ala.  213. 

*'■'  Hudson  V.  Kelly,  70  Ala.  393.  "=  5  W^ait's  Prac.  286. 


g    1101.]  REDEMPTION    OF    A    MORTGAGE.  68 

The  mortgagee  is  the  only  necessary  party  when  no  one  else  is  inter- 
ested under  hini  in  the  mortgage.  If  he  has  assigned  his  mortgage  as 
collateral  security,  or  has  assigned  a  part  interest  only  in  the  mortgage, 
he  is  still  a  necessary  party,  as  also  is  his  assignee.*^*  If  he  has  made 
an  absolute  conveyance  of  the  estate  as  security,  his  grantee  must  be 
joined  with  him.***^  Even  after  an  absolute  assignment,  the  mort- 
gagee, though  no  longer  a  necessary  party ,*^"'  may  properly  be  joined 
as  a  defendant,  especially  if  it  appears  that  he  is  in  any  way  interested 
in  taking  the  account.*"  But  a  prior  assignee  of  the  mortgage  who 
has  not  become  liable  for  the  debt,  and  who  has  not  become  accountable 
for  rents  and  profits,  should  not  be  made  a  party  to  the  bill,  unless  he  is 
charged  with  fraud  or  collusion,  or  a  discovery  is  sought  from  him.*®^ 
If  the  mortgage  has  been  assigned,  or  the  mortgage  interest  in  the  land 
has  been  conveyed  upon  trusts  declared,  the  trustee  and  the  cestui  que 
trust  as  well  should  be  made  parties  to  the  action.**^ 

A  surety  of  the  mortgagor  who  has  paid  the  mortgage  note  is  a 
necessary  party,  for  he  is  the  owner  of  the  mortgage  and  the  real  party 
in  interest.*^" 

A  mortgagee  who  has  sold  the  mortgaged  premises  at  foreclosure 
sale  is  not  a  proper  party  to  an  action  to  redeem,  though  he  might  be 
if  he  claimed  any  right  or  interest  as  owner  or  mortgagee  in  posses- 
sion.*^^ One  who  has  purchased  under  a  defective  foreclosure  sale  is 
in  effect  an  assignee  of  the  mortgage,  and  as  such  he  must  be  made  a 
party  to  the  suit.  If  he  has  granted  portions  of  the  property  to  others, 
they  thereby  become  assignees  of  a  part  of  the  mortgage  in  proportion 
to  the  value  of  their  respective  purchases;  and  upon  redemption  the 
money  paid  must  be  divided  in  proportion  to  the  purchase-money  paid 
by  each,  and  in  the  order  of  the  purchases.*®^ 

§  1101.  Upon  the  death  of  a  mortgagee  of  an  estate  in  fee,  ac- 
cording to  the  English  rule,  his  heir  or  devisee  must  be  made  a  party, 
because  the  legal  estate  is  in  him ;  and  the  personal  representative  must 
also  be  made  a  party,  because  he  is  generally  entitled  to  the  money 

^^Norrish    v.    Marshall,    5    Madd.  Wing  v.  Davis,  7  Me.  31;  Whitney  v. 

475-    Hobart   v.    Abbot,    2    P.    Wms.  McKinney,  7  Johns.  Ch.  144. 

643-  Winslow  v.  Clark,  47  N.  Y.  261;  **«  Williams  v.   Smith,  49  Me.   564. 

Dia's   v    Merle,   4  Paige,   259;    Davis  ^^nVetherell    v.    Collins,    3    Madd. 

v.  Duffie,  8  Bosw.  617,  4  Abb.  Pr.  N.  255;   Drew  v.  Harman,  5  Price,  319; 

S    478  Whistler  v.  Webb,  Bunb.  53. 

**'=•  Winslow  V.  Clark,  47  N.  Y.  261;  *""  Hunt  v.  Rooney,  77  Wis.  258,  45 

Dias  v.   Merle,   4   Paige,   259;    Davis  N.  W.  1084. 

V.  Duffie,  18  Abb.  Pr.  360;  Brown  v.  ^^-^  Johnson  v.  Colder,  9  N.  Y.  Supp. 

Johnson,'  53  Me.  246.  739. 

**«Beals  V.   Cobb,   51  Me.   348.  *"=  Davis    v.    Duffie,    8    Bosw.    617, 

*^Doody  V.   Pierce,   9   Allen,   141;  affirmed  3  Keyes,  606,  4  Abb.  Pr.  N. 

S.  478. 


G!J  PLEADINGS    AND    I'llACTICE.  [§    1102. 

when  it  is  paid/"^  If  the  mortgage  be  of  a  leasehold  estate,  the  per- 
sonal representative  only  of  the  mortgagee  without  the  heir  should  be 
made  defendant,  because  he  alone  is  interested  in  the  term.*''*  In  thos<3 
States  where  the  common  law  doctrine  that  the  legal  estate  is  in  the 
mortgagee  has  given  place  to  the  doctrine  that  he  has  only  a  lien  for  the 
security  of  his  claim  without  any  legal  estate,  the  mortgagee's  admin- 
istrator is  the  only  necessary  party  in  such  case.*"^ 

Where  the  heirs  at  law  of  the  mortgagee  entered  upon  the  land  and 
took  all  the  needful  steps  to  foreclose  if  they  had  been  entitled  to  fore- 
close, and  held  open  and  peaceable  possession  for  more  than  eight 
years,  when  an  administrator  was  first  appointed  upon  the  petition  of 
the  mortgagor,  who  thereupon  filed  a  bill  in  equity  to  redeem,  it  was 
held  that  he  was  entitled  to  redeem,  and  to  an  account  of  the  rents  and 
profits  wrongfully  received  by  the  heirs.  The  heirs  having  entered 
under  the  mortgage,  and  having  alleged  a  foreclosure  in  their  answer, 
cannot  shield  themselves  from  accountability  by  saying  that  they  oc- 
cupied as  mere  strangers  and  disseisors.  The  administrator  is  prop- 
erly made  a  party,  because  he  is  the  person  to  whom  the  balance  is  to 
be  paid  by  the  plaintiff.  The  heirs  being  in  effect  executors  in  their 
own  wrong  are  interested  in  the  account,  and  therefore  are  proper  par- 
ties to  the  bill.*'"^ 

§  1102.  When  a  junior  mortgagee  seeks  to  redeem  he  must  make 
the  mortgagor  or  other  representative  of  the  realty  a  party,  and  the 
prior  mortgagees  as  well.*"''  Though  the  object  be  merely  to  redeem 
a  prior  mortgage,  the  owner  of  the  equity  of  redemption  is  a  necessary 
party,  because  a  court  of  equity  always  seeks  to  determine  the  rights 
of  all  parties  interested  in  the  estate;  and  to  do  this  in  such  case  the 
decree  should  be  that  the  second  mortgagee  redeem  the  first  mortgage, 
and  that  the  owner  of  the  equity  of  redemption  redeem  the  second 
mortgage  or  stand  foreclosed.  If  the  owner  of  the  equity  of  redemp- 
tion be  not  made  a  party,  his  right  to  redeem  remains  open,  and  the 
first  mortgagee  may  be  exposed  to  another  suit.*^^  If  the  junior  mort- 
gagee is  unable  to  foreclose  his  mortgage,  for  the  reason  that  it  is  not 
due  or  for  other  cause,  then  he  cannot  redeem  a  prior  mortgage  against 
the  consent  of  the  holder  of  it ;  for  in  such  case  he  cannot  bring  the 

'''Story's   Eq.   PI.    §188;    Anon.    2  <"  Wimpfheimer       v.       Prudential 

Freem.   52.  Ins.  Co.  56  N.  J.  Eq.  585,  39  Atl.  916. 

^^  Osborn  v.  Fallows,  1  Russ.  &  M.  •"'«  Story's  Eq.  PL  §  186,  and  cases 

741.  cited;    Fell  v.   Brown,   2   Bro.   C.   C. 

'"'Copeland    v.    Yoakum,    38    Mo.  276;    Palk    v.    Clinton,    12    Ves.    48; 

349.  Farmer  v.  Curtis,   2  Sim.  466;    Cad- 

*'«Haskins   v.   Hawkes,   108   Mass.  dick  v.  Cook,  32  Beav.  70,  9  Jur.  N. 

379.  S.  454,  32  L.  J.  N.  S.  Ch.  769. 


§    1103.]  REDEMPTIOX    OF    A    MOKTGAGL.  TO 

mortgag'or  before  the  court  for  the  purpose  of  completing  his  remedy 
by  foreclosure,  and  he  cannot  compel  the  mortgagee  to  assign  to 
him.'*"^  Of  course  he  may,  at  a  foreclosure  sale  by  the  prior  mort- 
gagee, buy  the  estate;  and  it  is  said  that  the  court  may  restrain  the 
prior  mortgagee  from  making  a  sudden  sale  for  the  purpose  of  pre- 
venting a  redemption  or  purchase  by  the  junior  mortgagee.'^*"'  If  a 
junior  mortgagee  has  not  been  made  a  party  to  the  foreclosure  of  a 
senior  mortgage,  it  seems  that  an  action  brought  by  the  former  to  fore- 
close may  be  turned  into  one  for  redemption. ^°^ 

The  first  mortgagee,  after  having  filed  a  bill  of  foreclosure,  is  not 
justified  in  refusing  a  tender  of  the  principal  and  interest  due  him, 
and  in  insisting  upon  a  redemption  only  by  the  ordinary  suit  in 
court. ^"^ 

When  a  subsequent  mortgagee  of  a  part  of  the  estate  comprised  in 
the  first  mortgage  redeems,  he  must  make  the  owners  of  all  parts  of 
that  estate  parties  to  his  suit,^"^  for  the  prior  mortgage  must  be  re- 
deemed entirely  or  not  at  all;  and  if  the  owner  of  the  equity  of  re- 
demption of  any  part  of  that  estate  is  not  brought  before  the  court, 
the  mortgagee  may  be  subjected  to  another  suit. 

If  more  than  one  subsequent  incumbrancer  claims  the  right  to  re- 
deem both  or  all  should  be  made  parties  to  the  suit.^°* 

§  1103.  A  person  to  whom  the  mortgage  note  has  been  trans- 
ferred without  an  assignment  of  the  mortgage  has  an  equitable 
interest  in  it,  and  should  be  made  a  party  to  the  bill.^°^ 

It  would  seem  that  in  a' bill  to  redeem  where  a  mortgagee  has  indi- 
rectly become  the  purchaser  at  a  sale  under  a  power  in  the  mortgage 
which  gave  him  no  right  to  purchase,  and  the  property  sold  for  a  less 
sum  that  the  mortgage  debt,  the  bill  proceeding  on  the  ground  that  the 
purchase  from  his  grantee  was  not  a  bona  fide  purchase,  the  mortgagee 
should  be  made  a  party  to  the  bill,  because  he  apparently  retained  the 
original  debt  to  which  the  mortgage  is  incident.^"^ 

A  mortgagee  who  has  assigned  his  mortgage  and  note  as  collateral 
security  for  his  own  debt  must  be  made  a  party  to  a  bill  to  redeem,  as 
well  as  the  person  who  received  such  assignment.^*'^ 

<"»  Ramsbottom  v.   Wallis,   5  L.   J.  '"Talk    v.    Clinton,    12    Ves.    48; 

Ch.   N.   S.   92;    Rhodes  v.   Buckland,  Peto    v.    Hammond,    29     Beav.     91; 

Ib'Beav.  212;  Higman  v.  Humes,  133  Thorneycroft  v.  Crockett,  2  H.  L.  C. 

Ala.  G17,  32  So.  574,  quoting  text.  239. 

■"">  Rhodes    v.    Buckland,    16   Beav.  ^"^  Whipfheimer  v.  Prudential  Ins. 

212.  Co.  56  N.  J.  Eq.  585,  39  Atl.  916. 

^"^  Denton  v.  Nat.  Bank,  18  N.  Y.  ^"'  Stone  v.  Locke,  46  Me.  445. 

Supp.    38;    Bigelow  v.   Davol,   16   N.  ^"^  Burns  v.  Thayer,  115  Mass.  89. 

Y.  Supp.  646,  contra.  ""  Brown  v.  Johnson,  53  Me.  246. 

^"^  Smith  V.  Green,  1  Coll.  555. 


71  PLEADINGS    AND    I'RACTICE.  [§§    llU-i,    11U5. 

§1104.  Reference  to  state  account. —  Where  the  mortgagee  has 
been  in  possession  and  an  account  of  tlie  rents  and  profits  is  demanded, 
the  usual  practice  is  to  order  a  reference  to  a  master  to  state  an  ac- 
count. The  reference  generally  embraces  not  only  an  accounting  of 
the  rents  and  profits,  but  also  of  the  amount  due  on  the  mortgage. 
Even  when  the  mortgagee  has  not  received  the  rents  and  profits  a 
reference  may  be  had,  especially  upon  a  default  to  determine  the 
amount  due  on  the  mortgage.^"^  The  case  may  be  sent  to  a  master  to 
take  evidence  and  state  an  account  after  it  has  been  set  down  for  hear- 
ing on  the  bill  and  answer.^"''  If  there  bo  a  conflict  of  testimony  as  to 
the  amount  that  has  been  paid  upon  the  mortgage  the  court  will  not 
determine  it,  but  will  refer  the  case  to  a  master.^^" 

After  the  plaintiff  by  his  bill  has  admitted  that  a  certain  sum  is 
due  on  the  mortgage,  the  defendant  claiming  a  larger  sum,  the  master 
cannot  report  that  nothing  is  due.^^^ 

§  1105.  Defences. — ^The  consideration  of  the  mortgage  cannot  be 
inquired  into  unless  the  plaintiff  lays  the  foundation  for  the  inquiry 
by  proper  averments  in  the  bill.^^-  On  the  other  hand,  as  a  general 
thing  it  is  wholly  immaterial  to  the  mortgagee  in  what  manner,  for 
what  object,  or  what  consideration,  the  owner  of  the  equity  of  redemp- 
tion acquired  his  title.^^^  The  mortgagee  cannot  defend  upon  the 
ground  that  the  plaintiff  is  not  the  real  owner  of  the  equity  of  redemp- 
tion; that  the  money  for  the  purchase  of  the  property  was  furnished 
by  another  person,  as,  for  instance,  the  husband,  where  the  wife  was 
the  apparent  owner  and  the  plaintiff  in  the  suit  to  redeem.^^* 

A  first  mortgagee  cannot  defend  a  bill  brought  by  a  subsequent 
mortgagee  upon  the  ground  that  the  mortgage  was  fraudulent  as 
against  the  mortgagor's  creditors."^  But  he  may  show  that  such 
mortgage  was  never  delivered,  and  is  therefore  not  a  valid  conveyance 
between  the  parties  to  it.^^'' 

At  the  hearing  of  a  bill  to  redeem  from  a  mortgage  to  which  the  de- 
fendant pleads  a  foreclosure  and  the  plaintiff  files  a  general  replica- 
tion, it  seems  that  evidence  is  admissible  that  the  foreclosure  was 
fraudulent,  without  amending  the  bill.  If  an  amendment  were  neces- 
sary it  would  be  allowed  unless  the  defendant  should  suggest  surprise, 
or  ask  for  delay  or  for  a  specification  of  the  particulars  of  the  fraud 

"'Doody  v.  Pierce,  9  Allen,  141,  5  "^  Dexter  v.  Arnold,  2  Sumn.  108. 

Wait's  Prac.  288.  "'  Beach  v.  Cooke,  28  N.  Y.  508,  39 

^«»  Doody  v.  Pierce,  9  Alfen,  141,  5  Barb.  360,  86  Am.  Dec.  260. 

Wait's  Prac.  288.  "'  Green  v.  Dixon,  9  Wis.  532. 

""Bartlett  v.   Fellows,  47  Me.  53;  ""Livingston  v.  Ives,  35  Minn.  55, 

Jewett  V.  Guild,  42  Me.  246.  27  N.   W.   74. 

"'  Bellows  V.  Stone,  18  N.  H.  465.  "»  Powers  v.   Russell,   13  Pick.   69. 


§    1105.]  REDEMrTION    OF    A    MORTGAGE.  73 

relied  upon.  If  the  foreclosure  was  fraudulent,  the  plaintiff  does  not 
need  to  come  into  court  for  relief,  but  may  avoid  the  effect  of  th-e 
fraudulent  act  by  his  own  election,  in  pais,  ignoring  the  alleged  fore- 
closure.^^'' 

If  the  foreclosure  of  a  first  mortgage  of  land  was  fraudulent,  the 
fact  that  the  owner"  of  the  equity  of  redemption  has  not  attempted  to 
avoid  it  will  not  enable  the  first  mortgagee,  as  against  the  second 
mortgagee,  to  rely  upon  the  foreclosure.^^® 

If  the  plaintiff  has  an  equitable  right  to  redeem,  it  is  no  defence 
that  he  has  verbally  contracted  to  sell  the  land.^^^  If  the  mortgagor 
in  his  bill  to  redeem  alleges  payment  of  the  mortgage  prior  to  the 
mortgagee's  entry  upon  the  land  fifteen  years  before,  the  burden  of 
proving  payment  is  upon  him,  and  if  he  does  not  sustain  it  the  bill  is 
dismissed  with  costs.^^** 

After  an  express  waiver  by  the  defendant  in  his  answer  of  all  ob- 
jection to  the  plaintiff's  redeeming  upon  payment  of  all  sums  found 
due,  he  cannot  afterwards  insist  that  the  mortgage  had  been  fore- 
closed before  the  bringing  of  the  suit.^^^  In  a  bill  to  redeem  by  the 
mortgagor,  he  may  set  up  the  reservation  of  usurious  interest  on  the 
mortgage  debt,  and  is  entitled  to  the  statute  penalty  for  usury  in  re- 
duction of  the  sum  payable  on  the  mortgage."^  A  mortgagor  seeking 
to  redeem,  and  claiming  that  the  debt  is  tainted  with  usury,  must  offer 
to  do  equity  by  offering  to  pay  the  amount  due  under  the  mortgage 
with  legal  interest.^^^  And  so  also,  in  a  writ  of  entry  by  the  mort- 
gagee to  foreclose,  the  mortgagor  may  avail  himself  of*  usury  as  a  de- 
fence, and  in  reduction  of  the  amount  for  which  conditional  judgment 
shall  be  entered  f^*  but  no  deduction  is  to  be  made  for  usury  paid 

"'  Long  v.  Richards,  170  Mass.  120,  affect  the  second  mortgagee's  posi- 

48    N.    E.    1083,    citing    Billings    v.  tion,  for  the  plaintiff  represents  the 

Mann,  156  Mass.  203,  204,  30  N.   E.  equity    as    against    the    first    mort- 

1136.  gagee.     See  Ten  Eyck  v.   Casad,   15 

"^  Long    V.    Richards,     170     Mass.  Iowa,  524." 

120,  124,  48  N.  E.  1083,  per  Holmes,  ""Patterson  v.  Yeaton,  47  Me.  308. 

J.    '"This   is  not   the   case   of  fore-  =*="  Furlong  v.  Randall,  46  Me.  79. 

closure,   by    decree,  which    is    held  "^  Strong    v.    Blanchard,    4    Allen, 

valid   as   against   the   owner   of   the  538. 

equity     in     some    jurisdictions,     al-  "^  Hart  v.  Goldsmith,  1  Allen,  145; 

though  invalid  as  against  a  second  Smith    v.    Robinson,    10    Allen,    130; 

mortgagee  simply  by  reason  of  his  Gerrish  v.   Black,  104  Mass.  400,  99 

not  having  been  joined.    On  the  con-  Mass.  315,  113  Mass.  486,  122  Mass. 

trary,  the  finding  which  establishes  76. 

the   right  of  the   second   mortgagee  "'Lindsay    v.    United    States    Sav. 

to  avoid  the  foreclosure,  establishes  &  Loan  Co.  127  Ala.  366,  28  So.  717; 

also  the  right  of  the  owner  of  the  Turner  v.  Merchants'  Bank,  126  Ala. 

equity  to  avoid  it  even   if  the  sale  397,   28  So.   469;    Pearson  v.   Bailey, 

was  not  void.     If  he  did  not  choose  23  Ala.  537. 

actively  to  assert  his  right  but  sim-  '■*  Ramsay  v.  Warner,  97  Mass.  8. 
ply  remained  silent,  it  ought  not  to 


73  PLEADINGS    AND   PRACTICE,  [§    HOG. 

under  a  verbal  agreement  not  incorporated  in  the  written  contract.''*^ 
After  a  usurious  debt  has  been  settled,  by  the  mortgagee's  taking  the 
property  mortgaged  to  secure  it  in  satisfaction  of  it,  the  transaction 
will  not  be  opened,  and  redemption  allowed  on  account  of  the 
usury.^^*^  No  deduction  can  be  made  for  usurious  interest  already 
paid  by  a  former  owner.^^^  Usury  in  the  mortgage  debt  is  no  ground 
for  redemption  by  the  mortgagor  after  a  sale  under  a  trust  deed  for 
much  less  than  the  amount  secured  thereby,  when  the  sale  was  not  re- 
sisted on  the  ground  of  usury,  nor  the  amount  legally  due  tendered  be- 
fore sale.^-* 

Neither  can  the  mortgagor  be  allowed  in  the  account  treble  dam- 
ages for  waste  committed  by  the  mortgagee  pending  the  bill  to  re- 
deem, as  such  damages  can  only  be  enforced  in  the  manner  provided 
by  statute.^29 

Usury  cannot  be  shown  in  defence  to  a  bill  to  redeem  unless  the 
usury  and  the  facts  and  circumstances  constituting  it  are  set  up  in 
the  answer.^^" 

§  1106.  The  decree.  — The  form  of  the  judgment  ordinarily  is,  that 
the  plaintifE  may  redeem  upon  paying  the  amount  found  due  on  the 
mortgage  within  a  specified  time,  together  with  costs;  and  that  upon 
his  doing  so  the  defendant  shall  discharge  the  mortgage  and  deliver 
up  the  mortgaged  premises;  and  that  upon  default  of  such  payment 
the  complaint  be  dismissed  with  costs.^^^  A  decree  which  provides 
that  on  failure  to  make  payment  within  the  time  named  the  mortgage 
shall  stand  foreclosed,  is  not  erroneous  in  that  it  does  not  direct  a  sale 
on  failure  to  redeem,  and  the  proceedings  are  in  a  state  in  which  a 
strict  foreclosure  is  not  allowed.  A  decree  in  this  form  is  in  legal 
efEect  the  same  as  a  decree  that,  upon  default  the  bill  shall  be  dismissed 
with  costs,  for  upon  dismissal  the  mortgage  is  foreclosed  without  any 
formal  decree.^^- 

"'  Minot  v.  Sawyer,  8  Allen,  78.  Codman,  158  Mass.  371,  33  N.  E.  574 

""  Adams  v.  McKenzie,  18  Ala.  698.  Briggs    v.    Briggs,    135    Mass.    306 

="  Ferguson  v.  Soden,  111  Mo.  208,  Dyer  v.  Shurtleff,  112  Mass.  165,  166 

19  S.  W.  727.  Stevens  v.  Miner,  110  Mass.  57;  Tet- 

"'Perrine  v.  Poulson,  53  Mo.  309;  rault  v.  Labbe,  155  Mass.  497,  30  N. 

Kirkpatrick  v.  Smith,  55  Mo.  389.  E.  173;   Robertson  v.  Norris,  1  Giff. 

='"  Boston  Iron  Co.  v.  King,  2  Cush.  421;    Jenkins    v.    Jones,    2    Giff.    99; 

400.  Decker  v.  Patton,  120  111.  464,  11  N. 

™  Waterman   v.    Curtis,   26   Conn.  E.    897,   quoting   text;    McKenna   v. 

241.  Kirkwood,    50   Mich.    544,    15    N.    W. 

■^"5   Wait's   Prac.    288;    Pitman   v.  898;   Martin  v.  Ratcliff,  101  Mo.  254, 

Thornton,     66     Me.      469;      Walker  13  S.  W.  1051,  quoting  text, 

v.     Harris,     7    Paige,    1;     Kolle    v.  ==>=  Martin  v.  Ratcliff.  101  Mo.  254. 

Clausheide,    99     Ind.    97;       Chicago  13  S.  W.  1051.     See,  also,  O'Fallon  v. 

Mill   Co.    V.    Scully,   141    111.    408,    30  Clopton,    89    Mo.    284.    1   S.    W.    302; 

N.  E.  1062:   Bremer  v.  Dock  Co.  127  Davis  v.  Holmes,  15  Mo.  349;     Bol- 

111.    464,    18    N.    E.    321:    Dennptt    v.  ling,er  v.  Chouteau,  20  Mo.  89. 


§    1106.]  REDEMPTION    OF    A   MORTGAGE.  74 

A  mortgagor  who  brings  an  ordinary  bill  to  redeem,  in  which  he 
asks  for  no  particular  relief,  is  only  entitled  to  a  decree  in  usual  form. 
The  decree  should  require  redemption  within  a  time  stated,  and  not 
"at  any  time  before  a  valid  and  effectual  foreclosure  of  the  mortgage 
by  a  new  execution  of  the  power  of  sale  therein."^^^ 

If  a  mortgagor  of  land  brings  a  bill  in  equity  to  redeem  it  from  the 
mortgage,  offering  to  pay  the  amount  found  due  thereon,  and  to  set 
aside  a  foreclosure  sale,  vipon  which  a  d^ree  is  entered  granting  the 
relief  sought  and  giving  him  a  certain  time  in  which  to  redeem,  the 
remedy  so  obtained  is  full  and  adequate,  and  if  he  fails  to  avail  him- 
self of  it  he  cannot  afterwards  maintain  an  action  against  the  defend- 
ant for  conspiracy  to  defraud  him  of  the  land,  and  fraudulently  to 
foreclose  the  mortgage.^^* 

A  decree  which  declares  that  upon  redemption  the  mortgagor  shall 
hold  the  premises  discharged  of  the  mortgage,  and  free  from  all  right, 
title,  and  estate  under  the  mortgage,  gives  no  rights  as  against  tenants 
of  the  mortgagee  beyond  what  he  would  otherwise  have  upon  redemp- 
tion.^^^ 

When  nothing  is  found  due  to  the  mortgagee,  the  mortgagor  is  not 
only  entitled  to  a  discharge  of  the  mortgage,  but  to  a  judgment  for 
possession,  and  to  a  writ  of  possession  to  recover  it.^^*^ 

"^Dennett   v.    Codman,    158   Mass.  within  a  time  stated,  namely,  within 

371,    33    N.    E.    574.      Knowlton,    J.,  forty-five  days  from  the  entry  of  the 

said:     "It  may  well  be  that  if  a  sale  decree,  when,  as  they  contended,  it 

has   been   made  fraudulently,   or  in  should    have    permitted    redemption 

any    such     way    as     to     be    invalid  'at    any    time    before    a    valid    and 

against  the  mortgagor,  he  may  bring  effectual    foreclosure   of    said    mort- 

a  bill  asking  to  have   it   set   aside,  gage    by    a    new    execution    of    the 

and   to  be   permitted   to   redeem   at  power    of    sale    therein,    or    other- 

any  time  before  the  foreclosure  of  wise.'  .  .  .  Their    right    of    redemp- 

the  mortgage  by  a  valid  sale  or  by  tion  was  defined  by  the  court,  as  is 

the   expiration   of  three   years,   and  usual  in  such  cases,  and  they  were 

continued   possession   by    the   mort-  left   without   injury   from   the   fore- 

gagee    taken    and    held    on    account  closure    of   which    they    complained, 

of   the   breach    of   the    condition   of  They  lost  their  land,  not  by  reason 

the     mortgage.       There     might     be  of   the    foreclosure,    but    because   of 

equitable  grounds  for  permitting  the  their  failure  to  redeem  it  within  the 

mortgagor  to  stand  in  the  same  po-  time    allowed    them    by    the    court, 

sition  as  in  a  fraudulent  or  unlaw-  Having    elected    their    remedy,    and 

ful  sale  had  not  been  made,  and  for  having    obtained    full     satisfaction, 

giving  him  a  long  time  in  which  to  which     failed     to     be     beneficial    to 

redeem;    but  what  order  should   be  them    only    through    their    misfor- 

made  on  a  petition  asking  peculiar  tune    or    neglect,    there    is    nothing 

relief  in  a  case  of  that  kind,  it  is  left  upon   which   they   can  found   a 

unnecessary  now  to  determine."  claim    for    damages."      Per    Knowl- 

''*  Dennett   v.    Codman,    168   Mass.  ton,  J. 

428,  429,  47  N.  E.  131.    "They  were  =^'^  Holt  v.  Rees,  46  111.  181. 

dissatisfied  with  the  decree,  and  ap-  '"'■""  Churchill  v.  Beale,  MSS.  2  Benn. 

pealed     therefrom     on     the     ground  &  Heard  Dig.  (Mass.)  306.     See  Ger- 

that    it    required    them    to    redeem  rish  v.  Black,  122  Mass.  76. 


75  I'l.KADiNGS    AND    I'ltACTICE.  [§    1107. 

§  1107.  The  decree  should  fix  a  time  within  which  the  redemp- 
tion is  to  take  place. — This  time  rests  in  the  sound  discretion  of  the 
court  in  view  of  all  the  circumstances.'"'^'^  The  usual  time  was  for- 
merly six  months  ;^^^  if  the  plaintiff  neglected  to  redeem  within  the 
specified  time  his  right  was  barred  forever  ;^^®  but  the  time  is,  a  matter 
within  the  discretion  of  the  court,  and  a  year  is  allowed  in  some 
States/*"  and  at  least  ninety  days  is  usually  allowed. ^*^  Thirty  days 
is  too  short  a  time.^*^  Additional  time  might  be  allowed  to  enable  the 
plaintiffs  to  obtain  contribution  from  one  of  the  defendants  who  is 
also  interested  in  the  equity  of  redemption  ;'^*^  or  it  may  be  allowed 
when  the  failure  to  pay  was  occasioned  by  fraud,  accident,  or  mis- 
takCj^**  or  by  the  acts  of  the  mortgagee  without  the  mortgagor's 
f ault  v"'*'^  but  if  the  negligence  of  the  complainant  himself  has  con.- 
tributed  to  such  failure,  it  is  proper  to  refuse  to  extend  the  time.^*'' 
The  time  of  redemption  was  extended  for  thirty  days  where  the  decree 
omitted  to  declare  wliat  should  be  the  effect  of  an  omission  to  redeem, 
although  the  effect  of  such  decree  was,  tlie  court  declared,  that,  if  the 
plaintiff  should  fail  to  pay  the  money  within  the  time  specified,  his 
riffht  to  redeem  would  be  barred. ^^'^  But  the  same  reasons  do  not  exist 
for  such  extension  of  the  time  that  exist  in  case  of  a  strict  foreclosure, 
because  in  redemption  the  plaintiff  should  be  prepared  to  pay,  and  he 
in  fact  proffers  payment  by  his  bill.^*^ 

Instead  of  a  decree  requiring  the  mortgagor  to  pay  the  debt  by  a 
given  day,  or  that  his  bill  shall  stand  dismissed,  the  practice  has  some- 
times prevailed  in  some  States  to  order  a  sale  of  the  property  and  the 
payment  of  the  mortgage  out  of  the  proceeds,  and  the  surplus  to  the 

"'  Decker    v.    Patten,    120    111.    464,  ^"  Taylor     v.    Dillenburg,    168     111. 

11  N.  E.  897,  20  111.  App.  210;  Bremer  235,  48  N.   E.   41;    Sanders  v.   Peck, 

V.    Dock    Co.    127    111.    464,    18   N.    B.  131  111.  407,  25  N.  E.  508. 

321.  '"  Taylor     v.     Dillenburg,    168    111. 

^^"§1563;     Novosielski    v.     Wake-  235,  48  N.  E.  41. 

field,  17  Ves.  417.     New  York:   Wal-  ^"  Br inckerhoff  v. Lansing,  4  Johns, 

ler  v.  Harris,  7  Paige,  167;  Perine  v.  Ch.  140. 

Dunn,   4   Johns.    Ch.   140;    Brincker-  ="  Kopper   v.    Dyer,    59   Vt.    477,   9 

hoff  V.   Lansing,   4   Johns.   Ch.   65,   8  Atl.   4,  59  Am.   Rep.   742. 

Am.   Dec.  538;    Dunham  v.   Jackson,  '*' Pierson    v.    Clayes,    15    Vt.    93; 

6  Wend.   22.     See   Hollingsworth   v.  Daggett   v.    Mendon,   64   Vt.    323,   24 

Koon,  117  111.  511,  6  N.  E.  148,  8  N.  Atl.   242. 

E.    193,    where   a   limitation    of    the  "°  Segrest  v.   Segrest,  38  Ala.  674; 

time  to  three  months  was  adjudged  Cilley  v.  Huse,  40  N.  H.  358;   Fran- 

impi'oper  and  oppressive.  cis  v.  Parks,  55  Vt.  80. 

^^^^  Sherwood    v.    Hooker,    1    Barb.  '^"  Sherwood    v.    Hooker,    1    Barb. 

Ch.  65u;  Kolle  v.  Clausheide,  99  Ind.  Ch.   650. 

97.  ^**  Jenkins  v.  Eldredge,  1  Wood.  & 

""  Murphy  v.  N.  E.  Sav.  Bank,  63  M.  61 ;  Perine  r.  Dunn,  4  Johns.  Ch. 

N.  H.  362.  140. 


§§    1108,    1108a.]       REDEMPTION   OF   A    MORTGAGE.  7G 

mortgagor.     The    defendant    may  also    in    his    answer  ask    a    fore- 
closure.^*^ 

§  1108.  If  a  mortgagor  who  has  brought  a  bill  to  redeem  fails  to 
pay  the  amount  found  due  within  the  time  ordered,  and  the  mort- 
gagee obtains  judgment  for  costs,  the  mortgage  is  foreclosed  without 
any  formal  decree  dismissing  the  bill.^^°  The  judgment  for  costs 
takes  the  place  of  a  decree  of  dismissal,  and  works  a  foreclosure.  But 
if  there  is  no  order  of  any  kind  after  default,  the  right  to  redeem  is 
not  barred.^^^  According  to  the  English  practice,  which  is  adopted 
in  some  of  the  States,  proof  must  be  made  that  the  money  has  not  been 
paid,  and  a  final  decree  of  dismissal  must  be  first  entered,  upon  the 
ground  that  until  such  final  order  is  entered  the  records  of  the  court 
are  not  complete,  and  the  plaintiff  may  come  in  with  an  application 
to  have  the  time  within  which  he  may  redeem  extended.^^^  The  de- 
cree of  dismissal  with  costs  is  equivalent  to  a  decree  of  foreclosure,^^* 
and  has  this  effect  although  it  does  not  expressly  declare  it.^°*  Such 
a  decree  is  made  as  a  matter  of  course  upon  motion  supported  by  affi- 
davit that  the  time  within  which  the  plaintiff  was  allowed  to  redeem 
has  expired,  and  the  money  found  due  has  not  been  paid.^^^  It  is  ir- 
regular to  decree  a  sale  of  the  lands  when  the  bill  to  redeem  contains 
no  prayer  for  a  sale  and  the  mortgagee  has  not  filed  a  cross-bilL^^** 

§  1108a.  The  mortgagee  may  by  his  agreement  or  acts  open  or 
suspend  a  decree  of  redemption.  Thus  if,  after  the  entry  of  a  decree 
fixing  the  amount  and  time  of  payment,  the  mortgagee  receives  rents 
from  the  mortgaged  land,  no  further  proceedings  can  be  had  until 
there  has  been  a  new  accounting,  and  a  new  order  passed  fixing  the 
amount  and  time  of  payment.^^^ 

549  Virginia:    Turner   v.    Turner,    3  140;  Quin  v.  Brittain,  Hoff.  Ch.  353; 

Munf.   6G.     North   Carolina:    Ingram  Casserly  v.  Witherbee,  119  N.  Y.  522, 

V.  Smith,  6  Ired.  Eq.  97.    New  York:  23  N.  E.  1000;   Shannon  v.  Speers,  2 

Darvin    v.    Hatfield,  4    Sandf.    468;  A.  K.  Marsh.  311;   Gallagher  v.  Gid- 

Sutherland    v.    Rose,    47    Barb.    144.  dings,  33  Neb.  222,  49  N.  W.  1126. 

Michigan:      Meigs    v.    McFarlan,    72  ^"'^  Bolles    v.    Duff,    43    N.    Y.    469; 

Mich.  194,  40  N.  W.  246.  Beach  v.   Cooke,  28  N.    Y.   508,   535, 

''=°  Stevens  v.  Miner,  110  Mass.  57;  86  Am.  Dec.  260;  Ferine  v.  Dunn,  4 
Dennett  v.  Codman,  158  Mass.  371,  Johns.  Ch.  140;  Sherwood  v.  Hook- 
33  N.  E.  574;  Flanders  v.  Hall,  159  er,  1  Barb.  Ch.  650;  Adams  v.  Cam- 
Mass.   95,  34  N.  E.  178.  eron,  40  Mich.   506. 

=*"  Tetrault    v.    Labbe,    155    Mass.  '^^^  McDonough     v.     Shewbridge,     2 

497,   30   N.    E.    173.  Ball  &  B.   555,  564;    Stuart  v.   Wor- 

"'Seton,  Decrees  (Amer.  ed.),  516;  rail,  1  Bro.  C.  C  581. 

Sheriff    v.    Sparks,    West    Ch.    130;  '"Lindsay    v.    Matthews,    17    Fla. 

Bolles  V.  Duff,  43  N.  Y.  469;    Smith  575. 

v.  Bailey,  10  Vt.  163.  ■''  Frees  v.  Coke,  L.  R.  6  Ch.  App. 

"'Winchester    v.    Paine,    11    Ves.  645;   Allen  v.  Edwards,  42  L.  J.  Ch. 

194,  199;  Cholmley  v.  Oxford,  2  Atk.  455;    Ellis   v.    Griffiths,    7   Beav.    83; 

267;    Ferine   v.   Dunn,   4   Johns.    Ch.  Alden  v.   Foster,  5  Beav.   592;    Gar- 


77  PLEADINGS  AND  I'RACTICI-.  [§§  1109,  1110,  1111. 

§  1109.  Abandonment  of  suit. — The  parties  to  a  suit  to  redeem 
may  by  their  agreement  or  acts  treat  the  suit  as  abandoned.  But  if  a 
decree  has  been  made  in  the  suit  fixing  the  time  and  amount  of  pay- 
ment, and  enjoining  the  mortgagee  from  foreclosing  until  a  further 
order,  the  mortgagee  cannot,  without  first  procuring  a  dismissal  of 
that  suit,  immediately  begin  proceedings  to  foreclose  his  mortgage 
under  a  power  of  sale;  and  a  sale  made  to  himself  as  authorized  by 
the  power  will  not  bar  the  mortgagor's  right  of  redemption.^'*^  A  mort- 
gagor of  land  subject  to  two  mortgages  filed  a  bill  to  redeem  it  from 
the  first  just  before  the  expiration  of  the  three  years  after  open  and 
peaceable  entry.  While  the  suit  was  pending,  and  after  the  three 
years  expired,  the  first  mortgagee  executed  a  quitclaim  deed  of  the  land 
to  the  second  mortgagee.  It  was  held  that,  upon  the  subsequent  aban- 
donment of  the  suit  by  the  mortgagor,  the  second  mortgagee  succeeded 
to  all  the  rights  of  the  first  mortgagee,  and  held  the  e=tate  by  an  inde- 
feasible title  under  a  completed  foreclosure.^'®  The  plaintiff  in  a  bill 
to  redeem  may  be  debarred  from  his  right  to  redeem  by  improper 
delay  in  prosecuting  his  suit  after  it  is  commenced.^®** 

§  1110.  Redemption  does  not  necessarily  extinguish  the  mort- 
gage title.  If  the  plaintiff  owns  every  other  interest  in  the  land  there 
is  a  merger  of  this  title ;  but  if  there  are  intermediate  incumbrances, 
he  becomes  substituted  to  the  rights  and  interests  of  the  original  mort- 
gagee; and  such  incumbrancer  must  redeem  of  him  if  he  wishes  to 
protect  his  own  interest.'^^ 

§  1111.     The  general  rule  in  regard  to  costs   upon  a  suit  to  re- 
deem is  that  the  plaintiff,  instead  of  recovering  costs  himself,  pays 
them  to  the  defendant,  although  he  is  successful  in  the  suit.^®^     This 
is  upon  the  principle  that  at  law  the  mortgage  is  forfeited,  and  that 
the  legal  estate  being  in  the  mortgagee  he  is  at  liberty  to  deal  with  the 
property  as  his  own.'®^    The  mortgagor,  on  the  other  hand,  is  in  de- 
lick  V.  Jackson,  4  Beav.  154;   Wood        '"^  Harper  v.  Ely,  70  111.  581;   Slee 
V.    Surr,    19   Beav.     551;     Ferine     v.     v.     Manhattan     Co.     1     Paige,     48 
Dunn,    4   Johns.    Ch.    140;    Beach   v.     Brockway    v.    Wells,    1    Paige,    617 
Cooke,  28  N.  Y.  508;   Bolles  v.  Duff,     Benedict     v.     Oilman,    4    Paige,    58 
4a   N.    Y.    469;    Smith   v.    Bailey,   10     Vroom    v.     Ditmas,     4    Paige,     526 
Vt.  163;  Tetrault  v.  Labbe,  155  Mass.     Bean  v.  Brackett,  35  N.  H.  88;    Phil 
297,  30  N.  E.  173.  lips  v.    Hulsizer,   20   N.   J.   Eq.   308; 

"'Tetrault  v.  Labbe,  155  Mass.  Blum  v.  Mitchell,  59  Ala.  535;  Tur- 
497,  30  N.  E.  173.  ner  v.   Johnson,   95  Mo.   431,  6  Am. 

''"Thompson  v.  Kenyon,  100  Mass.  St.  Rep.,  62,  7  S.  W.  570;  Costigan  v. 
108.  Costigan,  20  R.  I.  535,  40  Atl.  341. 

^0  Bancroft  v.  Sawin,  143  Mass.  '"^  Wetherell  v.  Collins,  3  Madd. 
144,  9  N.  E.  539.  255. 

'"Brainard    v.    Cooper,    10    N.    Y. 
356. 


§    1112.]  REDEMPTION    OF    A    MORTGAGE.  78 

fault;  and  this  relief  in  equity  is  in  the  nature  of  a  favor  conferred, 
and  not  a  right  contracted  for.  An  exception  is  made  to  this  rule 
where  the  defendant  sets  up  an  unwarranted  defence,  or  one  which 
wholly  fails,  and  thereby  makes  delay  and  expense  in  prosecuting  the 
redemption;  in  such  case  the  defendant  may,  in  the  discretion  of  the 
court,  be  compelled  to  pay  costs  to  the  plaintiff.^"*  If  the  amount  due 
upon  the  mortgage  is  in  dispute,  although  the  defendant  proves  to  be 
in  error,  yet,  if  he  had  a  reasonable  ground  for  his  view  of  the  case,  the 
costs  will  still  be  awarded  against  the  plaintiff. '^^'^  The  court  may  also 
require  each  party  to  pay  his  own  costs.^*^*^ 

In  suits  to  redeem,  costs  are  sometimes  not  allowed  to  either  party 
as  against  the  other.'^''^  This  has  been  the  rule  adopted  by  some  courts 
where  the  plaintiff  before  bringing  his  suit  tendered  the  amount  due, 
and  any  costs  which  had  been  incurred.^"^ 

If  a  tender  be  made  by  the  mortgage  debtor  after  the  bringing  of 
a  suit  to  foreclose,  as  the  amount  of  costs  in  an  equitable  suit  for  the 
purpose  is  discretionary  with  the  court,  he  can  only  make  tender  of 
such  costs  as  may  seem  to  him  reasonable,  and  upon  refusal  apply  to 
the  court  to  have  the  costs  taxed. ■'"'*''' 

Where,  in  an  action  to  redeem,  the  decree  in  complainant's  favor  re- 
quires defendant  to  account,  the  costs  of  the  accounting  should  be 
charged  to  defendant.^^" 

§  1112.  Under  a  statute  providing  that  the  plaintiff  bringing  a 
suit  to  redeem  without  a  previous  tender  shall  pay  the  costs  of  suit, 
unless  the  defendant,  when  requested,  has  neglected  or  refused  to  ren- 
der a  just  and  true  account,  the  plaintiff  so  bringing  suit  is  liable  for 
costs,  although  the  defendant  be  liable  under  the  usury  law  to  forfeit 
threefold  the  unlawful  interest.^"^ 

In  Massachusetts  it  is  provided  by  statute  that  if  the  suit  is  brought 
without  a  previous  tender,  and  it  appears  that  anything  is  due  upon 
the  mortgage,  the  plaintiff  shall  pay  the  costs  of  suit,  unless  the  de- 

^"^  Davis  V.  Duffie,  18  Abb.  Pr.  360;  =>"'»  Pratt  v.  Ramsdell,  16  How.  Pr. 

Barton    v.    May,    3    Sandf.    Ch.    450;  59;    Bartow    v.    Cleveland,    16    How. 

Still   V.   Buzzell,  60  Vt.   478,   12   Atl.  Pr.   364.     The  statute  providing  for 

209;  Turner  v.  Johnson,  95  Mo.  431,  tender  to  a  plaintiff  to  stop  costs  is 

7   S.  W.   570;    Costigan   v.   Costigan,  confined    to    actions    at    law.      New 

20   R.   I.   535,   40   Atl.   341.  York  P.   &  M.  Ins.  Co.  v.  Burrell,  9 

''""  Sessions   v.    Richmond,    1    R.    I.  How.  Pr.  398. 

298;    Wells    v.    Van    Dyke,    109    Pa.  -"  Crawford  v.  Osmun,  90  Mich.  77, 

St.  '330,  quoting  text.  51  N.  W.  356. 

'^"«  Hollingsworth  v.   Koon,  117  111.  '"  Gerrish     v.     Black,     113     Mass. 

511.  486,  99  Mass.  315,  104  Mass.  400,  122 

■^^  Green  v.   Wescott,   13  Wis.   606.  Mass.  76.     And  see  McGuire  v.  Van 

="='King    v.    Duntz,    11    Barb.    191;  Pelt,  55  Ala.  344. 
Van  Buren  v.  Olmstead,  5  Paige,  9. 


79  PLEADINGS    AND    rHACTICE.  [§    1113. 

fendant  litis  unreasonably  refused  or  neglected,  when  requested,  to 
render  a  true  account  of  the  money  due  on  the  mortgage,  and  of  the 
rents  and  profits,  or  has  in  any  way  prevented  the  plaintiff  from  per- 
forming or  tendering  performance  of  the  condition  before  bringing 
suit.  In  all  other  cases  the  court  may  award  costs  to  either  party  as 
equity  may  require.^'^^  Under  these  provisions  the  mortgagee  may  be 
ordered  to  pay  the  plaintiff's  costs  when,  upon  request  for  an  account, 
he  has  failed  to  render  any  account,  or  has  rendered  an  untrue  one,  so 
that  the  mortgagor  is  compelled  to  resort  to  a  suit.'"'^^  But  in  a  case 
where  there  was  no  tender,  and  the  account  rendered  by  the  mort- 
gagee was  incorrect  only  because  it  contained  items  of  money  expended 
for  convenience  and  ornament  of  the  estate,  costs  were  allowed  to 
neither  party.^''^* 
'  There  is  a  similar  statute  in  Maine.^^^  As  the  law  now  stands,  no 
suit  can  be  maintained  without  a  tender,  unless  the  defendant  is  in 
default  in  preventing  a  tender.  If  the  bill  is  sustained,  the  plaintiff 
is  in  all  cases  entitled  to  costs  as  a  strict  legal  right."**  What  consti- 
tutes a  sufficient  demand  and  refusal  to  account  under  this  statute  de- 
pends upon  the  particular  circumstances;  thus  when  the  mortgagor 
made  a  demand  on  the  mortgagee  at  a  store  two  miles  distant  from  his 
residence  to  render  an  account,  to  which  the  reply  was  that  about  the 
sum  of  eleven  hundred  dollars  was  due,  and  the  mortgagee,  when  after- 
wards requested  to  render  a  more  particular  account,  replied  that  he 
would  not  until  obliged,  no  objection  being  made  to  the  place  of  de- 
mand, it  was  considered  sufficient  to  sustain  a  bill  to  redeem  brought 
four  years  afterwards. ^'^^ 

§  1113.     In   exceptional  cases  the  mortgagee  is  liable  for  costs 

upon  redemption.  A  mortgagee  who  has  refused  a  tender  of  a  sum 
sufficient  to  cover  principal,  interest,  and  costs  will  be  compelled  to 
pay  the  costs  of  a  suit  to  redeem.^^^ 

A  mortgagee  who  has  refused  to  inform  a  purchaser  of  the  equity 
of  redemption,  of  whose  rights  he  has  notice,  of  the  amount  due  him, 
and  without  demand  of  payment  takes  possession  in  the  owner's  ab- 
sence, is  not  entitled  to  costs. ^'^^ 

»"G.  S.  ch.  140,  §21.  more  v.  Savage,  68  Me.  191;   Hall  v. 

=•"  Montague   v.    Phillips,    15   Gray,  Gardner,  71  Me.  233. 

566;    Pease   v.    Benson,   28   Me.    336;  "«  Dinsmore  v.  Savage,  68  Me.  191. 

Roby  V.  Skinner,  34  Me.  270;  Sprague  "'Wallace  v.  Stevens,  66  Me.  190. 

V.  Graham,  38  Me.  328;  Dinsmore  v.  "« Grugeon  v.   Gerrard,  4  Y.  &  C. 

Savage,  68  Me.  191.  128;    Harmer    v.    Priestly,    16    Beav. 

"*  Woodward  v.  Phillips,  14  Gray,  569. 

132.  "^  Meigs    v.    McFarlan,    72    Mich. 

"'  R.    S.    1871,   ch.   90,    §  13.     Dins-  194,  40  N.  W.  246. 


§    1113.]  REDEMPTION    OF    A    MORTGAGE.  80 

The  costs  of  a  suit  to  foreclose  a  prior  mortgage  are  not  chargeable 
to  a  junior  mortgagee  who  was  not  a  party  to  it  when  he  redeems.^^" 

Where  both  parties  are  at  fault,  the  mortgagor  for  not  offering  to 
pay  the  balance  due  before  filing  his  bill,  and  the  mortgagee  for 
claiming  that  there  was  no  right  of  redemption,  the  deed  being  abso- 
lute on  its  face,  the  costs  may  be  divided. ^®^ 

'""Gage  V.  Brewster,  31  N.  Y.  218,        =*"  Perdue  v.   Brooks, '85  Ala.   459, 
reversing   30   Barb.    387;    Gaskell   v.    5  So.  126. 
Viquesney,  122  Ind.  244,  23  N.  E.  791. 


CHAPTER  XXIII. 


MORTGAGEE  S  ACCOUNT. 


I.  Liability  to  account,  1114-1120. 
II.  What  the  mortgagee  is  charge- 
able with,  1121-1125. 
III.  Allowances  for  repairs  and  im- 
provements, 1126-1131. 


IV.  Allowances     for     compensation, 

1132,  1133. 
V.  Allowances    for     disbursements, 

1134-1138. 
VI.  Annual  rests,  1139-1143. 


I.     LiahiUty  to  Account. 


§  1114.  In  general. —  A  mortgagee  in  possession,  whether  in  per- 
son, by  trustee,  receiver,  or  by  a  tenant,  is  in  equity  accountable  for 
the  rents  and  profits  of  the  estate,  and  is  bound  to  apply  them  in  re- 
duction of  the  mortgage  debt.^  After  paying  the  interest  of  the  debt, 
any  balance  of  receipts  is  applicable  to  reduce  the  principal.-  The 
mortgagee  is  not  allowed  to  make  a  profit  out  of  his  possession  of  the 
estate.  Therefore,  upon  a  redemption  of  the  mortgaged  premises  by 
any  one  interested  in  them,  he  is  obliged  to  state  an  account  of  his  re- 
ceipts from  the  mortgaged  property,  and  he  is  entitled  to  allowances 
for  all  proper  disbursements  made  by  him  in  respect  of  the  premises. 
The  principles  upon  which  this  account  should  be  stated  it  is  the  pur- 

tery,  124  Ala.  382,  27  So.  502;  Daniel 
V.  Coker,  70  Ala.  260;  Keith  v.  Mc- 
Laughlin, 114  Ala.  60,  21  So.  483; 
American  Freehold  Land  Mortgage 
Co.  v.  Pollard  120  Ala.  1,  24  So.  736; 
Clark  V.  Paquette  67  Vt.  681,  32 
Atl.  812;  Downs  v.  Hopkins,  65  Ala. 
508;  Greer  v.  Turner,  36  Ark.  17; 
Swegle  v.  Belle,  20  Oreg.  323,  25  Pac. 
633;  Byers  v.  Byers,  65  Mich.  598.  32 
N.  W.  831 ;  Hannah  v.  Davis,  112  Mo. 
599,  20  S.  W.  686:  Moss  v.  Odell,  134 
Cal.  464,  66  Pac.  581. 

=  McConnel  v.  Holobush,  11  111.  61; 
Walton  v.  Withington,  9  Mo.  549. 


^  Harrison  v.  Wyse,  24  Conn.  1,  63 
Am.  Dec.  151;  Kellogg  v.  Rockwell, 
19  Conn.  446;  Reitenbaugh  v.  Lud- 
wick,  31  Pa.  St.  131;  Breckenridge  v. 
Brooks,  2  A.  K.  Marsh.  335,  12  Am. 
Dec.  401;  Tharp  v.  Feltz,  6  B.  Mon. 
6;  Anthony  v.  Rogers,  20  Mo.  281; 
Chapman  v.  Porter,  69  N.  Y.  276; 
Dawson  v.  Drake,  30  N.  J.  Eq.  601; 
Lockard  v.  Hendrickson  (N.  J.  Eq.) 
25  Atl.  512;  Shouler  v.  Bonander,  80 
Mich.  531,  45  N.  W.  487;  Rooney  v. 
Crary,  11  111.  App.  213;  Wood  v. 
Whelen,  93  111.  153;  Davis  v.  Lassit- 
ter,  20  Ala.  561;  Toomer  v.  Ran- 
dolph, 60  Ala.  356;  Bickerton  v.  Gut- 


81 


§  1115.]  mortgagee's  account.  83 

pose  of  this  chapter  to  set  forth.  The  subject  is  of  much  less  general 
importance  than  it  formerly  was,  for  the  reason  that  it  is  comparatively 
seldom  now  that  the  mortgagee  takes  possession.  In  many  States,  as 
already  noticed,  the  mortgagee  is  prohibited  by  statute  from  entering 
or  in  any  way  acquiring  possession  before  a  foreclosure  and  sale.  In 
other  States,  power  of  sale  mortgages  and  trust  deeds  are  in  common 
use,  and  upon  u  default  a  speedy  sale  of  the  property  may  be  had,  so 
that  there  is  not  generally  occasion  for  the  mortgagee  to  take  posses- 
sion of  the  mortgaged  estate. 

This  liability  of  the  mortgagee  to  account  arises  only  when  his  entry 
and  possession  are  in  recognition  of  the  mortgage.  If  he  enters  as  a 
trespasser  or  as  the  tenant  of  the  mortgagor,  whatever  his  liabilities 
may  be,  they  are  not  to  be  enforced  in  equity  under  a  bill  for  an  ac- 
count and  for  redemption.^  A  mortgagee  is  not  liable  to  account  when 
he  has  held  possession  by  some  other  title  than  that  of  mortgagee. 
Thus  where  the  cestuis  que  tnistent  of  a  mortgage  have  been  in  pos- 
session, but  there  is  no  evidence  that  they  had  possession  other  than  as 
widow  and  heirs  of  the  mortgagor,  the  trustee  to  whom  the  mortgage 
was  given  cannot  be  called  on  to  apply  the  rents  and  profits  of  the  land 
in  satisfaction  of  the  interest  on  the  mortgage,  as  it  cannot  be  said  that 
they  had  possession  in  his  behalf.* 

§  1115.     This  is  a  matter  of  equitable  jurisdiction.     It  is  apparent 

enough  that,  where  the  English  doctrine  prevails  that  the  mortgage 
conveys  a  legal  title,  the  right  of  the  mortgagor  to  an  account  of  the 
rents  and  profits  of  the  land  received  by  the  mortgagee  is  purely  and 
exclusively  of  equitable  cognizance.  At  law  he  cannot  be  made  to  ac- 
count. He  is  the  legal  owner  of  the  estate,  and  takes  the  rents  and 
profits  in  that  character.  The  mortgagor  has  a  right  of  redemption 
only  in  equity,  and  the  right  to  an  account  is  only  incident  to  this.^ 
But  regarding  the  mortgagee's  interest  as  a  lien  only  does  not  obviate 
the  necessity  of  resorting  to  equity  for  an  accounting.®  The  mort- 
gagee in  possession  takes  the  rents  and  profits  in  the  quasi  character 
of  trustee  or  bailiff  of  the  mortgagor.  In  equity  he  must  apply  them 
as  an  equitable  set-off  to  the  amount  due  on  the  mortgage.  Such  a 
receipt  is  not  a  legal  satisfaction  of  the  mortgage.     There  is  no  pay- 

'  Daniel    v.    Coker,    70    Ala.    260;  '^  Wilcox  v.  Cheviott,  92  Me.  239,  42 

Bickerton   v.    Glittery,   124   Ala.   382,  Atl.    403;    Toomer    v.    Randolph,    60 

27    So.    502.      So    where    the    mort-  Ala.  356;    Dailey  v.  Abbott,  40  Ark. 

gagee's     possession     was     only     as  275. 

husband  of  one  of  the  mortgagors.  "  Hubbell    v.    Moulson,    53    N.    Y. 

Young  v.  Omohundro,  69  Md.  579,  16  225,  13  Am.  519;   Farris  v.  Houston, 

Atl.  120.  78  Ala.  250,  quoting  text. 

*  Avers   v.    Staley    (N.    J.   Eq.),    18 
Atl.  1046. 


83  LIABILITY    TO    ACCOUNT.  [§    1116. 

ment  and  satisfaction  of  the  mortgage  until  the  rents  and  profits  are 
applied  to  the  payment  of  the  debt.  The  law  does  not  apply  them  as 
they  are  received.'' 

Since  the  mortgagee's  accounting  is  a  matter  purely  of  equitable 
jurisdiction,  he  cannot  be  compelled  in  any  other  way  to  account.  A 
creditor  of  the  mortgagor  cannot,  by  garnishment  against  the  mort- 
gagee, reach  and  subject  rents  and  profits  received  by  him  in  excess 
of  his  demand.  Garnishment  is  a  legal  proceeding,  and  operates  only 
upon  legal  rights  which  the  principal  debtor  could  enforce  in  a  court 
of  law.^ 

§  1116.     The  mortg-ag^ee  is  charg^eable  only  upon  redemption.   The 

mortgagor's  right  to  hold  the  mortgagee  to  account  for  rents  and 
profits  of  the  mortgaged  premises,  or  for  waste  done  to  them,  must  be 
enforced  in  equity  and  not  by  suit  at  law.'-*  Though  the  rents  received 
may  be  sufficient  to  satisfy  the  debt  in  full,  the  only  remedy  of  the 
mortgagor  is  by  a  bill  in  equity  for  an  account  and  redemption.^**  He 
is  not  chargeable  so  long  as  the  premises  are  not  redeemed.  He  is  the 
legal  owner  of  the  estate,  and  his  accountability  for  rent  is  incident 
only  to  the  right  in  equity  to  redeem.  After  the  mortgage  is  extin- 
guished the  right  to  an  account  is  also  extinguished.^^  There  may  be 
a  special  agreement  between  the  parties  that  the  mortgagee  shall  pay 
rent;  he  may  be  a  lessee  of  the  premises;  but  after  the  expiration  of 
the  term  of  his  tenancy,  there  is  no  implication  of  an  agreement  to 

'  Hubbell  V.  Moulson,  53  N.  Y.  225.  satisfaction  of  the  mortgage  by  the 

"It  depends   upon   the  result  of  an  receipt    of    rents    and    profits    by    a 

accounting  upon  equitable  principles  mortgagee     in     possession,     to     an 

whether  any  part  of  the  rents  and  amount  to  satisfy  it,  and  his  charac- 

profits  received  shall  be  so  applied,  ter    as    mortgagee    in    possession    is 

The   mortgagee   is   entitled   to   have  not  divested  until  they  are  applied 

them  applied,  in  the  first  instance,  by    the    judgment    of    the    court    in 

to     reimburse    him    for    taxes     and  satisfaction   of   the    mortgage."    Per 

necessary    repairs    made    upon    the  Mr.  Justice  Andrews, 
premises;     for    sums    paid    by    him        »  Toomer  v.  Randolph,  60  Ala.  356 
upon   prior   incumbrances   upon   the        °  Farrant    v.    Lovel,    3    Atk.    723 

state,   in  order  to  protect  the  title.  Dexter  v.  Arnold,  2  Sumn.  108,  124 

and  for  costs  in  defending  it;  and  if  Gordon    v.    Hobart,    2    Story,     243 

he    has    made    permanent    improve-  Seaver  v.  Durant,  39  Vt.  103;   Chap- 

ments  upon  the  land,  in  the  belief  man  v.  Smith,  9  Vt.   153;    Givens  v. 

that  he  was  the  absolute  owner,  the  M'Calmot,    4    Watts,    460,    464;    Bell 

increased    value    by    reason    thereof  v.    Mayor    of    N.    Y.    10    Paige.    49; 

may  be  allowed  him.    In  many  cases  Daniel  v.  Coker,  70  Ala.  260;   Farris 

complicated    equities    must    be    de-  v.  Houston,  78  Ala.  250;   Garland  v. 

termined  and  adjusted  before  it  can  Watson,    74    Ala.    323;      Wilcox     v. 

be  ascertained  what  part,  if  any,  of  Cheviott,  92  Me.  239,  42  Atl.  403. 
the  rents  and  profits  received  is  to        '"Farris  v.  Houston,  78  Ala.  250. 
be  applied  upon  the  mortgage  debt.         "  Wilcox  v.   Cheviott.   92   Me.   239, 

In  the  absence  of  an  agreement  be-  42  Atl.  403;   Portland  Bank  v.  Fox, 

tween  the  parties  there  is  no  legal  19  Me.  99. 


R  lllG.]  mortgagee's  account.  84 

continue  to  pay  rent.^^  If  an  estate  under  lease  for  a  term  of  years 
be  mortgaged  to  the  lessee  in  fee,  unless  the  mortgagee  voluntarily 
pays  the  rent,  or  the  mortgage  makes  special  provision  that  he  shall 
hold  possession  in  the  capacity  of  lessee,  the  rent  is  suspended  until 
the  condition  be  performed,  or  the  estate  redeemed.  Upon  redemp- 
tion, of  course,  the  lessee,  during  the  term  of  the  lease,  will  be  account- 
able as  mortgagee  for  the  profits.  If,  however,  he  voluntarily  pay  the 
rent  during  such  term,  he  is  not  afterwards  accountable  for  the  same 
as  mortgagee.^' 

A  mortgagor  who  has  paid  the  mortgage  debt,  without  requiring 
the  mortgagee  to  account  for  rents  received  by  him  while  he  was  in 
possession,  cannot  afterwards  maintain  an  action  against  him  for  use 
and  occupation.  But  he  may  maintain  an  action  for  money  had  and 
received  to  recover  back  the  amount  overpaid,  which  ought  to  have 
been  allowed  for  rent  ;^*  and  if  the  rents  and  profits  exceed  the  amount 
of  the  debt  and  interest,  the  excess  may  be  recovered.^^ 

On  a  bill  against  two  or  more  persons  to  redeem,  if  one  of  them 
alone  has  received  rents  and  profits  more  than  sufficient  to  pay  the 
mortgage  debt,  he  alone  should  be  ordered  to  pay  over  the  surplus." 

An  action  of  trespass  quare  clausum  will  not  lie  by  a  mortgagor 
against  his  mortgagee  for  entering  and  harvesting  the  growing  crops. 
These  are  vested  in  the  mortgagee,  and  he  is  entitled  to  them  as  a  part 
of  his  security ;  and  is  liable  to  account  for  them  only  in  equity  upon 
a  redemption.^^  The  objection  to  such  action  does  not  lie  when  there 
is  an  agreement  between  the  parties  which  makes  the  mortgagor  a 
tenant  of  the  mortgagee." 

A  prior  mortgagee  in  possession  must  account  to  a  subsequent 
mortgagee  upon  his  redeeming;  but  a  subsequent  mortgagee  in  pos- 

"  Weeks  v   Thomas,  21  Me.  465.  Rev.  Laws,  1902,  ch.  188,  §  36.    First 

"  Newall  v   Wright,  3  Mass.  138,  3  enacted  in  1818  ch.  98,  §  3.   See  Wood 

Am   Dec   98  '  v.    Felton,    9    Pick    171;    Freytag   v. 

"Wilcox  v    Cheviott,  92  Me.   239.  Hoeland,    23    N.    J.    Eq.    36.      This 

42   \tl    403-  Barrett  v.  Blackmar,  47  statute    is   not   m   force   in    Maine. 

Iowa,    565.'    In    Massachusetts    it    is  Wilcox  v.   Cheviott,   92   Me.   239.   42 

provided  by  statute  that  if  a  mort-  Atl.  403.                          ^    oo  -nt    t   tp„ 

gagee  or  a  person  claiming  or  hold-  "  Freytag  v.  Hoeland,  23  N.  J.  Eq. 

ing   under   him   receives    from    the  36.                                       ^or.  t»t          nr, 

rents  and  profits  of  the  land  or  upon  ''  Mernam   v.   Goss,   139  Mass.   77, 

a   tender   made   to   him,   or   in    any  28  N.  E.  449. 

other  manner,  more  than  is  due  on  "See  §  697;   Bagnall  v.  Villar,  L 

the    mortgage,   and   no   suit  for   re-  R.  12  Ch.  D.  812;  Oilman  v.  Wills,  66 

demption    is    brought    against   him.  Me.    273,   and   cases   cited;    Reed   v. 

the  mortgagor  or  other  person  who  Elwell,  46  Me.  270. 

is   entitled  to  such   excess  may  re-  "  Marden  v.  Jordan,  55  Me.  9. 
cover   it   in   an   action  of  contract. 


85  LIABILITY  TO  ACCOUNT.  [§§    1117,    1118. 

session  is  not  bound  to  account  to  a  prior  mortgagee.^"  A  prior  mort- 
gagee can  always  secure  the  rents  and  profits  as  against  a  subsequent 
mortgagee  by  taking  possession. 

When  a  mortgagee  who  has  been  in  possession  is  called  upon  to  ac- 
count for  rents  and  profits,  and  fails  to  do  so,  his  mortgage  will  be 
declared  satisfied.^" 

A  mortgagee,  put  in  possession  of  a  going  concern  which  by  the 
terms  of  the  mortgage  he  is  required  to  keep  in  operation,  cannot  be 
charged  with  the  rental  of  the  property  while  so  in  his  possession,  but 
his  duty  is  to  operate  the  plant  as  would  be  done  by  an  ordinarily  pru- 
dent owner,  and  his  liability  is  only  to  account  for  the  net  proceeds  of 
the  business.^^ 

§  1117.  A  grantee  in  possession  under  a  deed  absolute  in  form, 
but  given  by  way  of  security  merely,  is  said  not  to  stand  exactly  in 
the  same  position,  in  reference  to  accounting,  as  an  ordinary  mort- 
gagee in  possession;  inasmuch  as  he  is  the  agent  of  the  mortgagor  as 
well  as  mortgagee,  and  is  chargeable  for  any  failure  to  obtain  the  full 
rental  value  of  the  premises  only  on  the  same  grounds  that  an  agent 
would  be.--  If  the  grantee  has  good  reason  to  consider  himself  pos- 
sessed of  an  absolute  estate  in  the  land,  and  he  consequently  makes 
permanent  improvements,  he  will  be  entitled  to  allowance  for  these 
when  a  mortgagee  generally  would  not  be  entitled  to  such  allowance. ^^ 

But  ordinarily  the  same  rules  for  accounting  are  held  to  apply  in 
such  case;  the  mortgagee  is  compelled  to  account  for  the  rents  and 
profits,  and  he  may  be  allowed  for  necessary  and  proper  repairs,  but 
not  for  costly  improvements,  unless  these  be  made  with  the  mortgagor's 
consent,  however  beneficial  they  may  be.  But  if  such  improvements 
are  made  in  good  faith  on  the  part  of  the  mortgagee,  under  the  belief 
that  he  owns  the  property  absolutely,  he  may  be  allowed  for  them.-* 

§  1118.  A  mortgagee  is  equally  liable  to  account  whether  his 
possession  be  before  or  after  the  law  day,  unless  there  is  some  agree- 

>°  Leeds    v.    Gifford,    41    N.    J.    Eq.  219;   Harrill  v.  Stapleton,  55  Ark.  1, 

464;    Galliher    v.    Davidson,    43    La.  16  S.  W.  474. 

Ann.  526,  9  So.  114.  ^^Wasatch  Min.  Co.  v.  Jennings,  5 

'"Morgan  v.  Morgan,  48  N.  J.  Eq.  Utah,    243,    15    Pac.    65,    73,    quoting 

399,  22  Atl.  545.  text;  Harper's  Appeal,  64  Pa.  St.  315. 

'"  Briggs    V.    Neal,    120    Fed.    224;  "There  is  a  manifest  distinction." 

Kiewert  Co.  v.  Juneau,  24  C.  Ct.  A.  says  Judge  Sharswood,  "between  the 

294,    297,    78    Fed.    708;    Shaeffer    v.  two    cases    in    reason     and     justice, 

Chambers,   6  N.  J.   Eq.   548,  47  Am.  which    are    controlling   guides    in    a 

Dec.  211.  court   of   equity,   where   no   positive 

"  Barnard    v.    Jennison,    27    Mich,  rule  of  law  intervenes."     The  cases 

230;  Clark  v.  Finlon,  90  111.  245;  Mil-  in   Pennsylvania   are  reviewed,   and 

ler  v.   Curry,  124   Ind.   48,  24   N.   E.  the  law  on  this  point  clearly  stated. 

"  Cookes  V.  Culbertson,  9  Nev.  199. 


§  1118.]  mortgagee's  accouxt.  86 

ment  to  the  contrary. ^^  An  equitable  mortgagee  is  under  the  same 
obligation  to  account  that  a  legal  mortgagee  is.^®  Where  redemption 
is  allowed  after  a  foreclosure  sale,  if  the  mortgagee  purchases  and 
enters  into  possession  he  must  account  for  the  rents  and  profits. ^'^  He 
is  not  allowed  to  claim  that  his  possession  was  unlawful.^'* 

A  mortgagee  who  has  entered  into  possession  and  received  the  rents 
and  profits  of  the  mortgaged  premises,  and  afterwards  purchased  the 
equity  of  redemption,  is  still  liable,  so  far  as  a  subsequent  mortgagee 
is  concerned,  to  account  for  the  rents  and  profits  of  the  premises  re- 
ceived while  he  occupied  as  mortgagee.  When  the  second  mortgagee 
applies  to  redeem  a  prior  mortgage,  he  stands  in  the  same  position  as 
the  mortgagor,  and  is  bound  to  pay  no  greater  sum  than  the  mort- 
gagor would  pay.^® 

If  the  owner  of  two  mortgages  forecloses  them  both  in  one  petition 
and  occupies  the  premises  under  the  decree  obtained,  he  is  liable  for 
rents  as  to  one  having  an  interest  between  his  two  mortgages,  and 
not  made  a  party  to  his  foreclosure  proceedings.^" 

A  mortgagee  in  possession  who  holds  possession  by  virtue  of  any 
other  title,  such  as  his  tenancy  by  the  curtesy,  or  by  prior  purchase,  is 
not  chargeable  with  rents  and  profits  during  the  time  he  holds  the 
property  by  that  title.^^  And  so  a  mortgagee  in  possession  under  a 
deed  from  the  mortgagor  of  the  equity  of  redemption  is  not  liable  as 
a  mortgagee  in  possession  to  account  to  junior  lien-holders  for  rents 
and  profits  received  after  the  time  he  took  possession  under  the  deed 
of  the  equity  of  redemption.^^ 

A  mortgagee  in  possession  after  default  is  presumed  to  be  in  posses- 
"Sion  in  his  character  of  mortgagee,  and  as  such  to  be  liable  to  account 
for  rents  and  profits;  and  such  is  the  presumption  although  he  first 
occupied  as  a  tenant  for  a  fixed  term,  and  while  so  occupying  pur- 
chased the  mortgage,  and  remained  in  possession  after  the  expiration 
of  his  term;  he  is  presumed  to  be  in  occupation  as  a  mortgagee,  and 
not  as  a  tenant  holding  over.^^ 

^'  Davis  V.   Lassiter,   20   Ala.    561 ;  Van  Duyne  v.   Shann,  41  N.  J.  Eq. 

Ross  V.  Boardman,  22  Hun,  527.  312. 

■"  Brayton  v.  Jones,  5  Wis.  117.  '-  Gray  v.  Nelson,  77  Iowa,  63,  41 

■'  Ten  Eyck  v.  Casad,  15  Iowa,  524;  N.  W.  566. 
Hill  v.  Hewett,  35  Iowa,  563;   Bunce        ^^  Anderson  v.  Lanterman,  27  Ohio 

V.  West,  62  Iowa,  80,  17  N.  W.  179;  St.  104;  Moore  v.  Degraw,  5  N.  J.  Eq. 

Blain  v.  Rivard,  19  111.  App.  477.  346;  Hilliard  v.  Allen,  4  Gush.  532. 

-*  Renshaw    v.    Taylor,    7    Oregon,        Possession  by  the  husband  of  the 

315.  mortgagee,  under  an  agreement  be- 

"■*  Harrison  v.  Wyse,  24  Conn.  1,  63  tween  him  and  the  supposed  owner, 

Am.  Dec.  151;   Clark  v.  Paquette,  67  does    not    enable   the    mortgagor    to 

Vt.  681,  32  Atl.  812.  offset  the  rent  against  the  mortgage 

=>*  Clark    V.    Paquette,    67    Vt.    681,  debt.     Sanford  v.   Pierce,   126  Mass. 

32  Atl.  812.  146. 

"  Hart    V.    Chase,    46    Conn.    207; 


87  LIABILITY  TO  ACCOUNT.  [§    1118a. 

The  mortgagee  must  account  for  the  rents  and  profits  received  by 
liim  after  a  decree  of  strict  foreclosure  upon  a  redemption  within  the 
time  allowed  by  the  decree.^'*  If  a  mortgagee  enters  into  possession 
under  a  defective  foreclosure,  he  is  in  the  position  of  a  mortgagee  in 
possession,  and  is  entitled  to  the  crops  and  other  products  of  the  land, 
and  is  accountable  for  the  rents  and  profits.^^ 

§  1118a.  A  junior  mortgagee  redeeming  from  a  senior  mortgagee 
who  has  been  in  possession  may  compel  an  accounting.  His  right 
does  not  rest  on  any  obligation  of  the  senior  mortgagee  to  him,  for 
there  is  no  contract  between  them,  but  upon  the  fact  that  the  senior 
mortgagee  is  under  obligation  to  account  to  the  mortgagor,  and  the 
junior  mortgagee  in  equity  stands  in  the  place  of  the  mortgagor.^' 
"The  junior  mortgagee  has  no  right,  therefore,  to  compel  an  account- 
ing when  the  mortgager  has  no  such  right ;  for  it  is  through  the  mort- 
gagor, and  the  equity  existing  between  him  and  the  senior  mortgagee, 
that  he  is  enabled  to  compel  an  application  of  the  rents  and  profits  to 
the  satisfaction  of  the  senior  mortgage.  For  these  reasons  it  is  well 
settled  that,  in  order  to  charge  a  mortgagee  with  rents  and  profits,  it 
must  be  shown  that  he  has  occupied  the  mortgaged  premises  under 
his  mortgage.  If  the  title  of  the  mortgagor  has  been  divested,  and  the 
mortgagee  has  been  in  possession  under  a  title  derived  from  the  mort- 
gagor, he  is  not  chargeable  with  the  rents  and  profits  of  the  mortgaged 
premises."^'^ 

If  a  second  mortgage  of  land  is  outstanding,  a  bill  in  equity  by  the 
second  mortgagee  to  redeem  the  land  from  the  first  mortgage  cannot 
be  defeated  by  the  defendant's  attempt,  after  failing  in  his  defence  to 
bring  a  cross-bill  to  redeem  from  the  plaintiff's  mortgage.  The  right 
of  the  second  mortgagee  to  redeem  from  the  first  mortgagee  is  para- 
mount to  the  right  of  the  first  mortgagee  to  redeem  from  the  second 
mortgagee.^* 

A  purchaser  at  a  foreclosure  sale,  which  is  defective  by  reason  that 
a  junior  mortgagee  was  not  made  a  party  to  the  bill,  must  account  for 
the  rents  and  profits  upon  a  subsequent  redemption  by  the  latter,  if 

^'Ruckman  v.  Astor,  9  Paige,  517;  W.  543,  quoting  text;  Long  v.  Rich- 

Dailey  v.  Abbott,  40  Ark.  275.     See  ards,    170    Mass.    120,    127,    48   N.    E. 

Chapman  v.  Smith,  9  Vt.  153.  1083,  citing  text;   Clark  v.  Paquette, 

■'-bee  S  1876a;   Lovelace  v.  Hutch-  67  Vt.  681,  32  Atl.  812. 

inson,  106  Ala.  417,  17  So.  623;   Hoi-  "  Gaskell    v.    Viquesney,    122    Ind. 

ton  V.  Bowman,  32  Minn.  191,  19  N.  244,  23  N.  E.  791,  17  Am.  St.  364,  per 

W.     734;    Johnson    v.    Sandhoff,    30  Coffey,  J.;   Gault  v.  Equitable  Trust 

Minn.  197,  14  N.  W.  799;  Jellison  v.  Co.  100  Ky.  578,  38  S.  W.  1065. 

Halloran,  44  Minn.  99,  46  N.  W.  332.  "*  Long  v.  Richards,  170  Mass.  120, 

^''  Adler-Goldman    Commission    Co.  48  N.  E.  1083. 
V.    Herren,    65    Ark.    229,   231,    45    S. 


§§  1119,  1120.]  mortgagee's  account.  88 

such  sale  operates  merely  as  an  assignment  of  the  mortgage;^®  but  if 
it  operates  not  only  as  an  assignment  of  the  prior  mortgage,  but  as  a 
foreclosure  of  the  equity  of  redemption  subject  to  the  junior  mort- 
gage, the  purchaser  standing  in  the  place  of  the  mortgagor  or  owner 
of  the  premises  is  not  liable  to  account  for  the  rents  and  profits.*"  If 
the  junior  mortgagee  wishes  to  secure  these  he  must  obtain  the  appoint- 
ment of  a  receiver  upon  showing  the  insufficiency  of  his  security.*^ 

§  1119.  An  assignee  stands  in  the  place  of  his  assignor  in  re- 
spect to  the  account,  whether  he  be  an  assignee  of  the  mortgage  or  of 
the  equity  of  redemption.  The  mortgagee's  liability  to  account  to  the 
mortgagor  for  the  rents  and  profits,  less  the  amount  paid  for  taxes  and 
repairs,  attaches  to  the  assignee  of  the  mortgage,  and  the  assignee  of 
the  mortgagor  acquires  the  rights  of  the  latter  in  this  respect.*^  A 
transfer  of  the  equity  of  redemption  while  the  mortgagee  is  in  posses- 
sion necessarily  carries  with  it  to  the  purchaser  the  right  to  an  account 
for  the  rents  and  profits  of  the  premises,  as  an  incident  to  the  right 
of  redemption,  both  those  received  by  the  mortgagee  before  the  sale 
and  those  received  afterwards.*^ 

When  a  mortgagee  in  possession  assigns  a  mortgage,  the  mortgagor, 
having  no  actual  notice  of  the  assignment,  is  entitled  as  against  the 
assignee  to  an  account  of  the  rents  and  profits  up  to  the  time  of  re- 
cording the  assignment,  and  to  have  them  applied  on  the  mortgage 
debt." 

§  1120.     So  long  as  the  mortgagee  refrains  from  taking  possession, 

he  has  no  right  to  the  rents  and  profits  received  by  the  mortgagor  or 
any  one  under  him ;  and  although  there  has  been  a  breach  of  the  con- 
dition, the  owner  of  the  equity  of  redemption  cannot  be  called  upon 
to  account.*^  He  may  redeem  without  paying  rent,  even  when  he  has 
been  allowed  to  remain  in  possession  under  an  agreement  to  pay  to 
the  mortgagee  a  stipulated  rent,  because  the  mortgage  does  not  secure 
the  rent.    The  agreement  to  pay  this  is  merely  personal.*® 

''  Ten  Eyck  v.  Casad,  15  Iowa,  524.  ''  Colman  v.  St.  Albans,  3  Ves.  Jun. 

*^  Catterlin  v.    Armstrong,   79   Ind.  25;   Higgins  v.  York  Buildings  Co.  2 

514,  quoting  text.     The  case  of  Mur-  Atk.  107;    Drummond  v.   St.  Albans, 

dock  v.  Ford,  17  Ind.  52,  in  so  far  as  5  Ves.  Jun.  '433,  438;  Hele  v.  Bexley, 

it  seems  to  hold  that  a  purchaser  at  20  Beav.   127;    Johnson  v.   Miller,   1 

a  foreclosure  sale  which  divests  the  Wils.    (Ind.)   416;    Butler  v.   Page,  7 

title  of  the  mortgagor  is  liable  for  Met.  40,  42,  39  Am.  Dec.  757;  Greer  v. 

rents  and  profits  to  a  junior  mort-  Turner,  36  Ark.  17;  In  re  Life  Asso. 

gagee,  is  disapproved.  of  America,  96  Mo.  632,  10  S.  W.  69. 

"  Renard  v.  Brown,  7  Neb.  449.  "  Merritt  v.  Hosmer.  11  Gray,  276, 

"  Strang  v.  Allen,  44  111.  428.  71  Am.  Dec.  713.     And  see  Chase  v. 

"  Ruckman  v.  Astor,  9  Paige,  517.  Palmer,    25    Me.    341;    Davenport    v. 

And    see    Gelston    v.    Thompson,    29  Bartlett,  9  Ala.  179;  Gilman  v.  Wills, 

Md.  595.  66  Me.  273. 

"  Ackerson  v.  Lodi  Branch  R.  Co. 
31  N.  J.  Eq.  42. 


89  WHAT  THE  MORTGAGEE  IS  CHARGEABLE  WITH.  [§    1121. 

Althougli  the  mortgagor  has  covenanted  in  his  mortgage  to  surren- 
der the  premises  upon  default,  but  when  a  default  occurs  he  refuses 
to  surrender,  and  drives  the  mortgagee  to  an  action  to  recover  posses- 
sion, the  latter  is  not  entitled  to  the  rents  and  profits  until  he  acquires 
actual  possession.'*^ 

A  husband  joined  his  wife  to  release  his  curtesy  in  a  mortgage  of 
his  wife's  separate  real  estate.  The  wife  having  died  the  husband 
married  again,  and  the  second  wife  took  an  assignment  of  the  mort- 
gage. Upon  a  bill  to  redeem  by  the  heirs  of  the  mortgagor,  it  was 
held  that  they  could  not  redeem  without  paying  interest  for  the  time 
the  husband  held  the  estate  as  tenant  for  life.  "He  was  not  legally 
liable  upon  the  debt  secured,  and,  as  between  himself  and  his  wife, 
the  assignee  of  the  mortgage,  he  was  under  no  obligation  to  pay  it,  or 
the  interest  upon  it.  .  .  .  By  redeeming  the  mortgage,  the  heirs  might 
at  any  time  have  put  themselves  in  a  position  to  enforce  payment  of 
interest  by  the  life  tenant,  and  to  save  themselves  from  risk  of  loss  by 
his  neglect."*^ 

When  the  mortgaged  premises  have  been  devised  by  an  insolvent 
owner  to  the  mortgagee,  and  he  has  entered  as  devisee,  the  creditors 
of  the  estate  have  the  right  to  demand  an  account  from  him  of  the 
rents  and  profits.*® 

A  mortgagor  in  possession  is  not  bound  to  rebuild  structures  de- 
stroyed by  fire,^°  or  to  repair  the  premises  when  they  have  been  injured 
without  his  default.^^ 


II.     What  the  Mortgagee  is  chargeable  with. 

§  1121.  A  mortgfagee  allowing  the  mortgagor  to  remain  in  occu- 
pation after  the  former  has  taken  possession  for  the  purpose  of  fore- 
closure does  not  necessarily  render  himself  accountable  for  rents  and 
profits.  If  the  mortgagor  is  permitted  to  remain  in  occupation,  and 
to  take  the  profits,  of  course  the  mortgagee  is  not  accountable  for  them 
to  himf^  nor  has  a  second  mortgagee  in  such  case  any  claim  upon 
the  first  mortgagee  to  account  after  formal  possession  taken  by  the 
former.  The  second  mortgagee  may  take  possession  as  against  the 
mortgagor  if  the  latter  holds  in  his  own  right,  and  thus  exclude  him 

"Teal  v.  Walker,  111  U.  S.  242,  4  =»  Reid  v.  Bank  of  Tenn.  1  Sneed, 

Sup.  Ct.  420.  262. 

*^  Martin  v.  Martin,  146  Mass.  517,  "  Campbell    v.    Macomb,    4    Johns. 

16  N.  E.  413.  Ch.  534. 

'"  Chalabre  v.    Cortelyou,  2   Paige,  "  Reynolds    v.    Canal    &    Banking 

605.  Co.  30  Ark.  520;    White  v.  Maynard, 

54  Vt.  575. 


§  1121.]  mortgagee's  account.  90 

and  take  the  rents  and  profits  to  his  own  use.  If  the  first  mortgagee 
should  by  previous  entry  and  actual  occupation,  or  by  virtue  of  his 
superior  title,  prevent  the  second  mortgagee  from  making  entry,  then 
he  would  be  held  to  account,  in  favor  of  the  second  mortgagee,  for  the 
rents  and  profits.^^  A  second  mortgagee  has  also  the  full  power  in 
any  case  to  protect  himself,  by  paying  off  the  first  mortgage  and  tak- 
ing entire  control  of  the  mortgaged  premises.  The  taking  of  formal 
possession  and  the  recording  of  the  certificate  in  the  registry  of  deeds 
doea  not  estop  the  first  mortgagee  to  show  that  he  was  not  in  actual 
possession,  nor  does  his  formal  entry  imply  a  continued  possession 
under  such  entry;  and  if  a  second  mortgagee  would  charge  the  first 
with  the  rents  and  profits,  he  should  attempt  to  enter  under  his  own 
mortgage,  or  should  tender  the  debt  due  to  the  first  mortgagee.^*  The 
mortgagee  having  taken  possession  and  allowed  the  mortgagor  to  re- 
main upon  the  property,  and  to  take  its  proceeds,  may  become  liable 
to  account  to  subsequent  creditors  for  the  rents  and  profits  which  he 
should  properly  have  applied  as  a  credit  upon  his  mortgage.^^ 

A  mortgagee  who  has  received  a  surrender  of  the  mortgaged  land 
from  the  mortgagor  and  has  appointed  the  latter  his  agent  to  gather 
the  growing  crop,  is  entitled  to  the  crop  when  gathered,  as  against  a 
subsequent  mortgagee  of  the  crop,  who  claims  under  a  mortgage  given 
to  secure  advances  to  enable  the  mortgagor  to  make  the  crop.^^ 

As  against  a  purchaser  from  the  mortgagor,  the  mortgagee  has  no 
right  to  allow  any  one,  as,  for  instance,  the  widow  of  the  mortgagor, 
to  occupy  the  premises,  or  any  part  of  them,  without  paying  rent.  He 
is  accountable  for  the  whole  profits  of  the  estate,  after  allowing  a 
reasonable  time  to  gain  possession  by  legal  process. ^'^ 

A  mortgagee  is  not  accountable  to  a  subsequent  incumbrancer  .or 
purchaser  for  the  rent  of  a  house  of  which  he  has  taken  formal  pos- 
session for  the  purpose  of  foreclosure,  when  the  house  is  occupied 
under  a  claim  of  right  adversely  to  him ;  as,  for  instance,  when  occu- 
pied by  the  mortgagor  and  his  family  under  a  homestead  right  not  re- 
leased in  the  mortgage.^*  But  if  the  mortgagor  has  a  right  of  home- 
stead in  a  part  of  the  mortgaged  premises,  which  right  he  has  released 
in  a  first  mortgage  but  not  in  a  second,  the  first  mortgagee,  having 

"  Coppring  v.  Cooke,  1  Vern.  270;  ''^Decker  v.   Wilson,   45  N.   J.   Eq. 

Demarest  v.  Berry,  16  N.  J.  Eq.  481;  772,  18  Atl.  843. 

Hitchcock    v.    Fortier,    65    111.    239 r  ""Thompson   v.    Union  Warehouse 

Watford  v.  Gates.  57  Ala.  290;  White  Co.  110  Ala.  499.  18  So.  105. 

V.  Maynard,  54  Vt.  575.  "Thayer  v.  Richards,  19  Pick.  398; 

'*  Bailey    v.    Myrick,    52    Me.    132;  Butts  v.  Broughton,  72  Ala.  294 

Charles  v.  Dunbar,  4  Met.  498.     See,  ^' Taf t  v.    Stetson,   117   Mass.   471; 

also,  Dawson  v.  Drake,  30  N.  J.  Eq.  Silloway  v.  Brown,  12  Allen,  30. 
601. 


91  WHAT  THE  MORTGAGEE  IS  CIIAHGEA15LE  WITH.  [§    1122. 

taken  actual  possession  for  the  purpose  of  foreclosure,  and  allowed  the 
mortgagor  to  occupy  the  homestead,  is  accountable  to  the  second  mort- 
gagee for  the  rent  he  might  have  obtained  for  the  homestead.'*^ 

If  one  who  is  a  prior  mortgagee  afterwards  acquires  the  equity  of 
redemption  subject  to  a  second  mortgage,  and  then  takes  possession, 
he  is  not  regarded  as  a  mortgagee  in  possession,  and  as  such  account- 
able for  the  rents  and  profits  to  the  Junior  mortgagee.*" 

§  1122.  Where  the  mortgagee  has  himself  occupied  and  im- 
proved the  estate  in  person,  the  value  of  the  occupation  must  neces- 
sarily be  determined  by  evidence  of  experts  as  to  what  ought  to  have 
been  received  for  the  rent  of  the  property  f^  and  such  evidence  is  also 
admissible  in  cases  where  the  mortgagee,  not  being  himself  in  posses- 
sion, has  kept  false  accounts  or  no  accounts  of  rents  received,  or  there 
is  such  misconduct  of  any  kind  on  his  part  as  makes  a  resort  to  this 
kind  of  evidence  necessary.  But  the  mere  fact  that  the  mortgagee  re- 
sides at  a  distance,  and  must  rely  upon  agents  to  manage  the  estate, 
should  not  make  evidence  of  experts,  that  a  higher  rent  could  have 
been  received,  admissible  to  charge  him  with  a  greater  amount  of  rent 
than  he  has  received.®- 

If  a  mortgagee  himself  occupies  the  premises,  especially  if  they  con- 
sist of  a  farm  under  cultivation,  upon  which  labor  and  money  must  be 
bestowed  to  produce  annual  crops,  he  will  be  charged  with  such  sums 
as  will  be  a  fair  rent  of  the  premises,  without  regard  to  what  he  may 
realize  as  profits  from  the  use  of  it.*'^  The  expenditures  necessary  to 
carry  on  a  farm,  and  the  profits  derived  from  it,  are  so  wholly  within 
the  knowledge  of  the  occupant  that  it  would  be  impossible  for  the 
mortgagor  to  show  the  account  to  be  wrong,  except  in  the  result.*'* 

If  the  property  has  no  rental  value,  and  no  rents  are  collected,  the 
mortgage  is  not  accountable  for  use  and  occupation.*'^ 

If  the  mortgagee  occupies  the  mortgaged  premises  jointly  with  the 

^^  Richardson  v.  Wallis,  5  Allen,  78.  Bourgeois  v.  Gapen,  58  Neb.  364,  78 

""  Rogers  v.  Herron,  92  111.  583.  N.     W.     639;      American     Freehold 

"Smart    v.    Hunt,    1    Vern.     418;  Mortg.  Co.  v.  Pollard,  132  Ala.  155, 

Trulock  v.  Robey,  15  Sim.  256;  John-  32  So.  630. 

son    v.    Miller,    1    Wils.    (Ind.)    416;  «- Gerrish  v.  Black,  104  Mass.  400. 

Montgomery    v.    Chadwick,    7    Iowa,  •"'  Equitable    Trust    Co.    v.    Fisher, 

114;    Moore  v.   Degraw,  5  N.   J.  Eq.  106  111.  189;  Engleman  Trans.  Co.  v. 

346;      Van     Buren    v.    Olmstead,     5  Longwell,  2  Flip.  601;    Still  v.  Buz- 

Paige,  9;  Barnett  v.  Nelson,  54  Iowa,  zell,  60  Vt.  478;   Robertson  v.  Read, 

41,  6  N.  W.  49;   Murdock  v.  Clarke,  52  Ark.  381,  14  S.  W.  387,  20  Am.  St. 

59  Cal.  683,  quoting  text;    Dozier  v.  188. 

Mitchell,  65  Ala.  511.    Mortgagee  not  "Sanders  v.  Wilson,  34  Vt.  318. 

chargeable  if  the  land  has  no  rental  "'   Bourgeois  v.  Gapen,  58  Neb.  364, 

value  nor  for  depreciation  in  value  78  N.  W.  639. 

of   the   property    during    litigation. 


§  1123.]  mortgagee's  account.  92 

mortgagor,  he  will  be  charged  with  a  fair  proportion  of  the  rent  of  the 
land.*^*' 

Where  a  mortgagee  of  an  undivided  half  of  property  enters  into  a 
partnership  with  the  owner  of  the  other  half  interest  for  the  use  of  the 
property  as  a  mill,  he  will  be  charged  with  a  fair  rental,  though  the 
business  turns  out  disastrously.*'^ 

What  is  a  reasonable  rent  is  a  matter  to  be  determined  from  a  con- 
sideration of  all  the  circumstances  of  the  case.  The  price  that  might 
be  obtained  by  a  letting  at  public  auction  is  not  necessarily  a  proper 
criterion;  for  in  many  cases  such  a  rent  would  be  no  just  standard  of 
the  real  value  of  the  rent. 

§1123.  As  a  general  rule  the  mortgagee  in  possession  is  held 
to  the  exercise  of  such  care  and  diligence  as  a  provident  owner  in 

charge  of  the  property  would  exercise ;  but  he  will  not  be  held  account- 
able for  anything  more  than  the  actual  rents  and  profits  received,  un- 
less there  has  been  wilful  default  or  gross  negligence  on  his  part.**^  It 
is  the  fault  of  the  mortgagor  that  he  lets  the  land  fall  into  the  hands 
of  the  mortgagee,  and  the  mortgagor  should  be  required  to  prove  ac- 
tual fraud  or  negligence  on  the  part  of  the  mortgagee  before  he  can  be 
charged  for  more  than  his  actual  receipts  of  rents  and  profits. 

He  will  not  be  held  to  account  according  to  the  value  of  the  prop- 
erty, but  for  what  he  should  with  reasonable  care  and  attention  have 
received.^*'    Neither  is  he  required  to  enter  into  any  speculations  for 

''Murdock  v.  Clarke,  90  Cal.  427,  129  111.  72,  21  N.  E.  580;  Magnusson 
27  Pac.  275.  v.  Charleson,  9  111.  App.  194.  Maine: 
«'  Engleman  Trans.  Co.  v.  Long-  Milliken  v.  Bailey,  61  Me.  316. 
well,  2  Flip.  p.  601,  48  Fed.  129.  Massachusetts:  Donahue  v.  Chase, 
"« Parkinson  v.  Hanbury,  L.  R.  2  H.  139  Mass.  407,  2  N.  E.  84;  Brown  v. 
of  Lords,  1;  Hughes  v.  Williams,  12  South  Boston  Savings  Bank,  148 
Ves.  493;  Scruggs  v.  Railroad  Co.  108  Mass.  300,  19  N.  E.  382;  Montague 
U.  S.  368,  2  Sup.  Ct.  780;  Peugh  v.  v.  Boston  &  Albany  R.  Co.  124  Mass. 
Davis,  4  Mack.  23,  113  U.  S.  542,  5  242.  Missouri:  Ely  v.  Turpin,  75 
S.  Ct.  622;  Engleman  Trans.  Co.  v.  Mo.  86;  Turner  v.  Johnson,  95  Mo. 
Longwell,  2  Flip.  601,  48  Fed.  129.  431,  7  S.  W.  570;  Stevenson  v.  Ed- 
Alabama:  Barron  v.  Pauling,  38  w  .rds,  98  Mo.  622,  12  S.  W.  255. 
Ala.  292;  Dozier  v.  Mitchell,  65  Ala.  Nebraska:  Comstock  v.  Michael,  17 
511;  Gr;tham  v.  Ware,  79  Ala.  192;  Neb.  288,  22  N.  W.  549.  New  Jersey: 
Butts  V.  Broughton,  72  Ala.  294;  Dawson  v.  Drake,  30  N.  J.  Eq.  601; 
Sloan  v.  Frothingham,  72  Ala.  589;  Shaeffer  v.  Chambers,  6  N.  J.  Bq. 
Daniel  v.  Coker,  70  Ala.  260;  548,  47  Am.  Dec.  211.  New  York: 
Gresham  v.  Ware,  79  Ala.  192;  Van  Buren  v.  Olmstead,  5  Paige,  9; 
American  Freehold  Mortg.  Co.  v.  Quinn  Brittain,  3  Edw.  314;  Walsh 
Pollard,  132  Ala.  155,  32  So.  630.  v.  Rutgers  Fire  Ins.  Co.  13  Abb.  Pr. 
California:  Murdock  v.  Clarke,  90  33.  Oregon:  Campbell  v.  McKin- 
Cal.  427,  27  Pac.  275.  Illinois:  ney.  22  Oreg.  459,  30  Pac.  231. 
Moore  v.  Titman,  44  111.  367;  Strang  ""Murdock  v.  Clarke,  59  Cal.  683, 
v.  Allen,  44  111.  428;  Harper  v.  Ely,  quoting  text,  90  Cal.  427,  27  Pac.  275; 
70  111.  581;  Mosler  v.  Norton,  83  111.  Peugh  v.  Davis,  4  Mack.  23;  Steven- 
519,  100  111.  63;  Clark  v.  Finlon.  90  son  v.  Edwards,  98  Mo.  622,  12  S.  W. 
111.  245;  Pinneo  v.  Goodspeed,  120  111.  255. 
524,  12  N.  E.  196;  Jackson  v.  Lynch, 


93 


WHAT  THE  MORTGAGEE  IS  CHAUGEABLE  WITH.  [§    1123. 


the  benefit  of  the  mortgagor/^  but  to  protect  the  property  as  it  is,  and 
to  obtain  from  it  what  returns  it  will  yield  under  prudent  manage- 
ment. It  has  been  suggested,  however,  that  when  the  mortgagee  is  un- 
able to  procure  a  tenant  for  a  large  farm,  it  may  be  his  duty  to  cause 
it  to  be  tilled  in  accordance  with  good  ordinary  husbandry."^ 

If  the  mortgagee  suffers  a  notoriously  insolvent  tenant  to  remain 
in  possession,  he  is  accountable  for  the  rent  during  such  time,  deduct- 
ing the  time  reasonably  necessary  to  expel  him  by  legal  means,  and  to 
obtain  a  responsible  tenant.^^  It  is  wilful  default  on  the  part  of  the 
mortgagee  to  allow  a  tenant  to  remain  in  possession  several  years  with- 
out paying  rent,  and  without  any  demand  upon  him  for  it."  He  may 
also  render  himself  liable  for  the  rents  and  profits  by  assigning  the 
premises  to  an  insolvent  person,  and  putting  him  in  possession.^*  A 
mortgagee  is  liable  for  rent  lost  or  not  collected  through  the  wilful  or 
gross  negligence  of  his  agent,  although  ordinary  and  proper  care  was 
exercised  in  the  selection  of  the  agent.'^^ 

A  mortgagee  of  land,  who  has  attempted  a  fraudulent  foreclosure  of 
the  mortgage  and  been  guilty  of  bad  faith  throughout  the  whole  trans- 
action, properly  may  be  charged,  upon  a  bill  in  equity  to  redeem  the 
land  from  the  mortgage,  with  what  could  have  been  earned  by  the  es- 
tate under  prudent  management.'^*' 

If  he  has  lost  rent  which  he  should  have  received,  as,  for  instance, 
by  refusing  a  higher  rent  from  a  responsible  tenant,  or  by  turning  out 
without  sufficient  cause  a  responsible  tenant,  and  then  getting  less 
rent  or  none  at  all,  he  is  chargeable  with  the  rent  lost.  If  the  mort- 
gagor is  aware  that  a  higher  rent  may  be  obtained,  he  should  inform 
the  mortgagee  of  the  fact;  and  his  neglect  to  do  so  may  prevent  his 
charging  the  mortgagee  with  such  higher  rent."  But  when  the  mort- 
gagee, in  the  exercise  of  a  reasonable  discretion  and  care,  has  already 

"Hughes  V.  Williams,  12  Ves.  493;  which   we    fully    share,    to    mitigate 

Peugh  V.  Davis,  113  U.   S.  542,  5  S.  rather   than   to   enhance   the   severe 

Ct.  622;    Rowe  v.  Wood,  2  J.   &  W.  liabilities  of  a  mortgagee  in  posses- 

553,  in  relation  to  working  a  mine.  sion.      Gerrish    v.    Black,    104    Mass. 

'"■  Shaeffer  v.  Chambers,  6  N.  J.  Eq.  400;  Brown  v.  South  Boston  Savings 

548,  47  Am.  Dec.  211.  Bank.   148  Mass.   300,   308,   19   N.   E. 

"Miller  v.    Lincoln,   6   Gray,   556;  382.     But  when  we  are  bound,  how- 

Greer  v.  Turner,  36  Ark.  17.  ever  much  we  may  hesitate  in  our 

^'Brandon   v.    Brandon,   10  W.    R.  belief,   to  assume  bad   faith  on  the 

287.  mortgagee's     part     throughout     the 

'■*  Hagthorp   v.   Hook,   1   Gill   &  J.  whole    transaction,    we    cannot    say 

270.  that    the    master    erred    in    holding 

"  Montague    v.    Boston    &    Albany  him  liable  for  what  he  might  have 

R.  Co.  124  Mass.  242.  made  by  reasonable  diligence.     Mil- 

'"Long  V.  Richards,  170  Mass.  120,  ler  v.  Lincoln,  6  Gray,  556;  Richard- 

125,  48  N.  E.  1083.     Per  Holmes,  J.:  son  v.  Wallis,  5  Allen,  78." 

"In  cases  where  there  has  been  no  ''Hughes  v.  Williams,  12  Ves.  493; 

wilful    default   or   gross   negligence,  Montague  v.  Boston  &  Albany  R.  Co. 

this    court   has    shown    an   anxiety,  124  Mass.  242. 


§  1123a.]  mortgagee's  account,  9-1 

agreed  upon  the  terms  of  a  lease,  he  is  not  chargeable  with  a  higher 
rent  for  the  reason  that  the  mortgagor  or  any  one  else  offers  a  higher 
rent.'^^ 

A  mortgagee  who  takes  possession  of  the  mortgaged  premises,  con- 
sisting of  an  hotel,  and  leases  the  same,  is  not  obliged  to  allow  the 
keeping  of  a  bar  for  the  sale  of  liquors  therein ;  and  the  fact  that  a 
higher  rent  could  have  been  obtained,  had  he  allowed  such  a  privilege, 
cannot  be  urged  on  a  bill  to  redeem,  for  the  purpose  of  rendering  him 
accountable  for  the  higher  rent."'' 

§  1123a.  A  qualification  of  the  general  rule  arises  when  one  goes 
into  possession  in  another  character,  as,  for  instance,  under  a  deed 
absolute  in  form,  and  the  circumstances  are  such  that  he  may  well  be- 
lieve himself  to  be  in  fact  the  owner  of  the  estate,  subject  only  to  an 
agreement  to  sell.  Such  a  grantee  is  not  technically  a  mortgagee  in 
possession.  The  character  of  mortgagee  is  cast  upon  him  by  the  appli- 
cation of  equitable  rules  to  an  oral  agreement  in  contradiction  of  the 
deed,  and  when,  perhaps,  the  transaction  might  be  construed  as  a  con- 
ditional sale.  In  such  case  the  mortgagee  is  chargeable  only  with 
what  he  has  received,  and  not  with  what  he  might  have  received.*^ 
Such  is  also  the  case  when  the  mortgagee  enters  not  as  mortgagee,  but 
as  purchaser  under  a  tax  title  f^  or  as  a  trespasser,  or  as  a  tenant  of 
the  mortgagor.^^  This  exception  to  the  rule  was  clearly  defined  by 
Lord  Cranworth,  in  the  House  of  Lords,  when  he  said :  "It  is  certainly 
too  much  to  force  upon  persons  the  character  of  mortgagees  in  posses- 
sion when  they  never  were  in  actual  possession  as  such,  and  never  re- 
ceived any  rents,  except  when  they  had,  by  subsequent  arrangement, 
become  entitled,  as  they  believed,  as  purchasers,  to  the  actual  posses- 
sion, or  to  the  actual  receipt  of  rents  and  profits  then  accruing."  Lord 
Westbury  said :  "It  is  undoubtedly  settled  in  courts  of  equity  that,  if 
a  mortgagee,  in  that  character,  receives  rents  and  profits,  he  will  be 
bound  to  account,  not  only  for  what  he  has  received,  but  for  what, 
without  wilful  default,  he  might  have  received,  upon  the  ground  that 
he  is  to  be  regarded  as  bailiff  of  the  mortgagor  or  his  representatives ; 
but  if  a  mortgagee  takes  in  another  character,  more  especially  if  he  re- 
ceives in  a  character  adverse  to  the  rights  of  the  mortgagor,  then  it 

'« Hubbard  v.  Shaw,  12  Allen,  120;  384;  Harper's  Appeal,  64  Pa.  St.  315. 

Montague    v.    Boston    &    Albany    R.  "  Hall  v.  Westcott,  17  R.  I.  504,  23 

Co.   124  Mass.  242;    Moshier  v.  Nor-  Atl.  25. 

ton,  100  111.  63.  "  Daniel  v.  Coker,  70  Ala.  260;  Hall 

'"Curtiss  V.  Sheldon,  91  Mich.  390,  v.  Westcott,  17  R.  I.  504,  23  Atl.  25. 

51  N.  W.  1057.  See.  also,  Gaskell  v.  Viquesney,  122 

^"Parkinson   v.   Hanbury,   L.   R.   2  Ind.    244,    23    N.    E.    791;    Young   v. 

H.  L.  1;  Morris  v.  Budlong,  78  N.  Y.  Omohundro,  69  Md.  424,  16  Atl.  120. 
543;    Moore  v.   Cable,   1   Johns.   Ch. 


95     WHAT   tllE    MORTGAGEE    IS    CHARGEABLE   WITH.    [§§    1123b,    1134. 

would  be  impossible  to  ascribe  to  him,  by  any  inference  of  law,  the  con- 
clusion that  he  intended  to  take  possession,  or  to  receive  the  rents  as 
the  bailiff  of  the  mortgagor,  or  that  that  relation  could  properly  be  im- 
puted to  him."^^ 

In  case  of  waste  by  destroying  valuable  timber,  the  measure  of  dam- 
ages is  not  the  value  of  the  timber,  but  the  diminished  value  of  the 
land, — the  difference  between  its  market  value  before  and  after  the  de- 
struction of  the  timber.  It  is  error  for  the  trial  court  to  accept  the 
opinion  of  witnesses  that  tlie  mortgagor  suffered  no  damage,  because 
the  destruction  of  the  timber  rendered  the  land  capable  of  cultivation 
and  of  yielding  a  revenue ;  and  at  the  same  time  to  disregard  evidence 
in  reference  to  the  decreased  market  value  of  the  land.^* 

§  1123b.  The  mortgagee  must  account  for  waste  cominitted  while 
he  is  personally  in  possession.^"  When  the  security  is  insufficient, 
he  will  not  be  enjoined  from  cutting  timber  or  opening  a  mine.  So 
long  as  he  does  not  commit  wanton  destruction,  he  may  also  clear  and 
cultivate  the  land.^^  He  is  entitled  to  make  the  most  of  the  property 
for  the  purpose  of  realizing  what  is  due  to  him.  He  has  only  to  ac- 
count for  the  proceeds  of  the  property.^'  But  a  mortgagee  having 
properly  rented  the  land  to  a  tenant  is  not  accountable  for  damages 
done  without  hi&  knowledge,  or  for  wood  cut  and  used  for  firewood  by 
such  tenant.®^ 

§  1124.    If  the  mortgagee  has  kept  no  proper  accounts  of   the 

rents  and  profits  received  by  him,  he  is  chargeable  with  what  he  might 
have  received,  and  must  be  presumed  to  have  received,  by  the  use  of 
ordinary  care.*"  If  the  mortgagee  be  unable  to  render  an  account,  he 
is  chargeable  with  a  fair  occupying  rent."" 

The  account  must  include  all  rents  received  from  the  time  of  the 
mortgagee's  entry  into  possession.^^  Altliough  redemption  is  sought 
by  one  having  only  a  limited  interest  in  the  property,  as,  for  instance, 

'-'Parkinson   v.   Hanbury,   L.   R.    2  »« Hubbard  v.  Shaw,  12  Allen,  120; 

H.  L.  1.  Onderdonk  v.  Gray,  19  N.  J.  Eq.  65. 

"Perdue  v.  Brooks,  85  Ala.  459,  5  '*'' Dexter  v.   Arnold,  2  Sumn.   108; 

So.   126;    American  Freehold   Mortg.  Van  Buren  v.  Olmstead,  5  Paige,  9; 

Co.  v.   Pollard,  132  Ala.   155,  32   So.  Frey  v.  Campbell  (Ky.),  3  S.  W.  368; 

630.  Hall  v.  Westcott,  17  R.  I.  504,  23  Atl. 

'"Sandon  v.   Hooper,  6  Beav.   246;  25. 

Hornby    v.    Matcham,    16    Sim.    325;  ™  Montgomery      v.      Chadwick,      7 

Midleton  v.  Eliot,  15  Sim.  531;    On-  Iowa,  114;  Gordon  v.  Lewis,  2  Sumn. 

derdonk  v.    Gray,   19   N.   J.    Eq.    65;  143,  150;  Clark  v.  Smith,  1  N.  J.  Eq. 

Daniel  v.  Coker,  70  Ala.  260.  121. 

'"Morrison  v.  M'Leod,  2  Ired.  Eq.  "^  Lupton    v.    Almy,    4    Wis.    242; 

108.  Ackerman    v.    Lyman,    20   Wis.    454: 

"  Millett   V.   Davey,   31   Beav.   470,  Reynolds  v.  Canal  &  Banking  Co.  30 

per  Romilly,  M.  R.;  Whiting  v.  Ad-  Ark.  520. 
ams,  66  Vt.  679,  30  Atl.  32. 


§§   1125,  1130.]  mortgagee's  account,  *  96 

a  right  of  dower,  the  mortgagee  is  liable  to  account  not  merely  from 
,the  time  of  the  demand  upon  him,  but  from  the  date  of  his  entry ."^ 

§  1125.  A  mortgagee  may  work  a  ratine  upon  the  mortgaged 
property,  if  the  work  be  carried  on  in  a  proper  manner.^*  Of  course 
the  product,  less  the  expense  of  working  it,  must  be  applied  to  the  pay- 
ment of  the  mortgage  debt.  But  he  would  not  be  justified  in  im- 
proving a  mine  by  a  large  expenditure,  or  at  most  to  advance  more  for 
this  purpose  than  would  a  prudent  owner.'**  A  mortgagee  may  even 
open  a  new  mine  when  the  mortgaged  estate  is  of  insufficient  value 
aside  -from  the  mine ;  and  he  is  chargeable  only  with  the  net  profits  of 
working  it."^  But  if  the  property  is  otherwise  sufficient,  the  mort- 
gagee has  no  right  to  open  and  work  mines,  and,  if  he  does  so,  will  be 
charged  with  the  gross  receipts,  without  any  allowance  for  the  ex- 
penses of  working.®^ 


III.     Allowances  for  Repairs  and  Improvements. 

§  1126.  The  rule  as  to  repairs. — Until  foreclosure,  the  mortgagee, 
although  in  possession  for  the  purpose  of  foreclosing,  is  not  the  owner 
of  the  property,  but  beyond  securing  payment  of  the  debt  due  him  is 
really  in  the  position  of  trustee  for  the  owner.  He  has  no  authority 
to  make  the  estate  better  at  the  expense  of  the  mortgagor,  but  is  bound 
to  use  reasonable  means  to  preserve  the  estate  from  loss  and  injury.®'^ 
He  cannot  charge  the  mortgagor  with  expenditures  for  convenience  or 
ornament.  The  rule  is  sometimes  stated  to  be  that  the  mortgagee  must 
preserve  the  estate  in  as  good  a  condition  as  that  in  which  he  received 
it.  But  he  may  properly,  under  some  circumstances,  go  beyond  this, 
and  supply  things  that  were  wanting  at  the  time  of  entry ;  as  where  the 
doors  or  windows  of  a  house  are  gone,  he  is  Justified  in  supplying  these 
in  order  to  put  the  estate  in  condition  for  occupation.®*'  What  is  a 
proper  expenditure  must  depend  upon  the  circumstances  of  each  case. 
If  the  estate  be  a  valuable  one,  handsomely  laid  out,  with  many  young 
fruit  and  ornamental  trees,  and  the  mortgagee  cannot  by  reasonable 
efforts  let  it  for  a  sum  sufficient  to  keep  it  in  proper  repair  and  pre- 
serve the  fruit  trees,  he  may  be  allowed  the  expenses  necessary  to  keep 

°=  Dela  v.  Stanwood,  62  Me.  574.  "  Hicklin   v.    Marco,    46    Fed.    424, 

»'  Irwin   v.   Davidson,    3   Ired.   Eq.  per  Deady,  J. ;    Miller  v.  Curry,  124 

311  Ind.  48,  24  N.  E.  219;  Bradley  v.  Mer- 

"  Rowe  V.  Wood,  2  J.  &  W.  553.  rill,  91  Me.  340,  40  Atl.  132,  S.  C.  88 

»=Millett  V.  Davey.  31  Beav.  470.  Me.  319,  34  Atl.  160. 

"■Millett   V.   Davey,   31   Beav.   470.  "« Woodward  v.   Phillips,   14  Gray, 

And  see  Hod  v.  Easton,  2  GifE.  692,  132;   Rowell  v.  Jewett,  73  Me.  365. 

2  Jur.  N.  S.  729. 


07  ALLOWANCES,    REPAIRS    ANO    IMPROVEMENTS.  [§    1127. 

it  in  such  repair;  but  not  for  expenditures  in  cultivating  the  land,  or 
for  money  paid  for  a  horse  and  cart  and  cow."" 

The  mortgagee  in  possession  is  bound  to  make  all  reasonable  and  nec- 
essary repairs,  and  is  responsible  for  loss  occasioned  by  his  wilful  default 
or  gross  neglect  in  this  respect.^"^°  What  are  reasonable  and  necessary 
repairs  depends  upon  the  particular  circumstances  of  the  case.^"^  He 
is  not  to  be  charged  with  exactly  the  same  degree  of  care  that  a  person 
in  possession  of  his  own  property  would  ordinarily  take.^°-  He  is  not 
bound  to  go  further  than  to  keep  the  estate  in  necessary  repair ;  or  to 
make  full  and  complete  repairs  if  he  would  thereby  incur  expense  dis- 
proportionate to  the  value  of  the  estate  or  to  his  own  mortgage  inter- 
est. He  is  not  even  bound  to  repair  defects  arising  in  the  ordinary 
way  by  w^ste  and  decay. 

A  clause  in  a  decree  for  redemption  directing  that  the  mortgagee  in 
possession  be  allowed  for  the  improvements  made  upon  the  premises, 
and  that  the  master  report  the  value  of  such  improvements,  is  merely 
a  less  formal  equivalent  for  a  direction  that  the  master  inquire 
whether  the  defendants  had  made  any,  and  what,  lasting  or  permanent 
improvements  on  the  premises:"^  It  is  proper  that  such  a  special  di- 
rection should  be  inserted  in  the  decree  if  a  prima  facie  case  is  made 
for  it  at  the  hearing,  but  in  itself  it  does  not  determine  that  there  are 
improvements  to  be  allowed  for.^"* 

§  1127.  The  ordinary  rule  in  respect  to  improvements  is  that  the 
mortgagee  will  not  be  allowed  for  them  further  than  is  proper  to  keep 
the  premises  in  necessary  repair.  Unreasonable  improvements  may  be 
of  permanent  benefit  to  the  estate;  but  unless  made  with  the  consent 
and  approbation  of  the  mortgagor,  no  allowance  can  be  made  for 
them."^    The  mortgagee  has  no  right  to  impose  them  upon  the  owner, 

»*Sparhawk  v.  Wills,  5  Gray,  423.  Mayor,  10  Paige,  49;    Quin  v.  Brit- 

'""Barnett  v.   Nelson,  54  Iowa,  41,  tain,  Hoff.  353,  354;    Moore  v.  Cable, 

6  N.  W.  49,  37  Am.  Rep.  183;  Dozier  1    Johns.    Ch.    385,    per    Chancellor 

V.  Mitchell,  65  Ala.  511, quoting  text;  Kent;    Mickles  v.   Dillaye,  17   N.   Y. 

State  V.  Brown,  73  Md.  484,  21  Atl.  80,  per  Denio,  J.;   Wetmore  v.  Rob- 

374.  erts,    10    How.    Pr.    51;    Benedict   v. 

""Dexter  v.  Arnold,  2  Sumn.  108;  Oilman,  4  Paige,  58;   Neale  v.  Hag- 

McCumber  v.  Oilman,  15  111.  381.  throp,  3  Bland  Ch.  551,  590;  Dough- 

"'-Shaeffer   v.    Chambers,    6    N.    J.  erty  v.  McColgan,  6  O.  &  J.  275;  Mc- 

Eq.  548.  Carron  v.  Cassidy,  18  Ark.  34;   Hid- 

'"■'  As  in  Webb  v.  Rorke,  2  Schoales  den  v.   Jordan,  28  Cal.   301,   32   Cal. 

&   L.   661,   670.  397;  ^''urdock  v.  Clarke,  59  Cal.  683; 

"*  Merriam  v.   Ooss,  139  Mass.   77,  Lowndes  v.  Chisholm,  2  McCord  Ch. 

28    N.    E.    449,    in    the    language    of  455,  16  Am.  Dec.  667;  Ruby  v.  Abys- 

Holmes,  J.  sian    Soc.    of  Portland,   15   Me.   306; 

""  Sandon   v.    Hooper,  6  Beav.  246;  Brqdlev   v.    Merrill,    91    Me.    340,    40 

Harper's    Appeal,    64    Pa.    St.    315;  Ati.  132.  S.  C.  88  Me.  319.  34  Atl.  160; 

Russell  V.  Blake,  2  Pick.  505;   Clark  Pierce  v.  Faunce,  53  Me.  351;   Hop- 

V.   Smith,   1  N.   J.  Eq.   121;    Bell   v.  kins  v.   Stephenson,  1  J.   J.   Marsh. 


g  1128.]  mortgagee's  account.  98 

and  thereby  increase  the  burden  of  redeeming.  The  improvements  will 
inure  to  the  benefit  of  the  estate  upon  redemption,  but  in  the  meantime 
the  mortgagee  has  the  use  of  them.  It  is  his  own  choice  to  make  them 
while  he  holds  only  a  'defeasible  title.^°®  A  default  having  occurred, 
he  can,  except  in  those  States  where  mortgages  other  than  those  hav- 
ing powers  of  sale  must  be  foreclosed  by  entry  and  possession,  by  a 
foreclosure  suit,  either  sell  the  property  to  another,  or  buy  it  himself 
and  hold  it  absolutely. 

But  while  the  mortgagee  in  possession  is  not  allowed  to  charge  for 
lasting  improvements,  he  is  not  on  the  other  hand  chargeable  with  the 
increased  rents  and  profits  which  are  directly  traceable  to  such  im- 
provements made  by  him.^°^  If,  however,  improvements  be  made  by 
a  third  person  in  possession  in  his  own  wrong,  they  inure  to  the  bene- 
fit of  the  mortgagor,  and  a  mortgagee  upon  entry  is  chargeable  with 
the  rents  arising  from  such  improvements."^  Such  would  also  be  the 
case  if  the  improvements  are  made  by  the  mortgagor.  But  the  mort- 
gagee is  not  otherwise  responsible  for  improvements  made  by  the 
mortgagor,  eitlier  to  him  or  to  mechanics  furnishing  labor  or  material 
without  the  mortgagee's  direction."^ 

g  1128.  Exception  to  the  rule.—  When  the  mortgagee  makes  per- 
manent improvements,  supposing  he  has  acquired  an  absolute  title  by 
foreclosure,  upon  a  subsequent  redemption  he  is  allowed  the  value  of 
them,^"  especially  if  the  mortgagor  has  by  his  actions  to  any  extent 
favored  the  mistaken  belief.^^^ 

341;    Morgan   v.    Walbridge,    56   Vt.  "'Merriam  v.  Barton,  14  Vt.   501. 

405;  Dozier  v.  Mitchell,  65  Ala.  511;  "»  Holmes   v.    Morse,    50    Me.    102; 

H^gan  v.  Stone,  1  Ala.  496;   Perdue  Childs  v.  Dolan,  5  Allen,  319. 

v.  Brooks,  85  Ala.  462,  5  So.  126;  Bar-  ^^^  Hicklin   v.    Marco,   46    Fed.   424, 

rows  v.  Paulding,  36  Ala.  292,  Adams  quoting  text;   Mickles  v.  Dillaye,  17 

V.    Sayre.    76    Ala.    509;     American  N.  Y.  80;   Thomas  v.  Evans,  105  N. 

Freehold  Mortg.   Co.  v.  Pollard,  132  Y.  601,  614,  12  N.  E.  571,  59  Am.  Rep. 

Ala.    155,    32    So.    630;    McQueen    v.  519;    Miner    v.    Beekman,    50    N.    Y. 

Whetstone,    127    Ala.    417,    432,    30  337;    Putnam    v.    Ritchie,    6    Paige, 

So.  548,  quoting  text;  American  But-  390;    Wetmore  v.   Roberts,   10  How. 

ton-Hole    Co.     v.     Burlington     Mut.  Pr.  51;    Fogal  v.   Pirro,  17  Abb.   Pr. 

Loan  Asso.   68  Iowa,   326,  27  N.  W.  113,  10  Bosw.   100;    Benedict  v.   Gil- 

291;    Miller    v.    Curry,    124    Ind.    48,  man,   4  Paige,  58;    Troost  v.   Davis, 

24  N.  E.  219.  31   Ind.   34;    Roberts   v.   Fleming,   53 

^'^  Robertson  v.  Read,  52  Ark.  381,  111.  196,  198;  Gillis  v.  Martin,  2  Dev. 

14  S.  W.  387.  Eq.   470,  25  Am.  Dec.   729;    Poole  v. 

'"^  Moore    v.    Cable,    1    Johns.    Ch.  Johnson,  62  Iowa,  605,  17  N.  W.  900; 

385;    Bell    v.    Mayor,    10    Paige,    49;  American   Button-Hole    Co.    v.    Bur- 

Raynor  v.  Raynor,  21  Hun,  36;  Clark  lington    Mut.    Loan    Asso.    68    Iowa, 

V.  Smith,  1  N.  J.  Eq.  121,  138;  Brad-  326,  27  N.  W.  271;  Millard  v.  Truax, 

ley  v.  Merrill.  91  Me.  340,  40  Atl.  132;  73  Mich.  381,  41  N.  W.  328;   Ensign 

Morrison  v.  McLeod,  2  Ired.  Eq.  108;  v.  Patterson,  68  N.   Y.   298;    McSor- 

Catterlin  v.  Armstrong,  79  Ind.  514,  ley  v.  Larissa,  100  Mass.  270;   Tufts 

523;  Robertson  v.  Read,  52  Ark.  381,  v.  Tapley,  129  Mass.  380. 

14  S.  W.  387;   Jones  v.  Fletcher.  42  "'Bacon  v.  Cottrell.  13  Minn.  194; 

Ark.   422.   456;    Tatum   v.    McLellan,  Hadlev  v.    Stewart,  65  Wis.   481,   27 

56  Miss.  352.  N.  W.  340. 


1)9  ALLOWANCES,   REPAIIiS    AND    IMPROVEMENTS,  [§    1129. 

In  like  manner  a  purchaser  at  a  foreclosure  sale,  who  has  made  valu- 
able improvements  in  the  belief  that  he  has  acquired  an  absolute  title, 
is  entitled  to  be  paid  for  them  in  case  the  premises  are  redeemed. ^^^ 
Such  a  purchaser,  when  the  equity  of  redemption  has  not  been  cut  off 
by  the  sale,  is  in  fact  an  assignee  of  the  mortgage  title.  In  like  man- 
ner a  purchaser  in  good  faith  from  the  mortgagee  in  possession,  and 
with  the  assurance  fhat  he  gave  a  perfect  title,  is  entitled  to  allowance 
for  improvements  made  by  him  thereon,  although  these  consist  of  new 
structures.^^^  Such  purchaser  may  remove  improvements  made  by 
him,  if  he  can  do  this  without  injury  to  the  premises ;  and  in  that  case 
he  cannot  recover  the  value  from  the  person  who  redeems,  nor  can  he 
be  compelled  to  account  to  him  for  the  rents  and  profits  arising  from 
such  improvements.^^* 

The  mortgagee  may  also  be  allowed  for  permanent  improvements 
when  he  has  been  in  possession  for  a  long  period,  and  the  mortgagor, 
knowing  that  the  improvements  were  going  on,  interposed  no  objec- 
tion.^^^  But  it  is  doubted  whether  it  can  be  asserted  as  a  general  rule 
that  acquiescence  alone  would  make  the  mortgagor  chargeable  with 
unreasonable  improvements.^^®  The  mortgagor  would  be  chargeable 
with  improvements  which  he  asked  the  mortgagee  to  make.^^^  And 
when  he  is  allowed  for  the  improvements  he  is  chargeable  with  the 
rent  on  the  property  as  improved,  and  not  as  it  was  exclusive  of  the 
improvements.^^'' 

§  1129.  Allowance  for  repairs, —  Though  not  bound  to  make  per- 
manent repairs,  it  is  quite  another  question  whether  the  mortgagee 
may  not  claim  an  allowance  for  proper  expenditures  for  permanent 
repairs  for  the  benefit  of  the  estate."^  The  rule  undoubtedly  is  that 
he  may  charge  the  cost  of  permanent  improvements  so  far  as  they  are 

"- Hicklin   v.   Marco,   46   Fed.   424,  Iowa,    114;    Roberts   v.    Fleming,    53 

quoting  text;  Green  v.  Dixon,  9  Wis.  111.   196,  204;    Morgan  v.   Walbridge, 

532;  Green  v.  Wescott,  13  Wis.  606;  56  Vt.  405. 

Bacon  v.  Cottrell,  13  Minn.  194;  Bar-  "« Merriam  v.   Goss,  139  Mass.   77, 

nard  v.  Jennison,  27  Mich.  230;  Van-  28    N.    E.    449.      In   England,    notice 

derhaise  v.  Hugues,  13  N.  J.  Eq.  410;  given  by  the  mortgagee  to  the  mort- 

Harper's    Appeal,    64    Pa.    St.    315;  gagor,  and  acquiescence  on  the  part 

Freichnecht  v.  Meyer,  39  N.  J.  Eq.  of  the  mortgagor,  is  said  to  render 

551.  unnecessary  an  inquiry  whether  the 

"^  McSorley  v.   Larissa,   100  Mass.  expenditure  was  reasonable.     Shep- 

270;  Mickles  v.  Dillaye,  17  N.  Y.  80.  ard  v.  Jones,  21  Ch.  Div.  469. 

And   see   Miner   v.   Beekman,    50   N.  "'  Brighton   v.    Doyle,    64   Vt.    616, 

Y.  337,  345;  Bright  v.  Boyd,  1  Story,  25  Atl.  694. 

478;    Hicklin  v.  Marco,  46  Fed.  424,  "^Montgomery     v.     Chadwick,     7 

quoting  text.  Iowa,    114;     Dozier    v.    Mitchell,    65 

"*  Poole  V.  Johnson,  62  Iowa,  611,  Ala.  511. 

17  N.  W.  900.  '"Bollinger  v. Chouteau,  20  Mo.  89. 

"°  Montgomery     v.     Chadwick,     7 


§  1129,]  mortgagee's  account.  100 

necessary  and  beneficial  to  the  estate/^"  and  the  mortgagee  will  not 
he  held  to  prove  their  absolute  necessity.^^^  The  value  of  the  im- 
provements to  the  property,  rather  than  their  cost,  is  the  true  basis  of 
the  allowance.  Mr.  Justice  Holmes  clearly  states  this  distinction  in 
a  recent  case,  saying  r^^z  "When  the  allowance  is  made,  however,  it 
is  made,  not  for  the  expenditure,  with  which  ex  hypothesi  the  mort- 
gagor had  nothing  to  do,  but  for  the  benefit  which  he  actually  receives 
from  that  expenditure.  The  mortgagor's  having  actually  received  the 
benefit  is  the  only  ground  for  charging  him;  and  it  follows  that,  al- 
though justice  will  ordinarily  be  done  by  crediting  the  mortgagee  in 
account  with  the  sums  expended,  which  is  the  usual  direction  in  de- 
crees, and  is  sanctioned  by  our  statute,  yet  that  'the  true  rule  undoubt- 
edly is  that  the  mortgagor  should  be  charged  no  more  of  the  cost  than 
that  which  i§  beneficial  to  the  estate.'  "^^^  All  necessary  repairs  made 
by  a  mortgagee  in  possession  should  be  allowed  for  in  his  ac- 
counts.^^*  The  fact  that  the  necessary  repairs  of  the  premises  exceed 
in  cost  the  amount  of  the  rents  and  profits  is  no  objection,  to  their  al- 
lowance.^^^  Neither  is  there  any  objection  to  an  allowance  for  repairs 
of  such  sums  as  the  master,  in  stating  the  account,  has  found  to  be 
reasonable,  and  to  have  been  actually  paid,  although  the  mortgagee 
is  unable  to  give  dates  and  items  of  all  the  repairs.^^^ 

But  repairs  which  are  demanded  merely  for  the  purpose  of  ornament 
or  comfort  while  the  mortgagee  himself  occupies  the  premises,  and 
are  not  of  any  substantial  benefit  to  the  realty,  will  not  be  allowed.^^^ 
And  so  also  charges  for  new  l)uildings  or  structures  which  are  not 
necessary  for  the  preservation  of  the  estate  should  not  be  allowed.^^^ 

A  mortgagee  in  possession  who  is  about  to  sell  under  foreclosure 
makes  repairs,  which  are  not  needed  to  preserve  the  property  from  in- 
jury, but  solely  for  the  purpose  of  obtaining  a  higher  price  at  the  sale, 
is  not  entitled  to  be  allowed  the  expense  of  the  repairs,  inasmuch  as 
the  owner  is  the  only  person  who  has  the  right  to  exercise  his  judg- 

12°  Boston  Iron  Co.  v.  King,  2  Cush.  Neesom    v.    Clarkson,    4    Hare,    97; 

400;    Reed    v.    Reed,    10    Pick.    398,  Harper's  Appeal,  64  Pa.  St.  315;  Ad- 

400;  Merriam  v.  Goss,  139  Mass.  77,  kins  v.   Lewis,   5  Oreg.   292;    Strong 

■  8  N.  E.  449;  Wells  v.  Van  Dyke,  109  v.  Blanchard,  4  Allen,  538;   Hosford 

Pa.  St.  330.  v.  Johnson,  74  Ind.  479;   Johnson  v. 

'-^  Wells  V.  Van  Dyke,  109  Pa.  St.  Hosford,  110  Ind.  572,  12  N.  E.  522. 

:^.'^0;  Harper's  Appeal,  64  Pa.  St.  315.  ^^^  Reed  v.  Reed,  10  Pick.  398.     . 

'--Merriam  v.  Goss,  139  Mass.  77,  '^'^  Montague   v.    Boston    &   Albany 

2S  N.  E.  449.  R.  Co.  124  Mass.  242. 

'-'Reed  v.  Reed,  10  Pick,  398,  400;  '"Madison    Av.    Church    v.    Oliver 

Boston    Iron    Co.    v.    King,    2    Cush.  St.  Church,  9  J.  &  Sp.  369. 

400,   405;    Gordon  v.    Lewis,   2   Sum.  '=»  Reed  v.  Reed,  10  Pick.  398;  Rus- 

143;    Shepard   v.  Jones,  21  Ch.  Div.  sell  v.  Blake,  2  Pick.  505;   Wells  v. 

463,  478.  Van  Dyke,  109  Pa.  St.  330. 

'=*  Sandon  v.  Hooper,  6  Beav.  246; 


101  ALLOWANCE,  COMPENSATION.  [§§  1130,  1131,  1132. 

ment  as  to  whether  the  estate  should  be  made  more  valuable  by  an 
•outlay  of  money. ^^'* 

Where  the  property  is  a  mill,  the  mortgagee  may  be  allowed  for  im- 
proved machinery  upon  proof  that  it  was  necessary  in  order  to  run 
tlie  mill  in  successful  competition  with  other  mills  which  contained 
similar  improved  machinery.^^" 

§  1130.     If  the  mortgagee  so  intermingles  the  mortgaged  property 

with  his  own  that  it  is  impracticable  to  ascertain  how  much  of  certain 
charges  ought  to  be  borne  by  the  mortgaged  estate,  he  will  not  be  al- 
lowed anything  in  respect  of  such  charges. ^^^ 

§  1131.  A  mortgagee  in  possession  of  a  church  edifice,  and  using 
it,  with  the  consent  of  the  mortgagor,  for  religious  services,  upon  ac- 
counting was  charged  with  the  actual  receipts  from  pew  rents,  but 
was  not  allowed  for  the  expenses  of  conducting  religious  services. 
There  seems  to  have  been  no  proof  offered  that  the  pew  rents  were 
paid  in  consideration  of  the  preaching,  the  music,  with  the  adjuncts 
of  light  and  warmth,  and  the  services  of  the  sexton;  and  it  was  sug- 
gested that  they  may  have  been  paid  for  the  privilege  of  assembling 
for  the  performance  of  religious  services,  and  for  the  advantage  of  the 
Sunday-school  and  the  lecture-room.  In  the  absence  of  proof,  it  was 
held  that  there  was  no  presumption  that  the  preaching,  the  music,  and 
the  like,  were  the  consideration  for  which  the  rents  were  paid,  and 
that  the  mortgagee  should  be  charged  with  all  the  pew  rents  received, 
and  should  be  allowed  nothing  for  maintaining  services.^^^  But  upon 
appeal  this  decision  was  reversed,  and  it  was  held  that  the  mortgagee 
should  be  allowed  to  offset  against  the  pew  rents  the  expenses  of  main- 
taining and  keeping  up  the  church  and  the  services  therein.^^^ 

IV.     Allowance  for  Compensation. 

§  1132.     A  mortgagee  in  possession  is  not  entitled  to  compensation 

for  his  own  trouble  in  taking  care  of  the  estate  and  renting  it,  al- 
though there  is  an  agreement  between  him  and  the  mortgagor  that 
he  shall  have  such  compensation.^^*     Tlie  reason  given  for  this  rule 

"^  Fletcher    v.     Bass    River    Sav.        '"'  Madison    Av.    Church   v.    Oliver 

Bank,  182  Mass.  5.     See  §  1126.  St.  Church,  73  N.  Y.  82. 

""Wells  V.  Van  Dyke,  109  Pa.  St.        '^^  French    v.    Baron,    2    Atk.    120 

330.  Bonithon  v.  Hockmore,  1  Vern.  316 

'"Elmer   v.    Leper,    25    N.    J.    Eq.  Godfrey  v.  Watson,  3  Atk.  517,  518 

475.  Eaton  v.  Simonds,  14  Pick.  98;  Clark 

"=  Madison    Av.    Church    v.    Oliver  v.  Smith,  1  N.  J.  Eq.  121,  137;  Elmer 

St.  Church,  9  J.  &  Sp.  369,  420.  v.    Loper,   25   N.   J.   Eq.   475;    Moore 

v.   Cable,   1  Johns.   Ch.   385,   388. 


§  1133.]  mortgagee's  account.  102 

is,  that  to  allow  such  compensation  would  tend  directly  to  facilitate 
usury  and  oppression.^^^  And  moreover  the  care  he  bestows  is  for  the 
furtherance  and  protection  of  his  own  interests,  being  not  an  agent, 
but  for  the  time,  as  it  were,  the  owner.^^"  But  he  may  charge  for  the 
services  of  an  agent  employed  by  him  to  collect  rents,  when  a  prudent 
owner  acting  for  himself  would  probably  have  done  so.^^^ 

If  a  mortgagor  agrees  and  consents,  with  a  knowledge  of  all  the 
facts  and  circumstances,  to  disbursements  made  by  the  mortgagee  in 
possession,  these  are  to  be  deemed  reasonable  and  must  be  reimbursed ; 
and  the  fact  that  the  mortgagor  or  his  agent  agreed  to  the  employment 
by  the  mortgagee  for  a  time  of  a  person  to  take  charge  of  the  mort- 
gaged estate,  at  a  certain  rate  of  compensation,  is  competent,  though 
not  conclusive  evidence  that  the  same  compensation  should  be  allowed 
during  the  residue  of  the  term  of  the  mortgagee's  possession.^^^ 

It  may  be  noticed  in  this  connection  that  in  the  early  cases  a  mort- 
gagee in  possession  was  regarded  as  a  trustee,  who  was  not  then  en- 
titled to  commissions.  This  rule  has  been  changed  as  regards  trus- 
tees, and  there  is  no  reason  why  it  should  be  retained  as  regards  mort- 
gagees in  possession.  The  tendency  in  recent  cases  is  evidently  in  the 
direction  of  a  change  in  this  rule.^^^ 

§  1133.  In  Massachusetts,  as  a  general  rule,  the  mortgagee  in  pos- 
session is  allowed  as  compensation  for  managing  the  property  five  per- 
cent of  the  rents  collected,  though,  if  it  were  found  that  the  services 
were  actually  worth  more,  the  rule  is  not  so  fixed  as  to  prevent  a  fur- 
ther allowance.^*"  Therefore  in  a  case  where  a  master,  in  stating  an 
account  between  the  mortgagor  and  mortgagee,  reported  that  he  was 
satisfied  that  such  commission  would  not  compensate  the  mortgagee 

"'Scott  V.  Brest,  2  T.  R.  238;  Tur-  make  different  rules  as  to  commis- 

ner  v.  Johnson,  95  Mo.  431,  7  S.  W.  sions  just  and  proper." 

570,  6  Am.  St.  62;  Allen  v.  Robbins,  In   the  case  before  the  court  the 

7  R.  I.  33;    Snow  v.  Warwick  Inst,  mortgagee    had     entered     with     the 

for  Sav.  17  R.  I.  66,  20  Atl.  94.  consent  of  the  mortgagor  before  de- 

""  Benham  v.  Rowe,  2  Cal.  387,  56  fault;    and   his   receipt  of  the  rents 

Am.  Dec.  342;  Turner  v.  Johnson,  95  and    profits   was    partly   at   least   to 

Mo.  431,  7  S.  W.  570.  pay    the    debt    owing   him.      It   was 

"'Davis    v.    Dendy.    3    Madd.    170;  observed  by  the  court  that  in  this 

Harper  v.  Ely,  70  111.  581.  respect  the  case  was  unlike  the  Mas- 

"*  Cazenove  v.   Cutler,  4  Met.  246.  sachusetts  cases  noticed  in  the  next 

""  Green  v.  Lamb,  24  Hun,  87.  section,  where  the  entry  was  either 
Learned,  P.  J.,  said:  "We  are  of  for  the  purpose  of  foreclosure  or 
opinion  that  no  fixed  rule  should  be  after  breach  of  the  condition, 
laid  down  which  would  apply  to  ""  Gerrish  v.  Black,  104  Mass.  400; 
every  case  where  there  is  the  legal  Gibson  v.  Crehore.  5  Pick.  146;  Tuck- 
relation  existing  between  mortgagee  er  v.  Buffum,  16  Pick.  46;  Montague 
in  possession  and  owner.  The  cir-  v.  Boston  &  Albany  R.  Co.  124  Mass. 
cumstances  which  cause  the  rela-  242. 
tion    may    differ    widely,    and    may 


103  ALLOWANCE^   DISBURSEMENTS.  [§    1134. 

for  his  trouble,  the  court  recommitted  the  report  with  directions  to 
allow  such  further  sum  as  he  might  think  just  and  reasonable.^*^  The 
question  of  compensation  is  peculiarly  within  the  discretion  of  the 
master  to  whom  the  bill  in  equity  is  referred  to  state  the  account.^*^ 
But  the  mortgagee  cannot  usually  charge  a  commission  on  the  amount 
expended  in  repairs  and  improvements.  In  Connecticut,  also,  a  mort- 
gagee in  possession  is  entitled  to  charge  for  his  services  in  renting 
them  and  collecting  rents,  and  for  such  sums  as  were  necessarily  ex- 
pended to  obtain  possession  of  the  property.^*^ 

In  determining  the  amount  of  compensation  to  be  made  to  the 
mortgagee,  reference  should  be  had  to  the  nature  and  condition  of  the 
property,  and  to  the  provisions  made  in  the  mortgage  itself  for  such 
compensation.^** 


V.     Allowances  for  Dishursements. 

§  1134.  Taxes  paid  by  the  mortgagee  on  the  mortgaged  premises, 
either  before  or  after  he  has  taken  possession,  must  be  repaid  upon  re- 
demption. Under  the  provisions  of  the  mortgage,  the  taxes,  when 
paid  by  him,  usually  become  a  lien  under  the  mortgage.^*^  But  even 
when  this  is  not  the  case,  the  payment  being  made  to  preserve  the 
security,  he  is  entitled  to  recover  the  amount  paid,  and  may  even  have 
a  preference  to  this  extent  over  prior  incumbrancers  whose  liens  the 
payment  has  served  to  protect."*'    The  same  is  true  of  any  assessment 

"'Adams   v.    Brown,   7   Cush.    220.  inson,    56    Neb.    50,    76    N.    W.    415; 

'"  Montague   v.    Boston   &   Albany  .''vmerican    Freehold    Mortg.    Co.    v. 

R.  Co.  124  Mass.  242.     A  commission  Pollard,  132  Ala.  155,  32  So.  630. 
of  five   per  cent,   is  allowed   to  the        ""  S§  358,    1597;    Cook    v.    Kraft,    3 

mortgagee    for    collecting    rents    in  Lans.  512;   Davis  v.  Bean,  114  Mass. 

Maiite.     Bradl-ey   v.    Merrill,   91   Me.  360;  Dozier  v.  Mitchell,  65  Ala.  511; 

340,  40  Atl.  132.  Red  Mountain  Min.  Co.  v.  Jefferson 

"'Waterman    v.    Curtis,    26    Conn.  County  Sav.  Bank,  113  Ala.   629,  21 

241.  So.    74;     Kilpatrick    v.    Henson,    81 

"*  Boston    &   Worcester   R.    Co.    v.  Ala.  464,  1  So.  188;  Cowley  v.  Shelby, 

Haven,  8  Allen,  359.  71    Ala.    122;    Dooley   v.    Potter,    146 

"^§§77,   1080;    Robinson  v.   Ryan,  Mass.  148,  15  N.  E.  499;  Horrigan  v. 

25    N.    Y.    320;    Burr    v.    Veeder,    3  A'/ellmuth,  77  Mo.  542;   Sidenberg  v. 

Wend.    412;    Eagle   Fire    Ins.    Co.    v.  Ely,  90  N.  Y.  257,  11  Abb.  N.  C.  354; 

Pell,  2  Edw.  631;   Harper  v.  Ely,  70  Young   v.    Omohundro,    69    Md.    424, 

111.  581;    Strong  v.  Blanchard,  4  Al-  16    Atl.    120;    Millard    v.    Truax,    73 

len,    538;    Kilpatrick    v.    Henson,    81  Mich.  381,  41  N.  W.  328;    Townsend 

Ala.    464,    1    So.    188,    193;    Miller   v.  v.    Threshing  Machine   Co.    31    Neb. 

Curry,    124    Ind.    48,    24    N.    E.    219;  836,  48  N.  W.  899;  Southard  v.  Dor- 

Gorham  v.   National   L.   Ins.   Co.   62  rington,  10  Neb.   119,  4  N.   W.   935; 

Minn.  327,  64  N.  W.  906;   Hamel  v.  Jackson  v.   Relf,   26  Fla.   465,   8  So. 

Corbin,  69  Minn.  223,  72  N.  W.  106;  184;  Gooch  v.  Botts,  110  Mo.  419,  20 

Northwestern    Mut.    L.    Ins.    Co.    v.  S.  W.  192. 

Butler,   57  Neb.   198,  77  N.  W.   667;         In    MichigTan,    in    the    absence    of 

New  England  Loan  &  T.  Co.  v.  Rob-  statute  or  special  agreement  between 


§  1135.]  mortgagee's  account.  104 

made  by  authority  for  public  purposes,  and  which  is  by  law  a  primary 
lien  upon  the  property.^*^ 

There  is  no  obligation  resting  upon  a  mortgagee  to  pay  the  taxes 
unless  he  be  in  possession  of  the  land ;  and  he  is  not  therefore  respon- 
sible to  the  mortgagor  for  the  loss  of  the  property  through  the  non- 
payment of  the  taxes. ^*^  But  a  mortgagee  in  possession  who  suffers 
the  lands  to  be  sold  for  taxes  will  not  be  allowed  the  amount  paid  by 
him  to  redeem,  but  only  the  amount  of  the  taxes,  with  interest,  for, 
being  in  possession,  it  is  his  duty  to  see  that  the  taxes  are  paid.^*^  In- 
asmuch as  the  mortgagee  has  the  right  to  pay  the  taxes  in  order  to 
protect  his  mortgage,  his  purchase  at  the  tax  sale  must  be  regarded 
merely  as  such  payment,  and  not  as  giving  him  a  title.^®"  The  mort- 
gagee is  not  bound  to  take  the  risk  of  contesting  the  tax  titles.  He 
may  buy  them,  if  he  can,  for  a  sum  exceeding  the  amount  of  the  un- 
paid taxes  and  interest,  though  for  less  than  the  amount  of  the  statu- 
tory penalties,  and  the  sum  so  paid  is  chargeable  to  the  mortgagor.^^^ 

When  the  mortgagee,  instead  of  paying  the  taxes,  purchases  the 
land  at  a  tax  sale,  it  is  held  in  Michigan  that,  though  the  mortgagor 
may  treat  such  purchase  as  a  payment,  the  right  so  to  treat  it  is  the 
right  of  the  mortgagor  only.  Against  the  mortgagor's  will  the  mort- 
gagee cannot  claim  the  purchase  to  be  a  payment  in  his  behalf.^^^ 

If  the  mortgagee  of  an  undivided  half  interest  pay  the  whole  tax 
levied  upon  the  land  in  order  to  preserve  his  lien,  he  can  charge  against 
the  mortgagor  only  half  the  amount  so  paid.^^^ 

Taxes  paid  by  a  mortgagee  on  land  not  covered  by  the  mortgage 
cannot  be  added  to  the  amount  of  the  mortgage  debt.^^* 

§  1135.  Insurance  Premiums. — Where  it  is  part  of  the  contract  of 
the  mortgagor  and  a  condition  of  the  mortgage,  that  he  shall  keep  the 
premises  insured  in  a  certain  sum  for  the  benefit  of  the  mortgagee, 

the  parties,  the  assignee  of  a  mort-  Co.  v.  Butler,  57  Neb.  198,  77  N.  W. 

gage  can  not  pay  taxes  or  incur  ex-  667. 

penses   to   clear   the   land   from   tax  "*  Harvie  v.  Banks,  1  Rand.  408. 

liens  that  have  accrued  prior  to  the  "°  Moshier  v.  Norton,  100  111.  63. 

execution    of    the    assignment,    and  ^^^  Eck    v.    Swennumson,    73    Iowa 

have    the   amount   so    paid    made    a  523,  35  N.  W.  503. 

lien  on  the  land.  Macomb  v.  Prentis,  ^'^^  Windett  v.   Union   Mut.   L.   Ins. 

78  Mich.  255,  44  N.  W.  324.  Co.  144  U.  S.  581,  12  Sup.  Ct.  751. 

Contra  in  Iowa:    Savage  v.  Scott,  ''=  Maxfield  v.  Willey,  46  Mich.  252, 

45  Iowa,  130.    But  in  Barthell  v.  Sy-  9  N.  W.  271;  Jones  v.  Wells,  31  Mich, 

verson,   54   Iowa,   160,   164,   6  N.   W.  170.     This  distinction  seems  not  to 

178,  it  is  remarked  that  the  language  have     been     taken     elsewhere,     and 

of  the  court  in  the  preceding  case  probably    will    not    be.      Broquet    v. 

should    be    strictly    confined    to    the  Sterling,  56  Iowa,  357,  9  N.  W.  301. 

facts  of  that  case.  '"Weed  v.  Hornby,  35  Hun,  580. 

'"Dale   V.    McEvers.    2    Cow.    118;  ''*  Crane  v.  Aultman-Taylor  Co.  61 

Rapelye  v.  Prince,  4  Hill,  119,  40  Am.  Wis.  110,  20  N.  W.  110. 
Dec.  267;  Northwestern  Mut.  L.  Ins. 


105  ALLOWANCE^   DISBURSEMENTS.  [§    1135. 

charges  for  premiums  paid  by  him  for  such  insurance,  which  the 
mortgagor  has  neglected  to  obtain,  or  pay  for,  are  allowed,^^^  though 
the  insurance  obtained  be  "for  whom  it  may  concern,"  and  payable  to  the 
mortgagee.^^*^  But  he  is  not  allowed  for  premiums  paid  by  him  to  in- 
sure his  own  interest  as  mortgagee  where  the  amount  recovered  in  case 
of  loss  would  go  to  him  for  his  sole  benefit  without  extinguishing  the 
mortgage  debt  pro  tanto}^''  An  assignee  of  a  mortgage  containing 
such  a  provision  for  insurance  has  the  same  right  as  the  mortgagee  to 
claim  allowance  upon  redemption  of  the  mortgage  for  sums  paid  for 
insurance  while  the  mortgagor  neglected  to  insure.^-'*^ 

Unless  there  be  a  provision  in  the  mortgage  for  insuring  the  prop- 
erty for  the  mortgagee's  benefit,  he  is  not  generally  allowed  for  pre- 
miums paid  by  him  for  such  insurance. ^^^  When  there  is  such  a  re- 
quirement, premiums  for  insurance  taken  in  excess  of  the  amouiit 
stipulated  for  in  the  mortgage  will  not  be  allowed. ^^'* 

Insurance  procured  by  the  mortgagee  is  not  chargeable  to  the  mort- 
gagor, unless  it  is  procured  at  his  request,  or  in  accordance  with  a 
provision  in  the  mortgage.^^^ 

A  mortgagee  of  land  is  not  entitled  to  be  allowed  for  premiums  on 
insurance  obtained  by  him  after  he  has  foreclosed  the  mortgage,  by 
the  terms  of  which  the  mortgagor  was  bound  to  keep  the  premises  in- 
sured for  the  benefit  of  the  mortgagee."^ 

"'Harper  v.  Ely,  70  111.  581;   Carr  ven,  8  Allen,  359;  White  v.  Brown,  2 

V.  Hodge,  130  Mass.  55.    Text  quoted  Cush.  412. 

with  approval  in  Hosford  v.   John-  '"-  Long  v.  Richards,  170'  Mass.  120, 

son,   74    Ind.    479;    Johnson   v.    Hos-  125,  48  N.  E.  1083,  per  Holmes,  J.: 

ford,  110  Ind.  572,  10  N.  E.  407;  Neale  "But  the  claim  of  the  mortgagee  is 

v.  Albertson,  39  N.  J.  Eq.  382;  Amer-  based   on   the   default  of  the   mort- 

ican  Button-Hole  Co.  v.  Burlington  gagor,  and  it  hardly  is  possible   in 

Mut.  Loan  Asso.  68  Iowa,  326,  27  N.  this  case  to  say  that  the  mortgagor 

W.  271;  McCormick  v.  Knox,  105  U.  was    in    default    for    not    insuring, 

S.   122.  when    the    mortgagee    affirmed    and 

i5«  Fowley  v.  Palmer,  5  Gray,  549;  insisted   that   the   mortgage   was   at 

Northwestern    Mut.    L.    Ins.    Co.    v.  an  end.     Moreover,  the  master  must 

Butler,  57  Neb.  198,  77  N.  W.  667.  have  been  right  in  finding  that  the 

157  Fowley  v.  Palmer,  5  Gray,  549;  mortgagee,  when  he  obtained  the  in- 

Baker   v.   Jacobson,   183    111.    171,   55  surance,    neither   purported   nor   in- 

N.  E.  724;   Snow  v.  Pressey,  85  Me.  tended   to  proceed  under  the  mort- 

408,  27  Atl.  272;  Hamel  v.  Corbin,  69  gage    and    to    obtain    an    agreement 

Minn.  223,  72  N.  W.  106.          •  of  indemnity  which,   if  paid,  would 

"*  Montague   v.    Boston   &   Albany  go  to  extinguish  the  mortgage  debt. 

R.  Co.  124  Mass.  242.  He    affirmed    the    obligation    of    the 

"°  Faure    v.    Winans,    Hopk.    283,  mortgagor    to    insure    to    be    extin- 

14    Am.    Dec.    545.      But    in    Slee    v.  guished  already  by  foreclosure,  and 

Manhattan  Co.  1  Paige,  48,  81,  such  proceeded  on  his  own  account  whol- 

an   allowance   was   made   under   the  ly    outside    of   his    relations    to    the 

peculiar  circumstances   of  the  case,  mortgagor,  as  he  had  a  right  to  do 

""'  Madison    Av.    Church    v.    Oliver  if  he  chose.     But  if  he  chose  to  do 

St.  Church,  9  J.  &  Sp.  369.  so,  he  can  not  require  the  mortgagor 

'"  Bellamy  v.  Brickenden,  2  John,  to  pay  his  bills.     We  see   no  suffi- 

&  H.  137;   bobson  v.  Lan  1,  8  Hare,  cient    reason    for    forcing    a    fiction 

216;  Boston  v.  Worcester  R.  v.  Ha-  upon  the  parties." 


§§  1136,  1137.]  mortgagee's  account.  106 

§  1136.  The  amount  of  insurance  recovered  upon  a  policy  upon 
the  buildings  standing  upon  the  mortgaged  premises,  procured  by  the 
owner  at  his  own  expense  but  payable  to  the  mortgagee  in  case  of  loss 
in  pursuance  of  a  provision  of  the  mortgage,  must  be  applied  in  re- 
duction of  the  mortgage  debt  upon  redemption,  although  the  insur- 
ance company,  upon  paying  the  loss  to  the  mortgagee,  take  from  him 
an  assignment  of  the  mortgage  and  policy.^^^ 

§  1137.  A  mortgagee  in  possession  who  is  compelled  to  pay  a  prior 
mortgage,  judgment,  or  other  lien,  or  interest  thereon,  in  order  to 
protect  his  title,  has,  as  against  the  mortgagor  and  those  claiming 
under  him,  a  right  to  indemnify  himself  out  of  the  mortgaged  prop- 
erty.^"* And  even  if  such  prior  mortgage  is  discharged  of  record  be- 
fore title  accrued  to  the  person  seeking  to  redeem,  instead  of  an  as- 
signment of  it  being  made  to  the  mortgagee  who  paid  it,  he  is  to  be 
allowed  for  the  sum  so  paid,  especially  if  it  appears  that  the  whole 
amount  claimed  by  the  mortgagee  is  less  than  what  appears  to  be  due 
upon  the  mortgage  by  the  record.^"^ 

A  mortgagee  who  has  advanced  money  to  protect  the  property  from 
injury  or  loss  is  held  to  have  a  good  charge  upon  the  property  for  the 
money  so  advanced.^*"^  Money  paid  by  the  mortgagee  to  protect  the 
title  to  the  estate  from  prior  incumbrances  may  be  added  by  him  to 
the  principal  of  his  claim,  and  he  is  entitled  to  interest  upon  the  sum 
so  paid.^®'' 

A  mortgagee  of  an  undivided  interest  in  common  may  pay  the  en- 
tire expense  of  repairs  necessary  for  the  preservation  of  the  property, 
and  hold  the  mortgaged  property  for  his  reimbursement,  though  the 
share  of  the  expense  belonging  to  the  mortgagor's  co-tenant  to  pay  is 
a  lien  upon  the  co-tenant's  interest. ^^^ 

Where  the  employment  of  a  watchman  is  necessary  to  preserve  the 
property  from  destruction,  the  mortgagee  in  possession  is  entitled  to 
charge  in  his  account  upon  redemption  the  amount  so  paid.^^^ 

"^  Braves  v.  Hampden  F.  Ins.  Co.  ton  v.  Fountain,  61  Iowa,  512,  14  N. 

10  Allen,  281.  W.  220,  16  N.  W.  534. 

"*  Harper  v.  Ely,  70  111.  581;  Com-  "^  Davjs  v.  Winn,  2  Allen,  111. 
stock  v.  Michael,  17  Neb.  288,  22  N.  ""Rowan  v.   Sharps'  Rifle  Manuf. 
W.  549;  Talbott  v.  Lancaster,  10  Ky.  Co.  29  Conn.   282;    Hughes  v.  John- 
Law  Rep.  475,  9  S.  W.  694-  Dummer  son,  38  Ark.  285. 
v.  Smedley,  110  Mich.  466,  68  N.  W.  i"  Godfrey  v.  Watson,   3  Atk.  517 
260;    Page  v.    Foster,   7   N.    H.    392;  518;  Sandon  v.  Hooper,  3  Beav.  248 
Arnold  v.   Foot,  7  B.  Mon.  66;    Mc-  Pelly  v.   Wathen,  7  Hare,  3.51,  373 
Cormick    v.    Knox,    105    U.    S.    122;  Davis  v.   Bean,   114  Mass.   360. 
Miller  v.  Curry,  124  Ind.  48,  24  N.  E.  '"^  Darling    v.    Harmon,    47    Minn 
219;  Fitch  v.  Stallings,  5  Colo.  App.  166,  49  N.  W.  686. 
\06;  Scott  v.  Shy,  53  Mo.  478;  Bying-  '°» Johnson    v.    Hosford,    110    Ind 

572,  10  N.  E.  407. 


107  ANNUAL    RESTS.  [§§    1138,    1139. 

§  1138.  The  mortgagee  should  be  credited  for  reasonable  counsel 
fees  paid  in  collecting  rents  and  profits;  but  not  for  counsel  fees  in 
suits  between  the  mortgagee  and  mortgagor.^^'^ 

A  mortgagee  who  has  paid  a  claim  upon  which  he  was  surety  of  the 
mortgagor,  and  which  the  mortgage  was  given  to  secure,  should  be 
allo-wed  the  whole  sum  paid,  although  he  has  afterwards  received  con- 
tribution from  a  co-security.^''^ 


VI.     Annual  Rests. 

§1139.  Rule  for  annual  rests  in  stating  account. —  Chief  Justice 
Shaw,^''^  in  directing  that  an  account  be  reformed  by  making  annual 
rests,  laid  down  the  following  rule : — 

"1.  State  the  gross  rents  received  by  the  defendant  to  the  end  of  the 
first  year.  2.  State  the  sums  paid  by  him  for  repairs,  taxes,  and  a 
commission  for  collecting  the  rents,  and  deduct  the  same  from  the 
gross  rents,  and  the  balance  will  show  the  net  rents  to  the  end  of  the 
year.  3.  Compute  the  interest  on  the  note  for  one  year,  and  add  it 
to  the  principal,  and  the  aggregate  will  show  the  amount  due  thereon 
at  the  end  of  the  year.  4.  If  the  net  annual  rent  exceeds  the  year's 
interest  on  the  note,  deduct  that  rent  from  the  amount  due,  and  the 
balance  will  show  the  amount  remaining  due  at  the  end  of  the  year. 
5.  At  the  end  of  the  second  year  go  through  the  same  process,  taking 
the  amount  due  at  the  beginning  of  the  year  as  the  new  capital  to 
compute  the  year's  interest  upon.    So  to  the  time  of  judgment." 

Statements  of  substantially  the  same  rule  have  frequently  been 
made.  The  two  essential  points  are :  First,  that  when  there  is  a  sur- 
plus of  receipts  in  any  year  above  the  interest  then  due,  a  rest  shall  be 
made,  and  the  balance  remaining  after  discharging  the  interest  shall 
be  applied  to  reduce  the  principal,  so  that  the  mortgage  shall  not  con- 
tinue to  draw  interest  for  the  face  of  it,  when  in  fact  the  mortgagee 
has  in  his  hands  money  that  should  be  applied  to  reduce  the  principal, 
and  thereby  make  the  interest  less  for  the  following  year. 

Secondly,  although  the  amount  received  in  any  year  be  insufficient 
to  pay  the  interest  accrued,  the  surplus  of  interest  must  not  be  added 
to  the  principal  to  swell  the  amount  on  which  interest  shall  be  paid 
for  the  following  year ;  for  that  would  result  in  the  charging  of  inter- 

""  Hubbard  V.  Shaw,  12  Allen,  120;  "'Strong   v.    Blanchard,    4    Allen, 

Boston  &  Worcester  R.   Co.   v.   Ha-  538. 

ven,  8  Allen,  359;  Rowell  v.  Jewett,  '"Van  Vronker  v.  Eastman,  7  Met. 

73  Me.  365.  157. 


g    1140.]  MORTGAGEE'S    ACCOUNT,  108 

est  upon  interest,  which  is  not  allowed  ;"3  but  the  interest  continues 
on  the  former  principal  until  the  receipts  exceed  the  interest  due. 
These  are  the  principles  upon  which  the  mortgagee's  interest  account 
is  everywhere  made  up;  and  the  cases  in  which  they  are  stated  are 
many  and  in  general  accord."* 

Except  for  the  first  part  of  the  rule,  that  if  the  annual  rents  exceed 
the  interest  on  the  mortgage  debt  annual  rests  shall  be  made  and  in- 
terest allowed  on  the  surplus,  great  injustice  would  be  done  in  many 
cases."^  If,  for  instance,  the  debt  were  $5,000  and  the  rents  should 
be  in  excess  of  the  interest,  the  amount  of  $500  each  year,  and  no 
rests  were  made,  the  mortgagee  might  remain  in  possession  ten  years, 
with  the  entire  mortgage  debt  drawing  interest  all  the  while;  when 
in  fact  he  had  received  $500  of  the  principal  each  year,  and  during 
the  last  year,  while  only  $500  would  remain  due,  he  would  receive  the 
interest  of  ten  times  that  sum. 

§  1140.  If  the  rents  and  profits  exceed  the  sums  properly- 
chargeable  for  repairs  and  the  care  of  the  estate,  so  that  there  is  a  net 
surplus  applicable  to  the  payment  of  interest  on  the  debt,  annual 
rests  in  the  computation  of  interest  should  be  made."®  Semi-annual 
rests  have  been  allowed  where  the  rents  and  profits  received  quarterly 
were  sufficient  to  pay  the  interest."'  But  if  there  be  nothing  received 
from  the  property  that  is  applicable  from  time  to  time  to  the  payment 
of  the  accrued  interest,  no  rests  can  be  made."-  Annual  rests  are  di- 
rected when  the  mortgagee  is  personally  in  possession  as  well  as  when 
he  receives  rents  from  a  tenant.^'^ 

In  taking  the  account  between  the  mortgagee  and  mortgagor  the 
surplus  of  his  receipts  over  his  disbursements  should  be  applied  to  the 
payment  of  the  interest  as  it  becomes  due ;  and  if  more  than  sufficient 

^"Bradley  v.   Merrill,   91  Me.   340,  '"Green  v.  Wescott,  13  Wis.  606; 

40  Atl.  132;  Whitcomb  v.  Harris,  90  Shaeffer   v.    Chambers,   6   N.    J.    Eq. 

Me     206     38   Atl.    138;    Kittredge   v.  548;   Gordon  v.  Lewis,  2  Sumn.  143, 

McLaughlin,  38  Me.   513;    Parkhurst  147;     Shephard    v.    Elliot,    4    Madd. 

V  Cummings,  56  Me.  155.  254;   Gibson  v.  Crehore,  5  Pick.  146, 
''*  Connecticut  v.  Jackson,  1  Johns.  160;  Reed  v.  Reed,  10  Pick.  398. 

Ch    13    17    7  Am.  Dec.  471;  Stone  v.  '"Gladding  v.  Warner,  36  Vt.  54; 

Seymour  'l5   Wend.    19,   24;    Jencks  Reed  v.  Reed,  10  Pick.  398;  Green  v. 

V  Alexander  11  Paige,  619,  625;  Wescott,  13  Wis.  606;  Blum  v.  Mit- 
•French  v  Kennedy,  7  Barb.  452;  chell,  59  Ala.  535;  American  Free- 
Bennett  V.  Cook,  5  Thomp.  &  C.  134,  hold  Mortg.  Co.  v.  Pollard,  132  Ala. 
2    Hun,    526;    Snavely   v.    Pickle,    29  155,  32  So.   630. 

Gratt.  27;  Moshier  v.  Norton,  100  111.  '"Gibson  v.   Crehore,  5  Pick.   146, 

63;    Adams    v.    Sayre,    76    Ala.    509,  160. 

quoting  text.  '''  Reed    v.    Reed,    10    Pick.    388; 

For    exceptional    cases    in    which  Montague   v.    Boston    &   Albany   K. 

annual    rests   are   not   required,   see  Co.    124   Mass.   242. 

Patch  v.  Wild,  30  Beav.  99;  Horlock  ''"Wilson  v.  Metcalfe,  1  Russ.  5o0; 

V.  Smith,  1  Coll.  Ch.  287.  Morris  v.  Islip,  20  Beav.  654. 


109  ANNUAL    RESTS.  [§    1141. 

for  that  purpose,  the  excess  should  be  credited  on  the  principal.^***  If 
in  any  year  his  disbursements  exceeded  his  receipts,  the  amount  of  the 
deficit  should  be  added  to  the  principal  of  the  debt.  Annual  rests  may 
be  made,  so  that  the  mortgagor  may  be  charged  with  interest  for  dis- 
bursementB  made  by  the  mortgagee,  but  not  so  as  to  charge  the  debtor 
with  compound  interest  either  upon  the  mortgage  or  upon  the  ad- 
vances.^^^  According  to  the  English  decisions,  if  there  is  interest  in 
arrear  at  the  time  the  mortgagee  takes  possession,  annual  rests  are  not 
generally  required  until  the  interest  in  arrear  is  paid  off,^*=^  or  even 
until  the  whole  mortgage  debt  has  been  paid  off."^  But  the  better  rule 
is,  that  any  surplus  of  receipts  in  any  year,  above  all  the  interest  then 
due  and  disbursements,  should  be  applied  in  reduction  of  the  princi- 
pal, irrespective  of  the  fact  that  there  was  interest  in  arrear  at  the 
time  the  mortgagee  took  possession.^** 

§  1141.  As  to  the  rate  of  interest,  the  contract  of  the  parties  will 
govern  after  default  as  well  as  before.  If  the  rate  reserved  in  the 
mortgage  be  less  than  the  legal  rate,  it  will  continue  at  that  rate  until 
paid.^*^  If,  on  the  other  hand,  that  rate  be  in  excess  of  the  rate  al- 
lowed upon  judgments  and  upon  contracts  when  the  parties  have  not 
fixed  upon  a  different  rate,  it  will  continue  at  the  same  rate  after  de- 
fault until  the  debt  be  paid  or  merged  in  a  judgment.  The  rule  upon 
this  point,  however,  is  not  uniform  in  the  different  States;  but  the 
rule  above  stated  has  the  support  of  the  weight  of  authority,  and  best 
accords  with  the  intention  of  the  parties,  and  with  the  principles  of 
equity  that  govern  the  enforcement  and  redemption  of  mortgages.^*® 
But  even  where  the  rule  is  that  after  maturity  the  legal  rate  of  interest 
governs  instead  of  the  contract  rate,  it  is  conceded  that  if  the  parties 
have  by  their  contract  shown  with  sufficient  clearness  their  intention 
that  the  stipulated  rate  is  to  continue  after  maturity,  then  that  rate 

•'"Shephard  v.  Elliot,  4  Madd.  254;  Thorneycroft  v.  Crockett,  2  H.  L.'.  C. 

Gould  V.   Tancred,  2   Atk.   533;    Ma-  233,    Horlock  v.   Smith,   1  Coll.   Ch. 

hone  v.  Williams,  39  Ala.  202;  Elmer,  287. 

v.  Loper,  25  N.  J.  Eg.  475;  Johnson  '^  Moshier  v.  Norton,  100  111.  63,  73. 

V.  Miller,  1  Wils.   (Ind.)  41G.  v.  Boston,  129  Mass.  82,  95,  37  Am. 

'^^  Vanderhaise    v.    Hugues,    13    N.  '*'  §  74;     Miller    v.     Burroughs,     4 

J.   Eq.  410;    Moshler  v.  Norton,  100  Johns.  Cb.  436. 

111.  63.  '^  Union    Institution    for    Savings 

''^Wilson  V.  Cluer,  3  Beav.  136,  140.  v.    Boston,    129  Mass.  82,  95,  37  Am. 

'"Latter  v.  Dashwood,  6  Sim.  462;  Rep.    305,   per   Gray,    C.    J.,   who   in 

Finch   V.    Brown,   3   Beav.    70.      See,  an    able    and    elaborate    opinion   re- 

also,  Morris  v.   Islip,  20  Beav.  659;  views  the  whole  subject.     See  §74. 


§  11-il-] 


MORTGAGEE  S    ACCOUNT. 


110 


will  govern  up  to  the  time  of  judgment.^*''    Of  course,  if  in  either  case 


>*' Brewster  v.  Wakefield,  22  How. 
118;  Holden  v.  Trust  Co.  100  U.  S. 
72;  Pearce  v.  Hennessy,  10  R.  I.  223, 
227;  Capen  v.  Crowell,  66  Me.  282; 
Paine  v.  Caswell,  68  Me.  80,  28  Am. 
Rep.  21;  Gray  v.  Briscoe,  6  Bush. 
687;  Young  v.  Thompson,  2  Kans. 
83. 

That  the  stipulated  rate  of  interest 
continues  after  default  is  the  rule 
in:  — 

England:  Price  v.  Great  Eastern 
Ry.  Co.  15  M.  &  W.  244;  Morgan  v. 
Jones,  8  Exch.  620;  Keene  v.  Keene, 
3  C.  B.  (N.  S.)  144;  Gordillo  v.  We- 
guelin,  5  Ch.  D.  287,  303.  See,  how- 
ever. Cook  V.  Fowler,  L.  R.  7  H.  L. 
27,  where  one  reason  for  not  allow- 
ing the  stipulated  rate  of  interest, 
which  is  five  per  cent,  per  month, 
was  that  it  was  so  excessive;  and 
In  re  Roberts,  14  Ch.  D.  49,  which 
was  decided  without  referring  to  the 
previous  decisions,  upon  the  assump- 
tion that  there  was  no  precedent 
for  giving  more  than  the  ordinary 
or  legal  rate  of  interest  by  way  of 
damages.  California:  Corcoran  v. 
Doll,  32  Cal.  82;  Guy  v.  Franklin,  5 
Cal.    416;    Kohler    v.    Smith,    2    Cal. 

597,  56  Am.  Dec.  369.  Connecticut: 
Adams  v.  Way,  33  Conn.  419;  Beck- 
with  V.  Hartford,  Prov.  &  Fishkill 
R.  29  Conn.  268,  76  Am.  Dec.  599; 
Hubbard  v.  Callahan,  42  Conn.  524, 
537,  19  Am.  Rep.  564;  Seymour  v. 
Continental  Ins.  Co.  44  Conn.  300, 
26  Am.  Rep.  469;  Suffleld  Eccl.  Soc. 
V.  Loomis,  42  Conn.  570,  575.  Illinois: 
Etnyre  v.  McDaniel,  28  111.  201; 
Heartt  v.  Rhodes,  66  111.  351;  Phin- 
ney  v.  Baldwin,  16  111.  108,  61  Am. 
Dec.  62.  Indiana:  Kilgore  v.  Pow- 
ers, 5  Blackf.  22;  Richards  v.  Mc- 
Pherson,  74  Ind.  158;  Burns  v.  An- 
derson, 68  Ind.  202,  34  Am.  Rep.  259, 
overruling  Kilgore  v.  Powers,  5 
Blackf.  22.  Iowa:  Hand  v.  Arm- 
strong, 18  Iowa,  324;  Thompson  v. 
Pickel,  20  Iowa,  490.  Kansas:  Rob- 
inson V.  Kinney,  2  Kans.  184;  Searie 
V.  Adams,  3  Kans.  515,  89  Am.  Dec. 

598.  Kentucky:  Rilling  v.  Thomp- 
son, 12  Bush,  310.  Maine:  Duran  v. 
Ayer,  67  Me.  145;  Eaton  v.  Boisson- 
ault,  67  Me.  540,  24  Am.  Rep.  52. 
Maryland:  Virginia  v.  Canal  Co.  32 
Md.  501.  Massachusetts:  Union  Inst. 
for  Savings  v.  Boston,  129  Mass.  82, 
37  Am.  Rep.  305;  Brannon  v.  Hur- 
sell,  112  Mass.  63;  Burgess  v.  South- 


ridge  Sav.  Bank,  2  Fed.  500.  Michi- 
gan: Warner  v.  Juif,  38  Mich.  662. 
Minnesota:  Lash  v.  Lambert,  15 
Minn.  416,  2  Am.  Rep.  142.  Nevada: 
McLane  v.  Abrams,  2  Nev.  199.  New 
Jersey:  Wilson  v.  Marsh,  13  N.  J. 
Eq.  289.  New  York:  Miller  v.  Bur- 
roughs, 4  Johns.  Ch.  436;  Van  Beu- 
ren  v.  Van  Gaasbeck,  4  Cow.  496. 
Later  cases  left  the  question  an  open 
one.  Bell  v.  Mayor,  10  Paige,  49; 
Hamilton  v.  Van  Rensselaer,  43  N. 
Y.  244;  Ritter  v.  Phillips,  53  N.  Y. 
586.  Under  a  stipulation  to  pay  in- 
terest at  seven  per  cent,  until  paid, 
interest  will  continue  at  that  rate 
after  maturity  up  to  the  time  of 
judgment.  Taylor  v.  Wing,  84  N.  Y. 
471,  477.  But  where  a  mortgage  is 
given  to  secure  a  sum  payable  in 
regular  instalments,  the  sums  re- 
maining unpaid  from  time  to  time 
to  bear  seven  per  cent,  interest,  if 
an  instalment  is  not  paid  when  due, 
interest  thereafter  on  such  instal- 
ment can  only  be  recovered  at  the 
legal  rate.  If  an  instalment  was 
not  paid  when  due,  the  contract 
was  violated,  and  interest  after  that 
upon  such  instalment  could  only 
be  recovered  as  damages,  and  at  the 
rate  of  interest  authorized  by  law. 
Bennett  v.  Bates,  94  N.  Y.  354;  O'- 
Brien V.  Young,  95  N.  Y.  428;  Fer- 
ris V.  Hard,  135  N.  Y.  354,  32  N.  E. 
129.  This  seems  to  wholly  change 
the  former  rule.  Ohio:  Marietta 
Iron  Works  v.  Lottimer,  25  Ohio  St. 
621;  Monnett  v.  Sturges,  25  Ohio  St. 
384.  Pennsylvania:  Ludwick  v.  Hunt- 
zinger,  5  W.  &  S.  51.  Rhode  Island: 
Pearce  v.  Hennessy,  10  R.  I.  223. 
South  Carolina:  Langston  v.  S.  C. 
R.  2  S.  C.  248.  Tennessee:  Overton 
V.  Bolton,  9  Heisk.  762,  24  Am.  Rep. 
367.  Texas:  Hopkins  v.  Crittenden, 
10  Tex.  189.  Virginia:  Cecil  v. 
Hicks,  29  Graft.  1,  26  Am.  Rep.  391. 
Wisconsin:  Pruyn  v.  Milwaukee,  18 
Wis.   367. 

On  the  other  hand,  the  rule,  that 
after  maturity  interest  by  way  of 
damages  will  be  allowed  only  at 
the  ordinary  legal  rate,  prevails  in 
the  United  States  Supreme  Court. 
Brewster  v.  Wakefield,  22  How.  118; 
Burnhisel  v.  Firman,  22  Wall.  170; 
Holden  v.  Trust  Co.  100  U.  S.  72. 
But  the  local  law  to  the  contrary  in 
any  State  will  be  followed  in  a  case 
coming  to  the  court  from  that  State. 


Ill  ANNUAL   UESTS.  [§§    1112,    1143. 

the  deljt  be  ra-erged  in  a  judgment,  the  rate  established  by  law  for  all 
cases  when  interest  is  implied  will  thereafter  govern.^®^ 

Where  coupons  have  been  given  for  the  interest  on  the  mortgage 
debt,  they  draw  interest  after  maturity  in  the  same  manner  as  do  notes 
for  the  principal.  They  provide  for  the  payment  of  definite  sums  of 
money  at  definite  times,  and  are  in  effect  promissory  notes. ^^^ 

Upon  the  redemption  of  a  mortgage  the  mortgagor  is  not  obliged  to 
pay  compound  interest,  though  the  mortgage  note  may  in  terms  re- 
quire it.^^"  If  the  mortgage  be  assigned  after  the  taking  of  possession, 
no  rest  in  the  computation  of  interest  at  that  time,  by  adding  the  in- 
terest then  due  to  the  principal,  should  be  made.^®^ 

§  1142.  The  account  binds  subsequent  incumbrancers,  though 
not  privy  to  the  taking  of  it,  unless  there  be  fraud  or  collusion.  This 
is  the  case  even  with  accounts  settled  between  the  mortgagor  and  mort- 
gagee out  of  court.^**^ 

§  1143.  An  account  may  be  opened  for  fraud  or  a  particular  error 
even  after  a  long  lapse  of  time.^''^  The  fraud  or  error  must  be  par- 
ticularly alleged;  a  general  charge  being  sufficiently  answered  by  a 
general  denial.^^* 

Cromwell   v.    County    of   Sac.    96   U.  398.     See  Jones  on  Corp.  Bonds  and 

S.  514;  Burgess  v.  Southbridge  Sav.  Mortgages,  §  256. 
Bank,   2   Fed.    Rep.    500.     See  Jones        "">  Parkhurst  v.  Cummings,  56  Me. 

on  Corp.  Bonds  and  Mortgages,  §  260,  155;  Stone  v.  Locke,  46  Me.  445.  See, 

for    remarks    about    this    and    other  however,  Millard  v.  Truax,  73  Mich, 

cases  upon  this  point.  381,  41  N.  W.  328. 

Arkansas:  Newton  v.  Kennerly,  31        '^^  Boston  Iron  Co.  v.  King,  2  Cush. 

Ark.  626;  Johnson  v.  Meyer,  54  Ark.  400. 
457,  16  S.  W.  121.  ^»2  Wrixon  v.  Vize,  2  Dru.  &  War. 

As  to   the  rule  in  New  York  see  192;    Knight    v.    Bamfeild,    1    Vern. 

this  note  above.  179. 

^^«  Taylor  v.  Wing,  84  N.  Y.  471.  "'  Vernon  v.  Vawdry,  2  Atk.  119. 

^*'  Gelpcke  v.  Dubuque,  1  Wall.  175,        "*  Drew   v.    Power,   1   Sch.    &   Lef. 

206;     Hollingsworth     v.     Detroit,     3  182,  192;  Kinsman  v.  Barker,  14  Ves. 

McLean,  472;    Harper  v.  Ely,  70  111.  579. 
581;  Dunlap  v.  Wiseman,  2  Disney, 


CHAPTER  XXIV. 


WHEN  THE  RIGHT  TO  REDEEM  IS  BARRED. 


I.  The   statute   of   limitations   ap- 
plies by  analogy,  1144-1151. 
II.  When  the  statute  begins  to  run, 
1152-1161. 


III.  What   prevents   the   running  of 
the  statute,   1162-1173. 


I.     The  Statute  of  Limitations  applies  hy  Analogy. 


§  1144.  In  general,  except  when  changed  by  modern  statutes,  the 
rule  adopted  by  courts  of  equity  in  regard  to  the  redemption  of  mort- 
gages is  in  analogy  with  the  right  of  entry  at  law,  under  the  old  stat- 
ute of  limitations,  21  Jac.  1,  ch.  16,  that  twenty  years'  possession  by 
the  mortgagee  without  any  account  or  acknowledgment  of  a  subsisting 
mortgage  is  a  bar,  unless  the  mortgagor  is  within  some  of  the  excep- 
tions made  for  disabilities.^"^    "Otherwise,"  said  Lord  Hardwicke,  "it 

"'England:    Barron  v.   Martin,  19    48  Me.   61;    McPherson  v.   Hay  ward, 


Ves.  327,  and  cases  cited;  Blake  v. 
Foster,  2  Ball  &  B.  387,  402;  John- 
son V.  Mounsey,  40  L.  T.  N.  S.  234, 
7  Reporter,  701.  United  States:  Ar- 
mory V.  Lawrence,  3  Cliff.  523;  Sli- 
cer  V.  Bank  of  Pittsburg,  16  How. 
571;  Hughes  v.  Edwards,  9  Wheat. 
489;  Dexter  v.  Arnold,  1  Sumn.  109. 
Alabama:  Gunn  v.  Brantley,  21  Ala. 
633;  Coyle  v.  Wilkins,  57  Ala.  100; 
Byrd  v.  McDaniel,  33  Ala.  18;  Good- 
wyn  V.  Baldwin,  59  Ala.  127.  Arkan- 
sas: Hall  V.  Denckla,  28  Ark.  506. 
Illinois:  Hallesy  v.  Jackson,  66  111. 
139;  Locke  v.  Caldwell,  91  111.  417; 
Jackson  v.  Lynch,  129  111.  72,  21  N. 
E.  580.  Iowa:  Crawford  v.  Taylor, 
42  Iowa,  260;  Montgomery  v.  Chad- 
wick,  7  Iowa,  114.  Maine:  Phillips 
V.  Sinclair,  20  Me.  269:  Randall  v. 
Bradley,  65  Me.  43;  Blethen  v.  Dwin- 
al,  35  Me.  556;  Roberts  v.  Littlefield, 


81  Me.  329,  17  Atl.  164;  Frisbee  v. 
Frisbee,  86  Me.  444,  29  Atl.  1115. 
Massachusetts:  Ayres  v.  Waite,  10 
Cush.  72;  Howland  v.  Shurtleff,  2 
Met.  26,  35  Am.  Dec.  384.  Michigan: 
Cook  V.  Finkler,  9  Mich.  131;  Hoff- 
man V.  Harrington,  33  Mich.  392. 
Missouri:  McNair  v.  Lot,  34  Mo.  285, 
84  Am.  Dec.  78;  Bollinger  v.  Chou- 
teau, 20  Mo.  89.  New  Hampshire: 
Clark  V.  Clough,  65  N.  H.  43,  23  Atl. 
526;  Grant  v.  Fowler,  39  N.  H.  101, 
104;  Forest  v.  Jackson,  56  N.  H.  357, 
362;  Green  v.  Cross,  45  N.  H.  584. 
New  Jersey:  Bates  v.  Conrow,  11  N. 
J.  Eq.  137.  New  York:  Wood  v. 
Baker,  14  N.  Y.  Supp.  821;  Demarest 
V.  Wynkoop,  3  Johns.  Ch.  129,  8  Am. 
Dec.  467,  where  Chancellor  Kent 
cites  many  cases;  Moore  v.  Cable,  1 
Johns.  Ch.  385;  Slee  v.  Manhattan 
Co.    1    Paige,    48.      North    Carolina: 


112 


113  STATUTE    OF    LIMITATIONS    APPLIES    BY    ANALOGY.    [§    1145. 

would  make  property  very  precarious,  and  a  mortgagee  would  be  no 
more  than  a  bailiff  to  the  mortgagor,  and  subject  to  an  account,  which 
would  be  a  great  hardship.^""  In  analogy  to  the  same  statute  the  same 
exceptions  are  made  for  disabilities,  and  ten  years  allowed  after  their 
removal  within  which  the  right  may  be  asserted,  at  the  expiration  of 
which  time  the  bar  is  complete. ^''^ 

The  right  of  the  mortgagor  to  redeem  being  an  equitable  and  not 
a  legal  right,  the  statute  of  limitations  does  not  strictly  constitute  a 
bar  to  a  bill  to  redeem;  but  equity  adopts  the  statutory  period  of 
twenty  years  after  forfeiture  and  possession  taken  by  the  mortgagee, 
beyond  which  the  mortgagor  shall  not  be  allowed  to  redeem  if  he  has 
paid  no  interest  in  the  mean  time.  Such  lapse  of  time  affords  evi- 
dence of  a  presumption  that  the  mortgagor  has  abandoned  his 
right.^®^  But  no  lapse  of  time  less  than  twenty  years  is  a  sufficient 
answer  to  the  mortgagor's  bill  to  redeem  where  that  is  the  time  neces- 
sary to  bar  real  actions;^""  and  that  is  not  a  conclusive  and  absolute 
bar,  but  only  affords  a  presumption  of  fact,  which  may  be  controlled 
by  evidence.^"" 

After  the  mortgagee  has  remained  in  possession  for  twenty  years 
without  accounting,  or  in  any  way  acknowledging  the  right  of  re- 
demption in  the  mortgagor,  the  latter  cannot  redeem.^°^  The  posses- 
sion of  the  mortgagee  must  be  unequivocally  adverse  to  the  mortgagor 
or  person  entitled  to  the  equity  of  redemption.  The  fact  that  he  en- 
tered with  the  consent  of  the  owner  makes  his  possession  none  the  less 
adverse,  unless  in  return  he  assumed  some  obligation  to  the  owner. 

If  the  mortgagor  was  under  disability,  the  time  of  his  disability  is 
to  be  deducted,  though  he  cannot  avail  himself  of  successive  disabili- 
ties.^''- In  analogy  with  the  statute  of  limitations  of  Jac.  1,  and  gen- 
erally adopted  in  this  country,  ten  years  is  allowed  after  the  removal 
of  the  disability  within  which  to  bring  the  action. ^''^ 

§  1145.    The  time  conforms  to  the   statute  in  force.     In  those 

States,  however,  in  which  the  time  of  limitation  within  which  a  re- 
Bailey  V.  Carter.  7  Ired.  Eq.  282.  For  a  brief  statement  of  the  limita- 
Ohio:  Clark  v.  Potter,  32  Ohio  St.  tion  of  real  actions  in  the  several 
49.  Virginia:  Ross  v.  Norvell,  1  States,  see  chapter  xxvi.  §  1193. 
Wash.  14,  17,  1  Am.  Dec.  422;  Wis-  =""  Ayres  v.  Waite,  10  Cush.  72. 
sonsin:  Rogan  v.  Walker,  1  Wis.  527;  ""'  Demarest  v.  Wynkoop,  3  Johns. 
Knowlton  v.  Walker,  13  Wis.  264.  Ch.  129,  8  Am.  Dec.  467;  Jackson  v. 

^""Anon.  3  Atk.  313.  Voorhis,    9    Johns.    129;    Stevens    v. 

''"  Beckford   v.    Wade,   17   Ves.    87,  Dedham  Institution  for  Savings,  129 

99;  Jenner  v.  Tracy,  3  P.  Wms.  287,  Mass.   547. 

n.;  Belch  v.  Harvey,  3  P.  Wms.  287,  ="=  Demarest  v.  Wynkoop,  3  Johns, 

n.;  White  v.  Ewer,  2  Vent.  340;  Price  Ch.  129,  8  Am.  Dec.  467. 

V.  Copner,  1  S.  &  S.  347.  -"^  And  see  Lamar  v.  Jones,  3  Har. 

"« Robinson  v.  Fife.  3  Ohio  St.  551.  &  M.  328. 

"» Amory  v.  Lawrence,  3  Cliff.  523. 


§   1145.] 


WHEN    RIGHT    TO    REDEEM    IS    BARRED. 


114 


covery  of  land  may  be  had  has  been  changed  by  statute  to  a  period 
longer  or  shorter  than  twenty  years,  following  the  analogy  of  those 
statutes  the  time  within  which  the  mortgagor  may  redeem  from  the 
mortgagee  in  possession  will  be  the  same ;  as,  for  instance,  the  statute 
of  limitations  in  Connecticut  prescribing  fifteen  years  as  the  period 
beyond  which  an  entry  shall  not  be  made,  a  mortgagor  is  there  barred 
by  the  lapse  of  this  period  during  which  the  mortgage  title  has  not 
been  recognized  by  the  mortgagee  in  possession.^"*  In  a  few  States 
special  statutes  have  been  enacted  with  reference  to  the  redemption  of 
mortgages,  and  a  synopsis  of  these  statutes,  and  of  the  English  statute 
upon  which  they  are  founded  as  well,  is  given  in  a  note.^°^ 


=»*Jarvis  v.  Woodruff,  22  Conn, 
548;  Skinner  v.  Smith,  1  Day,  124 
Crittenden  v.  Brainard,  2  Root,  485 
Fox  V.  Blossom,  17  Blatchf.  352 
Byrd  v.  McDaniel,  33  Ala.  18;  Coyle 
V.  Wilkins,  57  Ala.  108;  Dawson  v. 
Hoyle,  58  Ala.  44;  Askew  v.  Sand- 
ers, 84  Ala.  356,  4  So.  167. 

""■^  California:  An  action  to  redeem 
a     mortgage     of     real     property     is 
barred   after  an   adverse   possession 
of  the  mortgaged  premises  for  five 
years   after   breach   of   some   condi- 
tion   of    the    mortgage.      Civil    Code 
of  Procedure,  1903,  §§  346,  347.  Under 
this    statute    an    action    to    redeem, 
where   the   mortgagee  is   in   posses- 
sion,  may  be  brought   ■'.t  any  time, 
provided  there  shall  not  have  been 
an  adverse  possession  for  five  years. 
Raynor  v.  Drew,  72  Cal.  307,  13  Pac. 
866;   Warder  v.  Enslen,  73  Cal.  291, 
14    Pac.    874;    Cohen    v.    Mitchell,    9 
Pac.    649.     The   right   to   redeem   is 
unaffected    by    the    running    of    the 
statute    of    limitations    against    the 
principal   debt.     Hall   v.    Arnott,   80 
Cal.    348,    22    Pac.    200;     Raynor    v. 
Drew,  72  Cal.  307,  13  Pac.  866.  Ken- 
tucky:   After    a    mortgagee    of    real 
property,    or    any    person    claiming 
under   him,    has    had    fifteen    years' 
continued  adverse  possession,  no  ac- 
tion shall  be  brought  by  the  mort- 
gagor,   or   any   one   claiming   under 
him,  to  redeem  it.     G.   S.   1888,   ch. 
71,  art.   iv.   §  16.     Code  1892,   §  2732. 
Tuteur   v.    Brown,    74   Miss.    774,   21 
So.    748;    Little  v.   Teague,   60  Miss. 
115.  Mississippi:  When  a  mortgagee, 
after  a  forfeiture  of  the  mortgage, 
has    obtained    actual    possession,    or 
receipt  of  the  profits  or  rent  of  the 
land   mortgaged,   the   mortgagor,   or 
any  person   claiming   through   him. 


shall  not  bring  suit  to  redeem  but 
within  ten  years  next  after  the  time 
at    which     the    mortgagee    obtained 
such  possession  or  receipt,  unless  in 
the  mean  time  an  acknowledgment 
shall    have    been    made    in    writing 
signed  by  the  mortgagee  or  the  per- 
son claiming  under  him.    R.  C.  1880, 
§2666;     Annot.     Code     1891,     §2732. 
New    Jersey:      If    a    mortgagee    and 
those    under   him    be    in    possession 
of  the  lands  contained  in  the  mort- 
gage, or  any  part  thereof,  for  twenty 
years   after   default   of   payment   by 
the    mortgagor,    then    the    right    or 
equity  of  redemption  is  forever  bar- 
red.    Rev.  1877,  p.  507.     North  Caro- 
lina:   An  action  for  the  redemption 
of  a  mortgage  where  the  mortgagee 
has  been  in  possession,  or  for  a  re- 
siduary   interest    under    a    deed    of 
trust  for  creditors  where  the  trustee 
or    those    holding    under    him    has 
been  in  possession  must  be  brought 
within  ten  years  after  the  right  of  ac- 
tion accrued.     Battle's  Revisal  1873, 
p.  149;   Code  Civ.  Pro.  1891,  §  152.  A 
presumption  of  abandonment  of  this 
right  arises  within  ten  years   after 
forfeiture.     Houck  v.   Adams,  98  N. 
C.  519,  4  S.  E.  502.     Utah  T.:   Seven 
years  after  breach  of  the  condition. 
2  Comp.  Laws  1888,  §  3152.  Washing- 
ton:   Under    S  33   of   the    Code    1881, 
2     Codes     &     Stats.     1897.       §    4805, 
the  action  must  be  brought  within 
two    years.      Parker     v.     Dacres,     2 
Wash.    T.    439.     For   the   statute   in 
New  York,  see  §  1147. 

See  the  English  Statute  of  3  &  4 
Will.  IV.  ch.  27,  §  28,  providing  for 
bringing  the  action  within  twenty 
years  after  the  mortgagee  obtained 
possession  or  receipt  of  profits.  The 
Real  Property  Limitation  Act  1874. 


115 


STATUTE    OF    LIMITATIONS    APPLIES    BY    ANALOGY.    [§    1146. 


The  time  for  redemption  from  a  mortgage  is  fixeti  by  the  laws  in 
force  at  the  time  the  mortgage  is  given,  and  cannot  be  extended  by 
subsequent  legislation.^*"* 

§  1146.  The  right  to  foreclose  and  the  right  to  redeem  are  re- 
ciprocal.^" Since  the  rights  of  the  mortgagor  and  mortgagee  are  re- 
ciprocal and  commensurable,  redemption  under  the  mortgage  is  cut 
off  at  the  expiration  of  the  same  time  that  the  right  to  foreclose  is 
barred. ^"^  In  accordance  with  this  maxim,  it  is  held  in  California  that 
in  case  the  debt  is  foreclosed  in  four  years  the  right  to  redeem  is 
barred  by  the  lapse  of  the  same  period.^"**  In  Iowa,  also,  an  action  to 
redeem  is  barred  in  ten  years,  the  same  time  in  which  an  action  at  law 
for  the  debt  secured  would  be  barred.-^"  The  same  application  of  the 
principle  is  made  in  Minnesota,  where,  in  analogy  to  a  statute  specially 
providing  that  an  action  to  foreclose  shall  be  commenced  within  ten 
years  after  the  cause  of  action  accrues,  redemption  must  be  made 
within  the  same  time.-"  Of  course  this  principle  cannot  be  applied 
where  by  statute,  or  by  operation  of  judicial  construction  of  the  stat- 
ute, a  different  time  is  fixed  for  redemption  from  that  allowed  for  fore- 
closure, as  in  Wisconsin. 


§  7,  which  went  into  operation  on 
and  after  January  1,  1879,  makes 
the  period  of  limitation  twelve 
years   instead   of   twenty. 

See  §§   1051,   1321;   Allen  v.  Al- 


son  V.  Lynch,  129  111.  72,  21  N.  E. 
580.  Otherwise  in  Alabama:  §  1192. 
'""  Cunningham  v.  Hawkins,  24 
Cal.  403,  410,  85  Am.  Dec.  73;  Arring- 
ton  V.  Liscom,  34  Cal.  365.     A  mort- 


len,   95   Cal.   184,   27   Pac.   30;    Phin-    gage    was   made   in    New   York,    be 


ney  v.  Phinney,  81  Me.  450,  17  Atl. 
405;  Bronson  v.  Kinzie,  1  How.  311, 
316;  Walker  v.  Whitehead,  16  Wall. 
314;  Cargill  v.  Power,  1  Mich.  369; 
Malony  v.  Fortune,  14  Iowa,  417; 
Hollister  v.  Donahoe,  11  S.  Dak. 
497,    78    N.    W.    959.      See,    however 


tween  persons  residing  there,  on  land 
in  California.  After  the  mortgag- 
ee's right  to  sue  for  the  money 
loaned  was  barred  in  New  York, 
the  mortgagor  sued  in  California  to 
redeem.  It  was  held  that,  as  the 
right    of    action    for    the    loan    was 


State    Sav.    Bank    v.    Matthews,    123    barred  in  New  York,  a  suit  to  fore- 


Mich.    56,   81   N.   W.    918. 

="'  Long  V.  Long,  111  Mo.  12,  19  S. 
W.  537;  Green  v.  Cross,  45  N.  H. 
584. 

■•"'*King  V.  Meighen,  20  Minn.  264; 
Caufman   v.    Sayre,    2   B.    Mon.   202; 
Koch  V.  Briggs,  14  Cal.  256,  73  Am. 
Dec.    651;    Grattan    v.    Wiggins,    23 
Cal.    16,    34;    Cunningham    v.    Haw- 
kins, 24  Cal.   403,  410,   85  Am.   Dec. 
73;  Arrington  v.  Liscom,  34  Cal.  365, 
372,  94  Am.  Dec.  722;   Lord  v.  Mor- 
ris, 18  Cal.   482;    Allen  v.   Allen,  95 
Cal.    184,    27    Pac.    30,    30   Pac.    213 
Green  v.  Turner,  38  Iowa,  112,  116 
Haskell    v.    Bailey,    22    Conn.    569 
Locke  V.  Caldwell,  91  111.  417;  Jack 


close  the  mortgage  was  barred  in 
California.  The  contract  was  gov- 
erned by  the  laws  of  New  York,  but 
the  effect  of  the  deed  by  the  laws  of 
California.  Allen  v.  Allen,  95  Cal. 
184,  27  Pac.  30,  30  Pac.  213. 

='"  Smith  v.  Foster,  44  Iowa,  442 
Crawford  v.  Taylor,  42  Iowa,  260 
Gower  v.  Winchester,  33  Iowa,  303 
Albee  v.  Curtis,  77  Iowa,  644,  42  N 
W.   508. 

="  Holton  V.  Meighen,  15  Minn.  69 
80;  King  v.  Meighen,  20  Minn.  264 
Parsons  v.  Noggle,  23  Minn.  328 
Fisk  V.  Stewart,  26  Minn.  365;  Rog- 
ers V.  Benton,  39  Minn.  39,  38  N.  W, 
765,  12  Am.  St.  Rep.  613. 


§§    1147,    11-18.]    WHEN    TtlGHT    TO    REDEEM    IS    BARRED.  116 

§  1147.  The  right  of  redemption  in  New  York  was  formerl}' 
barred  in  ten  years.  It  was  held  that  inasmuch  as  the  statute  of  limi- 
tations, so  far  as  it  limits  the  recovery  of  the  possession  of  real  prop- 
erty to  twenty  years,  did  not  apply  to  cases  of  which  a  court  of  equity 
had  peculiar  and  exclusive  jurisdiction,  an  action  by  a  mortgagor  for 
redemption  or  for  an  accounting  and  recovery  of  possession  against  a 
mortgagee  in  possession  came  within  the  provision  of  the  statute  lim- 
iting the  time  for  the  commencement  of  actions  not  otherwise  speci- 
fied, and  was  thereby  limited  to  ten  years  from  the  time  the  right  of 
action  accrues.^^-  To  a  similar  statute  in  "Wisconsin  the  same  con- 
struction is  given. ^^^ 

But  in  the  new  Code  of  New  York  it  is  expressly  provided  that  the 
right  of  redemption  may  be  maintained  by  the  mortgagor  or  those 
claiming  under  him  against  the  mortgagee  in  possession  or  those  claim- 
ing under  him,  unless  he  or  they  have  continuously  maintained  ad- 
verse possession  for  twenty  years  after  breach  of  the  condition.^^* 

§  1148.  In  Tennessee  it  is  held  that  the  statute  of  limitations  does 
not  apply  to  a  bill  in  equity  to  redeem  a  mortgage,  because  redemption 
can  only  be  enforced  in  equity,  and  the  statute  does  not  apply  to  cases 
belonging  to  the  exclusive  jurisdiction  of  courts  of  equity.  "But  al- 
though equity  does  not  permit  the  statute  of  limitations  to  be  pleaded 
to  the  relief  which  it  affords  to  the  right  of  redemption,  yet,  in  the  ap- 
plication of  that  relief,  it  regards  time  and  discountenances  stale  de- 
mands."^^^  The  court  would  doubtless  adopt  the  period  of  twenty 
years  as  affording  a  presumption  of  right  in  the  mortgagee,  after  an- 
alogy of  the  statute  of  limitations.^^^  The  possession  of  the  mort- 
gagee is  consistent  with  the  right  of  the  mortgagor,  unless  it  be  con- 
tinued long  enough  to  afford  such  a  presumption,  which  a  shorter 
period  than  twenty  years  would  not  give.    But  if  the  mortgagee  pur- 

"M  Kent  Com.  p.  188;   Hubbell  v.  ^'^  Overton  v.  Bigelow,  3  Yerg.  513, 

Sibley,    50    N.    Y.    468,    affirming    5  ""  In  Yarbroughv.Newell,  10  Yerg. 

Lans.  51;   Miner  v.  Beekman,  50  N.  376,  the  court,  in  affirming  the  doc- 

Y.   337,   14  Abb.   Pr.   N.   S.   1;    Tibbs  trine  laid  down  in  Overton  v.  Bige- 

V.    Morris,    44   Barb.    138,   146;    Pea-  low    says:    "In   those    states    of   the 

body   V.    Roberts,   47   Barb.   91,   102;  Union  where  the  time  fixed  by  the 

Cleveland  v.  Boerum,  24  N.  Y.  613,  statute     of     limitations     is     twenty 

617.  years,  the  courts  of  equity  have  tak- 

"' Cleveland   Ins.    Co.    v.    Reed,   24  en  the  same  time  'as  the  presump- 

How.  284,  1  Biss.  180;   Knowlton  v.  tion  of  right'  in  a  mortgagee.     But 

Walker,  13  Wis.  264.  we  know  of  no  case,  either  in  this 

■''  Code    of    Civ.    Procedure    1890,  State    or    any    of    the    other    States 

§  379.     The  construction  of  the  for-  where  the  statute  of  limitations  is 

mer  statute,  though  conclusively  es-  for  a  shorter  period,  that  the  courts 

tablished  by  the  decisions,  was  re-  of    equity    have    reduced    the    time 

garded  as  being  contrary  to  the  in-  within    which    a   mortgage    may    be 

tent  of  the  legislature,   and   to  the  redeemed  to  that  period." 
general  policy  of  the  law. 


117   STATUTE   OF   LIMITATIONS   APPLIES    BY   ANALOGY.    [§§    11-49-1151. 

cliase  an  outstanding  title,  and  hold  it  adversely  to  the  mortgagor  with 
his  knowledge,  the  statute  which  makes  seven  years'  adverse  possession 
a  bar  to  an  action  to  recover  will  run  in  the  mortgagee's  favor,  and  will 
perfect  the  title  in  him.^^'^ 

§  1149.  The  mortgagee's  possession  must  be  unequivocally  adverse 
during  the  whole  period,^^^  and  therefore  if,  at  the  time  of  his  en- 
try, he  is  entitled  to  an  interest  in  the  equity  of  redemption,  or  if  he 
subsequently  acquires  such  an  interest,  as,  for  instance,  a  tenancy  for 
life,  he  loses  the  benefit  of  the  statute.^^''  Time  will  not  run  in  his 
favor  so  long  as  his  interest  in  the  equity  of  redemption  continues, 

A  mortgagee  is  estopped  to  avail  himself  of  the  statute  of  limita- 
tions by  a  parol  agreement  with  the  mortgagor  that  the  former  should 
take  and  hold  possession  until  the  debt  should  be  paid  from  the  rents, 
w^hen  the  property  should  be  restored  to  the  mortgagor.^^'' 

§  1150.  The  mortgagee's  possession,  when  adverse,  operates 
equally  against  a  married  woman  who  has  made  the  mortgage.  She 
is  in  no  way  protected  by  her  coverture  from  the  effect  of  the  adverse 
possession  of  the  mortgagee.  The  adverse  possession  is  against  the 
equitable  right  of  the  mortgagor  to  redeem,  and  the  limitation  is  an 
equitable  one  in  analogy  to  the  statute  of  limitations  at  law ;  and  it  is 
regarded  as  equitable  that  a  wife  should  lose  her  right  in  equity  to  re- 
deem when  there  has  been  such  a  lapse  of  time  as  would  in  equity  bar 
any  other  mortgagor.  The  privileges  and  exemptions  of  married 
women  should  be  curtailed  as  their  separate  rights  in  regard  to  their 
property  are  recognized.  Having  voluntarily  placed  herself  in  the  posi- 
tion of  a  mortgagor,  she  must  accept  the  usual  incidents  of  the  posi- 
tion, and  her  equitable  right  to  redeem  is  lost  when  there  has  been  such 
a  lapse  of  time  as  would  bar  the  right  of  any  other  mortgagor.^^^ 

§  1151.  Successive  disabilities  of  mortgagor  —  To  entitle  the  mort- 
gagor to  the  benefit  of  a  disability,  it  must  be  one  that  existed  at  the 
time  the  right  to  redeem  first  accrued ;  and  though  if  several  disabili- 
ties existed  together,  the  statute  does  not  begin  to  run  until  the  party 
entitled  to  redeem  has  survived  all  of  them,  yet  successive  or  cumu- 
lative disabilities  are  not  allowed.  "If  disability  could  be  added  to 
disability,"  says  Chancellor  Kent,  "claims  might  be  protracted  to  an 

'"Gudger.v.  Barnes,  4  Heisk.  570;  ='»  Hyde  v.  Dallaway,  2  Hare,  528; 

Wallen  v.  Huff,  5  Humph.  91,  94.  Raffety  v.  King,  1  Keen,  601. 

"'"  Simmons  v.   Ballard,  102   N.   C.  "-"  Higgins  v.  Haberstraw,  76  Miss. 

105,  9  S.  E.  495:  McPherson  v.  Hay-  627. 

ward,  81  Me.  329,  17  Atl.  164.  "'  Hanford  v.  Fitch,  41  Conn.  486. 


§    1152.]  WHEN    RIGHT    TO    REDEEM    IS    BARRED.  118 

indefinite  extent  /'^^^  and  lie  quotes  an  expression  of  Lord  Eldon,  that 
"a  right  might  travel  through  minorities  for  two  centuries." 

If  the  statute  has  once  begun  to  run  against  the  mortgagor,  it  is  not 
suspended  or  interrupted  by  his  death  and  the  infancy  of  his  heirs  at 
that  time.223 


II.     When  the  Statute  begins  to  run. 

§  1152.     So  long  as  the  relation  of  mortgagor  and  mortgagee  exists 

the  statute  does  not  commence  to  run  in  favor  of  either  the  mort- 
gagor or  the  mortgagee.^^*  That  relation  must  be  terminated  in  some 
way  before  either  party  in  possession  can  interpose  the  statute  of  limi- 
tations as  a  defence  against  the  other.  As  against  the  mortgagor  this 
relation  is  generally  terminated  when  the  mortgagee,  after  a  breach 
of  the  condition,  enters  and  holds  possession  of  the  mortgaged  prop- 
erty,^-^  or  obtain  possession  on  an  execution.  Such  possession, 
whether  it  be  for  the  purpose  of  foreclosure,^^"  or  for  the  purpose  of 
wresting  the  property  from  the  mortgagor,  is  equally  effectual.  When, 
however,  by  the  terms  of  the  mortgage,  or  by  subsequent  agreement, 
the  mortgagee  is  to  take  and  hold  possession  of  the  property  until  he 
shall  satisfy  his  claim  from  the  rents  and  profits,  his  possession  does 
not  become  adverse  until  his  demand  has  been  satisfied  from  this 
source,  or  he  asserts  an  absolute  title  in  himself,  and  gives  distinct  no- 
tice of  it  to  the  mortgagor.^^^  The  right  of  redemption  is  not  lost 
by  lapse  of  time  when  the  mortgagor  remains  in  possession  for  him- 

"'Deraarest  v.  Wynkoop,  3  Johns.  Green  v.  Turner,  38  Iowa,  112,  118; 

Ch.    129,    139,    8   Am.    Dec.    467,   and  Crawford    v.    Taylor,    42    Iowa,    260. 

numerous  cases  cited.  And  see  Humphrey  v.  Hurd,  29  Mich. 

The  disabilities  of  the  mortgagee  44;  Rockwell  v.  Servant,  54  111.  251; 
which  may  give  him  an  extension  Babcock  v.  Wyman,  19  How.  289, 
of  time  are  limited  by  the  English  affirming  Wyman  v.  Babcock,  2  Cur- 
statute  to  the  extreme  period  of  tis,  386;  Coe  v.  Finlayson,  41  Fla. 
forty  years  in  all,  under  Stat.  3  &  4  169,  26  So.  704;  Jones  v.  Foster,  175 
Wm.  IV.  ch.  27,  §§  16,  17,  and  to  111.  459,  51  N.  E.  862. 
thirty  years  under  Stat.  37  &  38  "5  Stevens  v.  Dedham  Institution 
Vict.  ch.  57.  Much  doubt  had  been  for  Savings,  129  Mass.  547;  Pomeroy 
entertained  as  to  the  effect  of  sue-  v.  Winship,  12  Mass.  514. 
cessive  disabilities  under  the  for-  ^^^  Montgomery  v.  Chadwick,  7 
mer  statute  until  the  case  of  Bor-  Iowa,  114;  Bailey  v.  Carter,  7  Ired. 
rows    V.    Ellison,    L.    R.    6    Ex.    128,  Eq.  282. 

where    it    was    decided    that,    when  "'  Anding  v.    Davis,   38   Miss.   574, 

the  causes  of  disability  overlap,  the  77  Am.  Dec.  658;  Kohlheim  v.  Har- 

disability    continues    subject    to    the  rison,  34  Miss.  457;  Frink  v.  Le  Roy, 

extreme  limitation  provided.  49    Cal.    314;    Warder   v.   Enslen,   73 

"^Frederick    v.    Williams,    103    N.  Cal.  291,  14  Pac.  874;  Quint  v.  Little, 

C.  189,  9  S.  E.  298.  4  Me.  495;    McPherson  v.   Hayward,  • 

"*  Waldo    V.    Rice,    14    Wis.    286;  81  Me.  329,  17  Atl.  164. 


119  WHEN  STATUTE  BEGINS  TO  RUN.  [§§  1153,  1154. 

self  and  not  for  the  mortgagee.-^^  Where  a  mortgagee  enters  into  pos- 
session of  the  mortgaged  premises  under  a  void  foreclosure,  he  is  pre- 
sumed to  hold  as  mortgagee  in  possession,  and  limitation  does  not  run 
in  his  favor,  or  in  favor  of  his  grantees,  against  a  suit  by  the  mort- 
gagor to  enforce  the  right  of  redemption,  and  to  an  accounting,  which 
is  a  continuing  right,  unless  there  is  an  actual  notice  to  the  mortgagor 
that  they  claim  to  hold  in  some  other  right  adverse  to  the  mortgage.'^" 
Inasmuch  as  an  ineffectual  sale  under  a  power  or  an  irregular  and 
void  foreclosure  by  suit  operates  as  an  assignment  of  the  mortgage,^^" 
and  the  mortgage  relation  still  continues  between  the  purchaser  at  such 
void  sale  and  the  owner  of  the  equity  of  redemption,  the  right  of  re- 
demption continues,  and  the  statute  of  limitations  does  not  begin  to 
run  against  the  right  until  actual  notice  is  given  to  such  owner  by  the 
party  in  possession  under  such  void  sale  that  he  claims  to  hold  in  some 
other  right  than  that  of  mortgagee  or  assignee  of  the  mortgage,  or  he 
clearly  makes  it  known  by  his  acts  that  he  holds  adverse  to  the  mort- 

§  1153.  As  to  a  Welsh  mortgage. —  A  mortgage  containing  such  an 
agreement  is  in  the  nature  of  a  Welsh  mortgage,  and  from  the  very 
nature  of  the  agreement  it  is  constantly  renewed  by  the  receipt  of  the 
rents  and  profits  in  payment  of  interest  or  in  discharge  of  the  debt. 
The  mortgagee's  possession  is  of  the  essence  of  the  contract;  he  holds 
the  estate  subject  to  perpetual  account.^^-  Time  will  not  bar  the 
mortgagor,  unless  the  mortgagee  disclaims  the  mortgage  and  gives  him 
notice  in  effect  that  he  holds  in  defiance  of  his  title;  or  a  sufficient 
length  of  time  to  constitute  a  bar  has  elapsed  since  the  principal  and 
interest  of  the  mortgage  has  been  paid  from  the  rents  and  profits. ^^^ 
The  mortgagor  could  in  equity,  doubtless,  compel  an  account,  which 
would  show  when  the  mortgage  was  paid.-^* 

§  1154.  The  mortgagee's  possession  runs  against  those  entitled 
to  the  estate  in  remainder  as  well  as  against  the  tenant  for  life ;  and 
if  his  possession  has  continued  for  twenty  years  before  the  title  of  the 

="Bird  V.   Keller,   77   Me.   270.  v.  Morgan,  10  Ga.  297;  Marks  v.  Pell. 

-•"'  Rigney    v.    De    Graw,    100    Fed.  1  Johns.  Ch.  594.     So  under  an  ar- 

213.  rangement  for  repayment  by  annui- 

""  §  812.  ties.      Teulon    v.    Curtis,    1    Younge, 

="  Rigney    v.    De    Graw,    100    Fed.  610. 

213;    Raskins  v.   Hawkes,  108  Mass.  ='^  Yates    v.    Hambly,    2    Atk.    360; 

379,  382,  384;   Miner  v.  Beekman,  50  Longuet  v.  Scawen,  1  Ves.  Sen.  402; 

N.  Y.  337;  Smith  v.  Smith,  15  N.  H.  Alderson  v.  White,  2  De  G.  «&  J.  97; 

55;  Quinn  v.  Quinn,  27  Wis.  168,  170;  Talbot  v.  Braddill,  1  Vern.  394;  Law- 

Budd  V.  Collins,  69  Mo.  129.  ley  v.  Hooper,  3  Atk.  278,  280;   Fen- 

^^=Fenwick    v.    Reed,    1    Mer.    114;  wick  v.  Reed,  1  Mer.  114. 

Orde  v.  Heming,  1  Vern.  418:   Balfe  =^*  Fulthorpe    v.    Foster,    1    Vern. 

V.  Lord,  2  Dr.  &  War.  480;   Morgan  477. 


§§    1155,    1156.]    WHEN    EIGHT    TO    REDEEM    IS    BARRED.  120 

remainder-man  accrued,  the  bar  is  as  effectual  against  him  as  it  was 
against  the  life-tenant,  who  had  the  immediate  right  to  redeem  during 
the  whole  period  of  his  possession. ^^^  The  rule  is  the  same  in  case  the 
tenancy  during  the  possession  was  by  the  curtesy,^^''  or  by  right  of 
dower.^^^ 

§  1155.     If  the  mortgagor  retains  possession   of  a  part    of  the 

mortgaged  premises,  though  the  mortgagee  be  in  possession  of  the  re- 
mainder, no  lapse  of  time  will  bar  the  right  of  redemption  of  the  en- 
tire estate.^^^  The  right  existing  as  to  any  part,  it  must  exist  as  to 
the  whole,  for  as  a  general  rule  there  can  be  no  redemption  of  separate 
parts.  If  the  mortgagor  has  constructive  possession,  as  when  the 
mortgagee  has  entered  under  a  lease,  or  an  agreement  amounting 
equitably  to  a  lease,  the  statute  will  not  begin  to  run  against  the  right 
of  redemption  until  the  mortgagee  ceases  to  hold  under  such  lease. -''^ 
It  may  happen,  however,  that  a  part  of  an  estate  may  become  irre- 
deemable while  redemption  is  not  lost  as  to  the  residue.^'**' 

§  1156.  The  cause  of  action  accrues  when  the  mortgagee  enters 
into  possession,  not  when  the  money  secured  by  the  mortgage  becomes 
due.^*^  Until  then  the  plaintiff  has  no  occasion  for  this  remedy  to 
regain  possession.  The  possession  may  be  explained,  so  that  it  is  not 
so  much  the  possession  itself  as  the  nature  of  it  that  operates  as  a  bar 
to  the  right  to  redeem;  but  the  presumption  is  that  the  possession  is 
adverse  after  an  entry  upon  a  default  in  the  mortgage.  When  the 
mortgagee  has  entered,  not  as  mortgagee  onh'',  but  by  virtue  of  having 
a  limited  interest  in  the  equity  of  redemption,  as,  for  instance,  a  life 
estate,  it  is  held  that  time  will  not  run  in  his  favor  during  the  con- 
tinuance of  that  interest,  for  it  would  be  his  duty  to  keep  down  the  in- 
terest on  his  mortgage  in  favor  of  the  remainder-men.-*^ 

As  against  the  owner  of  the  equity  of  redemption,  the  statute  does 

"=  Harrison  v.   Hollins,   1   S.   &  S.  er,  13  Wis.   264;   Waldo  v.   Rice,  14 

471;    Ashton   v.    Milne,    6   Sim.    369;  Wis.    286. 

Dallas  v.  Floyd,  6  Sim.  379.  In  Miner  v.  Beekman,  50  N.  Y.  337, 

^•^  Anon.  2  Atk.  333.  it   was   suggested    that   perhaps   the 

^"  Lockwood  V.   Lockwood,  1  Dav.  cause  of  action  does  not  accrue  so 

295.  long  as  the  mortgagee  continues  in 

238  Burke    v.    Lynch,    2    Ball    &    B.  possession   avowedly    as   mortgagee, 

426;   Rakestraw  v.  Brewer,  Sel.  Cas.  without  claiming  in  fee  or  by   any 

in  Ch.  56.  other  title;   but  as  in  that  case  the 

-^^  Archbold  v.  Scully,  9  H.  L.  360;  mortgagee  claimed  by  a  foreclosure 

Drummond  v.  Sant.  L.  R.  6  Q.  B.  763  title,  there  was  no  occasion  for  de- 

•''°  Lake  v.  Thomas,  3  Ves.  Jun.  17.  ciding  this  point. 

="Hubbell  V.  Sibley,  50  N.  Y.  468;  =«  Story's    Eq.    Jur.    §1028;    Reeve 

Peabody    v.    Roberts,    47    Barb.    91;  v.  Hicks,  2  S.  &  S.  403;    Raffety  v. 

Miner  v.  Beekman,  50  N.  Y.  337,  14  King,  1  Keen,  601,  618;    Seagram  v. 

Abb.  Pr.  N.  S.  1;  Knowlton  v.  Walk-  Knight,   L.    R.   2   Ch.   App.   628,   632, 

per  Chelmsford,  L.  C. 


121  AVIIEN    STATUTE   BEGINS    TO    RUN.  [§    1157. 

not  begin  to  run  until  the  mortgagee  takes  actual  and  open  possession 
of  the  mortgaged  premises;  and  it  does  not  begin  then  if  he  holds 
merely  under  his  mortgage  title  and  recognizes  the  mortgagor's  right 
of  redemption.^*^ 

An  action  by  a  widow  to  redeem  from  a  foreclosure,  had  in  the  hus- 
band's lifetime,  to  which  she  was  not  a  party,  of  a  mortgage  given  by 
the  husband  alone  for  the  purchase-price  of  land,  is  not  barred  until 
the  lapse  of  the  statutory  period  after  the  death  of  the  husband,  for 
her  right  to  redeem  did  not  come  into  existence  until  the  death  of  the 
husband.^** 

§  1157.  After  twenty  years'  possession  by  the  mortgagee  it  lies 
with  the  mortgagor  to  show  that  the  effect  is  not  a  bar  of  his  right 
of  redemption.  The  onus  lies  on  the  mortgagor  to  show  that  fact,  in 
order  to  defeat  the  effect  of  the  possession.-*^  The  presumption  is  that 
the  right  of  redemption  is  gone  after  the  mortgagee's  possession  has 
continued  for  this  period  of  time.  But  any  act  done  or  acknowledg- 
ment made  by  him  in  the  mean  time,  evincing  his  recognition  of  the 
mortgage  as  such,  may  be  offered  to  repel  this  presumption.  Although 
possession  by  the  mortgagee  has  continued  long  enough  to  give  him 
presumptive  title,  the  nature  of  his  possession  is  what  really  deter- 
mines the  rights  of  the  parties,  and  a  great  variety  of  facts  and  cir- 
cumstances may  be  adduced  to  show  it  is  by  virtue  of  the  mortgage 
only,  and  consequently  does  not  bar  the  right  to  redeem.^*^ 

A  bill  to  redeem  which  shows  that  the  mortgagee  has  been  in  pos- 
session for  twenty  years  or  more  must  distinctly  aver  the  grounds 
upon  which  the  possession  does  not  constitute  a  bar.  Twenty  years' 
possession  under  a  de  facto  foreclosure  is  a  bar  to  redemption,  though 
the  proceedings  were  irregular,  unless  the  mortgagor  shows  circum- 
stances which  repel  the  presumption  of  title  in  the  mortgagee.-*^  A 
bill  brought  thirty-four  years  after  the  maturity  of  the  mortgage, 
which  averred  that  the  mortgagee's  possession  was  not  continuous  and 
adverse  for  the  period  of  twenty  years,  but  did  not  aver  that  the  pos- 
session was  taken  within  that  period,  and  gave  no  excuse  for  the  delay 
in  bringing  the  bill,  was  dismissed,  because  the  averments  were  too  un- 
certain to  found  a  right  to  redeem  upon.^*^ 

When  a  creditor  having  two  mortgages  of  different  priorities  upon 
the  same  property  for  different  debts,  enforces  the  junior  mortgage  and 

"^  Knowlton    v.    Walker,    13    Wis.  =>*«  Robinson  v.  Fife,  3  Ohio  St.  551. 

264;   Waldo  v.  Rice,  14  Wis.  286.  ="  Slicer  v.   Bank  of  Pittsburg,  16 

="Barr  v.  Vanalstine,  120  Ind.  590,  How.  571;  Brobst  v.  Brock,  10  Wall. 

22  N.  E.  965.  519;   Nelson  v.  Ratliff,  72  Miss.  656, 

"'  Per   Sir  Wm.    Grant  in   Barron  18  So.  487. 

V.  Martin,  19  Ves.  326.  ="  Reynolds  v.  Green,  10  Mich.  355. 


§    1158.]  WHEN    RIGHT    TO    REDEEM    IS    BARRED.  122 

bids  in  the  property  at  the  sale,  and  then  enforces  the  prior  mortgage, 
he  opens  the  right  of  redemption  from  the  first  sale.^*" 

§  1158.  Mere  constructive  possession  by  the  mortgagee  for  twenty 
years  will  not  raise  a  presumption  that  the  title  has  become  absolute 
in  him ;  and  the  fact  that  the  mortgaged  premises  were  wild,  uncleared 
lands  will  not  avail  a  mortgagee  as  against  the  mortgagor,  although 
the  former  has  the  legal  title,  and  the  courts  have  adopted  a  rule  as 
to  such  lands  that  the  possession  follows  the  right;  for  the  purpose  of 
the  rule  is  to  protect  the  owner  of  such  lands  from  intrusion  and  tres- 
pass.^^"  Nothing  short  of  actual  possession  by  the  mortgagee,  con- 
tinued for  the  time  required  by  statute,  without  accounting  or  admit- 
ting that  he  is  merely  a  mortgagee,  but  under  a  claim  of  absolute 
ownership,  will  avail  to  convert  his  mortgage  title  into  a  title  absolute 
in  equity.^^^  Payment  of  taxes  on  wild  land  will  not  avail.^^^  An  oc- 
casional occupation  of  the  premises  will  not  avail.  The  occupation 
must  be  a  continuous  and  notorious  one,  adverse  to  the  right  to  re- 
deem.^^^ 

But  where  the  premises  consist  of  a  farm,  part  of  which  is  improved 
and  has  a  house  upon  it,  and  the  possession  of  the  whole  is  so  far  ad- 
verse as  to  cause  the  time  to  commence  running  against  the  right  to 
redeem,  a  temporary  interruption  of  the  actual  residence  of  the  mort- 
gagee upon  the  land,  caused  by  the  destruction  of  the  house,  will  not 
prevent  the  statute  from  continuing  to  run,  if  the  mortgagee  continues 
to  exercise  all  such  acts  of  ownership  and  dominion  as  the  nature  of 
the  land  and  its  condition  admits  of.^^* 

Where  after  the  death  of  the  mortgagor  his  widow  paid  the  mort- 
gage debt  and  inventoried  the  land  as  that  of  her  husband,  and  occu- 
pied the  premises  as  a  homestead,  the  widow's  possession  was  held  not 
to  be  adverse  as  against  the  heir,  and  laches  in  redeeming  was  not 
imputable.^^^ 

A  conveyance  by  the  mortgagee  purporting  to  give  an  absolute  title 
to  the  mortgaged  property  does  not  work  a  disseisin  of  the  mortgagor, 
but  passes  only  the  mortgage  title. ^^^  Nor  does  an  absolute  convey- 
ance of  a  portion  of  the  mortgaged  premises  by  the  mortgagor  while 

^"•Coler  v.   Barth,  24   Colo.   31,  48  -"Bollinger    v.    Chouteau,    20    Mo. 

Pac.  656.  89;  Locke  v.  Caldwell,  91  111.  417. 

""  Moore    v.    Cablf ,    1    Johns.    Ch.  =■"  Humphrey  v.  Hurd,  29  Mich.  44. 

385,    387;    Slee   v.    Manhattan    Co.    1  "^  Clark  v.  Potter,  32  Ohio  St.  49. 

Paige,  48;   Locke  v.  Caldwell,  91  111.  ="  Hunter  v.  Dennis,  112  111.  568. 

417.  =="  Humphrey  v.  Hurd,  29  Mich.  44; 

="  Miner  v.  Beekman,  50  N.  Y.  337;  Dexter  v.  Arnold,  2  Sumn.  108;  Dan- 

Demarest  v.  Wynkoop,  3  Johns.  Ch.  iels  v.  Mowry,  1  R.  I.  151. 
129,   8  Am.   Dec.   467;    McPherson  v. 
Hayward,  81  Me.  329,  17  Atl.  164. 


123  WHEN  STATUTE  BEGINS  TO  KL'X.  [§§  1159,  1160. 

the  mortgagee  is  in  possession  disseise  him  or  interrupt  his  posses- 
sion.^^^  But  if  for  twenty  years  the  mortgagor  has  paid  neither  prin- 
cipal nor  interest,  and  there  have  heen  no  dealings  between  him  and 
the  mortgagee,  there  is  presumptive  evidence  of  foreclosure.^^^ 

§  1159.  After  a  mortgagee  in  possession  has  received  payment  of 
the  debt,  he  really  holds  the  property  in  trust  for  the  mortgagor,  and 
the  statute  of  limitations  will  not  run  in  his  favor  until  by  some  fur- 
ther act  he  shows  that  his  possession  and  claim  have  become  adverse. 
This  rule  is  equally  applicable  to  the  case  of  an  absolute  deed  given  to 
secure  a  debt  and  treated  by  the  law  as  a  mortgage.^^®  The  statute 
does  not  begin  to  run  against  the  right  to  redeem  such  a  mortgage  until 
a  tender  and  refusal  of  the  money  secured  by  it ;-'"'  or  at  least  until  the 
mortgagee  denies  the  right  of  the  mortgagor  to  redeem  and  the  mort- 
gagor has  actual  notice  of  such  denial,  or  of  the  mortgagee's  adverse 
holding,  as  in  cases  where  the  mortgagee  has  entered  under  an  agree- 
ment to  account  for  the  rents. -*'^ 

The  possession  of  a  mortgagee  after  he  has  received  payment  of  the 
debt  will  not  be  regarded  as  a  holding  adversely  to  the  mortgagor,  un- 
less some  act  other  than  mere  possession  under  the  mortgage  be  shown 
to  establish  the  adverse  character  of  his  possession.  After  payment  he 
holds  the  premises  for  the  mortgagor  as  a  trustee. ^''^ 

§  1160.  The  right  to  redeem  a  junior  mortgage  accmes  at  its 
maturity,  so  that  the  statute  of  limitations  then  begins  to  run  against 
it ;  though  it  has  been  suggested  that  it  may  begin  to  run  upon  the  ma- 
turity of  the  prior  mortgage. ^•'^ 

257  "Possession    in    the    mortgagee  subject  of  equitable  bar  to  redemp- 

must  at  its  commencement  have  been  tion,    notwithstanding   a    clear    title 

taken  under  the  engagement,  which  to  redemption  in  the  one  party,  and 

equity  always  implies,  to  account  as  on  the  other  a  continued  misappli- 

a    bailiff   for    the    rents    and    profits  cation   of   the    rents    and    profits    of 

with    the    mortgagor,    and    to   apply  the    estate    committed    to    his    care, 

them  to  the  discharge  of  the  mort-  contrary   to  his  engagement,   and  a 

gage  debt.     If  this   be  not   punctu-  continued  breach  of  duty,  from  the 

ally    and    regularly    done,    and    the  beginning  to  the  end  of  the  period, 

account  rairly  and  properly  kept  by  in    omitting   to    keep    the    account." 

the   mortgagee,   it  is  a  violation   of  Cholmondeley   v.    Clinton,   2   Jac.    & 

the  implied  engagement  under  which  W.    187,    per    Sir    Thomas    Plumer, 

he  holds  the  possession.     The  pos-  Master  of  the  Rolls, 

session  is  all  along  consistent  with  "*  Hurd   v.    Coleman,    42   Me.    182; 

the  equitable  title  of  the  mortgagor,  Blethen  v.  Dwinal,  35  Me.  556;  Phil- 

who  may  be  disabled  by  poverty  and  lips  v.  Sinclair,  20  Me.  269. 

distress  to  enforce  the  account  and  "°  Green  v.   Turner,   38   Iowa,   112. 

redemption.     Yet  such  is  the  preva-  ^'^"  Wilson  v.  Richards,  1  Neb.  342. 

lence  of  analogy  in  equity  that,  even  -"  Yarbrough   v.    Newell,   10   Yerg. 

under  such   circumstances,  the  pos-  376;   Hammonds  v.  Hopkins,  3  Yerg. 

session  of  the  mortgagee  for  twenty  525. 

years,  without  a  recognition  of  the  ™=  Green  v.   Turner,  38   Iowa,   112. 

mortgage  title,  or  any  account  kept  ="'  Gower  v.   Winchester,   33   Iowa, 

upon   the   footing   of   it,    becomes   a  303. 


§§  llGl,  llGla,  1162.]  WHEN  right  to  redeem  is  barred.         124 

Tlie  right  of  a  remainder-man  to  redeem  from  a  mortgagee  in  pos- 
session under  the  owner  of  the  precedent  estate  does  not  begin  to  run 
until  that  estate  is  terminated.^*^* 

§  1161.  After  a  foreclosure  sale  the  statute  runs  from  the  ex- 
piration of  the  year  of  redemption.  Where  a  purchaser  under  a 
foreclosure  sale  relied  upon  the  statute  of  limitations  to  sustain  his 
title  against  redemption  by  the  mortgagor,  it  appeared  that  the  suit 
to  redeem  was  commenced  about  twenty-one  years  after  the  recovery  of 
judgment,  in  the  foreclosure  suit  and  the  sale  under  it,  but 
a  little  less  than  twenty  years  from  the  time  the  purchaser  was  enti- 
tled to  a  deed  of  the  land,  one  year  being  allowed  by  law  after  the  sale 
for  redemption.  It  was  held,  however,  that  the  suit  to  redeem  was 
seasonably  brought,  because  the  mortgagor  was  entitled  to  the  posses- 
sion during  the  year  without  any  liability  to  account  for  the  rents  and 
profits,  and  the  purchaser  in  the  meantime  had  only  a  certificate  of 
purchase,  and  no  legal  title  or  right  to  the  property  vested  in  him  until 
he  received  a  deed  from  the  officer  after  the  expiration  of  the  year. 
The  mere  recovery  of  judgment  did  not  terminate  the  relation  of  mort- 
gagor and  mortgagee,  and  during  the  year  allowed  for  redemption  the 
mortgage  remained  a  lien  upon  the  premises.^^^ 

§  1161a.  A  lapse  of  time  less  than  that  prescribed  by  the  statute 
of  limitations  may  be  a  bar  to  redemption.  Thus,  a  mortgagor  who, 
knowing  that  the  property  has  been  sold  under  foreclosure,  waits  more 
than  seven  years  before  taking  any  step  to  assert  his  rights,  cannot 
then  claim  that  the  sale  was  void  on  account  of  his  imprisonment  at 
the  time  of  the  sale,  though  he  was  released  a  few  months  afterwards. 
His  claim  to  redeem  will  be  adjudged  stale.^®' 


III.     What  prevents  the  Running  of  the  Statute. 

§  1162.  An  acknowledgment  will  not  be  inferred  from  equivocal 
expressions. — A.  mortgagee,  in  answer  to  a  letter  written  him  by  the 
solicitor  of  a  subsequent  incumbrancer,  replied  by  letter,  saying:  *'I 
deny,  though  with  all  due  courtesy,  the  claim  of  your  client.  I  need 
only  add  that,  if  he  were  entitled  to  the  account,  it  would  be  of  no  use, 
as  the  rents  and  profits  of  the  estate  have  never  been  sufficient  to  pay 

^'"Fogal  V.  Pirro,  17  Abb.  Pr.  113,        =""=§§1054,  1922;   Fraker  v.  Houck, 

10  Bosw.   100.  36    Fed.    403.        Also,    Schlawig    v.. 

2"  Rockwell  v.  Servant,  63  111.  424.    Fleckenstein,  80  Iowa,  668,  45  N.  W. 

770. 


125  WHxVT   PREVENTS    RUNNING    OF    STzVTUTE    [§§    11G3,    1164. 

the  interest  of  the  first  charge."  It  was  contended  that  by  this  letter 
he  acknowledged  that  he  held  under  a  mortgage  title,  and  that  this 
was  all  that  was  necessary ;  but  the  Master  of  the  Eolls  said  that  this 
view  was  a  misapprehension  of  what  is  required  in  an  admission,  which 
must  be,  not  that  the  mortgagee  holds  under  a  mortgage  title,  but  that 
some  one  has  the  right  to  redeem.  "This  letter,  beginning  as  it  did 
with  an  express  denial  of  the  plaintiff's  claim,  could  not  be  treated  as 
an  acknowledgment  of  his  right  to  redeem.  If  this  were  so,  no  one 
could  safely  answer  a  solicitor's  letter  except  to  say  that  he  refused  to 
give  any  reply."^*'^ 

§1163.  An  acknowledgment  made  after  the  expiration  of  the  twenty 
years  by  the  mortgagee  while  in  possession  has  the  same  effect  as  one 
made  before,  not  only  as  against  himself,  but  also  as  against  all  per- 
sons claiming  under  him,  or  claiming  an  estate  in  remainder.^"*  "If 
his  admission  had  any  effect  at  all,  it  must  have  restored  the  original 
character  of  the  mortgage,  and  must  have  given  to  those  entitled  to  re- 
deem the  right  of  recovering  the  legal  estate  on  payment  to  him  of  the 
mortgage  money  in  his  character  of  executor."^^**  But  it  is  said  that 
after  the  twenty  years  have  passed,  stronger  words  and  acts  are  re- 
quired to  constitute  an  admission  of  the  right  of  redemption  than 
would  have  been  requisite  while  the  mortgagor  clearly  had  this 
right."" 

§  1164.  Acknowledgment  to  a  third  person. — Except  as  required 
by  recent  statutes,  an  acknowledgment  of  the  mortgage  as  a  subsisting 
security  would  operate  to  keep  the  right  of  redemption  open,  although 
not  made  to  the  mortgagor,  but  in  transactions  with  other  persons, 
and  to  which  the  mortgagor  was  a  stranger,  as  in  an  assignment  or 
deed  to  a  third  person.-'^  In  England,  since  the  statute  of  3  &  4  Will. 
IV.,  ch.  27,  the  admission  must  be  made  to  the  mortgagor  himself,^" 
or  to  his  agent,^"  though  this  requirement  has  been  the  subject  of 
some  criticism.-^*    An  assignment  of  the  mortgage  subject  to  redemp- 

=>"  Thompson  v.  Bowyer,  9  Jur.  N.  ="»  Per  Sir  John  Stuart,  Vice-Chan- 

S.  863,  11  W.  R.  975.  cellor,    in    Pendleton    v.    Rooth,    1 

The  Master  of  Rolls,   Lord  Rom-  Giff.  35,  1  De  G.,  P.  &  J.  81. 

illy,  declared  the  authorities  on  the  "» Whiting    v.    White,    Coop.    1,    2 

question,    what    constitutes    a    suffi-  Cox,  290;  Barron  v.  Martin,  G.  Coop. 

cient    acknowledgment,    to    be    diffi-  189. 

cult  to  reconcile.  "^  Miller  v.    Teeter,    53   N.    J.    Eq. 

='"  Pendleton   v.   Rooth,   1   Giff.   35,  262,  31  Atl.   394. 

1   De   G.,   P.    &   J.    81;    Stansfield   v.  -"Lucas  v.  Dennison,  13  Sim.  584. 

Hobson,   3   De  G.,   M.    &   G.    620,   16  ='^  Trulock  v.   Robey,  12  Sim.   402. 

Beav.  236.  2  Ph.  396. 

This  rule  applies  since  the  passing  "*  Stansfield  v.  Hobson,  3  De  G.,  M. 

of  the  statute  of  Will.   IV.   as  well  &  G.  620. 
as  before. 


§§  1165,  11G6,  1167.]  WHEN  rpght  to  redeem  is  barred.         126 

tion  is  then  no  longer  a  sufficient  acknowledgment,  because  the  assignee 
is  not  a  claimant  of  the  mortgagor's  estate,  but  of  the  mortgagee's;^^* 
unless,  however,  the  mortgagor  or  one  claiming  under  him  be  made  a 
party  to  the  assignment,  when  the  requirement  would  be  answered.^^* 

§  1165.  The  mortgagee's  acknowledgment  is  binding  upon  all 
who  hold  under  him,  as,  for  instance,  his  lessee.^'^'^  And  so  persons 
claiming  in  remainder  under  the  mortgagee's  will  are  bound  by  an  ad- 
mission of  the  mortgage  title  made  by  his  devisee  in  tail  subject  to  re- 
mainders over,  by  purchase  of  the  title  of  the  owners  of  the  equity 
of  redemption,  notwithstanding  they  had  been  out  of  possession  more 
than  thirty  years  prior  to  the  mortgagee's  death:  their  title  was  re- 
vived by  the  acknowledgment,  and  the  tenant  in  tail  by  means  of  it 
acquired  the  absolute  ownership  as  against  the  devisees  in  remain- 
der."« 

§  1166.  By  rendering  an  account. —  There  are  many  cases  in 
which  it  has  been  held  that  the  rendering  by  the  mortgagee  of  an  ac- 
count of  the  amount  due  upon  the  mortgage  within  twenty  years  after 
his  entry  does  away  with  the  presumption  of  title  in  him,  and  lets  the 
mortgagor  in  to  redeem.^'^^  Whether  accounts  kept  by  the  mortgagee 
in  his  own  books  would  have  this  effect  without  some  communication 
on  the  subject  to  the  mortgagor  may  well  be  doubted.^®*  Accounts 
kept  by  the  mortgagee's  agent,  and  delivered  to  the  mortgagor  without 
authority,  are  held  not  to  have  this  effect.^^^  Under  statutes  requiring 
the  acknowledgment  to  be  made  to  the  mortgagor  or  his  agent,  it  would 
seem  to  be  clear  that  a  mortgagee's  account  of  rents  received  by  him 
would  not  have  the  effect  of  defeating  the  bar  created  by  his  possession 
unless  communicated  in  writing  directly  to  the  mortgagor  or  his 
agent.^*^ 

§  1167.  Acknowledgment  by  letter. — An  acknowledgment  by  a 
mortgagee  in  the  way  of  a  letter  written  by  him  to  the  mortgagor  or 
his  solicitor  is  sufficient.^*^     A  mortgagee  having  been  in  possession 

"'Lucas  V.  Dennison,  13  Sim.  584.  Jim.  84;  Campbell  v.  Beckford,  cited 

"'Batchelor  v.  Middleton,  6  Hare,  4  Ves.  474;   Lake  v.  Thomas,  3  Ves. 

75.  Jun.    17,   22;    Hansard  v.    Hardy,   18 

"'Ball  V.  Riversdale,  Beat.  550.  Ves.  455;  Price  v.  Copner,  1  S.  &  S. 

"*  Pendleton  v.  Rooth,  1  De  G.,  F.  347. 

&  J.  81,  1  Giff.  35,  5  Jur.  N.  S.  840,  6  -"'  Barron  v.  Martin,  G.  Coop.  189. 

Jur.  N.  S.  182.  '*'  See   Baker   v.    Wetton,    14    Sim. 

"'Edsell  v.  Buchanan,  2  Ves.  Jun.  426;  Richardson  v.  Younge,  L.  R.  10 

83,  and  cases  cited;  Procter  v.  Cow-  Eq.  275. 

per,  2  Vern.  377,  Anon.  2  Atk.  333;  ='^  Stansfield   v.    Hobson,   3    De   G., 

Hodle  V.  Healey,  6  Madd.  117.  M.   &  G.  620,  16  Beav.   236.     It  was 

^«"  Barron  v.   Martin,  19  Ves.   327;  contended  in  this  case  that  the  right 

Fairfax   v.    Montague,    cited   2    Ves.  of  redemption  was  not  acknowledged 


127  WHAT    PREVENTS    RUNNING    OF    STATUTE    [§§    1168,    1169. 

more  than  twenty  years,  the  solicitor  of  the  mortgagor  wrote  to  him 
requesting  to  know  where  he  could  see  him  upon  the  subject  of  the 
mortgage.  The  mortgagee  replied  by  letter,  saying :  "I  do  not  see  the 
use  of  a  meeting  either  here  or  at  Manchester,  unless  some  party  is 
ready  with  the  money  to  pay  me  off."  It  was  held  that  this  was  a 
sufficient  acknowledgment  by  the  mortgagee  that  he  held  a  redeemable 
estate  in  the  property  to  exclude  the  application  of  the  statute  of  limi- 
tations. 

§  1168.  Acknowledgment  may  be  made  by  an  assignment  of  the 
mortgage  as  security  for  a  debt,  or  by  any  form  of  an  assignment 
which  treats  the  mortgage  as  redeemable.^***  It  does  not  matter  that 
the  mortgagor  is  not  a  party  to  the  transaction. 

Now  under  the  English  statute,  however,  an  assignment  of  a  mort- 
gage subject  to  the  equity  of  redemption  is  not  a  sufficient  acknowledg- 
ment to  make  the  estate  redeemable,  because  is  it  not  an  acknowledg- 
ment made  to  the  party  entitled  to  the  equity  of  redemption.^**  But 
aside  from  this  requirement,  such  an  assignment  would  be  an  ac- 
knowledgment of  the  mortgage  title  such  as  would  make  a  renewal  of 
it  from  that  time. 

§  1169.  By  recital  in  deed. — In  like  manner  the  recital  of  the 
mortgage  in  a  deed  by  the  mortgagee  is  a  sufficient  admission  of  it,'*® 
and  so  is  the  recital  of  it  in  his  will,  by  which  he  directs  a  certain  dis- 
position of  the  money  in  case  the  mortgage  should  be  redeemed.^*^  A 
subsequent  mortgagee  acknowledges  the  existence  of  a  prior  mortgage, 
by  taking  a  mortgage  which  recites  the  existence  of  the  prior  mortgage, 

to  any  particular  person  in  accord-        -**  Hardy   v.    Reeves,    4    Ves.    Jun. 

ance   with  the  statute   3   &  4   Will.  466;  Smart  v.  Hunt,  4  Ves.  Jun.  478, 

IV.  ch.  27,  §  28.     See  statute  quoted  note;    Borst  v.    Boyd,    3    Sandf.    Ch. 

§  1171.      But    Lord    Justice    Knight  501. 

Bruce  said  that  the  letter  must  be  =^^  Lucas  v.  Dennison,  13  Sim.  584. 
understood  as  acknowledging  a  title  Upon  this  requirement  of  the  stat- 
to  redeem  in  the  person  on  whose  ute  Vice-Chancellor  Wigram,  in  Bat- 
behalf  the  solicitor  wrote.  chelor  v.  Middleton,  6  Hare,  75,  re- 
It  was  also  contended  that  the  marked:  "Why,  however,  the  mort- 
acknowledgment  was  conditional  gagee  should  not  be  allowed  to  make 
upon  some  one  being  ready  to  pay  an  admission  (in  writing,  signed  by 
the  money.  "I  think,  however,"  himself)  or  his  mortgage  title  to  a 
said  Lord  Justice  Turner,  "that  the  third  person,  of  which  the  mortgag- 
letter  could  not  mean  that  one  was  or  may  have  the  benefit,  I  do  not 
to  be  ready  at  the  moment  with  the  know;  but  the  statute  requires  that 
money,  because  accounts  had  to  be  the  admission  should  be  made  to  the 
taken,  and  the  balance  ascertained,  mortgagor  himself,  and  by  that  I  am 
The  letter  therefore  appears  to  me  bound." 

to   have   left   it   open    to    the   mort-        -^  Hansard  v.  Hardy,  18  Ves.  455. 
gagor  to  come  to  this  court  to  have        '^''  Ord  v.  Smith,  Sel.  Cas.  in  Ch.  9, 

the    balance    ascertained    upon    the  2  Eq.  Cas.  Abr.  600. 
statement  that  he  was  ready  t-o  pay 
off  the  money." 


§§    1170,   1171.]    WHEN   RIGHT   TO  REDEEM  IS   BARRED.  128 

or  by  entering  into  a  written  agreement  with  the  mortgagor  in  which 
provision  is  made  for  the  payment  of  interest  on  the  prior  mortgage 
out  of  the  income  of  the  property. ^^^  But  under  a  statute  requiring 
the  acknowledgment  to  be  made  to  the  mortgagor  or  his  agent,  a  re- 
cital in  a  deed  to  a  third  person  or  in  a  will  is  insufficient. -*° 

§  1170.  By  commencing  proceedings  to  foreclose  the  mortgage  the 
mortgagee  recognizes  it  as  a  subsisting  lien,  and  the  mortgagor 
may  thereafter,  within  twenty  years,  file  a  bill  for  redemption,  and  for 
an  account  of  the  rents  and  profits.^^'' '  Such,  too,  is  the  effect  of  pro- 
ceedings taken  meanwhile  to  enforce  the  mortgage  debt,  although  they 
be  irregular  and  ineffectual.^^^  It  would  be  wholly  inconsistent  for  the 
mortgagee  to  claim  that  there  is  no  right  of  redemption  after  he  has 
undertaken  by  such  proceedings  to  bar  such  a  right.  The  giving  of 
notice  under  a  power  of  sale,  or  under  a  statute  regulating  foreclosure 
by  advertisement,  is  an  admission  of  a  right  to  redeem.  This  is  in  ef- 
fect an  invitation  to  the  owner  of  the  equity  of  redemption  to  pay  the 
amount  of  the  debt  and  redeem  the  estate,  if  he  so  chooses;  and  the 
mortgagee  cannot  object  if  he  accejDts  the  invitation.^'^^ 

The  acknowledgment  may  also  be  found  in  an  answer  to  a  suit.^^^ 

§  1171.  A  verbal  acknowledgment  of  the  mortgage  as  a  subsisting 
security  is  sufficient  to  prevent  the  possession  from  operating  as  a  bar 
if  the  evidence  be  clear  and  unequivocal.^^*  Lord  Alvanley,  comment- 
ing upon  the  admissibility  of  such  evidence,  said:  "1  cannot  help 
thinking  that  it  would  have  been  a  very  wise  rule  if  no  parol  evidence 

="**  Foster  v.  Bowles,  138  Cal.  346;  1033.     In  that  case  a  mortgagee  who 

Kelly  V.  Leachman  —  Ida.  — ,  33  Pac.  had  been  in  possession  tor  more  than 

44;    Concannon    v.    Smith,    134    Cal.  twenty  years,  desiring  to  make  his 

14,  66  Pac.  40;    State  Loan  &  Trust  title    merchantable,    filed    a    bill    in 

Co.  V.  Cochran,  130  Cal.  251,  62  Pac.  equity  against  the  heirs  of  the  mort- 

466,  600;  Chaffee  v.  Browne,  109  Cal.  gagor,  in  which  he  set  out  the  mort- 

211,  41  Pac.  1028.  gage   and    his   possession   under    it; 

-"  Lucas  V.  Dennison,  13  Sim.  584.  alleged   that  a  certain  amount  was 

=''°  Robinson  v.  Fife,  3  Ohio  St.  551;  due  upon  it;   prayed  for  an  account 

In  re  Chickering,   56  Vt.   82;    Blais-  and   a   decree   of   strict   foreclosure, 

dell  V.  Greenwood,  70  Vt.  244,  39  Atl.  The  defendant  appeared  and  prayed 

1097;    Calkins    v.    Calkins,    3    Barb,  that  an  account  be  taken,  and  that 

305.     In  this  case  the  mortgagee  had  he    be    permitted    to    redeem.      The 

been    in    possession    almost    twenty  complainant  then  moved  to  dismiss 

years    prior    to    the    proceeding    to  his  bill  upon  payment  of  costs.  This 

foreclose.  was  allowed  upon  terms  that  it  be 

-"  Jackson  V.  De  Lancey,  11  Johns,  without  prejudice  to  the  defendant's 

365,   affirmed   13   Johns.    537,   7   Am.  right  to  the  benefit  of  the  admission 

Dec.  403;    Cutts  v.  York  Manuf.  Co.  and  waiver  contained  in  the  bill,  in 

18  Me.   190.  any  proceedings  the  defendant  might 

-"■  Calkins  v.   Isbell.  20  N.  Y.   147,  take  for  the  redemption  of  the  prem- 

affirming    3    Barb.    305;    Jackson    v.  ises. 

Slater,    5    Wend.    295;    McCarren    v.  ="' Goode  v.  Job,  1  El.  &  El.  6. 

Googan,    50    N.    J.    Eq.    268,    24   Atl.  =■**  Reeks    v.    Postlethwaite,    Coop. 


1^9  WHAT    PREVENTS    RUNNING   OF    STATUTE  [§    1171. 

had  been  admitted  upon  these  subjects."^"^  Mr.  Justice  Story,  quoting 
this  opinion  with  approval,  says:  "Such  admissions  and  acknowledg- 
ments are  certainly  open  to  the  strong  objection  that  they  are  easily 
fabricated,  and  difficult,  if  not  impossible,  to  be  disproved  in  many 
cases,  and  that  they  have  a  direct  tendency  to  shake  the  security  of  all 
titles  under  mortgages,  even  after  a  very  long  exclusive  possession  by 
the  mortgagee ;  nay,  even  after  the  possession  of  a  half  century."^®® 

The  objections  to  such  evidence  have  been  found  to  be  so  great  that 
the  modern  statutes  of  limitation  in  England  provide  not  only  that  an 
acknowledgment,  to  be  effectual  as  a  recognition  of  the  mortgage,  must 
be  in  writing,  signed  by  the  mortgagee,  or  the  person  claiming  through 
him ;  but  also  that  it  must  be  made  to  the  mortgagor,  or  some  person 
claiming  his  estate,  or  to  his  agent.-"^  If  the  writing  complies  with 
these  conditions,  no  particular  form  is  required  under  this  statute. 
The  amount  due  need  not  be  stated.^**^  An  acknowledgment  by  one  of 
several  mortgagees  is  binding  only  upon  himself  and  those  claiming 
under  him,  and  enables  the  mortgagor  to  redeem  only  his  estate  or  in- 
terest in  the  property.-""  This  provision  applies  only  to  mortgagees 
holding  interests  in  severalty,  and  not  as  joint  tenants.  An  acknowl- 
edgment by  one  joint  mortgagee  who  is  a  trustee  is  entirely  inopera- 
tive.; all  must  join  in  it  to  take  the  case  out  of  the  statute.^"" 

161;  Lake  v.  Thomas,  3  Ves.  Jun.  17;  in  writing,  signed  by  the  mortgagee 

Barron  v.  Martin,  19  Ves.  327;  Perry  or     the     person     claiming     through 

V.  Marston,  2  Bro.  Ch.  397,  per  Lord  him." 

Thurlow;  Dexter  v.  Arnold,  3  Sumn.  ="**  Stansfield    v.    Hobson,    16   Beav. 

152;  Marks  v.  Pell,  1  Johns.  Ch.  594.  236,  3  De  G.,  M.  &  G.  620;   Trulock 

"Such     acknowledgments,"     says  v.  Robey,  12  Sim.  402,  2  Ph.  396;  St. 

Chancellor    Kent,    "are    generally    a  John  v.  Boughton,  9  Sim.  219. 

dangerous  species  of  evidence."  See  =™  See  statute  quoted,   §  1146.     See 

also    Morgan  v.  Morgan,  10  Ga.  297,  Murdock  v.  Waterman,  145  N.  Y.  55, 

304;' Brown  v.  Lawton,  87  Me.  83,  32  39  N.  E.  829,  27  L.  R.  A.  418. 

Atl.  733.  ^'^  Richardson  v.  Younge,  L.  R.  10 

^"^  Whiting  v.   White,   2    Cox,   290,  Eq.  275,  6  Ch.  App.  478.     The  views 

300,    Cooper,    1.  of    the    question    presented    in    this 

^^  In    Dexter   v.    Arnold,    3    Sumn.  case,     in    argument     upon     appeal, 

152,    160.      "I    have    not    in    my    re-  were:    1.   That  the  acknowledgment 

searches,"  says  Judge  Story,  "found  of  one  trustee  bound  both.     2.  That 

any  other  cases  upon  the  point.  And,  it  bound  a  half  interest,  and  enabled 

what   is   very    remarkable,    there    is  the  mortgagor  to  redeem  half  of  the 

no  instance  of  a  decree  being  made  estate  upon  paying  half  the  debt.  3. 

upon   such   parol   evidence   in   favor  That  it  bound  neither.     "It  appears 

of  the  party  seeking  to  redeem.     In  to  me,"  said  Lord  Justice  James,  in 

the    present    case    I    am   spared    the  giving    judgment,    "to    be    the    best 

necessity    of    deciding    the    general  construction    of    this    involved    and 

principle."  difficult  section  to  hold  that  the  pro- 

-'"  Under  statute  3  &  4  Wm.  IV.  ch.  visions  as  to  acknowledgment  by 
27,  §  28,  "an  acknowledgment  of  the  some  of  several  mortgagees  apply 
title  of  the  mortgagor,  or  of  his  only  where  they  have  separate  in- 
right  of  redemption,  shall  have  been  terests,  either  in  the  money  or  the 
given  to  the  mortgagor  or  some  land.  I  do  not  think  that  Mr.  Wil- 
person  claiming  his  estate,  or  to  the  son  had  any  separate  interest  either 
agent  of  such  mortgagor  or  person,  in    the    money    or    the    land.     He 


§§  1171a,  1172,  1173.]  WHEN  right  to  redeem  is  barred.  130 

§  1171a.  The  fact  that  the  mortgagee  was  the  mortgagor's  at- 
torney does  not  rebut  the  presumption  that  the  mortgagor  has  lost  his 
right  to  redeem,  and  to  have  an  accounting,  by  permitting  the  mort- 
gagee to  remain  for  more  than  twenty  years  after  foreclosure  in  ac- 
tual and  exclusive  possession  of  the  mortgaged  premises,  unless  fraud 
or  deception  be  shown  on  the  mortgagee's  part.^°^ 

§  1172.  The  filing  of  a  bill  to  redeem  stops  the  running  of  the 
statute.  A  mere  demand  by  the  mortgagor  or  the  owner  of  the  equity 
of  redemption  to  be  allowed  to  redeem  does  not  prevent  the  running 
of  the  statute,""^  unless  accompanied  by  a  tender  of  the  amount  due 
upon  the  mortgage,  as  provided  by  statute  in  some  States,  and  fallowed 
by  a  suit  within  a  year  or  other  specified  time.  The  commencement 
of  a  suit  to  redeem  is  sufficient  to  save  the  right  against  the  statute 
although  the  bill  be  filed  merely,  without  any  service  of  it,  before  the 
expiration  of  tlie  twenty  years'  possession.  The  filing  of  the  bill  is 
the  commencement  of  the  suit.^*^^  But  the  plaintiff  may,  by  unwar- 
ranted delay  in  the  prosecution  of  the  suit,  lose  all  benefit  of  it.^°* 

§  1173.  The  statute  of  limitations  must  be  pleaded  in  order  to 
secure  the  protection  of  it.^'^^  It  may  be  pleaded  by  answer  as  a  de- 
fence,^"^  or,  in  case  it  appears  on  the  face  of  the  plaintiff's  bill  that 
the  mortgagee  has  been  in  possession  for  twenty  years,  without  ac- 
knowledgment of  the  mortgage  title,  by  demurrer.^"'  But  such  pos- 
session must  appear  by  dates  positively  stated,  and  not  to  be  made  out 
by  inference,  or  argument,^"^  or  presumption. ^°^ 

was    simply   joint   tenant   with    his  defence,    but    it    may    be    generally 

co-trustee   of  the   land,   and   jointly  stated    that   the   cause   of   action    is 

entitled   with   him  to   the   mortgage  barred   by  a  certain   section  of   the 

money.      Had    the    mortgagees    not  Code.     If  such  allegation  be  contro- 

been  trustees,  the  case  would  have  verted,  the  party  pleading  must  es- 

stood     ver;      differently,     for     they  tablish   the   facts   showing   the   bar. 

must,  almost  of  necessity,  have  been  A  plea  of  the  statute  of  limitations 

entitled    to    some    distinct    interests  to  a  cause  of  action  which  arose  in 

in  the  mortgage-money.  And  if  they  another  State  need  not  allege  facts 

had  been  partners,  difficult  questions  to    show    that    the    cause    of    action 

might  have  arisen;  but  in  the  pres-  arose  in  that  State,   and  under  the 

ent   case,    which    is    simply    that   of  laws  of  that  State  is  barred  by  the 

trustees.    I    agree    with    the    conclu-  statute    of    limitations.        Code    Civ. 

sion  of  the  Vice-Chancellor."  Proc.   §  4b8;    Allen  v.  Allen,  95  Cal. 

=»'  Clark  V.  Clough,  65  N.  H.  43,  23  184,  27  Pac.  Rep.  30. 

Atl.  526.  '""  Batchelor  v.  Middleton,  6  Hare, 

^''^Hodle  V.  Healey,  1  V.  &  B.  536.  75;    Adams    v.    Barry,    2    Coll.    285; 

^"^Van     Vronker     v.     Eastman,    7  Aggas  v.  Pickerell,  3  Atk.  225. 

Met.  157.  =>"' Foster  v.  Hodgson,  19  Ves.  180; 

^"^  Forster  v.    Thompson,   4   Dr.    &  Hoare  v.  Peck,  6  Sim.  51;   Baker  v. 

War.  303;  Coppin  v.  Gray,  1  Y.  &  C.  Wetton,     14     Sim.     426;     Jenner    v. 

C.  C.  205.  Tracy,  3  P.  Wms.  287  n. 

'"^  Fordham   v.    Wallace,   10   Hare.  '"'  Edsell  v.  Buchanan.  2  Ves.  Jun. 

217.  231,  17  Jur.  28.    In  California,  in  83,  4  Bro.  C.  C.  254. 

pleading  the  statute  it  is  not  neces-  •'»'' Baker  v.   Wetton.   14   Sim.    426; 

sary  to  state  the  facts  showing  the  Green  v.  NichoUs,  4  L.  J.  Ch.  118. 


CHAPTER  XXV. 

WHEN"  THE  RIGHT  TO  ENFORCE  A  MORTGAGE  ACCRUES. 

§  1174.  In  general  the  right  of  action  accrues  upon  the  non-pay- 
ment of  the  principal  or  interest  at  the  time  fixed  for  payment.^^"  If 
it  be  shown,  by  agreement  of  the  parties  at  the  time  of  the  execution 
of  a  bond  payable  on  demand,  that  it  was  not  to  be  paid  till  a  future 
specified  time,  the  statute  of  limitations  will  be  considered  as  begin- 
ning to  run  only  from  the  time  agreed  upon  for  payment.^^^  If  no 
time  of  payment  is  fixed,  the  debt  is  payable  on  demand,  and  the  right 
to  enforce  it  accrues  immediately.^^-  And  so,  if  by  the  express  terms 
of  the  mortgage  the  debt  is  payable  on  demand,  the  mortgagee  may 
foreclose  by  suit  at  any  time  without  a  previous  demand  other  than 
the  commencement  of  the  suit.^" 

But  if  the  condition  of  a  mortgage  given  to  secure  a  note  payable 
on  demand  be  that,  if  the  note  be  paid  "within  sixty  days  after  such 
demand,"  the  mortgage  shall  be  void,  a  demand  of  payment  is  neces- 
sary to  work  a  breach  of  the  condition,  and  no  right  of  action  accrues 
until  sixty  days  have  elapsed  after  demand. ^^* 

No  effectual  sale  under  a  power  or  by  decree  of  court  in  a  fore- 

''"  Gladwyn   v.   Hitchman,  2  Vern.  company,  and  it  was  provided  that 

135.  the  demand  should  be  made  by  the 

"'Hale  v.  Pack,  10  W.  Va.  145.  auditor  of  the  company;   but  it  was 

"-Eaton  v.  Truesdail,  40  Mich.  1;  held  that  this  provision  was  intend- 

Rhoads  v.  Reed,  89  Pa.   St.  436.  ed  to  operate  only  in  case  the  mort- 

"'Gillett  V.   Balcom,  6  Barb.   370;  gage   should   be   within  his   control. 

Union  Cent.  L.  Ins.  Co.  v.  Curtis,  35  but  may  be  made  by  an  assignee  of 

Ohio  St.  357;  Hill  v.  Henry,  17  Ohio,  the    mortgage.      But    if    demand    be 

9;    Darling  v.   Wooster,    9    Ohio   St.  made    by    an    agent    of    the    owner, 

517.  mere  possession  of  the  note  is  not 

"'Union  Cent.  L.  Ins.  Co.  v.  Cur-  proof   of  the   agency.     Union    Cent. 

tis,  35  Ohio  St.  343.     The  mortgage  L.    Ins.    Co.    v.    Jones,    35    Ohio    St. 

in    this   case   was    to   an    insurance  351. 

131 


§    11?0.]  WHEX    RIGHT    TO    EXFORCE    ACCRUES.  132 

closure  suit  can  be  made  until  the  occurrence  of  the  event  upon  the 
happening  of  which  a  sale  or  foreclosure  is  authorized.^^^ 

A  mortgage  cannot  be  foreclosed  before  it  is  due  or  there  is  a  breach 
of  some  condition,  although  in  a  suit  to  foreclose  a  subsequent  mort- 
gage on  the  same  property  the  holder  of  the  prior  mortgage  not  yet 
due  is  made  a  party  defendant,  and  he  files  a  cross-bill  asking  the  fore- 
closure of  his  mortgage.  The  sul:)sequent  mortgage  must  be  foreclosed 
by  a  sale,  subject  to  the  lien  of  the  prior  mortgage.  The  whole  estate 
cannot  be  sold  for  the  payment  of  both  mortgages.^^" 

A  mortgagor  may  w^aive  a  credit  secured  to  him  by  the  terms  of  the 
mortgage  and  consent  to  an  immediate  foreclosure;  and  if  the  mort- 
gagee be  in  possession,  or  have  the  right  of  possession,  an  execution 
creditor  of  the  mortgagor,  or  a  purchaser  of  the  equity  of  redemption 
upon  execution  sale,  cannot  object  that  the  debt  is  not  due,  except 
upon  a  bill  to  redeem.^^'^ 

§  1175.  The  right  to  foreclose  may  be  made  to  depend  upon 
events  other  than  the  lapse  of  time  which  generally  determines  the 
right  ;^^®  or  the  nature  of  the  security  may  be  such  that  an  event  not 
contemplated,  or  provided  for  by  the  parties,  may  give  this  right;  as 
where  the  mortgage  secures  the  fulfilment  of  an  executory  agreement 
which  is  to  run  for  three  years,  and  the  insolvency  of  the  mortgagor 
within  that  time  puts  it  out  of  his  power  to  fulfil  the  agreement ;  and 
therefore  this  works  a  breach  of"  it,  and  gives  the  mortgagee  the  right 
to  foreclose  immediately. ^^^ 

A  provision  in  a  mortgage  by  a  church  corporation  that  it  shall  be- 
come due  upon  an  alienation  or  abandonment  of  the  property  for 
church  purposes,  or  if  the  church  should  cease  to  be  connected  with 
the  general  assembly,  is  not  invalid.^^** 

Thus  also  a  mofrtgage  may  be  conditioned  that  the  mortgagor  shall 
pay,  within  a  fixed  time,  all  debts  contracted  by  him  for  labor  and 
material  for  the  construction  of  a  building.  In  such  case  a  default 
occurs  when  there  are  any  debts  outstanding  which  would  be  a  lien 
against  the  building.^^^ 

"=  Eitelgeorge     v.     Mutual     House  St.   299;    Board   of  Church   Erection 

Building  Asso.  69  Mo.  52;   Felton  v.  Fund  v.   First  Presbyterian  Church, 

Bissel,  25  Minn.  15;   Sullivan  v.  Me-  19  Wash.   455,   53  Pac.   671. 

Laughlin,    99    Ala.    60,    11    So.    447;  'i"  Harding  v.   Mill  River  Woollen 

Kirk  v.  Van  Petten.  38  Fla.  335,  21  Manuf.  Co.  34  Conn.  458. 

So.    286;    Cumberland    Island   Co.    v.  ^-o  Board  of  Church  Erection  Fund 

Bunkley,  108  Ga.  756,  33  S.  E.  183.  v.     First    Presbyterian    Church,    19 

^•'  Trayser  v.  Indiana  Asbury  Uni-  Wash.  455,  53  Pac.  671. 

versify,  39  Ind.  556.  '"  Houston  v.  Nord,  39  Minn.  490, 

'"Morton   v.    Covell,   10   Neb.   423.  40   N.   W.    568.     The   mortgage   was 

'■»  Delano  v.  Smith,  142  Mass.  490,  construed  to  be  one  not  of  indem- 

8  N.  E.  644;  Bank  v.  Price,  8  Ohio  nity  merely. 


133  WHEN    RIGITT   TO    ENFORCE    ACCRUES.  [§    1175. 

Where  a  mortgage  was  given  to  secure  certain  promissory  notes, 
conditioned  "tliat,  if  any  of  the  notes  prove  to  he  insolvent  or  worth- 
less, the  mortgage  is  to  be  good  and  valid,  otherwise  to  be  null  and 
void,"  it  was  held  that  to  constitute  a  breach  some  of  the  notes  must 
prove  worthless,  or  the  makers  insolvent.  Non-payment  alone  did  not 
constitute  a  breach. ^^- 

It  is  very  generally  provided  by  the  terms  of  the  mortgage  that  the 
mortgagee  shall  have  the  right  to  sell  on  the  failure  of  the  owner  to 
pay  the  taxes  assessed  on  the  premises,  and  in  such  case  a  default  in 
this  particular  gives  the  right  to  sell  as  effectually  as  when  the  default 
consists  in  the  non-payment  of  the  principal  sum  secured.^-''  And  so 
a  condition  in  a  mortgage,  that  in  case  the  taxes  upon  the  premises 
shall  remain  unpaid  after  a  certain  date  in  any  year  the  whole  debt 
shall  become  due,  is  equally  binding  and  operative  as  a  like  condition 
in  respect  to  the  non-payment  of  any  instalment  of  the  principal  or 
interest,  and  the  court  has  no  power  to  relieve  the  person  in  default 
from  the  consequences  of  it.^^*  But  where  the  mortgage  merely  pro- 
vides that  the  mortgagor  shall  pay  the  taxes  upon  the  premises,  and 
in  default  of  so  doing  that  the  mortgagee  may  discharge  the  same  and 
collect  them  as  a  part  of  the  mortgage  debt,  then  the  failure  of  the 
mortgagor  to  pay  them  is  not  such  a  default  as  will  give  the  right  to 
foreclose.  And  even  if  it  be  further  provided  that  on  default  in  the 
payment  of  the  principal  sum  or  interest,  or  of  the  taxes  as  provided, 
the  mortgagee  may  sell,  and  out  of  the  moneys  arising  from  such  sale 
retain  the  whole  debt  and  interest,  together  with  "such  taxes  and 
charges  as  shall  have  been  paid  by  him,"  the  right  to  sell  on  account  of 
the  taxes  alone  does  not  arise  until  the  mortgagee  has  himself  paid  the 
taxes,  because  until  then  no  money  has  become  due  which  he  is  en- 
titled to  retain  on  a  sale.^-^ 

A  condition  that  the  mortgagor  shall  pay  the  taxes  upon  the  mort- 
gaged land  applies  to  taxes  already  assessed  as  well  as  to  taxes  to  be 
assessed  in  future,  and  the  condition  applies  to  taxes  assessed  to  the 
mortgagee  prior  to  his  conveyance  of  the  land  to  the  mortgagor ;  as 
where  the  conveyance  and  mortgage  were  made  in  September,  and  the 

""  Fetrow  V.  Merriweather,  53  111.  Norton,  11  Kans.  48;  Piersol  v.  Shel- 

275.  ley,   3   Kan.    App.   386.   42   Pac.   922; 

='='Pope   V.   Durant,   26   Iowa,   233;  Hartsiiff  v.  Hall,  58  Neb.  417,  78  N. 

Harrington  v.  Christie,  47  Iowa,  319;  W.  716. 

Condon  v.  Maynard,  71  Md.  601,  18  '-*  O'Connor  v.   Shipman,  48  How. 

Atl.  957;   Parker  v.  Olliver.  106  Ala.  Pr.  126. 

549.  18  So.  40;   Chambers  v.  Marks,  =*=' Williams    v.    Townsend,    31    N. 

93   Ala.   412,   9   So.   74;    Stanclift   v.  Y.  411;  Heller  v.  Neeves,  93  Wis.  637. 


§    1176.]  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  134: 

taxes  for  a  year  had  been  assessed  to  the  grantor  and  mortgagee  in 
May  of  that  year.^^® 

Under  a  condition  to  pay  all  taxes  assessed  upon  the  mortgaged  land 
the  mortgagee  is  not  bound  to  wait  till  the  land  is  levied  upon  or  sold 
for  the  collection  of  a  tax  before  proceeding  to  foreclose  his  mortgage. 
Thus  if  the  taxes  assessed  in  May  are  due  by  Kovember  first,  and  in- 
terest is  payable  upon  taxes  after  that  date,  and  the  security  of  the 
mortgage  is  thus  diminishing  from  that  time,  it  seems  that  proceed- 
ings to  foreclose  the  mortgage  may  be  begun  at  any  time  after  that 
date.3" 

A  right  given  by  statute  to  the  holder  of  a  mortgage  to  pay  the  tax 
and  add  the  amount  to  the  debt  secured  by  the  mortgage  is  merely  an 
additional  security,  and  does  not  interfere  with  his  right  to  foreclose 
for  a  breach  of  the  condition  to  pay  the  tax.^-^ 

The  fact  that  the  mortgagee  did  not  elect  to  declare  the  debt  due 
and  to  foreclose  the  mortgage  the  first  time  the  mortgagor  allowed  the 
taxes  to  become  delinquent  does  not  impair  the  right  of  the  mortgagee 
to  declare  the  debt  due  upon  the  recurrence  of  such  delinquency,  nor 
preclude  him  from  exercising  thereupon  the  right  of  foreclosure.^^^ 

§  1176.  A  failure  to  pay  an  instalment  of  interest  or  principal 
when  due  is  a  default  within  the  meaning  of  a  mortgage  or  trust 
deed  which  authorizes  a  sale  to  be  made  upon  the  happening  of  any 
default,^^**  although  the -deed  does  not  show  when  the  interest  is  pay- 
able or  what  the  rate  of  it  is,  except  by  reference  to  the  note  se- 
cured.^^^  In  such  case  a  subsequent  purchaser  of  the  mortgaged  prem- 
ises cannot  insist  that  there  was  no  power  to  sell  for  non-payment  of 

'="  Stevens  v.  Cohen,  170  Mass.  551,  Where  a  mortgage  is  foreclosed  by 

49  N.  E.  926.  an  assignee  for  non-payment  of  in- 

^^  Stevens  v.  Cohen,  170  Mass.  551,  terest,  the  assignor  will  not  be  al- 

49  N.   B.   926;    Silva  v.   Turner,   166  lowed  to  prove  xhat  all  the  interest 

Mass.  407,  411,  44  N.  E.  532;  Condon  for  the  whole  term  of  the  mortgage, 

V.  Maynard,  71  Md.  601,  18  Atl.  957.  which  had  several  years  to  run,  had 

^'■"^  Stevens  v.  Cohen,  170  Mass.  551,  been  paid  to  him  in  advance.     New- 

49  N.  E.  926.  ton  Building  &  Loan  Asso.  v.  Boyer, 

^-"Parker  v.  Olliver,  106  Ala.  549;  42  N.  J.  Eq.  273. 

18  So.  40.  For  a  case  where  time  of  payment 

=™  Stanhope    v.    Manners,    2    Eden,  of    interest,    and    consequent    right 

197;  Goodman  v.  Cinn.  &  Chicago  R.  to  foreclose  for  non-payment,  were 

Co.    2    Disney    (Ohio),     176;     West  not      affected      by      an      agreement 

Branch     Bank    v.    Chester,     11     Pa.  whereby    the    possession    with    the 

St.    282,    51    Am.    Dec.    547;    Burt   v.  mortgagee's  consent    is  delivered  to 

Saxton,   1   Hun,   551;    Kelly  v.   Ker-  a    person    who    makes    further    ad- 

shaw.    5   Utah   295,    14    Pac.    804,    16  vances,    which    are    to   be    first   lien 

Pac.  488;  Fulgham  v.  Morris,  75  Ala.  upon  the  property,  and  a  final  settle- 

245;  Fields  v.  Drennen,  115  Ala.  558,  ment  is  to  be  made  at  the   end  of 

22  So.  114;  McLeon  v.  Presley.  56  Ala.  three  years,  see  South  St.  Louis  Rv. 

211;    Keith  v.  McLaughlin,  105  Ala.  Co.  v.  Plate,  92  Mo.  614,  5  S.  W.  199. 

339  16  So.  886.  '''  Richards    v.    Holmes,    18    How. 

143. 


135  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  [§    1176. 

such  interest,  because  the  mention  of  interest  in  the  deed  as  reserved 
by  the  note  is  sulTicient  to  put  him  upon  inquiry  as  to  the  rate  and  time 
of  payment  of  the  interest. 

A  mortgage  note  made  payal)le  one  year  after  date,  with  inter- 
est payable  monthly,  provided  that  if  the  interest  should  not  be  paid 
as  stipulated  the  whole  note  might,  at  the  option  of  the  holder,  '^e 
treated  as  due  and  collectible,"  and  that  if  not  paid  at  maturity  "it 
is  hereby  renewed  from  year  to  year,  at  the  option  of  the  holder,  until 
paid,  and  during  such  year  the  maker  shall  not  have  the  right  to  pay 
the  same."  It  was  held  that  the  holder  might  bring  suit  upon  it  dur- 
ing such  renewal  period  after  a  default  in  the  payment  of  interest  oc- 
curring therein.^^- 

The  fact  that  the  mortgagor  has  given  a  chattel  mortgage  as  addi- 
tional security  for  the  mortgage  debt,  as  well  as  for  past  due  interest 
and  taxes  paid  by  the  mortgagee,  is  not  a  waiver  of  the  default  in  the 
payment  of  any  subsequent  taxes  and  interest. ^^^ 

jSTo  default  arises  upon  a  refusal  of  the  mortgagor  to  pay  usurious 
interest  reserved  by  the  mortgage,  where  usury  works  a  forfeiture  of 
the  entire  interest,  and  a  foreclosure  of  the  mortgage  by  advertisement 
upon  such  default  is  without  legal  warrant  and  void.^^* 

If  the  condition  of  a  mortgage  given  to  secure  several  notes  ma- 
turing at  different  times  be,  that  if  the  mortgagor  shall  pay  all  the 
notes  as  they  become  due,  then  the  mortgage  shall  become  null  and 
void,  a  failure  to  pay  any  note  when  it  falls  due  is  a  breach  of  the  con- 
dition.^^^ 

The  fact  that  a  mortgage  is  given  to  secure  several  promissory  notes, 
which  mature  at  varying  dates,  does  not  postpone  the  running  of  the 
statute  of  limitations  to  the  accrual  of  right  of  action  upon  the  note 
last  maturing,  since  the  mortgage  is  a  mere  incident  to  the  notes  and 
the  right  of  action  upon  each  note  accrues  as  fast  as  it  matures,  and 
thereupon  starts  the  running  of  the  statute  as  to  such  note.^^^ 

A  promissory  note  given  by  the  mortgagor  for  accrued  interest  does 
not,  after  the  maturity  of  the  note,  operate  as  payment  so  as  to  take 
away  the  mortgagee's  right  of  foreclosure  on  account  of  the  arrears  of 
interest,  in  the  absence  of  a  specific  agreement  of  the  parties  to  that 
effect.^" 

In  some  States,  however,  it  is  held  that  a  provision  in  a  mortgage 

''=  Kleinsorge  v.  Kleinsorge,  133  53  N.  W.  767;  Jordan  v.  Humphrey, 
Cal.  412.  31  Minn.  495.  18  N.  W.  450. 

"''Weir  V.  Iron  Springs  Co.  27  Colo.        ''^  Fisher  v.  Milmine,  94  111.  328. 
385,  61  Pac.  619.  ""George  v.  Butler,  26  Wash.  456. 

"'  Chase  v.  Whitten,  51  Minn.  485,        '"  Dean  v.  Ridgeway,  82  Iowa,  757, 

48  N.  W.  923. 


§    1177.]  WHEN    RIGHT    TO    EXFORCE    ACCRUES.  136 

permitting  foreclosure  "in  case  default  is  made  in  the  payment  of  the 
principal  or  interest,"  does  not  make  the  entire  obligation  due  on  the 
failure  to  pay  any  or  all  of  the  instalments  less  than  the  whole ;  but  in 
case  foreclosure  is  commenced  for  non-payment  of  some  instalments, 
it  should  be  dismissed  on  payment  of  the  overdue  instalments  with  in- 
terest, and  accrued  costs  and  disbursements.^^^ 

§  1177.  Default  in  the  payment  of  the  yearly  or  half-yearly 
interest  at  the  times  stipulated  in  the  mortgage  gives  the  right  to 
foreclose  immediately,  although  the  period  for  payment  of  the  prin- 
cipal sum  has  not  arrived,  and  there  is  no  provision  specifically  mak- 
ing a  forfeiture  of  the  principal  upon  a  default  in  the  payment  of  the 
interest.^^**  A  dictum  of  Lord  Chancellor  Sugden  is  much  relied  upon 
as  establishing  this  doctrine :  that,  "default  having  been  made  in  the 
payment  of  the  interest  thereon,  the  mortgagee  would  at  any  time  after 
that  event  have  had  a  right  to  file  his  bill  for  a  foreclosure;  because 
his  right  became  absolute  at  law  by  the  non-payment  of  the  interest, 
the  estate  having  been  conveyed  subject  to  a  condition  which  had  not 
been  fulfilled."^**'  This  was  followed  in  the  case  of  Edwards  v.  il/ar- 
tin/*'^  notwithstanding  that  the  mortgagee  had  taken  possession  of  the 
property,  consisting  of  certain  leasehold  estates,  and  had  realized  by 
a  sale  of  a  portion  more  than  enough  to  cover  the  interest  due.  Kin- 
dersley,  Vice-Chancellor,  said :  "It  is  certainly  singular  that  this  ques- 
tion has  never  before  been  decided ;  but,  in  the  absence  of  any  direct 
authority,  the  dictum  of  Lord  St.  Leonards  is  sufficient  for  me  to  act 
upon  when  I  consider  that,  upon  the  whole,  that  dictum  is  in  accord- 
ance with  the  justice  of  the  case." 

Where  upon  a  sale  of  land  the  purchaser  retained  a  portion  of  the 
purchase-money  as  indemnity  against  an  incumbrance,  and  gave  the 
grantor  a  bond  and  mortgage  for  the  money  retained,  payable  with 
lawful  interest  on  the  extinguishment  of  the  claim,  it  was  held  that  the 

=^*As     in     Oregon:       Pomeroy     v.  283;  Silverman  v.  Silverman,  189  111. 

Woodward,  38  Or.  212,  63  Pac.  194.  394,  59  N.  E.  949;  Beyer  v.  Chandler, 

"We  find  nothing  in  this  which  may  160   111.   394,   43   N.   B.   803;    Gray  v. 

be  construed  into  an  agreement  be-  Robertson,  174  111.  242,  51  N.  E.  248; 

tween    the    parties    that    the    whole  Gladwyn  v.   Hitchman,  2  Vern.   135. 

obligation  shall  at  once  become  due  In  this  case  a  mortgage  was   made 

and  payable  by  reason  of  a  default  for  £450,  payable  at  the  end  of  five 

in  meeting  any  instalments  thereof."  years,  with   interest  at  the   rate  of 

Per  Wolverton,  J.  £5  per  cent,  in  the  meantime.     The 

"'  Butler    V.    Blackman,    45    Conn,  interest    not    being    paid    as    stipu- 

159;  Dederick  v.  Barber,  44  Mich.  19;  lated,  the  mortgage  was  treated  as 

Taylor  v.  Alliance  Trust  Co.  71  Miss,  forfeited. 

694,  15  So.  121;  Dun  ton  v.  Sharpe,  70  '"Burrows  v.  Mulloy,  2  Jones  &  L. 

Miss.    850,    12    So.    800;    Sanborn    v.  125. 

Ladd,    69    N.    H.    221,    39    Atl.  1072;  ="25  Law  J.  N.  S.  Ch.  284. 
Paul  V.  Roney,  94  Ga.  133,  21  S.  E. 


137 


WHEN    RIG^IT    TO    ENFORCE    ACCRUES. 


[§  1178. 


mortgage  could  be  foreclosed  for  arrears  of  interest,  although  the  prin- 
cipal had  not  become  due  through  the  removal  of  the  incumbrance.^*^ 
Under  an  agreement  for  a  mortgage,  the  court,  in  settling  the  terms 
of  the  mortgage  to  be  given  in  pursuance  of  it,  will  ordinarily  insert 
a  proviso  that  the  postponement  shall  be  conditional  on  punctual  pay- 
ment of  interest,  although  the  agreement  be  silent  upon  the  subject; 
so  that,  if  the  mortgagor  should  make  default  in  the  payment  of  in- 
terest, the  mortgagee's  remedy  by  sale  or  foreclosure  will  immediately 
arise.^*^ 

§  1178.  But  the  agreement  in  respect  to  the  payment  of  the 
principal  may  be  such  that  a  default  in  the  payment  of  the  interest 
will  give  no  right  to  institute  proceedings  for  foreclosure ;  as,  for  in- 
stance, where  it  is  provided  that  the  principal  shall  not  be  called  in 
during  the  lifetime  of  the  mortgagor;  though  a  yearly  interest  is  re- 
served, a  default  in  the  payment  of  the  interest  during  the  lifetime  of 
the  mortgagor  gives  no  right  of  action.^** 

If  the  mortgage  contains  an  absolute  covenant  that  the  principal 


^"  Van  Doren  v.  Dickerson,  33  N. 
J.  Bq.  388. 

"^  Seaton  v.  Twyford,  L.  R.  11  Eq. 
591. 

"*  Burrowes  v.  Molloy,  2  Jones  & 
L.  521.  Lord  Chancellor  Sugden 
said:  "Supposing  that  the  principal 
sum  had  been  made  payable  on  a 
given  day,  no  matter  whether  it  was 
one  year  or  twenty  years  after  the 
date  ot  the  mortgage,  with  interest 
thereon  half  yearly  in  the  mean- 
time, and  that,  before  the  day  of 
payment  of  the  principal  money,  de- 
fault had  been  made  in  the  payment 
of  the  interest  thereon,  the  mort- 
gagee would,  at  any  time  after  that 
event,  have  had  a  right  to  file  his 
bill  for  foreclosure;  because  his 
right  became  absolute  at  law  by  the 
non-payment  of  the  interest,  the  es- 
tate having  been  conveyed  subject 
to  a  condition  which  had  not  been 
fulfilled.  .  .  .  This  transaction  as- 
sumed a  different  shape  with  respect 
to  the  payment  of  the  principal 
and  the  payment  of  the  interest;  it 
was  only  upon  the  non-payment  of 
the  principal  sum,  after  the  decease 
of  the  mortgagor,  that  the  mort- 
gagee was  to  have  a  right  to  fore- 
close. Interest  was  to  be  paid 
half-yearly  upon  the  principal  sum; 
and  after  the  decease  of  the 
mortgagor  any  default  in  the  pay- 


ment of  the  interest  would  enable 
the  mortgagee  to  file  his  bill  of  fore- 
closure, because  the  condition  would 
then  have  been  broken;  but  the 
covenant  is  independent  of  every- 
thing contained  in  the  deed  of  mort- 
gage, and  is  in  point  of  fact  an  abso- 
lute covenant  that,  notwithstanding 
anything  contained  in  the  mortgage 
deed,  the  mortgagee  will  not  call  in 
the  principal  money  during  the  life- 
time of  the  mortgagor.  I  do  not  see 
how  any  default  in  the  payment  of  the 
interest,  during  the  lifetime  of  the 
mortgagor,  can  enable  the  mort- 
gagee to  commit  a  breach  of  his 
covenant.  It  was  said  that  this  was 
like  a  case  where,  although  the 
money  was  by  the  proviso  for  re- 
demption to  be  paid  at  a  fixed  period, 
yet  the  mortgagee  covenants  that  he 
will  not  call  in  the  principal  for  a 
longer  period,  unless  default  should 
be  made  in  the  payment  of  the  inter- 
est in  the  meantime;  but  the  parties 
here  have  not  entered  into  such  an 
arrangement.  I  think,  therefore, 
that  under  these  instruments  the 
plaintiff  was  not  at  liberty  to  file 
his  bill  for  a  foreclosure,  as  far  as 
relates  to  the  principal  money,  and 
therefore  cannot  do  so  in  respect 
of  the  interest  which  accrued  before 
the  principal  sum  became  payable." 


§    1179.]  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  138 

shall  not  be  called  in  during  a  specific  period,  or  until  the  happening 
of  a  certain  event,  then  no  default  in  the  payment  of  the  interest  in 
the  meantime  will  enable  the  mortgagee  to  sue.^*^  Such  a  covenant 
may  prevent  a  mortgagee's  suing  upon  a  salvage  claim,  as,  for  instance, 
upon  a  prior  mortgage  which  he  has  been  obliged  to  take  up  for  his 
own  protection;  although  that  has  matured,  the  covenant  in  his  own 
mortgage  will  prevent  his  enforcing  it  during  the  time  included  in  his 
covenant.^*^ 

When  it  appears  upon  the  whole  mortgage  deed  that  although  the 
principal  and  interest  are  expressed  to  be  payable  at  the  end  of  several 
years,  yet  it  was  the  intention  and  agreement  of  the  parties  that  the 
interest  should  be  paid  half  yearly,  the  mortgagee  may  foreclose  upon 
a  default  in  the  payment  of  the  interest  in  the  meantime. ^*'^ 

§  1179.  It  is  competent  for  the  parties  to  so  provide  that  the 
continuance  of  the  loan  ^hall  depend  upon  the  promptness    of  the 

borrower's  paying  the  interest,  or  the  instalments  of  principal.^*^  It 
is  competent,  also,  for  the  parties  to  provide  that  upon  a  default  of  the 
mortgagor  in  the  payment  of  the  taxes  assessed  upon  the  premises  the 
whole  mortgage  debt  shall  become  due.^*^  When  the  mortgage  pro- 
vides that  upon  any  default  in  the  payment  of  interest  the  principal 
sum  shall  immediately,  or  after  the  continuance  of  the  default  for  a 
specified  time,  become  due,  time  is  made  the  essence  of  the  contract, 
and  a  court  of  equity  will  not  relieve  the  mortgagor  from  a  default, 
unless  he  can  show  some  good  excuse  for  it,  such  as  mistake  or  acci- 
dent or  fraud.^^°  The  time  of  payment  may  be  extended  by  a  parol 
agreement  so  that  there  will  be  no  default  within  the  meaning  of  the 

'"Fisher  on  Mortgages,  3d  ed.  N.  W.  507;  Plummer  v.  Park,  62  Neb. 
347;  Bank  v.  Doherty,  29  Wash.  665,  87  N.  W.  534. 
233,  69  Pac.  732,  quoting  text.  The  ='^"  Terry  v.  Eureka  College,  70  111. 
condition  in  this  case  was  that  the  236;  Heath  v.  Hall,  60  111.  344;  Mar- 
mortgagor  "shall  on  or  before  ma-  tin  v.  Clover,  17  N.  Y.  Supp.  638; 
turity  pay  said  note  with  interest  Beisel  v.  Artman,  10  Neb.  181,  4  N. 
that  may  be  due  thereon."  W.   1011;    Baldwin  v.  Van  Vorst,  10 

'^^  Burrowes  v.  Molloy,  2  Jones  &  N.    J.    Eq.    577;    Anderson    v.    Lodi 

L.  521.     See  Dugdale  v.  Robertson,  3  Branch  R.   Co.  31  N.  J.  Eq.  42;    De 

Jur.  N.  S.  687,  as  to  suit  for  injuries  Groot  v.  McCotter,  19  N.  J.  Eq.  531; 

to  the  security  in  such  case.  Albert  v.  Grosvenor  Investment  Co. 

^"  Roddy   V.   Williams,   3   Jones  &  8  Best  &  S.  664,  L.  R.  3  Q.  B.  123. 

L.  1.    See  Wisner  v.  Chamberlin,  117  Per  Lush,  J.:      "The  word   'default' 

III.  568,  7  N.  E.  68.  imports     something     wrongful, — the 

"'  Cassidy   v.    Caton.   47   Iowa,   22,  omission  to  do  something  which,  as 

7  Reporter  335;   Stanclift  v.  Norton,  between  the  parties,  ought  to  have 

11  Kansas.  218;   Whitcher  v.  Webb,  been  done  by  one  of  them.     There- 

44  Cal.  127;  Hartsuff  v.  Hall,  58  Neb.  fore  the  omission  of  the  plaintiff  to 

417,  78  N.  W.  716;  National  Ins.  Co.  pay  on  the  day  specified,  being  with 

V.  Butler,  61  Neb.  449,  85  N.  W.  437.  the   concurrence   of  the   defendants, 

'"Stanclift  v.  Norton.  llKans.218;  was  not  a  default." 
Smalley  v.  Ranken,  85  Iowa,  612,  52 


139  WHEN    RIGHT    TO    EXFOHCE   ACCRUHS.  [§    1179a. 

deed,  because  this  is  made  with  the  concurrence  of  the  creditor.  Al- 
though such  an  agreement  be  not  binding  for  want  of  consideration, 
and  therefore  is  subject  to  revocation  at  any  moment,  it  is  a  sufficient 
excuse  for  the  default.  The  creditor  cannot  treat  it  as  a  default  work- 
ing forfeiture,  without  first  demanding  payment  of  the  instalment. 

Where  it  was  provided  that  in  case  the  interest  should  remain 
due  and  unpaid  for  ten  days  the  principal  should  become  due,  and  the 
owner  of  the  equity  paid  the  interest  after  that  time  and  took  a  re- 
ceipt as  of  the  day  when  it  fell  due,  it  was  held  to  be  a  waiver  of  the 
forfeiture,  so  that  the  mortgagee  could  not  proceed  to  foreclose.^^^ 
Neither  will  the  court  enforce  a  forfeiture  of  the  time  of  credit  if  the 
failure  to  pay  the  interest  within  the  time  specified  was  occasioned  by 
the  acts  or  declarations  of  the  holder  of  the  mortgage  f^^  as  where  by 
agreement  of  the  parties  the  payment  of  interest  had  been  regularly 
made  at  the  place  of  business  of  the  mortgagor,  and  the  payment  on 
which  the  forfeiture  of  credit  was  claimed  occurred  because  the  mort- 
gagee had  not  called  for  the  interest,  and  the  mortgagor  did  not  know 
where  to  find  him;^^^  or  where  the  owner  of  the  equity  tendered  the 
amount  due,  which  the  mortgagee  refused  to  receive  f^*  or  where  the 
mortgagee  had  paid  over  to  the  mortgagor  only  a  part  of  the  considera- 
tion of  the  mortgage  at  the  time  of  the  default.^^^ 

§  1179a.  It  is  not  essential  that  this  provision  shall  be  contained 
in  both  the  mortg'age  and  note.  When  these  instruments  are  executed 
at  the  same  time  with  regard  to  the  same  transaction,  and  make  refer- 
ence to  each  other,  they  are  but  one  in  the  eye  of  the  law,  and  the  terms 
of  either  are  qualified  by  any  provisions  of  the  other  applicable  there- 

'"  Sire  V.  Wightman,  25  N.  J.  Eq.  '"  Booknau    v.    Burnett,    49    Iowa, 

102.  303. 

For  circumstances  under  which  the  Where  the  mortgage  provides  that 

receipt   of   interest   will    not   be   re-  the    whole    debt    shall    become    due 

garded  as  a  waiver  of  forfeiture,  see  if    any    sum    of    money    or    interest 

Odell  v.  Hoyt,  73  N.  Y.  343.  thereon  becomes  due  and  the  taxes 

^"  Wilson  V.  Bird,  28  N.  J.  Eq.  352.  on    the    property    are    not    paid,    to 

»"  De  Groot  v.  McCotter,  19  N.  J.  make   the   whole   debt  due   and   au- 

Eq.  531.     The  order  in  this  case  was  thorize  a  foreclosure  both  conditions 

that     upon     payment    to    the  com-  must  concur,  namely  default  in  the 

plainant,    within    ten    days,    of    the  payment  of  a  sum   due   or  interest 

amount    then    due,    all    proceedings  thereon  and  default  in  the  payment 

upon  the  mortgage  be  stayed,  until  of   the   taxes   when    due.      Lewis   v. 

default    be    made    according    to    the  Lewis,  58  Kan.  563;  Ramsdell  v.  Hu- 

condition  of  the  mortgage,  without  left.  50  Kan.  440.     If  after  a  default 

reference  to  default  in  the  payment  in  the  payment  of  both  interest  and 

of  interest  moneys  previously  due.  taxes,  the  taxes  are  paid  by  themort- 

="''  Ewart  V.   Irwin,   1   Phila.   78    (7  gage    debtor    the    running    of    the 

Leg.  Int.  134).     Although  this  was  a  statute  in  his  favor  is  ended  by  his 

writ  of  scire  facias,  the  court  applied  voluntary  correction  of  the  one  de- 

equitable  principles  of  construction,  fault.     Douthitt  v.  Farrell,  60  Kan. 

195. 


§    1179b.]  WHEN  RIGHT  TO  EXFORCi;  ACCRUES.  1-4:0 

to.='=^  If  the  note  states  that  it  is  secured  by  mortgage,  a  provision  of 
the  latter  that  upon  default  in  the  payment  of  interest  the  whole  debt 
secured  shall  become  due  and  payable  becomes  in  law  a  part  of  the  for- 
mer."^ A  similar  provision  in  the  note  qualifies  in  the  same  way  the 
legal  effect  of  the  mortgage  from  which  the  provision  is  omitted.^^* 
Consequently  a  provision  in  the  mortgage,  that  all  the  notes  secured 
thereby  shall  become  due  on  default  in  the  payment  of  either  of  them, 
or  in  the  payment  of  taxes,  or  for  insurance,  on  such  default  makes 
the  notes  due,  not  merely  for  foreclosure  proceedings,  but  for  general 
purposes,  so  that  suit  may  be  brought  on  any  of  them.=^^» 

If  there  be  a  discrepancy  between  the  terms  of  the  mortgage  and 
those  of  the  bonds  secured  thereby,  inasmuch  as  the  debt  is  the  prin- 
cipal thing  and  the  mortgage  only  a  security,  the  terms  of  the  descrip- 
tion of  the  debt  will  govern.^*'*  Thus,  if  a  mortgage  executed  by  a  cor- 
poration, to  secure  its  bonds,  provides  that,  in  case  of  default  for  six 
months  in  the  payment  of  the  interest  upon  either  of  them,  the  entire 
amount  of  the  debt  secured  "shall  forthwith  become  due  and  payable," 
and  that  the  lien  of  the  mortgage  may  be  at  once  enforced,  and  the 
bonds  themselves  declare  that,  "in  case  of  the  non-payment  of  any  half- 
yearly  instalment  of  interest  which  shall  have  become  due.  and  been 
demanded,  and  such  default  shall  have  continued  six  months  after  de- 
mand," the  principal  of  the  bond  shall  become  due,  with  the  effect 
provided  in  the  mortgage,  a  demand  for  payment  is  necessary  to  make 
the  principal  of  the  bonds  payable.^" 

§  1179b.  Demand  after  default  is  not  necessary  to  support  an 
action  for  the  entire  sum  under  a  mortgage  which  provides  that  the 
whole  principal  debt  shall  become  due  in  case  default  be  made  in  the 
payment  of  interest  f^^  or,  if  the  mortgage  secures  bonds  with  interest 

^^^  Buchanan   v.   Berkshire   L.    Ins.  28  Fed.  741;   Kempner  v.  Comer,  73 

Co    96   Ind.   510,   520;    Fox  v.   Gray,  Tex.  196,  11  S.  W.  194. 

105  Iowa,  433,  75  N.  W.  339;  Smalley  ^^' Fletcher  v.   Daugherty,  13  Neb. 

v.   Ranken,   85   Iowa,  612,  52   N.  W.  224,  13  N.  W.  207. 

507-   Hawes  v.  Detroit  F.  &  M.  Ins.  ^^"Chambers  v.  Marks,  93  Ala.  412, 

Co.'  109    Mich.    324,    67    N.    W.    329.  9  So.  74. 

The  rule  is  the  same  although  the  =•'''' Mortgage  Security  Co.  v.  Case- 
note  states  that  interest  is  payable  bier,  3  Kan.  App.  741,  45  Pac.  452. 
annually  and  that  interest  when  due  ''"'  Railway  Co.  v.  Sprague,  103  U. 
is  to  become  principal  and  draw  in-  S.  756. 

terest    at    a    specified    rate.     Fox   v.  ^"^  Hewitt  v.  Dean,  91  Cal.  5,  617   25 

Gray,  105  Iowa,  433,  75  N.  W.  339.  Pac.  753;  Whitcher  v.  Webb,  44  Cal. 

'"Gregory  v.  Marks.  8  Biss.  44;  127;  Dean  v.  Applegarth,  65  Cal.  391, 
Noell  v.  Gaines,  68  Mo.  649.  Hough,  4  Pac.  375;  Pac.  Mutual  Life  Ins.  Co. 
J.,  dissenting,  8  Cent.  L.  J.  353;  v.  Shepardson,  77  Cal.  345,  19  Pac. 
Waples  V.  Jones,  62  Mo.  440;Schoon-  583;  Ziel  v.  Dukes,  12  Cal.  479;  Hal- 
maker  V  Taylor  14  Wis.  313;  leek  v.  Moss.  22  Cal.  266;  Luckhart 
Wheeler  &  W.  Manuf.  Co.  v.  Howard,  v.  Ogden.  30  Cal.  547.  556;  Cummings 

v.  Howard,  63  Cal.  503. 


141  WHEN    RIGHT    TO    ENFORCE   ACCRUES.  [§    1179c. 

coupons,  it  need  not  be  averred  in  a  bill  to  foreclose  the  mortgage  that 
the  coupons  were  presented  for  payment  at  the  office  or  agency  at 
which  they  were  payable.^^^  Bringing  the  suit  to  foreclose  is  a  suffi- 
cient demand.^*** 

So  completely  is  the  time  of  payment  changed  by  a  provision  for  the 
forfeiture  of  credit  upon  the  breach  of  a  condition  of  the  mortgage, 
that,  in  order  to  charge  an  indorser  of  the  mortgage  note,  demand 
upon  the  maker  and  notice  to  the  indorser  should  be  given  at  the  time 
the  mortgagee  elects  to  take  advantage  of  the  default  and  declare  the 
debt  to  be  due.  A  protest  afterwards  upon  the  maturity  of  the  note 
according  to  its  terms,  without  reference  to  the  forfeiture,  is  of  no  ef- 
fect.^^^  An  indorser  may  waive  any  right  he  had  to  have  the  note  pro- 
tested, by  promising  payment  and  applying  for  a  postponement  of 
sale.^^* 

§  1179c.  Corporate  mortgages  generally  provide  for  a  continuance 
of  default  for  a  period  of  time  before  any  right  of  sale  accrues.^" 
A  trust  deed  made  by  a  manufacturing  corporation  empowered  the 
trustees,  on  default  of  interest  payments,  to  sell  the  property,  "if,  after 
notice  is  served  on  the  president  of  said  company,  the  same  shall  re- 
main unpaid  for  six  months  after  such  default."  A  strict  compliance 
with  this  provision  would  be  necessary  to  a  valid  sale  under  the  power ; 
but  if  foreclosure  should  be  sought  in  equity,  a  condition  of  affairs 
might  be  shown  which  would  dispense  with  the  necessity  of  alleging 
the  giving  of  notice  as  provided.^*'^  The  six  months  after  maturity 
was  held  not  to  be  in  addition  to  days  of  grace,  but  to  run  from  the 
date  on  which  the  coupons  were  expressed  to  be  due,  and,  although  a 
default  continued  but  two  days  more  than  six  months,  the  holders  of 
such  coupons  were  entitled  to  declare  the  principal  immediately  dne.^^^ 

If  a  trust  deed  of  a  corporation  provides  that  a  default  in  the  pay- 
ment of  interest,  continued  for  six  months  after  "payment  shall  have 
been  duly  demanded,"  shall  at  the  option  of  the  trustee  render  the 
whole  debt  due,  demand  of  payment  must  be  made  at  the  principal 
office  of  the  company  where  the  interest  is  payable.  A  demand  made 
at  a  branch  office  of  the  company,  under  circumstances  which  tended 
to  show  that  the  demand  was  simply  a  device  by  which  a  form  would 

^''^  Savannah  &  Memphis  R.  Co.  v.  '»''  Cardwell  v.  Allan,  33  Gratt.  160. 

Lancaster,  62  Ala.  555.  '"Jones  on   Corporate  Bonds  and 

'«^  Sweeney   v.    Kaufmann,   168  111.  Mortgages,  §  384,  and  cases  cited. 

233,  48  N.  B.  144;  Northwestern  Mut.  ''"*  Robinson     v.     Alabama     &     G. 

L.  Ins.  Co.  v.  Butler,  57  Neb.  198,  77  Maniif.  Co.  48  Fed.  12. 

N.  W.  667 :  Coad  v.  Home  Cattle  Co.  -^"^  Alabama    &    G.    Manuf .    Co.    v. 

32  Neb.  761.  Robinson,  56  Fed.  690. 

^«=Noell  V.  Gaines,  68  Mo.  649. 


§    1180.]  WHEN    RIGHT   TO    ENFORCE   ACCRUES.  143 

be  substituted  for  the  substance  of  a  demand,  and  thus  an  advantage 
be  obtained  by  the  bondholder,  is  not  such  a  demand  as  is  called  for 
by  the  deed  of  trust.^^° 

§  1180.  There  is  almost  always  some  provision  in  the  mortgage 
under  which  the  right  to  foreclose  accrues  upon  a  breach  of  any  of 
the  stipulations  of  the  mortgagor  to  pay,  and  under  which  also  the 
mortgagee  is  entitled  to  receive  payment  of  the  whole  debt,  and  not 
merely  of  what  is  due  at  the  time  of  sale,  if  it  is  not  then  all  due.^^^ 
This  agreement  need  not  be  formal,  but  may  be  gathered  from  the  ex- 
pressed intention  of  the  whole  deed.  If  it  appears  from  the  whole  in- 
strument that  such  was  the  intention,  the  sale  may  be  made  upon  any 
default,  and  the  whole  debt  paid,  though  not  all  due;  as  where  it  is 
provided  that  on  default  it  should  be  lawful  for  the  mortgagee  to  sell 
and  execute  a  deed,  "rendering  the  surplus,  if  any,"  to  the  mort- 
gagor;^''^ or  where  the  condition  of  a  mortgage  securing  the  payment 
of  several  notes  falling  due  at  different  times  authorizes  a  sale  upon 
default  being  made  in  the  payment  of  the  notes  "as  they  fall  due."^'^ 
The  parties  are  free  to  contract  in  regard  to  the  maturity  of  the  whole 
debt  as  they  may  deem  fit. 

But  a  provision  in  a  power  of  sale  mortgage  that,  in  case  of  a  de- 
fault for  thirty  days  in  the  payment  of  any  instalments  of  interest  or 
of  the  principal,  the  mortgagee  may  advertise  and  sell,  and  apply  the 
proceeds  to  the  payment  of  the  whole  debt  and  interest  due,  only  au- 
thorizes this  application  in  case  of  sale  under  the  power,  and  does  not 
make  the  whole  debt  due  merely  by  neglect  to  pay  within  the  time  pre- 
scribed. It  does  not  change  the  time  when  the  instalments  of  the 
mortgage  become  payable,  so  as  to  authorize  a  suit  in  equity  to  fore- 

'"•'  Levey  v.  Union  Print  Works,  12        But  in  Bank  of  San  Luis  Obispo 

N.  Y.  Supp.  153.  V.  Johnson,  53  Cal.  99,  a  provision  in 

"'  Bushfield  v.  Meyer,  10  Ohio  St.  a  mortgage  that  "in  case  of  default 
334;  Hosie  v.  Gray,  71  Pa.  St.  198,  in  the  payment  of  said  note  or  inter- 
where  provision  was  made  for  issu-  est,  or  in  the  performance  of  any  of 
ing  scire  facias;  McLean  v.  Presley,  the  conditions  hereof, then  the  mort- 
56  Ala  211;  Lantry  v.  French,  33  gagee  may,  at  his  option,  either  com- 
Neb.  524,  50  N.  W.  679.  mence  proceedings   to  foreclose  the 

Such  a  provision  may  be  followed  mortgage   in    the   usual    manner,   or 

by  a  further  provision  that,  in  case  cause  the  said  premises  or  any  part 

of  default  in  the  payment  of  inter-  thereof  to  be  sold,"  was  held  not  to 

est  on  or  before  the  5th  day  of  any  authorize  a  foreclosure  for  the  prin- 

month  to  the  mortgagee's 'agent,  he  cipal  upon  a  default  in  the  payment 

should  take  charge  of  the  mortgaged  of  interest  only.     For  a  similar  deci- 

premises,    collect   the    rents,    deduct  sion  see  Jones  v.  Ramsey,  3  Bradw. 

interest,  and  pay  the  excess  to  the  303. 

mortgagor;  and  these  provisions  are        "^McLean  v.  Presley,  56  Ala.  211; 

not  in  conflict.     Stevens  v.  De  Car-  Meier  v.  Meier,  105  Mo.  411,  16  S.  W. 

dona,  53  Cal.  487.  223. 

'■-Pope  V.  Durant,  26  Iowa,  233. 


143  WHEN  KiGirr  to  enforce  accrues.  [§  1181. 

close  tlie  mortgage  and  to  apply  the  proceeds  of  sale  immediately  to 
the  satisfaction  of  the  mortgage.  If  the  mortgagee  chooses  to  proceed 
in  equity,  and  the  instalment  due  is  paid  before  sale,  he  can  only  apply 
to  the  court  when  future  instalments  become  due  for  a  sale  under  the 
decree  to  satisfy  them.^^* 

If  part  of  the  mortgage  notes  are  payable  unconditionally,  but  one 
is  payable  upon  condition  that  the  mortgagee  shall  procure  a  convey- 
ance of  certain  interests  to  the  mortgagor,  a  provision  making  the 
whole  mortgage  debt  payable  upon  any  default  in  the  payment  of  in- 
terest or  principal  enables  the  mortgagee  to  sell  for  the  payment  of 
the  notes  payable  unconditionally,  but  not  for  the  note  payable  upon 
condition  until  the  condition  is  performed. ^'^^ 

§  1181.  Such  a  provision  in  the  mortgage  is  not  considered  a 
penalty,  but  an  agreement  as  to  the  time  when  the  debt  shall  become 
due"*'  enforcible  according  to  its  terms.  Unless  so  provided, 
the  foreclosure  can  extend  no  further  than  to  enforce  satis- 
faction of  such  part  of  the  debt  &s  is  due  at  that  time, 
and  for  that  purpose  to  sell  so  much  of  the  mortgaged  property  as  may 
be  necessary.  Courts  of  equity,  without  the  aid  of  any  statutory  pro- 
vision to  that  effect,  may  generally  retain  jurisdiction  of  the  case  until 
the  subsequent  instalments  become  due,  and  then  decree  a  further  sale ; 
and  under  the  general  doctrines  and  practice  of  equity  may  direct  a 
sale  of  the  whole  mortgaged  estate,  though  not  required  for  the  pay- 
ment of  the  instalment  already  due,  in  case  the  property  is  indivis- 
ible;^" or  with  the  consent  of  the  mortgagor;  or  in  case  the  court 
should  be  satisfied  that  the  property  would  sell  for  a  better  price  if  sold 
together  in  one  lot  than  if  sold  in  parcels  at  different  times.^'^®    But  if 

"♦Holden  v.  Gilbert,  7  Paige,  208.  Wright,  522;    Morgenstern  v.   Klees, 

"^Gibbons  v.  Hoag,  95  111.  45.  30    III.    422;    Stillwell    v.    Adams,    29 

"'Richards    v.    Holmes,    18    How.  Ark.  346;   Goodman  v.  Cinn.  &  Chi- 

143;    Wheeler    v.    Howard,    28    Fed.  cago   R.   Co.   2   Disney,   176;    Savan- 

741;    Noyes  v.   Anderson,   124  N.   Y.  nah  &  Memphis  R.  Co.  v.  Lancaster, 

175,   26    N.    E.    316,    per    Parker,    J.;  62   Ala.    555,   565;    Connecticut   Mut. 

Cecil   V.   Dynes,   2    Ind.   266;    Green-  L.    Ins.    Co.    v.   Westerhoff,    58   Neb. 

man  V.  Pattison,  8  Blackf.  465;  Hunt  379,    78   N.   W.    724,    79    N.    W.    731; 

V.    Harding,    11    Ind.   245;    Hough   v.  Eastern   Banking   Co.    v.    Seeley,    55 

Doyle,  8  Blackf.  300;    Smart  v.   Mc-  Neb.  660,  75  N.  W.  1102;   Morling  v. 

Kay,    16   Ind.    45;    Taber   v.    Cincin-  Bronson,  37  Neb.  608,  56  N.  W.  205; 

nati,  etc.,  R.  R.  Co.  15  Ind.  459;  Ma-  Whitcher  v.  Webb,  44  Cal.  127. 

gruder   v.    Eggleston,    41   Miss.    284;  Contra,  Tiernan  v.  Hinman,  16  111. 

Grattan    v.     Wiggins,    23     Cal.     16;  400;    Hoodless  v.   Reid,   112   111.   105. 

Jones  V.  Lawrence,  18  Ga.  277;    An-  ""Bank  of  Ogdensburg  v.  Arnold, 

drews     v.     Jones,     3     Blackf.     440;  5  Paige,  38. 

Schooley  v.  Romain,  31  Md.  574,  100  ""  Caufman    v.    Sayre,    2    B.    Mon. 

Am.   Dec.   87;   Mobray  v.  Leckie,  42  202;   Adams  v.  Essex,  1  Bibb,  149,  4 

Md.  474:  Salmon  v.  Clagett,  3  Bland,  Am.    Dec.    623;    Peyton   v.    Ayres.    2 

125;   Adams  v.  Essex,  1  Bibb,  149,  4  Md.    Ch.    64;    Wylie    v.    McMaken    2 

Am.    Dec.    623:    Baker    v.    Lehman,  Md.  Ch.  413. 


§    1182.]  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  144 

the  whole  premises  are  sold  the  remedy  is  exhausted,  and  there  can  be 
no  second  sale  upon  the  maturing  of  the  principal  debt.^^^ 

If  other  instalments  become  due  after  the  suit  is  commenced,  and 
before  final  hearing,  these  may  be  included  in  the  decree  without  filing 
a  supplemental  bill  if  they  are  set  out  in  the  original  bill,  and  are  in- 
cluded in  the  prayer  for  decree.^^" 

§  1182.  Default  at  election  of  mortgagee.— Where  it  is  provided 
in  a  mortgage  that,  if  any  instalment  of  principal  or  interest  or  the 
taxes  shall  not  be  paid  at  the  times  stated,  the  principal  sum  secured 
shall  become  immediately  due  at  the  election  of  the  mortgagee,  or  the 
holder  of  the  mortgage,  the  whole  debt  is  not  due  until  the  mortgagee 
or  other  holder  has  exercised  his  election ;  and  a  sale  of  the  property 
free  from  the  mortgage  before  this  could  not  be  authorized  by  an  act 
of  the  legislature.^**^  "Immediately  due"  means  immediately  upon 
or  after  the  holder's  election ;  and  he  is  not  bound  to  elect  immediately 
after  default.^*-  If  the  provision  is  that,  if  default  be  made  for  ten 
days  in  the  payment  of  notes  due  on  the  first  day  of  a  month,  the  prin- 
cipal shall  become  due  at  the  option  of  the  mortgagee,  allowance  must 
be  made  for  days  of  grace,  if  that  is  allowed,  in  addition  to  the  ten 
days  before  bringing  action.^^^  Such  a  provision  does  not  simply  ren- 
der the  notes  due  for  the  purposes  of  foreclosure  in  case  the  option  is 
exercised,  but  for  all  purposes.^^*  The  mortgagee  may  exercise  his 
option  promptly  upon  a  default  in  the  payment  of  any  instalment  of 
interest,  although  the  mortgage  also  contains  a  provision  that  if  the 
interest  is  not  paid  semi-annually  it  shall  be  compounded  semi-an- 
nually, and  the  fact  that  he  has  compounded  the  interest  or  prior  in- 
stalments does  not  affect  his  right.^^" 

An  option  that  the  whole  mortgage  debt  shall  become  due  immedi- 
ately upon  default  in  the  payment  of  the  interest  as  therein  provided, 
in  order  to  be  availal)le  as  against  an  indorser  of  the  mortgage  note, 
must  be  exercised  within  a  reasonable  time  after  default,  and  a  delay 
of  seven  months  before  attempting  to  exercise  the  option  is  unreason- 
able.^«« 

"'  Poweshiek  Co.  v.  Dennison,  36  =^  Hartsuff  v.  Hall,  58  Neb.  417,  78 
Iowa  244  14  Am.  Rep.  521;  Buford  N.  W.  716;  Lantry  v.  French,  33  Neb. 
v.  Smith,'?  Mo.  489.  524,  50  N.  W.  679. 

'^°  Magruder  v.  Eggleston,  41  Miss.  ^*'  Wheeler  &  Wilson  Manuf .  Co.  v. 
284.  Howard,   28   Fed.    741;    Detweiler  v. 

^*'  Randolph  v.  Middleton,  26  N.  J.    Breckenkamp,  83  Mo.  45. 
Eq.   543;    Westcott  v.  Whiteside,   63        ^^^  Campbell   v.   West,   86   Cal.    197, 
Kan.  49,  51,  64  Pac.  1032.  24    Pac.     1000;     Caplice-Commercial 

^^-  Wheeler  &  Wilson  Manuf.  Co.  v.  Co.  v.  Cassidy,  25  Mont.  81,  63  Pac. 
Howard,  28  Fed.  741;  Hewitt  v.  Dean,    799. 

91  Cal    5    617    27  Pac.  423,  25  Pac.        ^^e  cj,Qggj„ore  ^   Page,  73  Cal.  213, 
753  '         '  14   Pac.   787. 


145  WHEN    KICiUT    TO    LXFOUCE    ACCRUES.  [§    1182. 

But  a  delay  of  three  months  or  four  after  default  in  the  interest  is 
not  a  waiver  of  the  right  to  exercise  the  option,  when  the  delay  is 
caused  by  reason  of  defendant's  request  to  be  allowed  a  few  days  ad- 
ditional in  which  to  pay  the  interest. ^^^ 

"  An  assignee  of  part  of  the  notes  secured  by  a  mortgage  containing 
such  provision  cannot  alone  exercise  such  option.  It  is  an  indivisible 
condition,  to  enforce  which  all  parties  interested  in  the  mortgage  se- 
curity must  unite.^^® 

Where  the  mortgagee  has  the  option  to  consider  the  entire  debt  ma- 
tured on  any  default,  it  is  not  necessary  that  any  particular  form  of 
expression  should  be  used  for  the  purpose  of  declaring  such  option. 
A  recital  in  a  mortgagee's  deed,  under  a  power  of  sale  in  the  mort- 
gage, that  "having  elected  to  declare  said  mortgage  due  and  payable, 
as  by  said  mortgage  he  was  authorized  to  do,  according  to  the  terms 
and  conditions  thereof,  he  had  proceeded  to  exercise  the  power,"  is 
sufficient.^^^ 

The  mortgagee  may  waive  such  option  at  any  time,  even  after  taking 
steps  to  exercise  it.^^'^  But  mere  acceptance  of  the  amount  due  is  not  a 
waiver.^^^ 

The  mortgagee's  right  to  exercise  such  election  is  not  defeated  by  a 
previous  extension  of  the  time  for  payment  of  the  principal  debt, 
when  such  extension  is  subject  to  the  terms  and  conditions  of  the 
mortgage  in  respect  to  the  payment  of  interest;  and  the  fact  that  the 
dates  for  the  payment  of  the  semi-annual  interest  were  changed  at  the 
time  of  the  extension  by  the  payment  of  all  interest  due  up  to  that 
time  does  not  defeat  the  application  of  this  principle.^''- 

Acceptance  of  interest  due  and  in  default  is  not  a  waiver  of  a  de- 
fault in  the  payment  of  matured  instalments  of  principal. ^^^ 

Where  a  mortgagee  had  the  option  to  declare  the  debt  due  prior  to 
its  maturity,  upon  the  non-payment  of  interest,  it  was  held  that  the 
presentation  of  a  claim  thereon  against  the  estate  of  the  deceased 
maker,  after  default  in  the  payment  of  the  interest  and  before  the  ma- 
turity of  the  note,  is  not  to  be  considered  as  the  exercise  of  the  option ; 
and  this  is  so,  notwithstanding  the  claim  recites  that  it  is  for  an 

'8'  Hewitt  V.  Dean,  91  Cal.  5,  617,  27  65  Pac.  624;  Van  Vlissingen  v.  Lenz, 

Pac.   423,  25  Pac.  753;    Washburn  v.  171  111.  162,  49  N.  E.  422. 

Williams,  10  Colo.  App.  153,  50  Pac.  '^' Van  Vlissingen  v.  Lenz,  171  111. 

223.  162,  49  N.  E.  422. 

'''*  Marine   Banli    v.     International  ''"'  Washburn  v.  Williams,  10  Colo. 

Bank.  9  Wis.  57.  App.  153.  50  Pac.  223. 

■■""  Harper  v.  Ely,  56  111.  179.  '"'  Northwestern  Mut.  L.  Ins.  Co.  v. 

='="'  Moore  v.   Russell,   133   Cal.   297,  Butler,  57  Neb.  198,  77  N.  W.  667. 


§    1182a.]  WHEN  RIGHT  TO  EXFOKCE  ACCRUES.  146 

"amount  due"  at  the  date  of  presentation,  and  such  amount  equals 
the  principal  on  the  note  and  interest  to  that  date.^^* 

Where  a  mortgage  provides  that  upon  default  in  the  payment  of  in- 
terest or  taxes  the  whole  sum  secured  thereby  shall,  at  the  option  of  the 
legal  holder,  become  due  and  payable,  the  statute  of  limitations  begins 
to  run  at  the  time  stated  in  the  declaration  of  election.^''^ 

§  1182a.  Generally  no  notice  of  the  mortgagees  election  to  con- 
sider the  whole  debt  due  is  necessary.  His  proceeding  to  enforce  the 
mortgage  sufficiently  shows  his  election. ^^°  An  assignee  of  the  mort- 
gagee may  also  exercise  this  option  in  the  same  way  as  the  mortgagee 
himself  may. 

In  Wisconsin,  however,  and  perhaps  elsewhere,^''^  it  is  held  that  no- 
tice of  the  mortgagee's  election  to  consider  the  whole  sum  due  must 
be  given  before  the  bringing  of  a  suit  for  the  whole  sum.^***  The  op- 
tion must  be  declared  within  a  short  and  reasonable  time  after  the 
right  to  do  so  has  accrued ;  and  after  a  delay  of  six  weeks  it  has  been 
held  under  some  circumstances  to  be  too  late  to  give  an  effectual  no- 
tice.^^^  A  notice  given  by  an  attorney  O'f  the  mortgagee  is  sufficient, 
though  it  does  not  show  the  authority  on  its  face.  If  the  mortgagor 
at  the  time  of  receiving  notice  refuses  to  pay  the  mortgage,  he  cannot 

3"  Moore  v.  Russell,  133  Cal.  297,  65  N.  W.  1102;  Hewitt  v.  Dean,  91  Cal. 

Pac.  624.  5,    617,    27    Pac.    423,    25    Pac.    753; 

^"^Westcott  V.  Whiteside,  63  Kan.  Whitcher  v.  Webb,  44  Cal.  127; 
49,  51.  Per  Curiam:  "A  declaration  Leonard  v.  Tyler,  60  Cal.  299;  Red- 
that  a  debt  is  due  and  an  election  man  v.  Purrington,  65  Cal.  271; 
to  treat  it  as  due  of  a  particular  Hodgdon  v.  Davis,  6  Dak.  21,  50  N. 
date,  on  an  action  brought  upon  it,  W.  478;  Chase  v.  First  Nat.  Bank 
is  not  for  purpose  of  foreclosure  in  (Tex.),  20  S.  W.  1027;  Sichler  v. 
that  case  merely,  but  for  all  pur-  Look,  93  Cal.  600,  29  Pac.  220;  War- 
poses."  Citing  Wheeler  &  Wilson  wick  Iron  Co.  v.  Morton,  148  Pa.  St. 
Manuf.  Co.  v.  Howard,  28  Fed.  741.  72,  23  Atl.   1065;    Huling  v.   Drexell, 

^"^  Harper  V.  Ely,  56  111.  179;  Heath  7  Watts,  126;  Holland  v.  Sampson 
v.  Hall,  60  111.  344;  Princeton  Loan  (Pa.),  6  Atl.  772;  Loan  &  Trust  Co. 
&  Trust  Co.  V.  Munson,  60  111.  371;  v.  Gill,  2  Kan.  App.  488,  492,  43  Pac. 
Cundiff  V.  Brokaw,  7  Bradw.  147;  991;  Hawes  v.  Detroit  F.  &  M.  Ins. 
Hoodless  v.  Reid,  112  111.  105;  John-  Co.  109  Mich.  324,  67  N.  W.  329. 
son  V.  Van  Velsor,  43  Mich.  208,  5  N.  The  case  of  Dean  v.  Applegarth,  65 
W.  265;  English  v.  Carney,  25  Mich.  Cal.  391,  4  Pac.  375.  differed  in  the 
178;  Buchanan  v.  Berkshire  L.  Ins.  fact  that  in  that  case  it  was  pro- 
Co.  96  Ind.  510;  Pope  v.  Hooper,  6  vided  that,  in  case  of  default,  the 
Neb.  178;  Fletcher  v.  Daugherty,  13  rate  of  interest  upon  the  note  should 
Neb.  224,  13  N.  W.  207;  Coad  v.  be  increased  at  the  option  of  the 
Home  Cattle  Co.  32  Neb.  761.  49  N.  holder,  and  the  court  held  that  this 
W.  757;  Alabama  &  G.  Manuf.  Co.  v.  option  must  have  been  exercisec* 
Robinson,  56  Fed.  690;  Lowenstein  and  manifested  in  some  way  by  the 
V.  Phelan,  17  Neb.  429,  22  N.  W.  561;  plaintiff  before  it  could  have  effect. 
Northwestern  Mut.  L.  Ins.  Co.  v.  ="  Swett  v.  Stark,  31  Fed.  858. 
Butler,  57  Neb.  198,  77  N.  W.  667;  ='^  Basse  v.  Gallegger.  7  Wis.  442.  76 
National  L.  Ins.  Co.  v.  Butler.  61  Am.  Dec.  225;  Marine  Bank  v.  Inter- 
Neb.  449,  85  N.  W.  437;  Eastern  national  Bank,  9  Wis.  57. 
Banking  Co.  v.  Seele-y,  55  Neb.  660,75        "''"Wilson  v.  Winter,  6  Fed.  16. 


117  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  [§    1183. 

object  that  the  mortgagee  resides  out  of  the  State,  and  no  person  is 
designated  to  whom  payment  could  be  made.*""  Such  a  provision 
being  unusual,  an  attorney  or  officer  of  a  corporation  having  general 
authority  to  execute  a  mortgage,  the  terms  and  conditions  of  which  are 
not  specified,  would  have  no  right  to  insert  it ;  but  a  mortgage  so  made 
would  not  thereby  be  void  except  as  to  such  provision.*"^ 

Notice  of  the  mortgagor's  election  to  receive  the  principal  debt  due 
is  sufficiently  declared  by  a  statement  to  that  effect  in  the  public  notice 
of  sale.*''^ 

A  notice  in  writing  by  the  mortgagee  declaring  his  election  is  suffi- 
cient if  left  at  the  residence  or  place  of  business  of  the  mortgagor  in 
his  absence,  with  a  person  of  discretion  in  charge.*"^ 

In  the  absence  of  any  express  or  implied  contract  as  to  the  manner 
of  giving  such  notice,  a  mortgagor  who  has  left  his  usual  place  of 
abode  without  making  any  provision  for  the  forwarding  of  his  mail, 
and  without  giving  the  mortgagee  notice  of  change  of  address,  is  held 
to  have  waived  giving  any  better  notice  than  by  mail,  addressed  to  his 
usual  place  of  abode  last  known  to  the  mortgagee.'*"* 

Inasmuch  as  grace  is  not  allowed  on  an  instalment  of  interest  alone, 
when  by  the  terms  of  the  note  interest  alone  is  due  on  the  first  day  of 
a  month,  and,  on  default  of  payment  thereof  within  ten  days  after  it 
becomes  due,  the  mortgagee  has  his  option  to  declare  the  whole  mort- 
gage debt  due,  notice  of  his  option  given  on  the  twelfth  of  said  month 
is  not  premature.*"*^ 

§  1183.  A  provision  forfeiting  eredit  may  affect  foreclosure  pro- 
ceedings only,  without  varying  the  obligations  expressed  on  the  face 
of  tire  bonds  or  notes  secured.*"''  Thus,  a  covenant  in  the  mortgage  of 
a  railroad  company  to  trustees  to  secure  bondholders,  "that  the  prin- 
cipal sum  secured  by  said  mortgage  shall  become  due  in  case  the  in- 
terest on  the  bonds  remains  unpaid  for  four  months,"  if  not  inserted 
in  the  bonds,  can  only  be  taken  advantage  of  by  the  trustees  for  the 
foreclosure  of  the  mortgage  according  to  the  terms  of  the  authority 
conferred  upon  them,  and  not  by  an  individual  bondholder;  although 

<°*Rosseel  v.  Jarvis,  15  Wis.  571.  ^o"  Macloon  v.  Smith,  49  Wis.  200, 

^"'Jesup  V.  City  Bank,  14  Wis.  331;  201,   5   N.   W.   336.     See  Alabama  & 

■"'-  Washburn  v.  Williams,  10  Colo.  G.  Manuf.   Co.  v.   Robinson,  56  Fed. 

App.   153,  50  Pac.   223.  690. 

^"^  Monroe  v.  Kohl,  72  Cal.  568,  14  *'>"  McClelland   v.    Bishop,   42    Ohio 

Pac.  514.  St.    113;    Mallory  v.   West   Shore  R. 

*"'  Julien  v.  Model  B.  L.  &  I.  Asso.  Co.  3  Jones  &  S.  174.     The  bonds  in 

116  Wis.  79.  this  case  did  not  refer  to  the  mort- 

^f"*  Hewitt   V.   Dean,    91    Cal.    5,   27  gage. 

Pac.   423;    Sichler   v.   Look,   93   Cal. 

600,  29  Pac.  220. 


§§  1183a,  1181,  1185.]  when  right  to  enforce  accrues.         1-18 

upon  the  bonds  there  was  a  certificate  signed  by  the  trustees,  that  such 
a  provision  was  contained  in  the  mortgage.  The  mortgage  could  be 
foreclosed  only  upon  the  written  request  of  the  holder  of  a  majority 
in  amount  of  the  bonds ;  and  it  was  construed  to  mean  that  the  trustees 
alone  could  enforce  it,  and  not  that  an  individual  solely  or  jointly  with 
others  should  have  any  right  to  do  so.***® 

§  1183a.  The  mortgagor  cannot  take  advantage  of  a  stipulation 
that  the  whole  mortgage  shall  become  due  upon  a  default  in  the 

payment  of  any  instalment  of  interest  or  principal.  Equity  will  not 
permit  him  to  take  advantage  of  his  own  wrong,  and  upon  such  a  de- 
fault pay  off  the  whole  mortgage  debt.  This  provision  is  for  the  bene- 
fit of  the  mortgagee,  and  not  for  the  benefit  of  the  mortgagor,  unless 
he  is  given  the  option  of  making  payment  upon  any  such  default.*'"' 

§  1184.  Provisions  against  forfeiture. —  Where  it  is  stipulated  as 
part  of  the  mortgage  contract,  that  "the  loan  shall  not  be  called  in  so 
long  as  the  mortgagor  continues  to  punctually  pay  the  interest  semi- 
annually, and  the  value  of  the  estate  pledged  shall  be  double  the 
amount  of  the  debt,  until  the  expiration  of  two  years  after  the  service 
of  a  written  notice  stating  the  time  when  payment  will  be  required," 
no  foreclosure  can  be  had  until  this  provision  is  complied  with  and 
the  notice  given,*^°  In  like  manner,  if  the  mortgage  contains  the  usual 
provision  that  the  several  notes  secured  by  it,  though  maturing  at  dif- 
ferent dates,  shall  not  become  due  and  the  mortgage  shall  not  be  fore- 
closed till  the  maturity  of  the  note  made  payable  latest,  no  judgment 
can  be  recovered  upon  any  of  the  notes  until  the  last  has  matured. 
The  notes  and  deed  are  to  be  read  together  as  one  instrument.*". 

§  1185.  The  court  has  no  power  to  relieve  a  mortgagor  from  a 
forfeiture  'of  condition  that  the  whole  principal  shall  become  due  at 
the  election  of  the  mortgagee  upon  a  failure  to  pay  the  interest,  or  to 
order  a  stay  of  proceedings  until  a  further  default,*^^  unless  fraud  or 
improper  conduct  on  the  plaintiff's  part  is  proved;  as  in  case  he  has 
prevented  the  mortgagor  from  ascertaining  the  owner  of  the  mortgage, 

♦"'Mallory  v.  West  Shore  Hudson  turity,  and  therefore  subject  to  the 

Riv.  R.  Co.  3  J.  &  Sp.  174.  equities  existing  between  the  original 

*«''Cox  v.  Kille  (N.  J.  Eq.),  24  Atl.  parties. 

1032;  Fletcher  v.  Daugherty,  13  Neb.  "'See  §  1178;  Belmont  Co.  Branch 

224,   13   N.   W.   207.     This  last  case  Bank  v.  Price,  8  Ohio  St.  299. 

calls  in  question  the  case  of  the  First  "^  Brownlee  v.  Arnold,  60  Mo.  70. 

Nat.  Bank  v.  Peck,  8  Kans.  660,  in  And  see  Noell  v.  Gaines  68  Mo.  649, 

which    it  was   held    that   the   mort-  8  Cent.  L.  J.  353. 

gagor  might  take  advantage  of  the  "^Bennett  v.   Stevenson,  53  N.  Y. 

provision   as   against   one   who   had  508;   Buchanan  v.  Berkshire  L.   Ins. 

taken  the  mortgage  notes  after  ma-  Co.  96  Ind.  510,  521. 


149  WIIEX    RIGHT    TO    ENFORCE    ACCRUES.  [§    1185. 

and  making  payment  to  him  within  tlie  time  fixed  by  the  condition  ;*^^ 
or  the  moTtgagor  has  made  an  honest  but  unsuccessful  effort  to  find 
the  mortgagee  and  tender  him  the  interest.*^*  The  mortgagor,  having 
negligently  permitted  the  time  to  pass,  and  the  whole  debt  thereby  to 
become  due,  cannot  relieve  the  forfeiture  by  paying  into  court  the  in- 
terest or  instalment  on  which  the  forfeiture  oecurred.*^^  But  if  after 
a  default  in  the  payment  of  taxes  the  mortgagor  pays  the  same  without 
prejudice  to  the  mortgagee,  and  before  suit  is  brought  to  declare  the 
debt  due  because  of  the  default,  such  payment  is  a  bar  to  the  suit.*^® 

If  the  only  question  be,  whether  a  tender  had  been  properly  made 
at  any  time,  and,  if  so,  whether  made  within  the  time  prescribed  by  the 
condition,  these  must  be  determined  upon  the  trial  of  the  foreclosure 
action. ■'^^  But  the  forfeiture  will  not  be  enforced  against  one  who  in 
good  faith  and  upon  reasonable  grounds  denies  his  liability  to  pay  in- 
terest, OT  claims  that  he  has  paid  it,  even  if  it  turns  out,  upon  trial  of 
the  matter,  that  he  was  in  error  about  it.*^^ 

Under  a  contract  by  a  mortgagee  with  the  mortgagor,  a  woman  of 
seventy  years  of  age,  that  he  would  not  foreclose  the  mortgage  in  her 
lifetime,  provided  no  interest,  taxes,  or  assessments  remained  unpaid 
for  more  than  thirty  days,  the  court  will  not  allow  the  mortgagee  to 
take  advantage  of  the  non-payment  of  a  sewer  assessment  within  the 
time  specified,  when  it  appears  that  the  mortgagor  did  not  know  of  the 
assessment  till  after  that  time,  and  that  she  paid  it  as  soon  as  she 
learned  of  it.*^" 

The  mortgagee  will  not  be  allowed  to  take  advantage  of  the  mort- 
gagor's failure  to  pay  an  instalment  of  interest  when  he  had  the  money 
for  such  payment  ready  at  the  usual  place  of  payment,  and  the  mort- 
gagee knew  this  fact,  but  failed  to  notify  the  mortgagor  that  he  re- 
quired payment  elsewhere.*^*' 

If  the  mortgagor's  failure  to  pay  the  interest  as  it  matured  is  due 
to  the  mortgagee's  own  act,  the  latter  will  not  be  allowed  to  take  ad- 
vantage of  it  by  claiming  the  whole  mortgage  debt  to  be  due.  Thus, 
if  the  mortgagee  has  agreed  to  call  at  the  mortgagor's  office  for  the  in- 

"3  Noyes  v.  Clark,  7  Paige,  179,  32  "'  Bennett  v.  Stevenson,  53  N.  Y. 

Am.  Dec.  620.  508. 

"*  Hale  v.  Fatten,  60  N.  Y.  233,  19  "« Wilcox   v.    Allen,   36   Mich.    160. 

Am.    Rep.    233;    Lynch   v.    Cunning-  ""Noyes    v.    Anderson,    124    N.    Y. 

ham,    6    Abb.    Pr.    94;    Asendorf    v.  175,  26  N.  E.  316,  14  Daly,  526,  1  N. 

Meyer,  8  Daly,  278.  Y.  Supp.  5.     See  also,  Shaw  v.  Well- 

"=  Ferris    v.    Ferris,    28    Barb.    29.  man,  13  N.  Y.  Supp.  527. 

See  Noyes  v.Anderson,  124  N.  Y.  175,  ^="  Union  Mut.  L.  Ins.  Co.  v.  Union 

26  N.  B.  316,  per  Bradley,  J.  Mills  Plaster  Co.  37  Fed.  286. 

""  Smalley  v.  Ranken  85  Iowa,  612, 
52   N.   W.   507. 


^    1186.]  WHEN    RIGHT    TO    ENFOKCE    ACCRUES.  150 

terest,  the  latter  is  excused  from  seeking  the  mortgagee  to  make  pay- 
ment, and  the  mortgagee  cannot  exact  the  penalty  for  such  failure.*^^ 

§  1186.  Waiver  of  default  of  credit.— When  a  niortgagee  has  made 
his  election  to  regard  the  principal  sum  due  under  a  stipulation  that 
he  shall  have  this  election  upon  the  non-payment  of  interest  for  thirty 
days  after  it  becomes  due,  he  cannot  be  compelled  to  waive  this  pro- 
vision and  accept  the  interest.  Undoubtedly  an  unconditional  ac- 
ceptance of  the  interest  in  default  would  be  a  waiver  of  the  default  ;*^^ 
but  the  acceptance  of  an  instalment  of  the  principal  already  due  would 
not  be  such  a  waiver  ;*-^  nor  would  the  commencement  of  a  foreclosure 
suit  prior  to  the  expiration  of  the  time  after  which  the  mortgagee  may 
elect  that  the  whole  amount  shall  become  due ;  he  may  after  that  time 
file  an  amended  and  supplemental  complaint,  and  proceed  for  the  col- 
lection of  the  whole  amount.*-*  An  acceptance  of  an  instalment  by  an 
agent  of  the  mortgagee  without  his  authority  does  not  have  the  effect 
to  restore  the  contract.*^^ 

A  forfeiture  is  waived  by  a  parol  extension  of  the  time  of  paying  the 
interest;  and  after  a  mortgagee  has  ratified  such  extension  made  by 
an  agent,  a  subsequent  similar  extension  made  by  the  agent  would  be 
deemed  a  waiver  by  the  mortgagee,  and  his  suit  at  law  to  enforce  the 
note  or  bond  on  the  ground  of  such  forfeiture  would  be  enjoined.*^^ 
If  the  mortgagor  sets  up  as  an  excuse  for  failure  to  pay  at  the  time 
specified  a  parol  agreement  with  the  mortgagee  that  the  lat.ter  would 
give  him  twenty  days'  additional  time,  he  should  make  tender  of  the 
interest  in  his  answer,  and  should  pay  the  amount  into  court ;  other- 
wise, even  if  the  extension  should  be  regarded  as  a  waiver  of  forfeiture 
of  the  principal  debt,  the  plaintiff  would  be  entitled  to  a  judgment 
of  foreclosure  for  the  amount  of  interest  due  and  for  costs.*" 

A  payment  of  a  sum  of  money  by  the  mortgagor  for  an  extension 
of  the  time  of  payment  for  a  term  of  years  does  not  prevent  the  mort- 
gagee from  taking  advantage  of  a  subsequent  forfeiture  within  that 
term;  although  such  payment  must  be  credited  upon  the  mortgage 
debt,  it  is  not  appropriated  to  the  interest  so  as  to  prevent  a  for- 
feiture.*-* 

*^»Foerst    v.    Masonic    Hall    Ass'n  ^"Malcolm  v.  Allen,  49  N.  Y.  448. 

(Cal.),  31  Pac.  903.  "'  Sloat  v.  Bean,  47  Iowa,  60,  7  Re- 

"-  Langrldge  v.  Payne,  2  John.  &  porter,  237.  And  see  Smalley  v.  Ran 

H.  423;    In  re  Taaffe,  14   Ir.  Ch.  R.  ken,  85  Iowa,  612,  52  N.  W.  507. 

347;  Lawson  v.  Barron,  18  Hun,  414;  ^^«  Manning  v.  Tuthill,  30  N.  J.  Eq 

Moore  v.  Sargent,  112  Ind.  484,  14  N.  29. 

E.  Rep.  466;    Alabama  &  G.  Manuf.  «' Asendorf  v.  Meyer,  8  Daly,  278. 

Co.  v.  Robinson,  56  Fed.  690.  *=«  Church    v.    Maloy,    9    Hun,    148. 

*=^  Moore  v.  Sargent,  112  Ind.  484, 
14  N.  E.  466. 


151  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  [§    1186. 

A  prO'vision  in  a  mortgage  by  a  railroad  company,  that  the  trustees 
shall  sell  the  mortgaged  property  upon  the  request  of  the  holders  of  a 
certain  amount  of  the  bonds  secured,  does  not  prevent  a  suit  upon  a 
bond  which  has  become  due  by  default  according  to  the  terms  of  the 
mortgage  and  bond.  The  enforcement  of  the  bond  and  of  the  mort- 
gage may  depend  upon  different  circumstances.*^" 

The  fact  that  no  notice  had  been  given  to  the  mortgage  debtor  of 
the  time  of  payment  of  the  interest  on  such  a  mortgage  will  not  avail, 
upon  tender  merely  of  the  interest,  to  restrain  the  proceeding  for  the 
entire  debt.*^^ 

It  is  no  excuse  for  the  non-payment  of  the  money  that  the  mort- 
gagee died  eight  days  before  the  interest  became  due,  and  the  debtor 
urged  feelings  of  delicacy  about  intruding  with  affairs  of  business  so 
soon  afterwards,  it  appearing  that  he  made  no  attempt  to  pay  the 
money,  and  paid  no  attention  to  the  matter  until  it  was  demanded  of 
him  some  weeks  afterwards.  He  should  have  made  inquiry  within  a 
reasonable  time  whether  there  was  any  one  authorized  to  receive  the 
money.*^^ 

A  forfeiture  of  credit  is  waived  by  accepting  interest  after  the  ex- 
piration of  the  time  at  which  the  holder  of  the  mortgage,  by  its  terms, 
is  entitled  to  a  forfeiture  of  the  principal  sum.  His  receipt  acknowl- 
edging the  payment  of  interest  as  of  the  day  on  which  it  fell  due  is  in- 
consistent with  any  claim  of  forfeiture.*^^  But  under  a  provision  in  a 
mortgage  that  in  case  the  interest  be  duly  and  punctually  paid  the 
principal  may  remain  for  two  years,  or  any  other  definite  period,  if 
an  instalment  of  interest  becomes  due  and  is  not  paid  upon  demand, 
and  the  mortgagee  thereupon  demands  payment  of  principal  and  in- 
terest, the  mortgagee  does  not  by  a  subsequent  acceptance  of  the  inter- 
est waive  his  right  to  call  in  the  principal.*^^  If  after  a  default  in  the 
payment  of  interest  on  a  prior  mortgage  which  gave  a  subsequent 
mortgagee  a  right  to  foreclose  for  the  whole  mortgage  debt,  such  mort- 
gagee accepts  payments  of  interest,  and  at  the  time  of  commencing  a 
foreclosure  suit,  and  for  a  long  time  prior  thereto,  there  was  no  exist- 
ing default,  this  having  been  removed  by  payments  on  the  prior  mort- 
gage, a  foreclosure  will  be  refused,  and  a  judgment  will  be  given  reliev- 
ing the  mortgagor  of  any  forfeiture.*^* 

""Philadelphia  &   Balto.   Cent.    R.  201;   Langridge  v.  Payne,  2  John.  & 

Co.  v.  Johnson,  .54  Pa.  St.  127.  H.   423,   distinguished,   as  the  mort- 

"0  Warwick    Iron    Co.    v.    Morton,  gagee's    notice    there    might    be    re- 

148  Pa.  St.  72,  23  Atl.  1065.  garded    as    conditional.      See    obser- 

*"  Mobray  v.  Leckie,  42  Md.  474.  vation  in  In  re  Taaffe.  14  Ir.  Ch.  347{ 

"-  Sire  V.  Wightman,  25  N.  J.  Eq.  that  the  latter  case  should  be  over- 

102;    Smalley    v.    Ranken,    85    Iowa  ruled. 

612,  52  N.  W.  507.  "*  Gilbert  v.  Shaw,  17  N.  Y.  Supp, 

"'  Keene  v.  Biscoe,  L.  R.  8  Ch.  D.  621. 


§§  1186a,  1187.]  WHEN  right  to  enforce  accrues.  152 

§  1186a.  A  foreclosure  for  a  breach  of  the  condition  in  respect  to 
the  payment  of  interest,  taxes  or  a  part  of  the  principal  may  be  pre- 
vented by  a  tender  of  the  amount  due  or  by  the  performance  of  the 
condition,  unless  there  is  a  provision  that  the  whole  mortgage  debt 
shall  become  due  upon  the  breach  of  any  condition.  Such  a  tender, 
however,  does  not  prevent  a  foreclosure  for  a  subsequent  breach  of  the 
same  or  any  other  condition,  or  for  a  prior  breach,  for  which  no  tender 
is  made.*^^ 

§  1187.  When  a  guarantor,  or  surety,  or  indorser,  is  secured  by 
a  mortgage,  he  cannot  foreclose  until  he  has  paid  the  obligation  he 

became  liable  upon  ;*^''  and  a  mortgage  given  to  indemnify  one  against 
damages  occasioned  by  the  negligence  of  the  mortgagor  or  other  person 
cannot  be  foreclosed  until  judgment  has  been  recovered  for  the  negli- 
gence, because  it  is  not  certain  before  this  that  the  mortgagee  has  been 
damnified.'*^^  Where  a  mortgage  w^as  given  to  secure  the  performance 
of  a  contract  of  the  mortgagor  to  consign  all  the  goods  he  should  man- 
ufacture for  three  years  to  the  mortgagee,  who  accepted  drafts  for  the 
mortgagor's  accommodation,  and  was  obliged  to  pay  them,  it  was  held 
that  upon  the  insolvency  of  the  mortgagor  the  mortgagee  was  entitled 
to  an  immediate  foreclosure,  because  the  agreement  contemplated  a 
continuous  performance  of  it,  and  the  assignee  could  not  carry  on  the 
business  as  stipulated. *^^ 

An  indorser  for  accommodation  who  is  secured  for  his  liability  by  a 
mortgage  need  not  wait  until  the  note  indorsed  by  him  is  protested 
before  paying  it,  in  order  to  have  the  benefit  of  his  mortgage  security ; 
but  upon  being  informed  by  the  principal  debtor  that  he  could  not  and 
should  not  pay  the  note,  such  indorser  may  pay  the  note  in  time  to 
save  it  from  going  to  protest,  and  such  payment  will  be  within  the  con- 
dition of  the  mortgage. ■'^^ 

The  condition  of  a  mortgage  given  to  indemnify  a  surety  is  not 
broken  until  the  surety  has  been  obliged  to  pay  the  debt,  and  therefore 
his  right  to  foreclose  does  not  accrue  until  that  time.*'*"     It  is  suffi- 

*''Silva  V.   Turner,  166  Mass.   407,  Planters'  Bank  v.  Douglass,  2  Head, 

44  N.  E.  532;    Weeks  v.   Baker,   152  699. 

Mass.  20,  24  N.  E.  905.  "''Harding  v.  Mill   River  Woollen 

"'  Ketchum   v.    Jauncey,   23    Conn.  Manuf.  Co.  34  Conn.  458,  461. 

123,  126;  Kramer  v.  Farmers'  &  Me-  ""National    State    Bank   v.    Davis, 

chanics'    Bank,    15    Ohio,    253;    Mc-  24  Ohio  St.  190. 

Connell    v.    Scott,    15    Ohio,    401,    45  ^^"  Colvin    v.    Buckle,    8    M.    &    W. 

Am.  Dec.  583;  Ohio  Life  Ins.  &  Trust  680;    Rodman  v.   Hedden,   10  Wend. 

Co.  V.  Reeder,  18  Ohio,  35;  Lewis  v.  499,   500;    Piatt  v.   Smith,   14  Johns. 

Richey,  5  Ind.  152;   Francis  v.  Por-  368;   Powell  v.  Smith,  8  Johns.  249; 

ter,  7  Ind.  213.  McLean   v.    Ragsdale,   31   Miss.   701; 

"'Grant  v.  Ludlow,  8  Ohio  St.  1;  Shepard    v.    Shepard,    6    Conn.    37; 

Tilford    V.    James,    7    B.    Mon.    336;  Pond  v.  Clarke,  14  Conn.  334. 


153  WHEN    RIGHT   TO    ENFORCE   ACCRUES.     [§§    1188,    1189. 

cient,  however,  if  he  has  paid  a  part  of  the  debt.*"  Neither  is  it  neces- 
sary that  the  amount  of  the  damages  sustained  by  the  mortgagee 
should  be  determined  by  a  suit  at  law  before  filing  a  bill  to  foreclose."" 

§  1188.     When  the  condition  is  to  pay  or  to  save   harmless,  the 

mortgagee  may  foreclose  on  the  mortgagor's  failure  to  pay ;"'  although 
when  the  condition  is  merely  to  save  harmless  he  cannot  foreclose  until 
he  has  suffered  loss.  If  the  condition  be  to  pay  and  save  harmless,  it 
is  broken  upon  failure  to  pay. 

A  condition  that  the  mortgagor  "shall  promptly  pay  and  discharge 
all  notes  and  papers  of  his  upon  which  the  mortgagees  shall  become  in- 
dorsers  or  acceptors,  together  with  all  the  interest,  costs,  and  charges 
thereon,  so  as  to  save  said  mortgagees  harmless  by  reason  of  their  con- 
nection with  such  paper,"  is  broken  at  once  on  a  failure  to  pay  at  ma- 
turity, and  the  mortgagee  may  foreclose  without  further  action.  Al- 
though the  power  of  sale  in  this  mortgage  was  limited  to  the  case  of 
the  mortgagee  being  damnified  by  paying  the  debts  himself,  the  mort- 
gage was  foreclosed  in  equity.  The  power  of  sale  need  not  be  coexten- 
sive with  the  condition  of  the  mortgage;  and  although  that  remedy 
cannot  be  used  for  a  breach  not  covered  by  the  power,  the  remedy  in 
equity  is  open  upon  every  breach  of  the  condition.*** 

When  a  mortgage  is  given  to  secure  the  payment  of  the  note  of  a 
third  person,  which  the  mortgagor  transfers  to  the  mortgagee  at  the 
time  of  executing  the  mortgage,  the  mortgagee  may  foreclose  the  mort- 
gage upon  the  happening  of  a  breach,  without  first  prosecuting  his 
remedy  against  the  maker  of  the  note.**^ 

§  1189.  A  mortgagee  may  be  estopped  from  foreclosing  his  mort- 
gage by  an  agreement  with  the  mortgagor,  upon  which  the  latter  has 
acted,  that  the  mortgage  should  never  be  enforced  against  him ;  or  an 
agreement  that  the  mortgagee  should  hold  possession  until  his  demand 
should  be  paid  out  of  the  rents  ;**'^  and  even  without  any  positive  agree- 
ment, if  the  mortgagee,  by  giving  the  mortgagor  to  understand  that  he 
should  be  released  of  the  burden  of  the  mortgage,  intentionally  leads 
the  mortgagor  to  act  in  such  a  manner  that  he  will  be  seriously  preju- 
diced by  the  mortgagee's  not  carrying  out  the  understanding.**^ 

"1  Beckwith     v.     Windsor     Manuf.  "'  Butler  v.  Ladue,  12  Mich.  173. 

Co.    14    Conn.    594.  ^*' Ballenger  v.  Oswalt,  26  Ind.  182, 

**-  Rodgers  v.  Jones,  1  McCord  Ch.  O'Haver  v.  Shidler,  26  Ind.  278. 

221.  "°  Higgins  v.  Haberstraw,  76  Miss. 

"^Thurston    v.    Prentiss,    1    Mich.  627,   25   So.    168;    Lee  v.    Hawks,    68 

193;  Dye  v.  Mann,  10  Mich.  291;  But-  Miss.  669,  671,  9  So.  828. 

ler  v.  Ladue,  12  Mich.  173;    Francis  "' Faxton  v.  Faxon,  28  Mich.   159. 

V.  Porter,  7  Ind.  213;   Ellis  v.  Mar-  In  this  case  the  mortgagee  having 

tin,  7  Ind.  652;   Lewis  v.  Richey,  5  persuaded   a  son   of  the  mortgagor, 

Ind.  152.  after  the  death  of  the  latter,  to  re- 


§    1190.]  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  154 

A  person  being  desirous  of  purchasing  land  upon  which  there  was  a 
mortgage,  but  being  unable  to  make  the  payments  at  the  times  speci- 
fied in  the  mortgage,  called  upon  the  holder  of  it,  who  agreed  verbally 
that  if  the  proposed  purchaser  would  pay  two  hundred  dollars  the  en- 
suing spring,  and  interest  on  all  sums  remaining  unpaid  annually 
thereafter,  and  would  make  certain  improvements,  he  would  extend  the 
time  of  payment  of  the  mortgage  for  twenty  years.  The  purchase  was 
accordingly  made  and  all  the  requirements  complied  with,  except  that 
the  purchaser  failed  for  two  years  to  pay  the  interest.  It  was  decided 
that  the  time  of  payment  was  extended  by  the  verbal  contract,  and  that 
there  was  no  default  in  the  payment  of  the  principal,  although  there 
might  have  been  a  foreclosure  for  the  interest  remaining  unpaid.**^ 

It  is  held  in  Indiana  that  an  agreement  made  after  the  maturity 
of  a  mortgage  note  to  extend  the  time  of  payment  is  no  bar  to  a  fore- 
closure before  the  expiration  of  the  period  of  extension,  of  the  mort- 
gage securing  the  note,  the  only  remedy  for  violation  of  the  agreement 
being  an  action  for  damages.  Such  an  agreement  is,  in  substance,  an 
agreement  not  to  sue  within  that  time,  and  cannot  be  pleaded  in  bar 
of  an  action  brought  within  the  time.'**^ 

§  1190.     If  the   time   of  payment   of   a   mortgage  be  extended, 

the  right  to  foreclose  is  of  course  suspended  until  the  expiration  of  the 
extended  term.  Tlie  extension  of  the  time  of  payment,  if  binding, 
has  the  effect  in  equity  of  modifying  the  original  condition  of  the  mort- 
gage to  the  same  extent  as  if  the  terms  of  the  new  agreement  were  in- 
corporated into  the  condition.^^"  A  verbal  agreement  to  extend  the 
time  of  payment  is  binding,  and  suspends  the  right  to  foreclose  if 
founded  on  a  good  consideration  and  otherwise  valid  ;*^^  but  if  made 
without  consideration  it  amounts  to  nothing,  and  the  mortgage  may 

main    upon    the    farm    and    support  nell,  35  Ohio  St.   365;    Washburn  v. 

his  father's  family,  upon  a  promise  Williams,  10  Colo.  App.  153,  50  Pac. 

that    the    mortgage    should    not    be  223. 

enforced  against  the  family,  was  not  It  is  suggested  that  such  an  ex- 
allowed,  after  the  son  had  cultivated  tension  takes  the  mortgage  out  of 
the  farm  and  supported  the  family  the  statute  as  between  the  original 
for  several  years,  to  foreclose  the  parties  only,  and  not  between  the 
mortgage.  See  Fausel  v.  Schabel,  mortgagee  and  innocent  purchasers 
22  N.  J.  Eq.  126,  for  circumstances  who  had  no  notice  of  the  extension, 
and  agreement  not  amounting  to  an  Wyman  v.  Russell,  4  Biss.  307. 
agreement  to  extend;  Burke  v.  ^"Tompkins  v.  Tompkins,  21  N. 
Grant,  116  111.  124,  4  N.  E.  655.  J.   Eq.   338;    Parker  v.    Jameson,   32 

"'Burt  V.  Saxton,  1  Hun,  551.    See  N.  J.  Eq.  222;   French  v.  Griffin,  18 

Marshall  v.  Old,  14  Colo.  App.  32,  59  N.   J.   Eq.    279,   281;    Trayser  v.    In- 

Pac.  217.  diana    Asbury    University,    39    Ind. 

""Ayers  v.  Hamilton,  131  Ind.  98,  556;     Loomis    v.    Donovan,    17    Ind. 

30  N.  E.  895.  198;  Redman  v.  Deputy,  26  Ind.  338; 

*""  Union  Cent.  L.  Ins.  Co.  v.  Bon-  Fish  v.  Hayward,  28  Hun,  456. 


155  WHEN    RIGHT    TO    ENFORCE    ACCRUES.  [§    1190. 

be  foreclosed  at  any  timc.^^^  jf^  however,  the  action  of  the  party  to 
whom  the  promise  was  made  was  controlled  by  such  promise,  and  he 
took  title  to  the  real  estate  covered  by  the  Qiortgage  relying  upon  such 
promise,  a  court  of  equity  will  apply  the  doctrine  of  estoppel,  and  re- 
fuse its  aid  to  the  mortgagee  when  he  attempts  to  foreclose  his  mort- 
gage before  the  expiration  of  the  period  named.*^^  The  payment  of 
interest  in  advance  is  a  sufficient  consideration  to  support  an  extension 
of  a  mortgage.*^* 

An  extension  of  the  time  of  payment  of  a  mortgage  note  endorsed 
thereon  is  presumed  to  have  been  made  by  the  party  having  the  note 
in  his  possession.  If  the  note  is  secured  by  a  trustee  an  endorsement 
oi  an  extension  on  the  note  will  be  presumed  to  have  been  made  by 
trustee  who  has  the  note  in  his  possession.  Such  an  extension  is  bind- 
ing upon  the  trustee  although  not  signed  by  him,  but  only  by  the 
makers  of  the  trust  deed  and  note,  where  the  trustee  has  endorsed  the 
extension  upon  the  note  as  per  the  agreement  attached,  and  has  ac- 
cepted interest  during  part  of  the  period  of  extension.*^^ 

If  an  agent  of  the  mortgagee,  without  his  knowledge  or  authority, 
induces  the  mortgagor  to  execute  an  additional  note  covering  addi- 
tional interest  for  a  period  of  extension,  and  such  note  was  executed  by 
the  mortgagor  because  he  believed  it  was  demanded  by  the  mortgagee, 
it  was  held  that  there  was  no  consideration  for  the  extension  note.*^" 

Where  the  mortgage  was  payable  in  six  months  after  date,  with  in- 
terest monthly  in  advance,  and  contained  also  a  stipulation  that  in 
case  the  interest  or  any  portion  of  it  should  become  due  and  remain 
unpaid  after  demand,  then  the  mortgage  should  be  foreclosed,  the 
prompt  payment  of  the  interest  was  held  not  to  prolong  the  time  of 
payment  beyond  the  six  months,  and  a  cause  of  action  upon  the  note 
and  mortgage  then  accrued.*^^ 

An  agreement  to  extend  the  payment  of  a  debt  already  due  is  not 
to  be  implied  from  a  provision  in  a  mortgage  of  a  mining  claim,  that 
the  debt  is  to  be  paid  as  fast  as  it  can  be  made  out  of  the  claim,  after 

*'=-  Massaker  v.  Mackerley,  9  N.  J.  a    mortgage    debt,    entered   Into    on 

Bq   440;  Olmstead  v.  Latimer,  158  N.  Sunday,  is  void.     Rush  v.  Rush   (N. 

Y.    313,   53   N.   E.    5;    Parlver,    C.   J.,  J.),  18  Atl.  221. 

reviewing  the  New  York  cases.  ^"  Maher  v.   Lanfrom,   86   111.   513; 

*'^Van    Syckle   v.    O'Hearn,    50   N.  In  re  Belts,  4  Dill.   93,  7   Reporter, 

J.  Eq.   173,  24  Atl.  1024.  225. 

In  New  Jersey,  under  the  statute  "=  Kransz    v.    Uedelhofen,    193    111. 

relating    to    business    done    on    the  477,  62  N.  E.  239. 

"Christian   Sabbath,"    commonly  '''  Purness  v.  Stiles,  18  Wash.  383, 

called    Sunday,    a    parol    agreement  51  Pac.  470. 

extending   the   time  of   payment  of  "'Pendleton  v.  Rowe,  34  Cal.  149. 


§    1191.]  WHEN    RIGHT    TO    ENFORCE   ACCRUES.  156 

deducting  certain  expenses ;  nor  does  such  an  agreement  imply  that  the 
claim  is  to  be  paid  only  in  this  wa}^*^^ 

A  provision  for  the  extension  of  the  mortgage  at  the  option  of  the 
holder  of  the  mortgage  note  is  an  agreement  coupled  with  an  interest, 
and  is  not  revoked  by  the  death  of  the  mortgagor.*'^® 

When  a  mortgagee  in  assigning  an  overdue  mortgage  guarantees  its 
payment,  and  provides  for  its  extension  upon  condition  oi  the  prompt 
payment  of  the  interest,  this  agreement  does  not  inure  to  the  benefit 
of  the  mortgagor ;  but  the  mortgagee  may  at  any  time  after  a  default 
require  the  assignee  to  proceed  to  foreclose  at  his  expense.*^" 

Only  a  party  to  an  agreement  to  extend  the  time  of  payment  can 
maintain  an  action  for  a  breach  of  it  by  the  mortgagee.**'^ 

An  extension  of  a  mortgage  which  covers  a  homestead  not  executed 
by  a  wife  of  the  mortgagor  does  not  have  the  effect  to  keep  the  mort- 
gage on  foot  against  the  homestead  right.*^- 

An  extension  agreement  made  between  a  purchaser  of  the  land  sub- 
ject to  the  mortgage  and  the  original  mortgagee  after  he  had  assigned 
the  mortgage  does  not  interrupt  the  running  of  the  statute  as  against 
a  purchaser  from  the  owner  who  made  such  agreement,  the  agreement 
being  void  because  the  mortgagee  had  no  interest  in  the  mortgage.*"^ 

§  1191.  If  the  time  of  payment  of  such  a  mortgage  be  ex- 
tended by  a  parol  agreement,  though  this  may  be  insufficient  to 
change  the  legal  effect  and  operation  of  the  writing  vmder  seal,  it  will 
be  a  sufficient  waiver  of  the  default  contemplated  in  the  mortgage,  and 
neither  a  court  of  equity  nor  a  court  of  law  will  enforce  a  fo-rfelture 
of  credit  which  has  occurred  under  such  agreement.****    A  foreclosure 

"*  Sharpe  v.  Arnott,  51  Cal.  188.  which   is,   that   the   mortgagees   can 

^^^  Benneson  v.  Savage,  130  111.  352,  not  seize  and  sell  the  goods  unless 

22  N.  E.  838.  the  mortgagor  makes  default  in  pay- 

*""  Lee    v.    West    Jersey    Land    &  ing  the  instalments  of  £2,  which  he 

Cranberry  Co.  29  N.  J.  Eq.  377.  is   bound   to   do   on   each   successive 

••"^  Reed    v.    Home    Savings    Bank,  Monday    until    the    loan    is    repaid. 

127  Mass.  295.  Now   the  facts  are,   that  the   plain- 

*"' Wells  V.   Harter,  56  Cal.   342,  7  tiff's  wife  went  to  Bayne  (who  must 

Reporter,  266.  be   taken   to   have   had   full   author- 

^"'^  Investment     Securities     Co.     v.  ity  to  bind  the  defendants  by  what 

Bergthold  Co.  60  Kan.  813,58Pac.469.  he  did,  for,   on  the  evidence,   I   see 

*"  Van    Syckle   v.    O'Hearn,    50    N.  not  the   slightest   reason   to  believe 

J.  Eq.  173,  24  Atl.   1024.     In  Albert  any  one  else  ever  interfered  in  the 

V.    Grosvenor   Investment   Company,  management  of  the  business  of  the 

L.  R.  3  Q.  B.  123,  127,  Chief  Justice  company)    and    told    him    that    her 

Cockburn  said:   "This  is  the  case  of  husband    had    difficulty    in    meeting 

a  mortgage  whereby  the  mortgagor  the   instalment  due  on   the  28th   of 

transfers    the    property    in    certain  August,    and    Bayne    extended    the 

goods   to  the   mortgagees,   but  sub-  time  for  the  payment  of  that   and 

ject  to  the  mortgagor's  right  of  re-  the  next  instalment  to  the   11th   of 

demption;     and    there    are    certain  September.      Now    the    bill    of    sale 

clauses    In    the    deed,    the    result    of  provides  that  if  the  mortgagor  shall 


157 


WHEN    EIGHT    TO    ENFORCE    ACCRUES. 


[§    11^1- 


suit  brought  before  the  expiration  of  the  time  so  extended  is  pre- 
mature, and  will  be  dismissed.*^^ 

It  is  the  general  rule,  therefore,  that  no  interest  having  been  paid, 
and  no  entry  made  under  the  mortgage,  or  other  proceedings  had  to 
enforce  the  mortgage,  it  is  presumed  as  a  matter  of  fact  from  these 
circumstances  that  the  mortgage  has  been  discharged  by  payment  or 
otherwise.  This  presumption  of  fact  is,  however,  always  liable  to  be 
controlled  by  other  evidence.  The  period  of  twenty  years  is  not 
adopted  as  a  fixed  and  positive  limitation  of  right,  but  as  an  equitable 
rule,  after  the  analogy  of  the  statute  of  limitations.'**"^  In  several 
States  in  which  the  time  of  limitation  has  been  made  less  than  twenty 
years,  the  analogy  of  the  statute  of  limitations  is  followed,  and  a  cor- 
responding period  is  adopted  in  equity  as  a  bar  to  a  suit  to  foreclose  or 
redeem  a  mortgage.*®^ 

The  rule  is  otherwise  in  Alabama;'*"^  for  while  it  is  held  that  the 


make  'default'  in  payment  of  the 
sum  of  £62  10s.,  or  any  part  there- 
of, the  whole  amount  shall  be  then 
immediately  due  and  payable;  and  it 
shall  be  lawful  for  the  mortgagees 
to  take  possession  of  the  goods,  and 
to  sell  and  dispose  of  them.  Now 
'default'  must  be  taken  to  mean  a 
non-payment  by  the  party  bound  to 
pay,  without  the  consent  of  the  par- 
ties having  a  right  to  waive  the  pay- 
ment. And  I  see  nothing  which  goes 
to  show  that  if,  by  the  consent  of 
the  person  who  is  to  receive  pay- 
ment, the  time  for  payment  is  ex- 
tended, the  omission  to  pay  within 
the  time  specified  must  be  a  'de- 
fault' within  the  meaning  of  the 
word  in  the  bill  of  sale;  and  it 
would  be  monstrous  to  hold  that  it 
was  a  default,  for  the  mortgagee 
might  always  lead  the  mortgagor 
into  a  snare  by  consenting  that  the 
time  for  payment  should  be  extend- 
ed, and  then  .coming  down  upon 
him  by  insisting  that  there  had  been 
a  default.  And  even  if  money  were 
offered  by  the  mortgagor  the  next 
day,  and  it  were  accepted  by  the 
mortgagee,  the  result  would  be  the 
same.  'Default'  must  mean  a  de- 
fault where  something  is  not  done 
by  the  mere  act  of  omission  of  the 
one  party,  and  not  an  omission  with 
the  concurrence  of  the  other  party. 
And  in  the  present  case  the  volun- 
tary extension  of  the  time  by  Bayne 
alters  the  character  of  the  act  of  the 
plaintiff,  which  would  otherwise 
have  been  a  default." 


In  North  Dakota  the  Rev.  Code, 
§  4G99,  provides  that  a  mortgage 
can  be  "extended"  only  by  an  instru- 
ment in  writing,  formally  executed, 
but  such  provision  has  no  reference 
to  an  extension  of  time  for  the  pay- 
ment of  the  debt  secured  by  this 
mortgage.  A  mortgage  is  extended 
when  it  is  made  to  stand  for  some 
debt  or  obligation  not  originally  in- 
cluded therein.  The  receiver  of  a 
national  bank  has  authority,  upon 
sufficient  consideration,  to  extend 
the  time  of  payment  of  a  debt  ow- 
ing such  bank,  where  by  so  doing  he 
can,  in  his  judgment,  strengthen 
the  security  he  holds  for  the  pay- 
ment of  such  debt.  People's  State 
Bank  v.  Francis,  8  N.  D.  369. 

''"Goodall  V.  Boardman,  53  Vt.  92. 

""  In  Iowa  the  statute  of  limita- 
tions is  held  to  apply  directly  to 
suits  in  equity  as  well  as  suits  at 
law,  and  to  bar  a  suit  to  foreclose  a 
mortgage  after  the  lapse  of  ten 
years.  Newman  v.  De  Lorimer,  19 
Iowa,  244;  Hendershott  v.  Ping,  24 
Iowa,  134.  The  right  to  foreclose  a 
title  bond  is  barred  in  the  same 
time.     Day  v.  Baldwin,  34  Iowa,  380. 

^"  As  in  Vermont:  Richmond  v. 
Aiken,  25  Vt.  324;  Martin  v.  Bow- 
ker,  19  Vt.  526;  Merriam  v.  Barton, 
14  Vt.  501.  Connecticut:  Haskell  v. 
Bailey,  22  Conn.  569;  Crittendon  v. 
Brainard,  2  Root*  485.  Kentucky: 
Field  V.  Wilson.  6  B.  Mon.  447.  Iowa: 
Crawford  v.  Taylor,  42  Iowa,  260. 

^sgyrd  V.  McDaniel,  33  Ala.  18; 
Coyle  V.   Wilkins,   57   Ala.   108.     In 


1191.] 


WHEN    RIGHT    TO    ENFORCE    ACCRUES. 


158 


possession  of  the  mortgagee  after  the  law  day  of  the  mortgage  with- 
out an  account  of  rents  and  profits,  or  other  recognition  of  the  mort- 
gagor's equity  of  redemption  for  the  period  which,  under  the  statute 
of  limitations,  would  har  an  action  at  law,  if  the  right  and  remedy 
were  legal,  would  by  analogy  bar  the  mortgagor  of  a  bill  to  redeem,  it 
is  held  that  a  mortgagee  is  not  barred  of  a  bill  to  foreclose,  unless 
twenty  years  have  elapsed  without  the  payment  of  interest  or  an  admis- 
sion of  the  existence  of  the  mortgage  debt  creating  the  presumption  of 
its  payment. 

The  distinction  taken  between  a  bill  by  the  mortgagor  to  redeem  and 
a  bill  by  the  mortgagee  for  foreclosure  rests  on  the  difEerence  of  the 
right,  and  of  the  possession  of  the  mortgagee  and  of  the  mortgagor. 
The  statute  does  not  begin  to  run  until  there  is  a  breach  of  the  condi- 
tion of  the  mortgage.**^^ 

The  statute  of  limitations  does  not  bar  a  foreclosure  unless  it  is  sup- 
ported by  an  adverse  possession  of  the  mortgaged  property  for  the  re- 
quired period  of  the  statute.*^** 


the  latter  case  Brickell,  C.  J.,  upon 
this  distinction  further  said:  "After 
forfeiture  the  mortgagee  has  the 
complete  legal  title.  It  is  in  equity 
only,  and  by  construction,  that  he 
is  regarded  as  a  trustee  of  the  legal 
estate  for  the  mortgagor,  and  bound 
to  apply  the  rents  and  profits  to 
the  payment  of  the  mortgage  debt. 
A  possession  without  recognition  of 
the  equity  of  the  mortgagor,  with- 
out an  application  of  the  rents  and 
profits,  as  by  decree  of  a  court  of 
equity  their  application  could  be 
compelled,  is  in  hostility  to  and  ad- 
verse to  the  mortgagor,  and  refer- 
able only  to  the  legal  title.  The 
mortgagor  stands  in  a  different  re- 
lation. If  in  possession,  his  posses- 
sion is  permissive,  referable,  and  in 
subordination  to  the  legal  title  of 
the  mortgagee,  until,  by  disclaimer, 
of  which  the  mortgagee  has  notice, 
it  becomes  adverse.  His  alienation 
passes  only  his  equity  of  redemp- 
tion, and  if  the  alienee  has  notice 
of  the  mortgage  he  enters  and  holds 


in  subordination  to  the  title  of  the 
mortgagee.  The  mortgage  to  the 
appellant  was  properly  recorded, 
and  it  is  not  necessary,  therefore, 
to  examine  the  evidence  which  has 
been  offered  to  show  actual  notice  to 
those  entering  subsequently  into 
possession  of  the  premises  under 
the  mortgagor.  The  registration  is 
equivalent  to  actual  notice,  and  the 
purpose  of  the  statutes  which  au- 
thorize it  is  to  make  it  operate  as 
direct  notice  to  all  persons  deriving 
title  from  the  mortgagor.  Having 
notice,  they  are  bound  by  the  mort- 
gage; and  the  evidence  fails  to  show 
any  disclaimer  by  them  of  the  title 
of  the  mortgage." 

*«=•  Delano  v.  Smith,  142  Mass. 
490,  8  N.  E.  644. 

*™§  1211;  St.  Louis  v.  Priest,  103 
Mo.  652,  15  S.  W:  988;  Lewis  v. 
Schwenn,  93  Mo.  26,  2  S.  W.  391; 
Booker  v.  Armstrong,  93  Mo.  49,  4 
S.  W.  727;  Gardner  v.  Terry,  99  Mo. 
523,  12  S.  W.  888. 


CHAPTEE  XXVI. 

WHEN  THE  RIGHT  TO  FORECLOSE  IS   BARRED. 

§  1192.  Statutes  of  limitation  are,  as  a  general  rule,  only  ap- 
plicable as  such  to  proceedings  at  law;  but  without  having  any 
binding  force  upon  courts  of  equity  they  have  been  adopted  here  by 
analogy  as  fixing  the  time  within  which  rights  may  be  enforced  in 
equity.^  Following  this  analogy,  the  right  of  the  mortgagee  to  fore- 
close and  of  the  mortgagor  to  redeem  is  presumed  to  be  barred  after 
the  lapse  of  such  a  period  as  is  prescribed  by  the  statute  for  enforcing 
a  right  of  entry  upon  lands.  This  period  by  the  English  Statute  of 
Limitation  of  32  Henry  VIII.  and  21  James  I.,  and  by  the  earlier  stat- 
utes enacted  in  this  country,  which  generally  followed  the  English 
statute,  was  twenty  years  ;^  and  following  the  analogy  of  th«e  statutes 
so  long  as  they  remained  in  force,  the  lapse  of  this  period  was  in  the 
same  way  presumed,  as  between  a  mortgagor  and  mortgagee,  to  be  a 
bar  to  the  rights  of  the  one  as  against  the  other.  In  the  early  case  of 
White  V.  Ewer,^  "the  Lord  Keeper  declared  that  he  would  not  relieve 
mortgages  after  twenty  years ;  for  that  the  statute  of  21  Jac.  I.,  ch.  IG, 

1  Ayres  v.  Waite,  10  Cush.  72;  any  time  hereafter,  make  any  entry- 
Morgan  v.  Morgan,  10  Ga.  297;  Rob-  into  any  lands,  tenements,  or  here- 
erts  V.  Welch,  8  Ired.  Eq.  287;  Ray  ditaments,  but  within  twenty  years 
V.  Pearce,  84  N.  C.  485;  Coyle  v.  next  after  his  or  their  right  or  title 
Wilkins,  57  Ala.  108;  Cleveland  Ins.  which  shall  hereafter  first  descend 
Co.  V.  Reed,  1  Biss.  180;  Wyman  v.  or  accrue  to  the  same;  and  in  de- 
Russell,  4  Biss.  307;  Boone  v.  Cole-  fault  thereof,  such  persons  so  en- 
hour,  165  111.  305,  46  N.  E.  253.  Per  tering,  and  their  heirs,  shall  be  ut- 
contra.  Lord  Redesdale,  in  Choi-  terly  excluded  and  disabled  from 
mondeley  v.  Clinton,  4  Bligh,  119,  such  entry  after  to  be  made,  any 
said  the  statute  was  meant  to  bind  former  law  or  statute  to  the  con- 
courts  of  equity.  Pitzer  v.  Burns,  7  trary  notwithstanding."  In  case  of 
W.  Va.  63,  69.  disabilities     entry     may     be     made 

"The    words    of    the    statute    21  within  ten  years  after  the  removal 

James  I.   ch.   16,   §  1,  are,  that  "for  of  the  same, 

quieting  men's  estate,  be  it  enacted,  '  2  Vent.  340. 
that  no  person  or  persons  shall,  at 

159 


^    1193.]  WHEN    RIGHT    TO    FORECLOSE    IS    BARRED. 


160 


did  adjudge  it  reasonable  to  limit  the  time  of  one's  entiy  to  that  num- 
ber of  years;  unless  there  are  such  particular  circumstances  as  may 
vary  the  ordinary  case,  as  infants,  femes  covert,  etc.,  are  provided  for 
in  the  very  statute ;  though  those  matters  in  equity  are  to  be  governed 
by  the  course  of  the  court,  and  that  'tis  best  to  square  the  rules  of 
equity  as  near  the  rules  of  reason  and  law  as  may  be." 

§  1193.  The  tendency  of  legislation  has  been  to  reduce  the 
period  of  limitation  within  which  suits  relating  to  real  property  shall 
be  brought.*  A  statement  is  appended  of  the  periods  of  limi- 
tation in  the  several  States  applicable  to  actions  for  the  recovery 
of  real  property,  though  it  will  be  observed  that  in  some  States  there 
are  special  provisions  applicable  to  mortgages.^     A  reference  to  the 


*  "It  might  at  first  sight  be  con- 
sidered that  the  duration  of  wrong 
ought  not  to  give  it  a  sanction,  and 
that  the  long  suffering  of  the  in- 
jury should  be  no  bar  to  the  ob- 
taining of  right  when  demanded. 
But  human  affairs  must  be  conduct- 
ed on  other  principles.  It  is  found 
to  be  of  the  greatest  importance  to 
promote  peace  by  affixing  a  period 
to  the  right  of  disturbing  possession. 
Experience  teaches  us  that,  owing 
to  the  perishable  nature  of  all  evi- 
dence, the  truth  can  not  be  ascer- 
tained on  any  contested  question  of 
fact  after  a  considerable  lapse  of 
time.  The  temptation  to  introduce 
false  evidence  grows  with  the  diffi- 
culty of  detecting  it;  and  at  last, 
long  possession  affords  the  proof 
most  likely  to  be  relied  upon  of  the 
right  of  property.  Independently 
of  the  question  of  right,  the  disturb- 
ance of  property  after  long  enjoy- 
ment is  mischievous.  It  is  accord- 
ingly found  both  reasonable  and 
useful  that  enjoyment  for  a  certain 
period  of  time  against  all  claim- 
ants should  be  considered  conclu- 
sive evidence  of  title."  First  Re- 
port of  the  Real  Property  Commis- 
sioners of  England,  1829,  p.  39. 

^Alabama:  Ten  years.  Code  1896, 
§  2795.  Alaska:  T.  Ten  years.  An- 
not.  Codes  1900,  Pt.  IV,  §  5.  Ar- 
kansas: Seven  years,  or  when  debt 
is  barred.  Acts  of  1887,  ch.  104.  R. 
S.  1894,  34815.  See,  however,  §  1207, 
that  mortgage  is  discharged  when 
debt  is  barred.  Nix  v.  Draughon,  54 
Ark.  340,  15  S.  W.  893.  California: 
An  action  upon  any  contract,  obliga- 
tion,  or   liability,   founded   upon   an 


instrument    in    writing    executed    in 
this  State,  must  be  brought  within 
four  years.     This   is   held   to   apply 
to  mortgages,  which  are  not  regard- 
ed as  conveyances  of  land.     Code  of 
Civil    Procedure    1903,    §  337.      New- 
hall    V.    Sherman,    124    Cal.    509,    57 
Pac.  387.     See  §  1207,  that  mortgage 
is   discharged  when  debt  is   barred. 
Colorado:   Twenty  years.     Acts  1893, 
§  1.       Annot.      Stats.     1891,      §  2900. 
Connecticut:     Fifteen    years.      G.    S. 
1875,  p.  493.  Delaware:  Twenty  years. 
R.    S.    1893,   c.    122.     Florida:    Seven 
years.      R.    S.    1892,    §  1287.      Fore- 
closure suit  barred  in  twenty  years. 
Jordan    v.    Sayre,    24    Fla.    1,    R.    S. 
1892,  §  1294,  3  So.  329.     Coe  v.  Fin- 
layson,     41     Fla.     169,    26    So.     704. 
Georgia:     Twenty    years;     or    seven 
years     under     written     evidence     of 
title.     Code  1882,  §§2682,  2683.  Code 
1895,    i5  3588.      And    see    Parker    v. 
Jones,  57  Ga.  204.  Idaho:  Five  years. 
R.  S.  1887,  §  4039.     See  §  1207,  that 
mortgage  is  discharged  when  debt  is 
barred.     Illinois:    An  action  or  sale 
to  foreclose  any  mortgage,  or  deed 
of  .trust  in  the  nature  of  a  mortgage, 
is    limited    to    ten    years    after    the 
right    of    action    or    right    to    make 
such  sale  accrues.  Real  actions  are 
limited  to  twenty  years.     R.  S.  1877 
and    1880,    ch.    83,    §§  1,    11.      Hiber- 
nian  Banking   Asso.   v.   Commercial 
Nat.  Bank,  157  111.  576,  41  N.  E.  918. 
See    §  1207,    that    mortgage    is    dis- 
charged when   debt  is   barred.     In- 
diana:   Twenty    years.      R.    S.    1888 
and    1896,    §293;    Catterlin   v.    Arm- 
strong, 101  Ind.  258.    See  §  1207,  that 
mortgage   is    discharged    when    debt 
is  barred.     Iowa:   Ten  years.  Annot. 


161 


WHEN    KIGIIT    TO    FORECLOSE    IS  BARRED. 


[§  11U3. 


earlier  statutes  in  several  States  will  show  that  the  period  has  been  ma- 
terially shortened  in  the  present  statutes.    But  the  history  of  the  law 


Code  1888,  §  3734.  Code  1897,  §  3447. 
See  §  1207,  that  mortgage  is  dis- 
charged when  debt  is  barred.  Kan- 
sas: Fifteen  years.  G.  S.  1888,  §  4093. 
K.  S.  1897,  c.  95,  §  10.  See  §  1207, 
that  mortgage  is  discharged  when 
debt  is  barred.  Kentucky:  Fifteen 
years.  G.  S.  1888,  ch.  71,  art.  iv. 
§  16.  See  §  1207,  that  mortgage  is 
discharged  when  debt  Is  barred. 
Maine:  Twenty  years.  R.  S.  1883, 
ch.  105,  §  1.  Frisbee  v.  Frisbee,  86 
Me.  446,  29  Atl.  1115.  Maryland: 
Twenty  years  by  analogy  to  the 
time  of  limitation  under  the  statute 
of  James.  Baltimore  &  Ohio  R.  Co. 
V.  Trimble,  51  Md.  99.  Massachu- 
setts: Twenty  years.  R.  L.  1902, 
§  20.  Michigan:  Fifteen  years.  An- 
not.  Stats.  1882,  §  8698.  See  High- 
stone  V.  Franks,  93  Mich.  52,  52  N. 
W.  1015.  Minnesota:  An  action  to 
foreclose  a  mortgage  upon  real  es- 
tate must  be  commenced  within  fif- 
teen years  after  the  cause  of  action 
accrues.  G.  S.  1894,  S  5134.  The 
statute  changing  the  time  from  ten 
to  fifteen  years  was  retrospective. 
Bradley  v.  Norris,  63  Minn.  156,  65 
N.  W.  357;  Backus  v.  Burke,  63 
Minn.  272,  65  N.  W.  459.  See,  also, 
Archambau  v.  Green,  21  Minn.  520; 
Parsons  v.  Noggle,  23  Minn.  328; 
Reeves  v.  Vinacke,  1  McCrary,  213; 
Duncan  v.  Cobb,  32  Minn.  460,  21  N. 
W.  714.  See  S  1207,  that  mortgage 
is  discharged  when  debt  is  barred. 
Mississippi:  No  action  or  other  pro- 
ceeding can  be  had  upon  a  mort- 
gage or  deed  of  trust  to  recover  the 
money  secured,  except  within  the 
time  that  may  be  allowed  for  the 
commencement  of  an  rction  at  law 
upon  such  writing;  and  in  all  cases 
where  the  remedy  at  law  to  recover 
the  debt  is  barred,  the  remedy  in 
equity  on  the  mortgage  is  barred. 
Aotions  on  contracts  not  under  seal 
are  limited  to  six  years;  and  ac- 
tions on  open  account  to  three  years. 
Annot.  Code  1892,  §§  2733,  2737.  An 
equitable  mortgage  by  absolute  con- 
veyance is  subject  to  same  rule 
when  mortgagor  remains  in  posses- 
sion. Green  v.  Mizelle,  54  Miss. 
220.  See  §  1207,  that  mortgage  is 
discharged  when  debt  is  barred. 
Missouri:  Ten  years.  2  R.  S.  1889, 
§  6764.     See   Orr   v.    Rode,   101   Mo. 


387,  13  S.  W.  1066.  See  §  1207,  that 
mortgage  is  discharged  when  debt 
is  barred.  Montana:  Ten  years. 
Code  Civ.  Pro.  1895,  §  483.  Nebraska: 
Actions  to  foreclose  mortgages  must  , 
be  commenced  within  ten  years  after 
the  cause  of  action  accrues.  Consol. 
Stats.  1891,  §4542;  Comp.  Stats. 
1895,  §  5596;  Baldwin  v.  Burt,  43 
Neb.  245,  61  N.  W.  601;  Studebaker 
Manuf.  Co.  v.  McCargur,  20  Neb. 
500,  30  N.  W.  686;  Cheney  v.  Camp- 
bell, 28  Neb.  376,  44  N.  W.  451;  Mer- 
riam  v.  Goodlett,  36  Neb.  384,  54  N. 
W.  686.  See  §  1207,  that  mortgage 
is  discharged  when  debt  is  barred. 
Nevada:  For  the  recovery  of  real 
property,  five  years.  Actions  to  fore- 
close mortgages,  four  years,  as  in 
California.  Codes  &  Stats.  1885, 
§S  3633,  3644;  Henry  v.  Confidence 
G.  &  S.  Mining  Co.  1  Nev.  619.  See 
§  1207,  that  mortgage  is  discharged 
when  debt  is  barred.  New  Hamp- 
shire: Actions  for  the  recovery  of 
real  estate  are  limited  to  twenty 
years.  Actions  upon  notes  secured 
by  mortgage  may  be  brought  so  long 
as  the  plaintiff  is  entitled  to  bring 
an  action  upon  the  mortgage.  P. 
S.  1891  and  1901,  ch.  217,  §§1,  5. 
New  Jersey:  Twenty  years.  Rev. 
1877,  p.  597.  G.  S.  1895,  p.  1977. 
Bliss's  Annot.  Code  1895,  §  365.  New 
York:  Twenty  years.  Code  of  Civil 
Procedure  1890,  §§365,  379.  North 
Carolina:  Action  must  be  com- 
menced within  ten  years  after  the 
forfeiture  of  the  mortgage,  or  after 
the  power  of  sale  became  absolute, 
or  within  ten  years  after  the  last 
payment  on  it.  Code  of  Civ.  Pro. 
1891,  §  152.  Jenkins  v.  Wilkinson, 
113  N.  C.  532,  18  S.  B.  696;  Fraser 
V.  Bean,  96  N.  C.  327,  2  S.  E.  159. 
North  Dakota  :  Ten  years.  R.  Code 
1895,  §§  5187,  5189.  Comp.  Laws 
1887,  §  4837.  Ohio:  Fifteen  years, 
the  mortgage  being  regarded  as  a 
specialty  under  the  statute.  Kerr 
V.  Lydecker,  51  Ohio  Et.  240,  37  N. 
E.  267.  Oregon:  Actions  for  the  re- 
covery of  real  property  may  be 
brought  within  ten  years;  an  action 
upon  a  sealed  instrument  within 
ten  years.  1  Annot.  Laws  1892, 
pp.  132,  135.  A  foreclosure  suit  is 
not  regarded  as  a  suit  upon  a  real 
estate     interest,     and     therefore     is 


§    1193.]  WHEN   EIGHT    TO    FORECLOSE    IS    BARRED.  163 

of  limitations  in  England  illustrates  this  fact  most  forcibly.  At  com- 
mon law  there  was  no  period  of  limitation  within  which  any  action 
now  in  use  should  be  brought.  An  uncertain  doctrine  of  presumption 
was  applied  against  stale  demands  and  claims. 

Previous  to  the  reign  of  Henry  VII.  there  was  no  statute  prescribing 
a  period  of  a  certain  number  of  years  within  which  the  assertion  of  a 
claim  to  real  estate  was  limited;  though  different  events  had  been  se- 
lected by  successive  enactments,  from  the  Anglo-Norman  times  down 
to  the  time  of  Henry  VII.,  as  periods  of  limitation  beyond  which 
claimants  should  not  go  for  the  foundation  of  titles  as  against  persons 
who  had  been  in  possession  since  the  specified  time.  The  lapse  of  tim-e 
rendered  fresh  starting-points  necessary  to  the  security  of  titles.  The 
beginning  of  the  reign  of  Henry  I.,  of  Richard  I.,  the  last  return  of 
King  John  out  of  Ireland  into  England,  the  coronation  of  King  Henry 
III.,  and  the  first  voyage  of  King  Henry  III.  into  Gascony,  were  pe- 
riods of  limitation  successively  selected." 

"A  profitable  and  necessary  statute,"  passed  near  the  close  of  the 
reign  of  Henry  VIII.,'^  for  the  first  time  provided  a  fixed  period  of 
limitation  within  which  actions  should  be  brought.  The  general  period 
for  actions  for  the  recovery  of  real  estate  was  three-score  years.  By  the 
statute  of  James  I.  this  period  was  reduced  to  twenty  years.    By  the 

barred  in  ten  years  as  a  suit  upon  any  deed  of  trust  or  mortgage  exe- 

a    sealed    instrument.      Eubanlcs    v.  cuted  by  a  corporation.     Code  1887, 

Leveridge,  4  Sawyer,  274;   Anderson  S  2935.       Washington:     Ten    years, 

v.    Baxter,    4    Oregon,    105.      Other-  Codes  and  Stats.  1897,  S  4797.     West 

wise  if  the  suit  is  in  effect  one  to  Virginia:    Ten    years.      Codes    1887, 

remove  a  cloud  on  the  title.     Meier  1891,    ch.    104,    §1.      Wisconsin: 

V.  Jvelly,  22  Oregon,  136,  29  Pac.  265.  Twenty  years.     R.   S.   1878,   ch.   177, 

Pennsylvania:    Twenty-one    years.  §4209.      The    twenty    years'    limita- 

Brightly's    Purdon's    Dig.    vol.    2,    p.  tion   applies   to   suits   for   the   fore- 

927.     Rhode   Island:    Twenty   years,  closure  of  mortgages  on  the  ground 

P.  S.   1882,  ch.   205,   §  4,  G.   L.   1896.  that    they    are    instruments    under 

South   Carolina:    Twenty   years.      G.  seal.      Whipple    v.    Barnes,    21    Wis. 

S.  1882,  Code  of  Civ.  Pro.  1893,  §  111.  327.      A    suit    to    redeem,    however. 

South   Dakota:    Seven   years.     R.   S.  must  be  brought  within  ten  years, 

1898,  §§  2858,  2860.  Tennessee:   Seven  as     this     is     an     equitable      action 

years.      Code    1884    and    Code    1896,  coming  within  a  clause  of  the  stat- 

§  3461.  Texas:  Ten  years.  As  against  ute    limiting   actions    not   otherwise 

a  person  in  adverse  possession  under  specified  for.     Knowlton  v.  Walker, 

color  of  title,   action  must  be  com-  13  Wis.  264;  R.  S.  1878,  §  4227.  Wyo- 

menced  within  three  years.     R.  Civ.  ming:  Ten  years.     R.  S.  1888,  §  2366. 

Stats.  1889,  §§  3191,  3194.     See  §  1207,  "  See  Stat,  of  Merton  (20  Hen.III.), 

that    mortgage    is    discharged    when  ch.  8;    Stat,  of  West.  1   (3  Edw.  I.), 

debt    is    barred.      Vermont:    Fifteen  ch.  39.    See  Edson  v.  Munsell,  10  Al- 

vears.     R.  L.  1880,  ch.  56,  §  1,  G.  S.  len,  557,  for  a  sketch  of  the  history 

1894,   §  1193.     Virginia:    No   deed   of  of    the   English    Statute    of    Limita- 

trust,  mortgage,  or  lien  for  purchase-  tions  and  of  that  of  Massachusetts, 

money     shall      be      enforced     after  And   see  Fellowes  v.   Clay,  4   Q.   B. 

twenty   years   from    the    time   when  313,  354,  per  Lord  Denman,  C.  J. 

the  right  to  enforce  the  same  first  '  Co.  Litt.  §  115a;  32  Hen.  VIII,  ch. 

accrued;  but  this  does  not  apply  to  2. 


163 


WHEN    RIGHT   TO    FORECLOSE    IS   BARRED.  [§    1194. 


act  which  went  into  operation  in  England  on  the  first  day  of  January, 
1879,  the  period  is  reduced  to  twelve  years.** 

While  a  statute  of  limitations  is  favorably  regarded  by  the  courts,  it 
will  not  be  allowed  to  have  a  retroactive  effect.'' 

A  statute  of  limitations  relates  solely  to  the  remedy,  and  may  be 
shortened  or  lengthened,  and  changed  from  time  to  time,  at  the  pleas- 
ure of  the  legislature,  so  long  as  the  creditor  is  not  denied  a  reason- 
able opportunity  to  enforce  collection  of  his  debt.^" 

§  1194.  In  some  early  cases  it  was  declared  that  the  presump- 
tion of  payment  arising  from  the  lapse  of  time,  though  applicable 
to  a  bond  secured  by  the  mortgage,  was  not  applicable  to  the  mortgage 
itself,  inasmuch  as  the  legal  estate  was  in  the  mortgagee,  and  the  mort- 
gagor was  regarded  as  a  mere  tenant  at  will,  whose  possession  was 
therefore  the  possession  of  the  mortgagee.^^  This  doctrine  was,  how- 
ever, repudiated  by  Lord  Thurlow  in  1791,^-  and  it  has  not  in  any  case 


•By  the  Real  Property  Limitation 
Act,  1874,  which  went  into  operation 
on  the  first  day  of  January,  1879, 
"No  action  or  suit  or  other  proceed- 
ing shall  be  brought  to  recover  any 
sum  of  money  secured  by  any  mort- 
gage, judgment,  or  lien,  or  otherwise 
charged  upon  or  payable  out  of  any 
land  or  rent,  in  law  or  in  equity,  or 
any  legacy,  but  within  twelve  years 
next  after  a  present  right  to  receive 
the  same  shall  have  accrued  to  some 
person  capable  of  giving  a  discharge 
for  or  release  of  the  same,  unless 
in  the  mean  time  some  part  of  the 
principal  money,  or  some  interest 
thereon,  shall  have  been  paid,  or 
some  acknowledgment  of  the  right 
thereto  shall  have  been  given  in 
writing,  signed  by  the  person  by 
whom  the  same  shall  be  payable,  or 
his  agent,  to  the  person  entitled 
thereto,  or  his  ^igent;  and  in  such 
case  no  such  action  or  suit  or  pro- 
ceeding shall  be  brought  but  within 
twelve  years  after  such  payment  or 
acknowledgment,  or  the  last  of  such 
payments  or  acknowledgments,  if 
more  than  one,  was  given."  37  &  38 
Vict.  ch.  57,   §  8. 

"  McKisson  v.  Davenport,  83  Mich. 
211,  47  N.  W.  100. 

"Campbell  v.  Holt,  115  U.  S.  620, 
628,  6  Sup.  Ct.  209;  Terry  v.  Ander- 
son, 95  U.  S.  628;  Drury  v.  Hender- 
son, 143  111.  315,  32  N.  E.  186. 

"  Toplis  V.  Baker,  2  Cox,  118;  Le- 
man   v.   Newnham,   1   Ves.   Sen.   51; 


dictum    in    Cholmondeley    v.    Clin- 
ton, 2  Meriv.  171,  360. 

'-Trash  v.  White,  3  Bro.  Ch.  289. 
The  Lord  Chancellor  said:  "That  if 
the  case  was  clear  that  no  interest 
had  been  paid  for  twenty  years,  he 
had  always  understood  that  it  did 
raise  the  presumption  that  the  prin- 
cipal had  been  paid;  but  there  must 
not  only  be  non-payment  of  inter- 
est, but  no  demand;  and,  in  that 
case,  he  thought  the  presumption 
on  a  mortgage  as  strong  as  that 
at  law."  In  Christophers  v.  Sparke, 
2  Jac.  &  W.  223,  though  the  decision 
turned  upon  another  point.  Sir 
Thomas  Plumer,  Master  of  the  Rolls, 
said,  in  relation  to  this  question  of 
presumption:  "I  can  not  accede  to 
the  doctrine  that  no  length  of  time 
will  operate  against  a  mortgagee 
who  has  been  out  of  possession 
without  claim  or  acknowledgment. 
The  argument  of  there  being  a  ten- 
ancy at  will  arises  from  a  mere  fic- 
tion; for  there  is  no  actual  tenancy, 
no  demise,  either  express  or  im- 
plied. A  mortgagor  has  not  even 
the  rights  of  a  tenant  at  will;  he 
may  be  turned  out  of  possession 
without  notice,  and  is  not  entitled 
to  the  emblements.  It  is  only  quo- 
dam  modo  a  tenancy  at  will,  as  Lord 
Mansfield  says  in  one  of  the  cases. 
Moss  V.  Gallimore,  1  Doug.  279.  We 
can  not  push  it  to  that  extent,  rea- 
soning on  the  supposed  relation  of 
landlord   and   tenant,   which   is   not 


1195.] 


WHEN    RIGHT    TO    FORECLOSE    IS    BARRED. 


164 


since  been  asserted.  The  fact  that  the  debt  is  secured  by  a  moTtgage 
does  not  place  it  on  any  different  footing  from  a  debt  due  upon  a  bond 
without  a  mortgage,  but  is  liable  to  be  defeated  by  the  same  presump- 
tion arising  from  lapse  of  time  and  laches  of  the  mortgagee. 

Although  the  mortgagor  is  not  a  tenant  at  will  to  the  mortgagee  in 
any  such  sense  that  his  possession  cannot  become  adverse,  yet  the  re- 
semblance holds  to  this  extent,  that,  so  long  as  the  mortgagor  acknowl- 
edges his  relation  to  the  mortgagee  by  payment  of  interest  or  the  like, 
his  possession  is  the  possession  of  the  mortgagee.^''  The  mortgagor 
may  convey,  mortgage,  or  lease  the  premises,  or  deal  with  them  in  other 
ways  as  the  owner  of  them,  without  rendering  his  possession  hostile  to 
the  mortgagee.  The  constructive  possession  of  the  mortgagee  con- 
tinues until  the  mortgagor's  holding  is  either  in  opposition  to  the  will 
of  the  mortgagee  or  is  without  any  recognition  of  his  right.^* 

§  1195.  This  doctrine  of  presumption  has  been  one  of  frequent 
application  against  the  mortgage  debt,  and  is  fully  established  every- 


founded  in  fact.  The  relation  of 
mortgagor  and  mortgagee  is  pecu- 
liar: in  a  court  of  equity  the  for- 
mer is  considered  as  owner,  and 
that  is  the  nature  of  the  contract 
between  them;  the  tacit  agreement 
is,  that  he  is  to  be  the  owner  if  he 
pays.  Then  what  is  to  be  the  effect 
of  one  person's  continuing  for 
twenty  years  in  possession  of  the 
estate  of  another,  who  does  nothing 
to  make  good  his  title,  and  to  keep 
alive  the  relation  of  mortgagor  and 
mortgagee?  The  difficulty  I  feel  is, 
that  if  twenty  years'  possession, 
without  claim  on  the  part  of  the 
mortgagee,  will  not  operate  as  a  de- 
fence against  him,  I  do  not  see  how 
any  period  of  time,  however  long, 
can  bar  him.  If  the  fiction  of  a 
tenancy  at  will  is  an  answer  to  the 
objection  after  twenty  years,  why 
will  it  not  be  an  answer  after  any 
other  time?  Tnere  would  be  no 
possibility  of  stopping.  With  respect 
to  the  mortgagor,  it  is  clear  that 
his  equity  is  shut  out  by  the  mort- 
gagee being  in  possession  for  twenty 
years  without  acknowledgment; 
then  why  should  this  not  be  recip- 
rocal? Why  should  it  be  necessary 
for  the  relation  to  be  kept  alive  in 
the  one  case  and  not  in  the  other? 
For  these  reasons,  though  I  do  not 
give  a  positive   opinion,   I   can  not 


agree  to  the  doctrine  intimated  in 
the  cases  alluded  to." 

''  In  Harris  v.  Mills,  28  111.  44,  81 
Am.  Dec.  259,  Mr.  Justice  Walker 
says:  "It  has  been  said  that  no 
length  of  time  will  bar  a  foreclos- 
ure by  a  mortgagee  out  of  posses- 
sion. This  is  placed  upon  the  ground 
that  the  relation  of  landlord  and 
tenant  is  supposed  to  exist  between 
the  parties.  But  such  is  not  the 
true  relation  of  the  parties.  For 
some  purposes,  and  to  a  limited  ex- 
tent only,  a  portion  of  the  incidents 
are  the  same.  To  a  limited  extent, 
and  for  some  purposes,  the  relation 
of  vendor  and  vendee,  and  trustee 
and  cestui  que  trust,  also  exists." 

"Jones  V.  Williams,  5  Ad.  &  E. 
291,  6  Nev.  &  M.  816;  Hall  v.  Sur- 
tees,  5  B.  &  Aid.  686,  687;  Higgin- 
son  V.  Mein,  4  Cranch,  415;  How- 
land  V.  Shurtleff,  2  Met.  26,  35  Am. 
Dec.  384;  Inches  v.  Leonard,  12 
Mass.  379;  Sheaf e  v.  Gerry,  18  N.  H. 
245;  Howard  v.  Hildreth,  18  N.  H. 
105;  Roberts  v.  Littlefield,  48  Me. 
61;  Chick  v.  Rollins,  44  Me.  104; 
Bates  V.  Conrow,  11  N.  J.  Eq.  137; 
Atkinson  v.  Patterson,  46  Vt.  750; 
Martin  v.  Jackson,  27  Pa.  St.  504,  67 
Am.  Dec.  489;  Benson  v.  Stewart,  30 
Miss.  49;  Boyd  v.  Beck,  29  Ala.  703; 
Drayton  v.  Marshall,  Rice  Eq.  373, 
33  Am.  Dec.  84;  Pitzer  v.  Burns,  7 
W.  Va.,  63. 


165  WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.  [§    1195. 

where.^^  It  arises  from  the  policy  of  the  law.  It  docs  not  proceed  nec- 
essarily on  a  belief  that  payment  has  actually  taken  place.^**  The  lapse 
of  time  and  the  neglect  of  the  mortgagee  to  enforce  his  demand  against 
the  mortgagor,  when  he  continues  in  adverse  possession  without  recog- 
nizing the  debt  in  any  way,  are  grounds  for  a  presumption  in  fact, 
which,  unexplained,  authorizes  a  jury  to  infer  that  the  mortgage  is 
satisfied,  and  is  a  sufficient  answer  to  a  bill  by  the  mortgagee  to  fore- 
close, A  bill  to  foreclose  does  not  lie  after  the  mortgagor  has  held  ad- 
verse possession  for  a  period  equal  to  the  statute  period  of  limitations 
for  real  actions."  But  the  fact  that  there  has  been  no  recognition  of 
the  mortgage  debt  for  a  period  less  than  the  statute  period  of  limita- 
tion, as,  for  instance,  nineteen  years,  affords  no  presumption  of  pay- 
ment.^^ 

If  the  mortgagor  remains  in  possession  for  twenty  years  without 
paying  interest  or  rent,  or  otherwise  admitting  that  the  mortgage  debt 
is  unpaid,  this  is  good  presumptive  proof  of  payment,  and  a  defence  to 
an  action  for  foreclosure.^^  This  rule  applies  equally  to  estates  held 
in  trust ;  the  equitable  rule,  that  the  statute  of  limitations  does  not  bar 
a  trust  estate,  holds  only  as  between  cestui  que  trust  and  trustee,  and 
not  between  a  cestui  que  trust  and  trustee  on  the  one  side  and  a 
stranger  on  the  other.^"  Neither  does  it  matter  that  the  cestui  que 
trust  is  under  disability,  if  there  be  a  trustee  to  represent  him.-^ 

When  there  has  been  a  foreclosure  sale,  whether  defective  or  not,  and 
this  has  not  been  followed  by  a  conveyance  to  the  purchaser  or  any 

"Kellogg  v.  Dickinson,  147  Mass.  150;    Agnew    v.    Renwick,    27    S.    C. 

432,  437,   18  N.  E.  223;    Howland  v.  562,  4  S.  B.  223;   Staples  v.  Staples, 

Shurtleff,    2    Met.    26,    35    Am.    Dec.  20  R.  I.  264,  38  Atl.  498. 

384;  Inches  v.  Leonard,  12  Mass.  379;  ^"Hillary    v.    Waller,    12   Ves.    239, 

Bacon     v.     Mclntire,     8     Met.     87;  252,  per  Sir  William  Grant. 

Hughes  v.   Edwards,  9  Wheat.  498;  "  Cleveland    Ins.    Co.    v.    Reed,    24 

Collins  v.  Terry,  7  Johns.  278,  5  Am.  How.  284;    Downs  v.  Sooy,  28  N.  J. 

Dec.  273;  Jackson  v.  Wood,  12  Johns.  Eq.  55. 

242,    7    Am.    Dec.    315;    Jackson    v.  ^^  Boon  v.  Pierpont,  28  N.  J.  Eq.  7. 

Pratt,  10  Johns.  381;   Giles  v.  Bare-  "Bacon    v.    Mclntire,    8    Met.    87; 

more,   5   Johns.   Ch.   545,   552;    New-  Chick  v.  Rollins,  44  Me.  104;   Crook 

comb  V.  St.  Peter's  Church,  2  Sandf.  v.    Glenn,    30    Md.    55;    Demarest    v. 

Ch.   636;    Martin  v.   Bowker,   19   Vt.  Wynkoop,   3   Johns.    Ch.    129,   135,   8 

526;  Field  v.  Wilson,  6  B.  Mon.  479;  Am.  Dec.  467;   Jackson  v.  Wood,  12 

McNair  v.   Lot,  34  Mo.  285,  84  Am.  Johns.  242,  7  Am.  Dec.  315;  Jackson 

Dec.    78;    Wilson   v.    Albert,    89    Mo.  v.    Pratt,   10   Johns.    381;    Collins   v. 

537;    Nevitt  v.   Bacon,   32  Miss.  212,  Torry,  7  Johns.  278,  5  Am.  Dec.  273; 

66  Am.  Dec.  609;  Wilkinson  v.  Flow-  Jackson  v.   Hudson,  3  Johns.  375,  3 

ers,   37   Miss.    579,   75   Am.   Dec.    78;  Am.  Dec.  500. 

McDonald    v.    Sims,    3    Kelly,    383;  ™  Lord  Hardwicke,  in  Llewellin  v. 

Hoffman    v.    Harrington,    33    Mich.  Mackworth,  15  Vin.  Abr.  125,  pi.  1; 


392 
355 
127 


Reynolds    v.    Green,    10    Mich.     Bond  v.  Hopkins,  1  Sch.  &  Lef.  429. 
Goodwyn   v.    Baldwin,    59    Ala.        ^^  Crook  v.  Glenn,  30  Md.  55;  Wych 
Blaisdell    v.    Smith,    3    Bradw.    v.  East  India  Co.  3  P.  Wms.  309. 


§    1196.]  WHEN    RIGHT    TO    FOUFXLOSE    IS   BARRED.  166 

recognition  of  the  mortgage  by  the  mortgage  debtor,  it  will  be  pre- 
sumed after  the  lapse  of  twenty  years  that  the  land  has  been  redeemed 
from  such  sale.^^ 

The  mortgagor  may  avail  himself  of  the  benefit  of  this  presumption 
of  payment  not  only  in  defence  to  a  foreclosure  suit,  but  in  a  bill  for 
reconveyance  of  the  property,  which  he  is  constrained  to  bring  for  his 
protection  against  a  judgment  creditor  of  the  mortgagee,  who,  with 
full  knowledge  of  the  fact  that  the  deed  to  the  latter  is  merely  a  mort- 
gage, is  about  to  proceed  to  sell  the  mortgaged  premises  as  the  property 
of  the  mortgagee.^^ 

§  1196.  The  presumption  of  payment  is  not  conclusive  in  favor 
of  a  mortgagor  who  has  been  in  uninterrupted  possession  for  twenty 
years,  but  may  be  controlled  by  evidence  o-f  part  payment  of  principal 
or  interest,  or  other  admissions  or  circumstances  from  which  it  may  be 
found  that  the  debt  is  still  unpaid  ;-*  but  parol  evidence  to  control  this 
presumption  should  clearly  show  some  positive  act  of  unequivocal 
recognition  of  the  debt  within  that  time."  Mere  silent  acquiescence 
in  the  mortgagee's  demands  of  payment,  without  a  well-defined  verbal 
promise  to  pay  on  the  part  of  the  mortgagor,  or  admission  on  his  part 
of  the  debt,  is  not  sufficient  to  repel  the  presumption.-" 

The  statute  of  limitations  is  not  conclusive  against  the  mortgagee 
unless  it  appears  that  he  has  been  actually  disseised  by  the  mortgagor 
for  a  period  of  twenty  years.^'^ 

A  new  promise  or  acknowledgment  will  take  the  mortgage  out  of  the 
statute  of  limitations;^^  as,  for  instance,  where  a  note  and  mortgage 
were  presented  for  payment  or  renewal  to  the  makers,  who  wrote  and 
signed  at  the  foot  of  the  mortgage  a  promise  under  seal  to  renew  the 
note,  and  to  give  a  new  mortgage,  whenever  the  exact  amount  of  the 
debt  should  be  ascertained,  a  plea  of  the  statute  of  limitations  to  a  bill 
to  foreclose  the  mortgage  was  disallowed.^"  Such  a  promise  or  ac- 
knowledgment is  binding  not  only  upon  the  mortgagor  who  makes  it, 
but  upon  a  subsequent  mortgagee,  if  the  prior  mortgage  was  duly  re- 
corded, for  in  such  case  the  subsequent  mortgagee  having  constructive 

"Reynolds    v.    Dishon,    3    Bradw.  Kennedy,    17    Cal.    574;     Brown    v. 

173;  Barnard  v.  Onderdonk,  98  N.  Y.  Wagner   (Pa.),  16  Atl.  834. 

158.  "Jarvis  v.  Albro,  67  Me.  310;  Ray 

^' Downs  V.  Sooy,  28  N.  J.  Eq.  55.  v.  Pearce,  84  N.   C.  485;    Kellogg  v. 

=^  Locke    V.    Caldwell,    91    111.    417;  Dickinson,   147   Mass.   432,   18  N.   B. 

Wanmaker  v.  Van  Buskirk,  1  N.  J.  223. 

Eq.  685;  23  Am.  Dec.  748;  Barned  v.  =^  Cheever  v.  Perley,  11  Allen,  584. 

Barned,    21    N.    J.    Eq.    245;     Cold-  "Anthony  v.   Anthony,   161  Mass. 

cleugh  v.  Johnson,  34  Ark.  312;  Cook  343,  37  N.  E.  386. 

V.    Parham,    63   Ala.   456;    Philbrook  =-*  Murphy  v.   Coates,  33  N.  J.  Eq. 

v.    Clark,    77    Me.    176;     Barron    v.  424. 

'''Hart  V.  Boyt,  54  Miss.  547. 


1G7  WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.  [§    1197. 

notice  from  such  record  is  put  upon  inquiry  to  ascertain  whether  such 
mortgage  still  remains  in  force.^° 

The  new  promise  to  avail  anything  must  be  an  express  promise,  and 
not  merely  one  raised  by  a  doubtful  implication  of  law,  containing  no 
direct  admission  of  the  debt  as  a  subsisting  obligation.  Thus  a  re- 
cital in  a  deed  by  a  mortgagor  of  the  mortgaged  property  that  the 
grantee  assumes  the  payment  of  the  mortgage  does  not  conclusively  es- 
tablish a  new  promise  on  the  part  of  the  mortgagor  to  pay  the  mort- 
gage debt,  so  as  to  take  the  mortgage  debt  out  of  the  statute  as  against 
him.^^  A  promise  in  writing,  signed  by  a  mortgage  debtor,  to  pay  the 
interest  due  upon  the  whole  debt,  is  an  unequivocal  acknowledgment 
of  the  whole  debt,  from  which  a  promise  to  pay  the  same 
may  be  implied.^-  If  the  promise  to  pay  the  interest  be  in  the 
form  of  a  promissory  note,  or  the  overdue  interest  be  included  in  such 
a  note,  the  identity  of  the  sum  included  in  the  note  with  the  overdue 
interest  may  be  shown  by  parol  evidence.^^ 

Where  a  mortgage  note  signed  by  husband  and  wife  was  invalid  as 
against  the  wife  at  the  time  it  was  signed,  by  reason  of  her  coverture, 
a  payment  thereon  made  by  the  wife  after  the  decease  of  her  husband 
does  not  validate  a  mortgage  upon  her  separate  real  estate  given  to 
secure  the  payment  of  such  note.  As  the  husband  had  deceased  prior 
to  the  payment,  the  wife  could  not  be  regarded  as  his  agent,  nor  was 
there  any  moral  obligation  resting  upon  the  wife  to  repay  a  loan  made 
to  the  husband  for  his  own  purpose;  hence  the  payment  was  made 
under  circumstances  repelling  the  inference  of  a  new  promise.^* 

§  1197.     Presumption   of   payment   is  repelled   by   circumstances 

which  evince  an  improbability  of  any  discharge,^^  as  well  as  by  an  ex- 
press acknowledgment  of  the  debt,  or  by  acts  recognizing  it.  Thus, 
this  presumption  has  been  considered  as  answered  by  showing  that  the 
mortgage  debt  belonged  to  the  mother  of  the  owner  of  the  estate  mort- 
gaged, and  that  she  had  not  permitted  the  title  deeds  to  be  delivered  to 
him.^*^ 

The  fact  that  the  mortgagor  is  the  son,  brother,  or  other  near  rela- 
tion of  the  mortgagee,  and  proof  that  he  intentionally  permitted  the 

=»  Murphy  v.   Coates,  33  N.  J.  Eq.  '*  Radican    v.    Radican,    22    R.    I. 

424.  405,   48   Atl.   143. 

"Biddel  v.  Britzzolara,  56  Cal.  374;  =^  Brobst     v.    Brock,    10     Wallace, 

Kelly  V.   Leachman,  2   Ida.   1112,  33  519;  Snavely  v.  Pickle,  29  Gratt.  27; 

Pac.   44.  Lewis  v.   Schwenn,   93  Mo.   26,   2   S. 

^=  Kelly  v.  Leachman,  2  Ida.  1112,  W.   391. 

33  Pac.  44.  ^"^  Leman  v.  Newnham,  1  Ves.  Sen. 

^'  Keily  v.  Leachman,  2  Ida.  1112,  51. 
33  Pac.  44. 


§    1198.]  WHEN    RIGHT    TO    FORECLOSE    IS    BARRED.  168 

mortgagor  to  occupy  the  land  without  payment  of  interest,  though  for 
more  than  twenty  years,  are  sufficient  to  rebut  the  presumption  of 
payment. ^^ 

But  the  fact  that  the  mortgage  and  bond  secured  thereby  remain  in 
the  possession  of  the  mortgagee  does  not  repel  the  inference  of  pay- 
ment which  arises  from  lapse  of  time.^® 

It  has  even  been  held,  in  a  case  where  it  was  shown  that  the  parties 
to  a  bond  resided  in  a  country  which  was  occupied  by  contending 
armies,  and  was  in  such  a  disturbed  condition  as  to  render  it  highly  im- 
probable that  debts  could  or  would  be  collected,  the  time  during  which 
the  war  continued  should  not  be  computed  as  forming  any  part  of  the 
time  whose  lapse  gives  rise  to  a  presumption  of  payment.^"  But  ordi- 
narily the  absence  of  the  mortgagor  from  the  State  when  the  cause  of 
action  accrues  or  afterwards  does  not  suspend  or  prevent  the  statute 
of  limitations  from  running  against  a  suit  to  foreclose  the  same,  for 
the  reason  that  the  remedy  may  be  as  well  pursued  during  his  absence 
as  in  his  presence.*" 

§  1198.  A  payment  of  interest  or  part  of  the  principal  renews 
the  mortgage,  so  that  an  action  may  be  brought  to  enforce  it  within 
twenty  years  or  other  period  of  limitation  after  such  last  payment. 
This  is  a  rule  universally  recognized.*^    Where  there  are  several  per- 

"  Philbrook  v.   Clark,  77  Me.   176.  statute  is  prospective  in  its  opera- 

^*  Ray  V.  Pearce,  84  N.  C.  485.  tion  and  does  not  apply  to  payments 

^°  Hale  V.  Pack,  10  W.  Va.,  145.  made  before  the  passage  of  the  Act. 

*"  Eubanks    v.    Leveridge,    4    Saw-  In  South  Carolina  it  is  provided  by 

yer,  274;  Anderson. v.  Baxter,  4  Oreg.  statute,  G.  S.  1882,  §  1871,  passed  in 

105,  107.  1879,  that  no  mortgage,  or  other  lien 

"  Lewis  V.   Schwenn,  93  Mo.  26,  2  on  real  estate,  shall  constitute  a  lien 

S.   W.   391;    Schifferstein  v.   Allison,  on  any  real  estate  after  the  lapse  of 

123  111.  662,  15  N.  E.  275;   Martin  v.  twenty  years  from  the  date  of  the 

Bowker,  19  Vt.  526;  Barrett  v.  Pren-  creation  of  the  same,  provided  that, 

tiss,  57  Vt.  297;  Barron  v.  Kennedy,  if  the   holder  thereof  shall,   at  any 

17   Cal.    574;    Kelly   v.    Leachman,   2  time  during  the  continuance  of  such 

Ida.    1112,    33   Pac.    44;    Hollister   v.  lien,  cause  to  be  recorded  upon  the 

York,  59  Vt.  1,  9  Atl.  2;    Carson  v.  record    of    such    mortgage,    etc.,    or 

Cochran,      52      Minn.      67,      53      N.  file  with  the  record  thereof,  a  "note 

W.     1130;      Ely     v.     Bush,     89     N.  of    some    payment    on    account,"    or 

C.     358;      Blair     v.      Carpenter,     75  some    written    "acknowledgment    of 

Mich.   167,  42   N.  W.   790;    Moore  v.  the  debt,"  such  mortgage,  etc.,  shall 

Beaman,  112  N.  C.  558,  16  S.  E.  177;  continue    to    be    a    lien    for    twenty 

Gay  V.   Hassam,  64  Vt.   495,  24  Atl.  years  from   the   date  of   the   record 

715;    Kendall   v.    Tracy,   64   Vt.    522,  of    such    payment    or    acknowledg- 

24  Atl.  1118;  Colton  v.  Depew,  59  N.  ment.      It    is    held,    however,    that 

J.  Eq.  126,  44  Atl.  662;   Hollister  v.  the   recording  of  an   assignment    of 

York,  59  Vt.   1,  9   Atl.   2;    Woodruff  a  mortgage  before  the  expiration  of 

V.    Albright,    10    Kan.    App.    113.    62  the    twenty    years    was    neither    a 

Pac.  250;  McLane  v.  Allison,  60  Kan.  "note  of  some  payment  on  account," 

441,  56  Pac.  747;  St.  Louis. Ft.  S.  &W.  nor     an     "acknowledgment     of     the 

R.   Co.   V.   Tiernan,  37  Kan.    605,   15  debt,"  within  the  statute.     Curtis  v. 

Pac.   544.  Renneker,  34  S.  C.  468,  13  S.  E.  664. 

Arkansas:    Stat.  Dig.   §  5094.     This  This  case  also  holds  that  the  stat- 


169 


WHEN    RIGHT    TO    FORECLOSE    IS   BARRED. 


[§  1198. 


sons  interested  in  the  equity  of  redemption,  such  payment  by  one  of 
them  keeps  alive  the  right  of  entry  not  only  against  him,  but  also 
against  all  other  owners  of  the  equity.*-  Payment  by  an  agent  of  the 
mortgagor,  as,  for  instance,  by  his  solicitor,  has,  of  course,  the  same 
effect  as  a  payment  by  the  mortgagor  himself;*^  but  payment  by  a 
stranger  does  not  affect  the  mortgagor's  rights.**  Acknowledgment  of 
the  debt  made  to  a  stranger  does  not  avoid  the  running  of  the  statute 
of  limitations.*^  Payments  of  interest  by  a  tenant  for  life  are  binding 
upon  those  entitled  to  the  remainder  ;*•*  and  payments  by  the  widow  of 
the  mortgagor,  while  in  possession  under  her  right  of  dower,  prevent 
the  statute  running  against  the  mortgagee  in  favor  of  the  heirs  at 
law.*''  Payments  upon  a  note  by  the  principal  debtor  serve  to  keep 
it  alive  both  against  him  and  a  surety  upon  it.*^  Payments  of  inter- 
est by  a  husband  upon  his  note  secured  by  a  mortgage  upon  the  sepa- 
rate real  estate  of  his  wife  or  upon  a  homestead  estate  operate  to  keep 
alive  the  mortgage  security.*^  Payments  made  by  the  principal  debtor 
after  the  death  of  the  surety  prevent  the  pleading  of  the  statute  by  the 
surety's  personal  representative,  in  case  the  liability  is  upon  a  mort- 


ute  does  not  apply  to  mortgages  exe- 
cuted  prior  to   its   passage. 

As  to  evidence  of  payment  in  serv- 
ices, see  United  States  Trust  Co.  v. 
Stanton,  8  N.  Y.  Supp.  756. 

'-  Pears  v.  Laing,  L.  R.  12  Bq.  41, 
51,  54;   Kendall  v.  Tracy,  64  Vt.  522, 

24  Atl.  1118;  Hollister  v.  York,  59 
Vt.  1,  9  Atl.  2;   Richmond  v.  AiKen, 

25  Vt.  324;  Gay  v.  Hassam,  64  Vt. 
495,  24  Atl.  715,  quoting  text;  Em- 
ory V.  Keighan,  88  111.  482;  Roddam 
v.  Morley,  1  De  G.  &  J.  1.  In  the 
latter  case,  it  was  held  that  a  pay- 
ment of  interest  by  the  tenant  for 
life  of  a  devised  estate  keeps  a 
specialty  alive  against  the  persons 
entitled  to  the  remainder.  Lord 
Cranworth,  in  the  Court  of  Appeals, 
said:  "Who  is  affected  by  the  pay- 
ment? Does  it  operate  against  the 
party  only  by  whom  the  payment  is 
made?  or  does  it  affect  all  the  other 
parties  liable?  Does  it  merely  en- 
able the  creditor  to  sue  the  party 
by  whom  the  payment  was  made, 
or  does  it  set  free  the  action  gener- 
ally? I  have  come  to  the  conclu- 
sion that  when  a  part  payment  or 
payment  of  interest  has  been  made, 
which  has  the  effect  of  preserving 
any  right  of  action,  that  right  will 
be  saved  not  only  against  the  party 
making  the  payment,  but  also 
against  all   other   parties   liable   on 


the  specialty."  He  further  says 
that,  as  the  statute  does  not  so  re- 
strict the  effect  of  the  payment,  the 
court  can  not  restrict  it. 

^^Ward  V.  Carttar,  L.  R.  1  Eq.  29; 
Blair  v.  Carpenter,  75  Mich.  167,  42 
N.   W.   790. 

"  Chinnery  v.  Evans,  11  H.  L.  C. 
115. 

"  Schmucker  v.  Sibert,  18  Kans. 
104,  26  Am.  Rep.  765. 

'"Roddam  v.  Morley,  1  De  G.  & 
J.  1;  Toft  V.  Stephenson,  1  De  G.,  M 
&  G.  28,  40;  Pears  v.  Laing,  L.  R.  12 
Eq.   41. 

"  Ames  V.  Mannering,  26  Beav. 
583. 

**  Whitcomb  v.  Whiting,  2  Dougl. 
652;  Wyatt  v.  Hodson,  8  Bing.  309; 
Burleigh  v.  Stott,  8  B.  &  C.  36;  Main- 
zinger  v.  Mohr,  41  Mich.  685;  Na- 
tional Bank  v.  Cotton,  53  Wis.  31, 
9  N.  W.  926;  Quimby  v.  Putnam,  28 
Me.  419. 

*"  Cross  V.  Allen,  141  U.  S.  528,  12 
Sup.  Ct.  67;  Skinner  v.  Moore,  64 
Kan.  360,  67  Pac.  827;  Perry  v.  Ho- 
rack.  63  Kan.  88,  64  Pac.  990;  Jack- 
son V.  Longwell,  63  Kan.  93,  64  Pac. 
991;  Schmucker  v.  Sibert,  18  Kan. 
104,  26  Am.  Rep.  765;  Waterson  v. 
Klrkwood,  17  Kan.  9:  Fuller  v.  Mc- 
Mahan,  64  Kan.  441,  67  Pac.  828;  In- 
vestment Securities  Co.  v.  Manwar- 
ren,  64  Kan.  636,  68  Pac.  68. 


§    1198.]  WHEN    RIGHT    TO    FORECLOSE    IS    BARRED.  170 

gage,^°  though,  where  the  liability  is  merely  personal,  there  are  au- 
thorities that  hold  that  such  payments  will  not  prevent  the  surety's 
representatives  from  pleading  the  statute.^^ 

A  payment  by  a  purchaser  from  the  mortgagor  is  a  binding  admis- 
sion that  the  land  is  subject  to  the  mortgage  and  operates  to  suspend 
the  running  of  the  statute  of  limitations  against  a  foreclosure  of  the 
mortgage. ^^ 

Unauthorized  payments  made  by  one  of  several  joint  promisors  after 
the  completion  of  the  bar  of  the  statute  do  not,  at  the  common  law, 
serve  to  keep  alive  the  demand  as  against  any  one  but  the  person  mak- 
ing the  payments.^^  "The  reason  of  this  distinction  lies  in  the  prin- 
ciple that,  by  withdrawing  from  a  joint  debtor  the  protection  of  the 
statute,  he  is  subjected  to  a  new  liability  not  created  by  the  original 
contract  of  indebtedness."^* 

Payments  on  a  mortgage  debt  by  grantees  of  a  portion  of  the  prem- 
ises who  have  assumed  the  debt  do  not  arrest  the  operation  'of  the  stat- 
ute of  limitations  in  favor  of  a  grantee  of  another  portion  thereof,  who 
has  not  assumed  the  payment  of  the  mortgage  debt,  and  has  neither 
made  nor  authorized  any  payments  thereon  within  twenty  years;  and 
an  action  to  foreclose  the  mortgage  as  against  him  is  barred. ^^ 

Whether  a  payment  made  by  a  mortgagor  after  he  has  sold  or  mort- 
gaged the  premises  to  another  will  not  repel  the  presumption  of  satis- 
faction arising  after  the  lapse  of  twenty  years  from  the  time  when  the 
mortgage  became  due,  so  far  as  the  subsequent  purchaser  or  mortgagee 
is  concerned,^*'  is  a  question  upon  which  the  authorities  differ.  A  lease 
from  a  mortgagee"^  to  his  mortgagor,  more  than  twenty  years  after  the 
maturity  of  the  mortgage  debt,  does  not  affect  the  rights  of  a  subse- 
quent purchaser  or  mortgagee  of  the  property.^^ 

Where  a  mortgage  on  the  homestead,  the  title  to  which  is  in  the 

^"  Cross  V.  Allen,  141  U.  S.  528,  12  Mo.  Valley  L.  Ins.  Co.  25  Kans.  172; 

Sup.  Ct.  67.  Investment   Securities    Co.    v.   Berg- 

"2  Parsons  Bills  and  Notes,  659;  thold,  6u  Kan.  813,  58  Pac.  469.     To 

Lane  v.  Doty,  4  Barb.  530.  the  contrary  see  Barrett  v.  Prentiss, 

"McLane  v.  Allison,  60  Kan.  441,  57   Vt.    297;    Hughes   v.    Edwards,   9 

56  Pac.   747.  Wheat.    489;    New    York    L.    Ins.    & 

"Atkins  V.  Tredgold,  2  B.  &  C.  23;  Trust  Co.  v.  Covert,  6  App.  Pr.   (N. 

Sigourney    v.    Drury,    14    Pick.    387,  S.),    154.      Payments    by    the    mort- 

391;    Ellicott  v.  Nichols,  7  Gill,  85;  gagor    after    he    has    conveyed    the 

Waughop  v.  Bartlett,  165  111.  124,  46  premises  bind  his  grantees,  because 

N.  E.  197.  they  took  their  title  burdened  with 

"Cross  V.  Allen,  141  U.  S.  528,  12  the  debt,  of  which  they  had  either 

Sup.  Ct.  67.  actual  or  constructive  notice.     Mack 

"Mack    V.    Anderson,    165    N.    Y.  v.   Anderson.  165  N.  Y.   529,  532,  59 

529,  59  N.  E.  289,  reversing  12  App.  N.  E.  289,  per  Werner,  J. 

Div.  624;  Murdock  v.  Waterman,  145  "New  York  Life  Ins.  &  Trust  Co. 

N.  Y.  55,  39  N.  E.  829.  v.  Covert,  29  Barb.  435. 

^^  That  such  payment  will  not  keep  '^  Jarvis   v.    Albro,   67   Me.   310. 
the  mortgage  alive  see  Hubbard  v. 


171  WHKN    RIGHT    TO    FORECLOSE    IS   BARKED.  [g    1199. 

wife,  is  executed  by  both  husband  and  wife  to  secure  the  payment  of 
a  promissory  note  made  by  botli,  the  statute  of  limitations  will  not  bar 
a  foreclosure  of  the  mortgage  so  long  as  an  action  to  recover  the  debt 
may  be  maintained  against  the  husband,  although  an  action  to  recover 
the  debt  is  barred  as  against  the  wife.^^ 

If  the  mortgagee  be  a  tenant  for  life  of  the  mortgaged  estate,  and 
as  such  receives  the  rents,  the  statute  does  not  run  against  the  mort- 
gage title.*'*'  The  concurrence  of  the  tenancy  for  life,  and  the  right 
to  receive  the  interest  on  the  mortgage  in  the  same  individual,  renders 
it  impossible  for  him  to  make  any  acknowledgment  of  that  title  to 
himself;  but  it  being  his  duty  as  such  tenant  to  keep  down  the  inter- 
est, the  law  will  presume  that  he  does  so  out  of  the  rents  received  by 
him.  This  rule  being  in  favor  of  the  remainder-men,  they  cannot 
afterwards  be  permitted  to  contend  that  the  interest  thus  deemed  to 
have  been  kept  down  for  their  benefit  was  not  in  fact  paid,  and  that 
the  right  to  enforce  the  mortgage  is  barred  by  the  statute ;  under  such 
circumstances  the  statute  of  limitations  cannot  be  applied  against  the 
mortgage.  The  presumption  of  payment  or  release  of  the  mortgage, 
arising  from  twenty  years'  possession  by  the  mortgagor,  may  be  re- 
pelled by  evidence  of  the  payment  of  interest,  of  a  promise  to  pay,  ot 
of  an  acknowledgment  that  the  mortgage  is  still  existing. "^ 

Under  a  mortgage  which  by  its  terms  is  to  be  paid  out  of  the  rents 
and  profits  of  the  property,  the  statute  does  not  run  against  the  mort- 
gagee. The  mortgage  creates  a  trust  which  is  designed  to  run  indefi- 
nitely.®^ 

The  receipts  of  rents  and  profits  by  one  holding  only  an  equitable 
mortgage  has  been  held  to  be  equivalent  to  a  part  payment. 

§  1199.  If  land  subject  to  a  mortgage  be  sold  to  different  pur- 
chasers, one  of  whom  pays  the  entire  interest  for  more  than  twenty 
years  without  calling  on  the  purchaser  of  another  portion  for  contribu- 
tion, the  former  cannot,  upon  purchasing  the  mortgage,  enforce  it 
against  the  latter  or  his  grantee.*'^  After  such  a  lapse  of  time,  by  an- 
alogy to  the  statute  of  limitations,  it  would  seem  that  a  court  of  equity 
should  conclusively  presume  that  the  parties  had  agreed  the  latter's 
portion  should  not  be  regarded  as  subject  to  the  mortgage.     Of  course 

'"  Investment    Securities    Company  land  v.  Shurtleff,  2  Met.  26,  35  Am. 

v.   Manwarren,  64  Kan.  636,  follow-  Dec.   384;   Ayres  v.  Waite,   10  Cush. 

ing   Jackson    v.    Longwell,    63    Kan.  72. 

93,  64  Pac.  991.  «=  Charter  Oak  L.  Ins.  Co.  v.  Gis- 

•'^  Wynne  v.  Styan,  2  Ph.  303;  Car-  borne,  5  Utah,  319,  15  Pac.  253. 

bery  v.  Preston,  13  Ir.  Eq.  455;  Bur-  *Brocklehurst    v.    Jessop,    7    Sim. 

rell  V.  Bgremont,  7  Beav.  205.  438. 

"Hough   V.   Bailey.  32  Conn.   288;  ""Pike  v.   Goodnow,  12  Allen,  472. 
Bacon  v.  Mclntire,  8  Met.  87;   How- 


§§    1200,    1201.]     WHEN    RIGHT    TO    FORECLOSE    IS    BARRED.  172 

the  holder  of  the  mortgage,  having  received  the  payments  exclusively 
from  one  part-owner,  would  not  by  that  fact  alone  be  precluded  from 
subjecting  to  a  foreclosure  the  whole  property  which  his  mortgage  cov- 
ered. He  would  have  no  reason  to  know  or  inquire  from  whom  the  in- 
terest came,  or  to  whom  the  mortgagor  had  sold  the  land.  But  the 
conduct  of  the  grantees  of  the  equity  of  redemption  in  respect  to  the 
interest  has  a  direct  bearing  upon  the  question  which  of  them  is  liable 
for  the  payment  of  the  principal. 

•  §  1200.  The  payment  of  taxes  by  the  owner  of  the  equity  of  re- 
demption does  not  in  any  way  contribute  to  make  his  possession  hos- 
tile to  the  mortgagee;  nor  does  it  give  him  any  rights  against  the 
mortgagee  under  a  statute  making  seven  years'  payment  of  taxes  with 
a  record  title,  or  a  colorable  one  and  possession,  a  bar  to  any  adverse 
rights  or  proceedings;  for  it  is  his  duty  while  in  possession  to  pay  the 
taxes,  and  the  mortgagee  may  well  regard  the  payment  as  made  in  his 
interest  and  not  in  subversion  of  it."* 

A  second  mortgagee,  who  forecloses  and  acquires  a  right  to  a  deed 
of  the  premises,  cannot,  as  against  a  first  mortgagee,  set  up  a  claim  for 
taxes  paid  after  the  expiration  of  tlue  right  of  redemption,  even  though 
the  deed  had  not  issued  to  him,  as  he  stands  in  the  position  of  owner  of 
the  premises  until  foreclosure  of  the  prior  mortgage."^ 

§  1201.  A  purchaser  assuming  the  payment  of  a  mortgage 
recogpiizes  it  as  a  subsisting  incumbrance,  and  cannot  set  up  the  stat- 
ute of  limitations  against  it  until  the  limitation  of  twenty  years  or 
other  period  of  limitation,  from  that  time  has  elapsed.  His  grantee 
is  also  bound  by  such  admission  to  the  same  extent  that  he  was  him- 
self bound.®®  A  recital  in  a  deed  or  mortgage  that  the  premises  are 
subject  to  a  prior  mortgage  has  the  same  effect.®^  It  constitutes  an 
admission  that  removes  the  bar  of  the  statute  as  to  parties  to  the  deed. 

Moreover,  any  purchaser  from  the  mortgagor,  with  actual  or  con- 
structive notice  of  the  mortgage,  is  bound  by  any  previous  acknowledg- 
ment of  the  debt  by  his  grantor.®^ 

^*  See    8§  679,   680;    Medley   v.    El-  er  or  a  prior   mortgage.     This   de- 

liott,  62  111.  532;  Wright  v.  Langley,  cision  so  far  as  it  relates  to  a  re- 

36  111.  381;  Hagan  v.  Parsons,  67  111.  covery  against  the  prior  mortgagee 

170;    AIsup  v.    Stewart,   194  111.   595,  is  questionable. 

62  N.  E.  795;   Vreeland  v.  Mounier,  o"  §    744;    Harrington   v.    Slade,   22 

127  Mich.  304,  86  N.  W.  819.  Barb.   161;    Schmucker  v.   Sibert,   18 

^'  Farrell  v.  Gustin,  18  Wash.  239.  Kans.  104.  26  Am.  Rep.  765. 

But   in   this   case   it   was   held   that  "'Palmer  v.  Butler,  36  Iowa,  576; 

taxes  paid  by  such  mortgagee  after  Moore  v.  Clark,  40  N.  J.  Eq.  152. 

foreclosure,  but  prior  to  the  expira-  "' Heyer    v.    Pruyn,    7    Paige,    465; 

tion   of  the  right  to  redeem   there-  Hughes  v.   Edwards,   9  Wheat.   489; 

from,    although    not    delinquent    at  Carson  v.   Cochran,  52  Minn.   67.  53 

the    time    of   payment,    may   be   re-  N.  W.  1130,  1132,  per  Mitchell,  J. 
covered  either  from  the  redemption- 


173  WHEN    KIGIIT    TO    FORECLOSE    iS   BARPEb.  [§    1202. 

§  1202.  The  mortg-agors  grantee  has  no  greater  rig-hts  ag-ainst 
the  mortgagee  than  the  mortgagor  himself.  —  A  purchaser  with 
actual  notice  of  the  mortgage,  or  constructive  notice  by  means  of  a 
registry,  can  avail  himself  of  the  presumption  of  payment  from  lapse 
of  time  only  when  the  mortgagor  could  avail  himself  of  it  under  the 
same  circumstances.  The  grantee  succeeds  to  the  estate  and  occupies 
the  position  of  his  grantor.  He  takes  subject  to  the  incumbrance ;  and 
his  title  and  possession  are  no  more  adverse  to  the  mortgagee  than  was 
the  title  and  possession  of  the  mortgagor.''''  The  purchaser  is  bound 
by  the  acts  and  declarations  of  the  mortgagor  in  respect  to  the  mort- 
gage while  he  retains  the  equity  of  redemption  or  any  part  of  it;  as, 
for  instance,  the  purchaser  of  a  part  of  the  mortgaged  premises  can- 
not claim  a  presumption  of  payment  of  the  mortgage  from  lapse  of 
time  when  this  presumption  is  repelled  by  payments  of  interest  made 
by  the  mortgagor  within  twenty  years,  or  by  his  admission  within  this 
time  that  the  mortgage  was  then  subsisting.'^''  A  purchaser  from  the 
mortgagor  stands  in  no  better  position  than  the  mortgagor  himself  as 
to  gaining  title  by  possession  and  lapse  of  time,  if  the  mortgage  be  re- 
corded. The  record  is  notice  of  the  mortgage  to  a  subsequent  pur- 
chaser; and  the  mere  fact  that  he  has  had  actual  possession  under  his 
purchase  for  the  statute  period  of  limitation  is  no  bar  to  a  foreclosure 
of  the  mortgage.'^^ 

But  when  a  note  and  mortgage  are  once  barred,  although  the  mort- 
gagor may,  by  a  subsequent  part  payment,  promise,  or  acknowledg- 
ment, revive  the  mortgage,  so  far  as  it  afEects  his  own  interest  in  the 
premises,  he  cannot  revive  it  as  against  his  grantee,  or  any  other  par- 
ties who  have  acquired  interest  in  the  premises  prior  to  such  revivor.'- 
But  such  renewal  will  revive  the  mortgage  as  against  a  Junior  mort- 
gagee whose  mortgage  was  taken  before  the  statute  of  limitations  ran 
against  the  prior  mortgage,  if  no  new  equities  were  acquired  by  the 
junior  mortgagee  after  the  statute  had  run  and  before  the  debt  was  re- 

""  Medley  v.  Elliott,  62  111.  532;  parts  of  the  mortgaged  premises  for 
Waterson  v.  Kirkwood,  17  Kans.  9;  a  valuable  consideration.  The  con- 
Grether  v.  Clark,  75  Iowa,  383,  39  N.  elusive  answer  to  this  argument  is, 
W.  655,  9  Am.  St.  491;  Kendall  v.  that  they  were  purchasers  with  no- 
Tracy,  64    /t.  522,  24  Atl.  1118.  tice  of  this  incumbrance." 

"  Heyer  v.  Pruyn,  7  Paige,  465,  34  •'  Thayer    v.    Cramer,    1    McCord, 

Am.   Dec.   355;    Hughes  v.   Edwards,  Ch.  395;  Mitchell  v.  Bogan,  11  Rich. 

9  Wheat.  489.    Mr.  Justice  Washing-  686,   706;    Wright  v.   Eaves,   5  Rich, 

ton  upon  this  point  said:   "It  is  in-  Eq.  81;  Norton  v.  Lewis,  3  S.  C.  25; 

sisted  that,  although  these  acknowl-  Lynch  v.  Hancock,  14  S.  C.  66. 

edgments    may   be    sufficient   to   de-  '-  Schmucker    v.    Sibert,    18    Kans. 

prive  the  mortgagor  of  a  right  to  set  104,  26  Am.  Rep.  765;   Cook  v.  Prin- 

up  the  presumption  of  payment  or  die,  97  Iowa,  464,  66  N.  W.   781,   59 

release,  they  cannot  affect  the  other  Am.  St.  424,  reversing  same  case,  63 

defendants,  who  purchase  from  him  N.  W.  187. 


§    1203.]  WHEN    RIGHT    TO    FORECLOSE    IS    BARRED.  174 

newed.  The  junior  mortgagee,  after  the  bar  of  the  statute  has  been 
removed  by  the  new  promise,  is  in  no  different  condition  than  he  was 
when  he  acquired  his  interest.'^^ 

In  California,  however,  it  is  the  settled  doctrine  that  the  mortgagor 
has  no  power  by  stipulation  to  prolong  the  time  of  payment  of  his 
mortgage  as  against  others  who  have  acquired  interests  in  the  equity 
of  redemption,  either  as  subsequent  incumbrancers  or  purchasers  of 
the  equity  of  redemption  ;^*  for  against  them  he  can  neither  suspend 
the  running  of  the  statute  of  limitations  by  an  express  waiver  nor  by 
his  voluntary  act  in  absenting  himself  from  the  State.^^  In  fact, 
under  the  provisions  of  the  code  of  this  State  a  mortgage  can  only  be 
renewed  by  a  writing  executed  with  the  formalities  required  in  the 
case  of  the  original  mortgage.  The  mortgage  cannot  be  renewed  sim- 
ply by  a  renewal  of  the  note.''*' 

Neither  has  the  mortgagor's  widow  who  has  released  her  dower,  or 
who  has  no  dower  as  in  the  case  of  a  purchase-money  mortgage,  greater 
rights  as  against  the  mortgagee  than  her  husband  had." 

'    §  1203.     The  statute  of  limitations  does  not  discharge  the  debt 

or  extinguish  the  right,  but  only  takes  away  the  remedy.  This  is  the 
rule  even  in  California  and  other  States  where  it  is  held,  as  already 
noticed,  that  when  the  debt  is  barred  the  mortgage  is  also  rendered  un- 
available. The  debt  and  the  mortgage  are  distinct  causes  'of  action, 
and  distinct  remedies  may  be  pursued  upon  them.'^^  The  recent  Eng- 
lish Statutes  of  Limitations,  beginning  with  that  of  William  IV.,  op- 
erate by  their  direct  terms  as  a  bar  to  the  right,  and  not,  like  the  stat- 
ute of  James  I.,  upon  which  the  statutes  in  this  country  are  generally 
founded,  as  a  bar  to  the  remedy  only.'^^     The  effect,  therefore,  of  the 

"  Kerndt  v.   Porterfield,   56   Iowa,  as  the  mortgage  is  in  full  force,  and 

412,  9  N.  W.  322;   Johnston  v.  Las-  not   barred    by   the  statute   of  limi- 

ker  Real  Est.  Asso.  2  Tex.  Cir.  App.  tations  as  to  the  husband,  it  is  also 

494,  21  S.  W.  961;  Whitacre  v.  Ful-  in  full  force  against  the  wife."  Cit- 

ler'  5  Minn.   508;    Ware  v.   Bennett,  ing  Catterlin  v.  Armstrong,  101  Ind. 

18  Tex.  794;  Heyer  V.  Pruyn,  7  Paige,  258,    79    Ind.    514;    .l^.tna   Ins    Co.    v. 

465-    Hughes  v.  Edwards,  9  Wheat.  Finch,  84  Ind.  301;  Walters  v.  Wal- 

4g9'  ters,   73   Ind.   425;    May  v.   Fletcher, 

■^Sichel    V.    Carrillo,    42    Cal.    493;  40    Ind.    575;    Baker   v.    McCune,    82 

Barber  v.  Babel,  36  Cal.  11;   Lent  v.  Ind.   339,   585;    Bowman  v.   Mitchell, 

Shear,  26  Cal.  361.  97  Ind.  155. 

"Wood  v.  Goodfellow.  43  Cal.  185.  '« Sichel   v.    Carrillo,    42    Cal.    493; 

The    authority    and    correctness    of  Low  v.   Allen,  26  Cal.   141;    Lent  v. 

this  decision  is  denied  in  Waterson  Shear,   26   Cal.   361;    Grant  v.   Burr, 

V.  Kirkwood.  17  Kans.  9;  Schmucker  54  Cal.  -98. 

V    Sibert    18  Kans.  104,  26  Am.  Rep.  "  Beckford   v.   Wade,   17   Ves.    87; 

765-     Clinton     County     v.     Cox,     37  Incorporated  Society  v.  Richards,  1 

Iowa    570  Dru.    &   War.    258,    289;    Higgins    v. 

^^  Wells  V.  Harter.  56  Cal.  342.  Scott,  2  B.  &  Add.  413. 

"  Leonard  v.  Binford,  122  Ind.  200,  2  B.  &  Ad.  413. 
23  N.  E.  704.    Per  Olds,  J.:  "So  long 


175  WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.  [§    1204. 

new  enactments  in  England  is  not  simply  to  exclude  the  reoo-very,  but 
to  transfer  the  estate.***  "This,"  says  Lord  St.  Leonards,  "is  a  great 
improvement."®^  This  change  in  the  statute  does  not  affect  the  ques- 
tions under  consideration,  inasmuch  as  the  recent  acts  have  contained 
special  provisions  relating  to  mortgages.  In  America  the  statutes  of 
limitation  being  generally  founded  upon  the  earlier  English  statutes, 
the  same  doctrine,  that  the  effect  of  the  statute  is  merely  to  take  away 
the  remedy  and  not  to  extinguish  the  debt,  which  prevailed  in  England 
under  those  statutes,  prevails  here  as  well.*^ 

Tlie  commencement  of  foreclosure  proceedings  arrests  the  running 
of  the  statute  of  limitations,  even  as  against  persons  who  are  not  made 
parties  to  the  suit.*^ 

Tlie  death  of.  the  mortgagor  before  the  expiration  of  the  period  of 
limitation  suspends  or  extends  the  running  of  the  statute  until  letters 
of  administration  are  issued  upon  his  estate.^* 

§  1204.     Though  the  debt  be  barred  the  lien  may  be  enforced. 

The  fact  that  a  debt  secured  by  a  mortgage  is  barred  by  a  statute  of 
limitations  does  not  necessarily,  or  as  a  general  rule,  extinguish  the 
mortgage  security,  or  prevent  the  maintaining  of  an  action  to  enforce 
it.*^     Although  the  mortgagee  may  foreclose  his  mortgage  after  the 

«°3  &  4  Will.  IV.  ch.  27,  §34,  37  &  pin.  81.  "United  States:  Sparks  v. 
38  Vict.  ch.  57.  See  per  Lord  St.  Fico,  1  McAll.  497;  Sturges  v.  Crown- 
Leonards,  in  Dundee  Harbor  v.  Dou-  inshield,  4  Wheat.  122;  Hughes  v. 
gall,  1  Macq.  H.  L.  C.  321.  Edwards,  9  Wheat.  489;  Union  Banlt 

''  Charley's    Real    Prop.    Acts,    3d  of    Louisiana    v.    Stafford,    12    How. 

ed.  p.  26.  327,    340;    Townsend    v.    Jemison,    9 

"•^  Waltermire  v.  Westover,  14  N.  How.  407,  413;  McElmoyle  v.  Cohen, 
Y.  16;  Pratt  v.  Huggins,  29  Barb.  13  Pet.  312.  Bank  v.  Guttschlick, 
277.  In  this  case  Mr.  Justice  Hoge-  14  Pet.  19;  Lewis  v.  Hawkins,  23 
boom  said:  "It  is  said  that  the  note.  Wall.  119.  Alabama:  Inge  v.  Board- 
frora  the  lapse  of  time,  is  presumed  man,  2  Ala.  331.  Arkansas:  Birnie 
to  be  paid.  Not  altogether  so;  for  v.  Main,  29  Ark.  591;  Coldcleugh 
the  law  allows  a  suit  upon  it,  and  a  v.  Johnson,  34  Ark.  312.  Now  by 
recovery,  unless  the  statute  of  limi-  Acts  1887,  ch.  104,  barred  when  debt 
tations  is  pleaded.  It  is  therefore,  is  barred.  Connecticut:  Baldwin  v. 
at  most,  but  a  presumption;  suf-  Norton,  2  Conn.  163;  Hough  v. 
fered  to  be  overthrown,  it  is  true,  Bailey,  32  Conn.  288;  Belknap  v. 
only  in  one  way,  and  that  is  by  Gleason,  11  Conn.  160,  27  Am.  Dec. 
proof  of  payment  thereon,  or  recog-  721.  Florida:  Browne  v.  Browne,  17 
nition  thereof,  in  the  way  pointed  Fla.  607,  35  Am.  Rep.  96;  Jordan  v. 
out  in  the  statute.  This,  however,  Sayre,  24  Fla.  1,  3  So.  Rep.  329;  Bi- 
as before  stated,  only  acts  upon  the  lis  v.  Fairbanks,  38  Fla.  257,  21  So. 
remedy."  107.     Georgia:   Blkins  v.  Edwards,  8 

«=  Emory   v.    Keighan,    88   111.    482;  Ga.  325;   Story  v.  Doris,  110  Ga.  65, 

Kibbe  v.  Thompson,  5  Biss.  206.  35  S.  E.  314,  Civ.  Code,  §  2735.  Idaho: 

**  Casey  v.    Gibbons,   136   Cal.    368.  Kelly  v.   Leachman,  2   Ida.   1112,  33 

And  see  Rev.  Laws  Mass.  1902,  ch.  Pac.  44.     Indiana:   Where  the  mort- 

202,  §  10.     Converse  v.  Johnson,  146  gage  contains  a  covenant  to  pay  the 

Mass    20    14  N.   E.   925.  debt  secured.  Crawford  v.  Hazelrigg, 

^■^  England:    Higgins  v.  Scott,  2  B.  117  Ind.  63,  18  N.  E.  603.    See  §  1207. 

&  Ad.  413;   Spears  v.  Hartly,  3  Es-  Kentucky:    Kellar  v.    Sinton,   14   B. 


§  1204.] 


WHEN    RIGHT    TO    FORECLOSE    IS    BARRED. 


176 


debt  is  barred  he  cannot  foreclose  it  after  the  statutory  period  has  run 


Mon.  307.     See  present  rule,  §  1207, 
otherwise  if  the  debt  secured  is  not 
described  or  referred  to  in  the  mort- 
gage.    Duke  V.   Story,   116   Ga.    788; 
Story  V.  Doris,  supra.  Maine:  Crook- 
er   V.    Holmes,    65    Me.    195,   20   Am. 
Rep.  687;   Joy  v.  Adams,  26  Me.  330. 
Maryland:    Ohio    Life    Ins.    &   Trust 
Co.    V.    Winn,   4   Md.    Ch.    Dec.   253; 
Demuth  v.  Old  Town  Bank,  85  Md. 
315,  37  Atl.  266,  60  Am.  St.  322.  Mass- 
achusetts:  Thayer  v.  Mann,  19  Pick. 
535;    Eastman  v.  Foster,  8  Met.  19; 
Grain  v.  Paine,  4  Gush.  483,  1  Am. 
Dec.    807;    Ball    v.    Wyeth,    8   Allen, 
275;    Norton    v.    Palmer,    142    Mass. 
433,   8  N.   E.   346.     Michigan:    Mich. 
Ins.    Go.    V.    Brown,    11    Mich.    266; 
Powell  V.  Smith,  30  Mich.  451;  Web- 
ber V.  Ryan,   54  Mich.   70,  19  N.  W. 
751.  Minnesota:   Slingerland  v.  Sh-er- 
er,  46  Minn.  422,  49  N.  W.  237.  Miss- 
issippi:    Wilkinson    v.    Flowers,    37 
Miss.  579,  75  Am.  Dec.  78;  Nevitt  v. 
Bacon,    32    Miss.    212,    62    Am.    Dec. 
609;   Trotter  v.  Erwin,  27  Miss.  772. 
Missouri:   Lewis  v.  Schwenn,  93  Mo. 
26,  2  S.  W.  391;  Wood  v.  Augustine, 
61    Mo.    46;    Gape    Girardeau    Go.    v. 
Harbison,    58    Mo.    90;    Ghouteau    v. 
Burlando,    20    Mo.    482;     Tucker    v. 
Wells,    111   Mo.    399,   20   S.   W.    114; 
Benton    Go.    v.    Gzarlinsky,    101   Mo. 
275,  14  S.  W.   114;    Booker  v.  Arm- 
strong, 93  Mo.  49,  4  S.  W.  727;   Orr 
V.  Rode,  101  Mo.  387,  13  S.  W.  1066; 
Louis  V.   Priest,   103  Mo.   652,   15   S. 
W.    988;    Gardner  v.    Terry,   99    Mo. 
523    12  S.  W.  888;    Gombs  v.  Golds- 
worthy,  109  Mo.   151,  18  S.  W.  1130. 
Nebraska:    Gheney   v.    Woodruff,    20 
Neb.   124,   29   N.  W.   275;    Stevenson 
V.   Graig,   12   Neb.   464,   12   N.  W.    1. 
See,  however,  §  1207.  Nevada:  Henry 
V.  Confidence  Gold  &  Silver  M.  Go. 
1  Nev.  619;  Read  v.  Edwards,  2  Nev. 
262;  Mackie  v.  Lansing,  2  Nev.  302; 
Gookes   V.    Gulbertson,    9    Nev.    199; 
Cheney  v.  Campbell,  28  Nev.  376,  44 
N.    W.    451.      New   Hampshire:     De- 
merritt  v.  Batchelder,  28  N.  H.  533. 
New  Jersey:     Earned  v.  Earned,  21 
N.  J.  Eq.  245;   Princeton  Sav.  Bank 
v.  Martin  53  N.  J.  Eq.  463,  33  Atl.  45. 
New  York:    Waltermire  v.  Westover, 
14  N.  Y.  16,  20,  128  N.  Y.  295,  28  N. 
E.   638;    Pratt  v.   Huggins,  29  Barb. 
277;    Heyer  v.   Pruyn,  7   Paige,  465, 
34  Am.  Dec.  355,  in  which  Chancel- 
lor Walworth   denies  the  authority 


to  the  contrary  of  Jackson  v.  Sack- 
ett,  7  Wend.  94;  Hulbert  v.  Clark,  11 
N.  Y.  Supp.  417,  57  Hun,  558,  28  N. 

B.  638;  Gillette  v.  Smith,  18  Hun, 
10;  Kincaid  v.  Richardson,  9  Abb.  N. 

C.  315;  In  re  Latz,  33  Hun,  622. 
North  Carolina:  Gapehart  v.  Det- 
trick,  91  N.  G.  344;  Fraser  v.  Bean, 
96  N.  G.  327;  Overman  v.  Jackson,  ' 
104  N.  G.  4;  Hedrick  v.  Byerly,  119 
N.  G.  420,  25  S.  E.  1020;  Jenkins  v. 
Wilkinson,  113  N.  C.  532,  18  S.  E. 
696;  Taylor  v.  Hunt,  118  N.  G.  168, 
24,  S.  E.  359.  Ohio:  Fisher  v.  Moss- 
man,  11  Ohio  St.  42;  Gary  v.  May,  16 
Ohio,  66;  Longworth  v.  Taylor,  2 
Gin.  Sup.  Gt.  39.  Oregon:  Myer  v. 
Beal,  5  Oreg.  130.  Ehode  Island: 
Ballon  V.  Taylor,  14  R.  I.  277.  South. 
Carolina:  Nichols  v.  Briggs,  18  S.  G. 
473;  Dearman  v.  Trimmier,  26  S.  C. 
506,  2  S.  E.  501,  505,  per  Mclver,  J.; 
McGowan  v.  Reid,  27  S.  G.  262,  3  S. 
E,  337.  Tennessee:  Harris  v. 
Vaughn,  2  Tenn.  Gh.  483;  Irvine  v.  ■ 
Shrum,  97  Tenn,  259,  36  S.  W.  1089. 
Texas:    Fievel  v.  Zuber,  67  Tex.  275, 

3  S.  W.  Rep.  273;  Goldfrank  v. 
Young,  64  Tex.  432,  overruling  Black- 
well  V.  Barnett,  52  Tex.  326,  331; 
King  V.  Brown,  80  Tex.  276,  16  S. 
W.  39.  See  McKeen  v.  James,  87 
Tex.  193,  25  S.  W.  208,  27  S.  W.  59. 
An  agreement  by  the  mortgagee  to 
extend  the  right  to  redeem,  and  not 
to  foreclose  for  a  specified  time, 
does  not  extend  the  personal  lia- 
bility of  the  mortgagor  beyond  the 
time  -when  it  would  otherwise  be 
barred  by  the  statute  of  limitations. 
Vermont:  Richmond  v.  Aiken,  25  Vt. 
324.  Virginia:  Smith  v.  Washing- 
ton City,  &c.  R.  Co.  33  Graft.  617; 
Coles  V.  Withers,  33  Graft.  186; 
Hanna  v.  Wilson,  3  Graft.  243,  46 
Am.  Dec.  190.  West  Virginia:  Roots 
V.  Mason  City  Salt  &  M.  Go.  27  W. 
Va.  483;  Griss  v.  Criss,  28  W.  V.  388. 
Wisconsin:  Cleveland  v  Harrison, 
15  Wis.  670;  Wiswell  v.  Baxter,  20 
Wis.  680;  Whipple  v.  Barnes,  21 
Wis.  327;  Knox  v.  Gallagan,  21  Wis. 
470;  Kennedy  v.  Knight,  21  Wis. 
340,  94  Am.  Dec.  543;  Potter  v. 
Stransky,  48  Wis.  235.  4  N.  W.  95; 
Gerney  v.  Pawlot,  66  Wis.  262,  28  N. 
W.  183;  Phelan  v.  Fitzpatrick,  84 
WMs.  240,  54  N.  W.  614;  Duecker  v. 
Goeres  104  Wis.  29. 


177  WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.  [§    1204. 

against  the  mortgage  as  a  specialty.'^''  But  after  both  the  debt  and 
tlie  mortgage  are  barred  the  mortgagee  may  bring  ejectment  on  the 
ground  that  he  has  the  right  to  possession. ^^  The  statute  of  limita- 
tions as  to  the  debt  docs  not  in  any  way  apply  to  the  mortgage  security. 
This  remains  in  force  until  the  debt  which  it  secures  is  paid.  Payment 
may  be  established  not  only  by  direct  evidence,  but  also  by  the  pre- 
sumption of  law  arising  from  the  lapse  of  twenty  years  from  the  time 
when  the  cause  of  action  accrued;  a  presumption  which  may  be  coun- 
tervailed by  evidence  tending  to  show  a  contrary  presumption. ®®  A 
payment  made  by  the  mortgagor  within  the  period  of  limitation  inter- 
rupts the  running  of  the  statute.^® 

Where  the  legal  title  to  land  is  held  as  security  for  a  debt,  the 
equitable  owner  cannot  recover  such  title  without  paying  the  debt, 
though  an  action  for  the  debt  be  barred  by  limitation.®"  Neither  can 
one  who  has  made  an  absolute  conveyance  to  secure  a  debt  have  his  title 
quieted  except  upon  condition  of  payment  of  the  debt  to  secure  which 
he  had  mortgaged  the  land,  notwithstanding  the  debt  was  barred  by 
the  statute  of  limitations.*^^ 

Upon  a  witnessed  mortgage  note,  more  than  twenty  years  after  it 
was  due,  was  an  indorsement  signed  by  the  payee  of  the  receipt  on  a 
day  named  of  a  note  for  a  certain  sum,  "being  balance  of  the  within 
note,  and  interest  to  date ;"  and  a  new  note  bearing  that  date  for  the 
sum  so  named  was  signed  by  the  mortgagor,  payable  in  six  years  to  the 
mortgagee,  and  witnessed.  The  first  note  showed  no  further  pay- 
ments, but  there  were  two  indorsements  on  the  second  note,  the  last 
one  being  within  twenty  years  of  the  date  of  an  action  by  the  mort- 
gagee to  recover  possession  of  the  premises.  As  to  this  last  indorse- 
ment the  payee's  daughter  testified  that  she  made  it  in  the  maker's 
presence  at  the  request  of  her  mother,  to  whom  the  money  was  claimed 
to  have  been  paid,  the  money  being  then  on  a  table;  but  she  did  not 
testify  to  the  amount  of  the  money,  and  there  was  no  other  evidence 
that  the  maker  knew  the  contents  of  the  paper  on  which  the  indorse- 
ment was  made,  or  that  he  ever  saw  it  after  it  was  made.  A  computa- 
tion of  the  sum  due  on  the  first  note  showed  that  the  sum  named  in 
the  last  indorsement  thereon  was  a  fair  statement  of  the  balance ;  and 
the  second  note  and  the  mortgage  were  kept  by  the  mortgagee.  It  was 
held  that  the  indorsement  on  the  original  note  was  rightly  admitted 

«'  Kerr    v.    Lydecker,    51    Ohio    St  Ins.  Co.  v.  Horner,  30  Oreg.  558,  48 

240.  Pac.  175. 

"Bradfield    v.    Hale,    67    Ohio    St.  »» Phelan    v.    Pitzpatrick,    84    Wis. 

316,  65  N.  E.  1008.  240,   54   N.   W.   614. 

''  Joy  v.  Adams,  26  Me.  330,  333.  "'  Booth  v.  Hoskins,  75  Cal.  271,  17 

**'  Longstreet  v.  Brown  (N.  J.  Eq.)  Pac.  225;  De  Cazara  v.  Orena,  80  Cal. 

37  Atl.  56.  •  See  Dundee  Mortg  &  L.  132,  22  Pac.  74. 


§§    1205,  .1206.]     WHEN    KIGPIT    TO    FORECLOSE    IS    BARRED.  178 

in  evidence;  and  that  the  judge  was  justified  in  finding  that  the  sec- 
ond note  was  a  renewal  of  the  balance  due  on  the  first  note,  and  that 
the  payment  last  indorsed  on  the  second  note  was  made  in  part  pay- 
ment of  the  mortgage  debt.®^* 

§  1205.  The  mortgagee  may  retain  possession  till  the  debt  is 
paid.  Although  the  right  to  proceed  by  action  on  the  mortgage  is 
barred,  still,  if  the  mortgagee  can  obtain  rightful  possession  of  the 
premises,  he  may  retain  them  until  the  debt  is  paid.^-  But  after  the 
expiration  of  the  time  within  which  a  mortgage  may  be  enforced  by 
foreclosure,  the  mere  entering  into  possession  by  the  mortgagee,  with- 
out objection  on  the  part  of  the  mortgagor,  does  not  restore  the  mort- 
gage to  efficacy,  or  entitle  the  mortgagee  to  the  rights  of  a  mortgagee 
in  possession.^^ 

§  1206.  There  can  be  no  decree  for  the  deficiency  after  the  debt 
is  barred.®*  It  was  held,  however,  in  an  Arkansas  case,  that  a  court 
of  equity  is  not  precluded,  in  a  suit  for  the  foreclosure  of  the  mort- 
gage given  to  secure  the  debt,  from  rendering  a  decree  against  the 
mortgagor  for  any  remainder  of  the  debt  not  satisfied  by  the  sale. 
This  decision  was  made  on  the  ground  that  such  a  decree  is  an  inci- 
dent to  the  decree  of  foreclosure,  and  that  when  a  court  of  equity  once 
takes  jurisdiction  of  a  case  it  will  retain  it  for  the  purpose  of  com- 
plete relief.®^  But  this  cannot  be  regarded  as  sound  law ;  and  in  other 
States  a  judgment  for  a  deficiency  is  barred  when  the  debt  is  barred, 
though  an  action  to  foreclose  the  mortgage  is  not  barred."® 

Where  in  a  petition  to  foreclose  a  mortgage  a  deficiency  judgment 
is  asked  against  the  defendants,  who  are  personally  liable  on  the  notes, 
the  running  of  the  statute  of  limitations  is  tolled  as  to  such  notes  as 
were  not  outlawed  at  the  commencement  of  the  action.®'^ 

"  *Cuniiingham  v.  Davis  175  Mass.  Mitchell,    J.,    said:     "A    variety    of 

213.    56    N.    E.    2,    quoting   text    and  cases  may  exist  where  the  right  to 

Thayer   v.    Mann,    19    Pick.    (Mass.)  enforce    the    mortgage    still    exists, 

535  and  Norton  v.  Palmer,  142  Mass.  but  the  right  to  recover  a  personal 

433,  8  N.  E.  346.  judgment  for  the  debt  has  been  lost, 

"See  §§  715,  716;   Henry  v.  Confi-  and    consequently    where    the    only 

dence  Gold  &  Silver  M.   Co.   1  Nev.  judgment    that    could    be    rendered 

619;  Van  Dyne  v.  Thayre,  14  Wend,  would    be    one   of   foreclosure.      But 

233;    Phyfe  v.   Riley,  15  Wend.   248,  in    all    cases    of    foreclosure    it    is 

30  Am.  Dec.  55.  necessary   to   have   a   judgment   ad- 

"  Banning  v.  Sabin,  45  Minn.  431,  indicating   the   amount    due   on   the 

48  N.  W.  8.  mortgage,  in  order  to  determine  the 

"  Thompson  v.Cheeseman,  15  Utah,  sum  to  be   realized   out   of   the   se- 

43,  48  Pac.  477.  curity;   and  in  cases  where,  for  any 

*'  Birnie  v.  Maine,  29  Ark.  591.  cause,    the    plaintiff   is   not    entitled 

»°  Hulbert  v.  Clark,  57  Hun,  558,  11  to  a  personal  judgment  for  the  debt, 

N.   Y.   Supp.  417;   Michigan  Ins.   Co.  this  is  its  only  purpose  and  effect." 

V.  Brown,  11  Mich.  266;   Slingerland  "Patrick    v.    National     Bank,     63 

v.  Sherer,  46  Minn.  422,  49  N.  W.  237.  Neb.  200,  88  N.  W.  183. 


179 


WHEN    RIGHT    TO    FORKCLOSK    IS    BARRED. 


[§    1207 


§  1207.  In  several  States  the  mortgage  lien  is  discharged  when 
the  debt  is  barred.  The  statutes  in  these  States  limit  suits  in  equity 
in  the  same  manner  as  suits  at  law,  and,  the  debt  being  barred  by  the 
statute,  the  mortgage  is  in  effect  extinguished.  This  is  the  rule  estab- 
lished in  California.  Chief  Justice  Field,  giving  the  opinion  of  the 
court,  in  addition  to  the  special  ground  of  the  decision  founded  upon 
the  peculiarity  of  the  statute  of  limitations  of  that  State,  intimates 
that,  by  the  doctrine  of  mortgages  established  there,  when  the  debt  is 
barred  by  the  statute  of  limitations,  the  mortgage,  being  considered 
a  mere  incident  to  it,  is  also  barred,  or  at  least  rendered  unavailable 
for  any  purpose.®^  In  fact  the  mortgage,  not  being  regarded  as  a  con- 
veyance in  fee,  but  only  a  contract  creating  a  lien  or  charge  upon  the 
property,  comes  within  the  same  general  limitation  as  the  note  or  other 
obligation  secured  by  it.  Just  as  much  as  the  note,  it  is  a  "contract, 
obligation,  or  liability  founded  upon  an  instrument  in  writing,"  within 
the  terms  of  the  statute.  The  same  rule  has  been  established  in  Ken- 
tucky, Minnesota,  Nevada  and  Texas,  upon  the  ground  that  the  mort- 
gage is  a  mere  security  for  a  debt,  and  the  mortgagor  is  the  owner  of 


"« Lord  V.  Morris,  18  Cal.  482.  Mr. 
Chief  Justice  Field  said:  "The  stat- 
ute of  limitations  of  this  State  dif- 
fers essentially  from  the  statute  of 
James  I.,  and  from  the  statutes  of 
limitations  in  force  in  most  of  the 
other  States.  Those  statutes  apply 
in  their  terms  only  to  particular 
legal  remedies,  and  hence  courts  of 
equity  are  said  not  to  be  bound  by 
them  except  in  cases  of  concurrent 
jurisdiction.  In  other  cases  courts 
of  equity  are  said  to  act  merely  by 
analogy  to  the  statutes,  and  not  in 
obedience  to  them.  Those  statutes, 
as  a  general  thing,  also  apply,  so  far 
as  actions  upon  written  contracts 
not  of  record  are  concerned,  only 
to  actions  upon  simple  contracts, — 
that  is,  contracts  not  under  seal,  fix- 
ing the  limitation  at  six  years,  and 
leaving  actions  upon  specialties  to 
be  met  by  the  presumption  estab- 
lished by  the  rule  of  the  common 
law,  thatafter  a  lapseof  twenty  years 
the  claim  has  been  satisfied.  In 
those  statutes  where  specialties  are 
mentioned,  as  in  the  statutes  of 
Ohio  and  Georgia,  the  limitation  is 
generally  fixed  at  either  fifteen  or 
twenty  years.     The  case  is  entirely 


different  in  this  State.  Here  the 
statute  applies  equally  to  actions  at 
law  and  to  suits  in  equity.  It  is 
directed  to  the  subject-matter,  and 
not  to  the  form  of  the  action,  or  the 
forum  in  which  the  action  is  pros- 
ecuted. Nor  is  there  any  distinction 
in  the  limitation  prescribed  between 
simple  contracts  in  writing  and 
specialties.  Thus  the  statute  re- 
quires an  action  'upon  any  contract, 
obligation,  or  liability  founded  upon 
an  instrument  of  writing,'  except  a 
judgment  or  decree  of  a  court  of  a 
State  or  Territory,  or  of  the  United 
States,  to  be  commenced  within  four 
years  after  the  cause  of  action  has 
accrued.  .  .  .  We  do  not  question 
the  correctness  of  the  general  doc- 
trine prevailing  in  the  courts  of 
several  of  the  States,  that  a  mort- 
gage remains  in  force  until  the  debt 
for  the  security  of  which  it  is  given 
is  paid.  We  only  hold  that  the  doc- 
trine has  no  application  under  the 
statute  of  limitations  of  this  state." 
See,  also.  Low  v.  Allen,  26  Cal.  141; 
Lent  V.  Morrill,  25  Cal.  492;  Allen  v. 
Allen,  95  Cal.  184,  30  Pac.  213,  16  L. 
R.  A.  646. 


§    1207.]  WHEN    RIGHT    TO    FORECLOSE    IS    BARRED. 


180 


the  land.*'^  The  rule  is  established  by  statute  in  Arkansas/""  Idaho/"^ 
Indiana/"^'  Iowa,"'  Illinois/"^  Kansas,"^  Mississippi,"*^  Missouri/" 
and  Wyoming,"*  also  the  mortgage  is  regarded  as  a  mere  incident 
following  the  debt,  which  is  the  principal  thing,  for  which  it  stands 
security,  and  therefore  the  remedy  upon  the  mortgage  is  barred  when 
that  upon  the  debt  is  lost,  and  not  till  then.  Otherwise,  if  the  mort- 
gage contains  an  express  covenant  to  pay  the  debt."" 

When  the  debt  is  barred,  and  the  mortgagee's  title  is  thus  barred, 
the  mortgagor's  title  is  freed  from  the  title  of  the  mortgagee,  and  the 
mortgagor  is  the  absolute  owner,  not  by  any  new  title,  but  by  the  title 
he  formally  had.^" 

Under  this  rule  the  mortgage  lien  is  barred  when  the  debt  is  barred. 


'"  Clift  V.  Williams,  105  Ky.  559,  49 
S.  W.  328,  51  S.  W.  821;  McCracken 
Co.  V.  Mercantile  Trust  Co.  84  Ky. 
344,  1  S.  W.  585;  Tate  v.  Hawkins,  81 
Ky.  577,  50  Am.  Rep.  181;  Prewitt  v. 
Worthen,  79  Ky.  287;  McManaman 
V.  Hinchley  82  Minn.  296,  84  N.  W. 
1018;  Carson  v.  Cochran,  52  Minn.  67, 
53  N.  W.  1130;  Oster  v.  Mickley,  35 
Minn.  245,  28  N.  W.  710:  Duty  v. 
Graham,  12  Tex.  427,  62  Am.  Dec. 
534;  Wells  v.  Harter,  56  Cal.  342; 
Blackwell  v.  Barnett,  52  Tex.  326; 
Perkins  v.  Sterne,  23  Tex.  561,  76 
Am.  Dec.  72;  Ross  v.  Mitchell,  28 
Tex.  150;  Daggs  v.  Ewell,  3  Woods, 
344;  Kyger  v.  Ryley,  2  Neb.  20; 
Peters  v.  Dunnells,  5  Neb.  400; 
Hurley  v.  Estes,  6  Neb.  386;  Henry 
V.  Confidence  Gold  &  Silver  M.  Co.  1 
Nev.  619;  Hurley  v.  Cox,  9  Neb.  230, 
2  N.  W.  705;  Cheney  v.  Campbell,  28 
Neb.  376,  44  N.  W.  451. 

'''"Acts  1887,  p  196;  Acts  1889,  p. 
73.  And  see  Hill  v.  Gregory,  64 
Ark.  317,  42  S.  W.  408;  Fayette- 
ville  Build.  &  L.  Asso.  v.  Bow- 
lin,  63  Ark.  573,  39  S.  W.  1046; 
American  Mortg.  Co.  v.  Milam,  64 
Ark.   305,  42  G.  W.  417. 

""■  Law  v.  Spence,  (Ida.)  48  Pac. 
282. 

"'  Goodman  v.  Pareira,  70  Ark.  49, 
66  S.  W.  147. 

'™  Gower  v.  Winchester,  33  Iowa, 
303;  Burton  v.  Hintrager,  18  Iowa, 
438;  Sangster  v.  Love,  11  Iowa,  580; 
Crow  V.  Vance,  4  Iowa,  434;  Green  v. 
Turner,  38  Iowa,  112;  Newman  v. 
De  Lorimer,  19  Iowa,  244;  Clinton 
County  V.  Cox,  37  Iowa,  570;  Mahon 
V.  Cooley,  36  Iowa,  479;  Brown  v. 
Rockhold,    49    Iowa,    282;    Jenks    v. 


Shaw,  99  Iowa,  604,  68  N.  W.  900,  61 
Am.  St.  Rep.  256. 

"*  Pollock  V.  Maison,  41  111.  516; 
Hagan  v.  Parsons,  67  111.  170;  Emory 
V.  Keighan,  94  111.  543,  88  111.  482; 
Quayle  v.  Guild,  91  111.  378;  Hancock 
V.  Harper,  86  111.  445;  Carter  v.  Tice, 
120  111.  277,  11  N.  E.  529;  Hyman  v. 
Bayne,  83  111.  256;  Gridley  v.  Barnes, 
103  111.  211;  McMillan  v.  McCormick, 
117  111.  79,  7  N.  E.  132  Schifferstein 
v.  Allison,  123  111.  662,  15  N.  E.  275; 
Harding  v.  Durand,  138  111.  515,  28  N. 
E.  948;  Murray  v.  Emery,  187  111. 
408,  58  N.  E.  327,  affmg  85  111.  App. 
348;  Richey  v.  Sinclair,  167  111.  184, 
47  N.  E.  364. 

1"^  Fort  Scott  V.  Schulenberg,  22 
Kans.  648;  Schmucker  v.  Sibert,  18 
Kans.  104,  26  Am.  Rep.  765;  Hub- 
bard V.  Mo.  Valley  L.  Ins.  Co.  25 
Kans.  172;  Kulp  v.  Kulp,  51'  Kan. 
341,  32  Pac.  1118;  McLane  v.  Allison 
7  Kan.  App.  263,  53  Pac.  781. 

'""Annot.  Code  1892,  §  2733;  Hunt- 
ington V.  Bobbitt,  46  Miss.  528;  Mad- 
dux, V.  Jones,  51  Miss.  531;  Van 
Eaton  V.  Napier,  63  Miss.  220. 

''"  Laws  1891,  p.  184.  As  to  mort- 
gages made  before  the  statute,  it 
takes  effect  after  the  expiration  of 
two  years. 

'"^Balch  V.  Arnold,  (Wyo.)  59  Pac. 
433. 

109  New  England  Mortg.  Sec.  Co.  v. 
Reding,  65  Ark.  489,  47  S.  W.  132; 
Holiman  v.  Hance,  61  Ark.  115,  32  S. 
W.  488;  Vaughan  v.  Norwood,  44 
Ark.  101;  Brown  v.  Cascaden,  43 
Iowa,  103;  Harris  v.  Mills,  28  111.  44, 
81  Am.  Dec.  259;  Lilly  v.  Dunn,  96 
Ind.   220. 

""  Lightcap  V.  Bradley,  186  111.  510, 
58  N.  E.  221. 


181  WHEN    RIGHT    TO    FORECLOSE    IS  BARRED.  [§    1207. 

although  at  the  time  the  note  and  mortgage  become  due  and  after- 
wards the  mortgagor  holds  a  claim  against  the  holder  of  the  note  and 
mortgage,  which  he  might  use  as  a  set-off  if  suit  were  brought  thereon, 
unless  the  holder  of  the  note  and  mortgage  should  recognize  and  allow 
such  claim."^  In  these  States  the  statutory  period  of  limitation  com- 
mences to  run  from  the  time  the  debt  becomes  due."- 

But  in  California  it  is  held  that  a  trust  deed  is  not  a  mortgage  re- 
quiring a  judicial  foreclosure,  but  is  a  conveyance  of  the  legal  title; 
that,  although  the  debt  be  barred  by  limitation,  it  is  not  extinguished 
or  paid ;  and  therefore  the  legal  title  and  power  of  the  trustee  are  not 
affected  by  the  expiration  oi  the  period  prescribed  to  bar  the  debt,  and 
a  court  of -equity  will  not  interfere  to  enjoin  a  sale  under  the  deed.^^-'^ 

The  statute  of  limitations  of  these  States  is  wholly  unlike  that  of 
England,  and  of  those  States  which  have  adhered  to  the  common  law 
forms  of  action.  The  latter  statutes  apply  in  terms  only  to  actions 
at  law;  and  courts  of  equity  in  general  act  merely  in  analogy  to  the 
statutes,  and  not  in  obedience  to  them.  But  in  States  where  the  dis- 
tinction between  actions  at  law  and  suits  in  equity  is  done  away  with, 
the  statutes  of  limitation  apply  equally  to  both  classes  of  cases;  and 
therefore  a  suit  to  foreclose  a  mortgage  must  be  brought  within  the 
time  limited  for  an  action  upon  the  note  secured  by  it."*  A  purchaser 
of  the  equity  of  redemption  may  interpose  this  defence  to  the  fore- 
closure of  a  mortgage,  whether  the  mortgagor  does  or  not."^  The 
statute  does  not  begin  to  run  until  the  debt  is  due.^^^ 

The  mere  fact  of  posting  notices  at  a  trust  sale  by  a  trustee  before 
the  debt  secured  by  the  trust  deed  is  barred,  but  not  in  time  to  make 
the  sale  before  the  bar  of  limitation  would  be  complete,  cannot  be  held 
equivalent  to  the  institution  of  an  "action  or  suit,"  which  would  sus- 
pend the  running  of  the  limitation."^ 

Whatever  suspends  the  operation  of  the  statute  of  limitations  as  to 
the  debt,  keeps  alive  the  mortgage  which  secures  the  debt."^ 

In  equity  a  mortgage  is  always  regarded  merely  as  a  security  for  the 
debt.  The  debt  is  the  principal  thing,  and  the  mortgage  an  incident 
only.  But  the  note  or  bond  which  accompanies  the  mortgage  may  also 
be  regarded  as  an  incident  or  evidence  of  the  debt,  especially  if  the 

"1  Hubbard  v.  Mo.  Valley  L.   Ins.  104,   26   Am.    Rep.    765;    Roberts   v 

Co.  25  Kans.  172.  Tunnell,  165  111.  631,  46  N.  E.  713. 

"-  Bassett  v.  Monte  Christo  Mining  ""  Mason  v.  Luce,  116  Cal.  232,  4 

Co.  15  Nev.  293.  Pac.  72;  Richards,  v.  Daley,  116,  Cal 

"=•  Grant  v.  Burr,  54  Cal.  298.  336,  48  Pac.  220. 

"*  Chick  V.  Willetts,  2  Kans.  384;  ^"  Blackwell '  v.    Barnett,    52    Tes 

Schmucker  v.   Sibert,   18  Kans.   104,  326. 

26    Am.    Rep.    765.  '"  First  Nat.  Bank  v.  Woodman,  9 

"'  Schmucker   v.    Sibert,    18   Kans.  Iowa,  668,  62  N.  W.  28. 


§    1207.]  WHEJT    RIGHT    TO    FORECLOSE    IS   BARRED.  182 

mortgage  itself  contains  a  covenant  for  the  payment  of  it."®  The  doc- 
trine that  there  can  be  no  remedy  upon  the  mortgage  after  the  remedy 
upon  the  note  is  barred  cannot  properly  rest  upon  this  foundation.  If 
not  based  upon  the  express  terms  of  the  statute  of  limitartions,  it  must 
rest  upon  the  statutory  declaration  made  in  several  States,  that  a  mort- 
gage is  not  to  be  deemed  a  conveyance  of  the  land,  but  only  a  contract 
lien  upon  it.^^°  Yet  in  Illinois,  when  the  debt  is  barred  the  remedy 
on  the  mortgage  is  barred  also,  and  the  decisions  are  placed  upon  the 
ground  that  the  debt  is  the  principal  thing ;  that  an  assignment  of  this 
carries  with  it  the  mortgage ;  that  the  release  of  it  releases  the  mort- 
gage ;  and  that  by  analogy  there  is  no  reason  why  a  bar  to  a  recovery 
on  the  note  should  not  produce  the  same  effect  on  the  mortgage.  It  is 
conceded,  however,  that  when  the  mortgage  itself  contains  a  covenant 
for  the  payment  of  the  debt,  this  being  an  instrument  under  seal,  al- 
though a  mortgage  note  not  under  seal  might  be  barred  under  a 
shorter  period  of  limitation  than  that  required  to  bar  a  sealed  instru- 
ment, the  remedy  upon  the  mortgage  would  be  barred  only  by  the  lapse 
of  a  longer  period  required  to  bar  a  recovery  on  sealed  instruments. ^^^ 

If  the  debt,  secured  l)y  a  mortgage  of  real  estate,  is  not  evidenced 
by  any  other  written  instrument,  and  the  mortgage  contains  no  express 
covenant  to  pay  such  indebtedness,  and  a  stipulation  annexed  thereto 
expressly  excludes  previous  liability,  the  right  to  foreclose  the  mort- 
gage is  barred  in  ten  years  under  the  special  statute  relating  to  mort- 
gages, and  not  under  a  statute  relating  to  limitations  of  actions  upon 
debts.  There  is  in  such  case  no  debt  which  can  be  considered  as  the 
principal  to  which  the  mortgage  is  incident.^^^ 

On  the  other  hand,  so  long  as  the  statute  does  not  bar  a  recovery  on 
the  note,  it  does  not  bar  a  foreclosure  of  the  mortgage.^'^  If  by  the 
non-residence  of  the  mortgagor  time  be  deducted  from  the  period  of 

"^  Pratt  v.  Huggins,  29  Barb.  277.  The  language  of  the  statute  is  ex- 

1="  Lord    V.    Morris,    18    Cal.    482.  press   that   it   shall    not   be   deemed 

Chief  Justice  Field   said:      "Here  a  a    conveyance,    whatever    its    terms, 

mortgage  is  regarded  as  between  the  so   as    to   enable   the   owner   of   the 

parties,  as  well  as  with. reference  to  mortgage      to      recover      possession 

the  rights  of  the  mortgagor  in  his  without    a    foreclosure     and     sale." 

dealings    with    third    persons,    as    a  And   see  Jackson  v.   Lodge,  36   Cal. 

mere    securitv,    creating    a    lien    or  28;    Carpentier  v.  Brenham,  40  Cal. 

charge  upon  the  property,   and  not  221;  Harp  v.  Calahan,  46  Cal.  222. 

as  a  conveyance  vesting  any  estate  '^^  Harris    v.    Mills,    28    111.    44,    81 

in    the    premises,    either    before    or  Am.  Dec.  259;  Hagan  v.  Parsons,  67 

after  condition  broken.    Here  it  con-  111.  170;  Brown  v.  Devine,  61  111.  260; 

fers  no  right  to  the  possession  of  the  Pollock  v.   Maison,   41  111.   516. 

premises  either  before  or  after  de-  '==  Von  Campe  v.  Chicago,  140  111. 

fault,   and,    of  course,   furnishes   no  361,  29  N.  B.  892. 

support  to  an  action  of  ejectment,  or  ^-^  Schmucker   v.    Sibert,   18   Kans. 

to  a  writ  of  entry  for  their  recovery.  104,  26  Am.  Rep.  765. 


183       WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.     [§§    1208,    1209,    1210. 

limitation,  so  that  an  action  on  the  debt  is  not  barred,  neither  is  an 
action  to  foreclose  the  mortgage  barred.^^* 

§  1208.  It  is  immaterial  whether  the  adverse  possession  be 
that  of  one  person  for  the  whole  period,  or  that  of  several  persons 
holding  in  succession  each  for  a  part  of  the  period,  provided  the  pos- 
session be  uninterrupted  and  adverse;  but  if  a  period  of  time  inter- 
venes when  the  possession  is  not  adverse,  the  statute  only  runs  from 
the  commencement  of  the  last  adverse  possession.^^^ 

Moreover,  as  against  the  mortgagee  under  the  English  statute,^^'*  the 
adverse  possession  must  have  commenced  under  the  mortgage,  so  that 
an  occupation  previous  to  the  making  of  the  mortgage  cannot  be  added 
to  an  occupation  afterwards  to  make  up  the  period  of  twenty  years; 
therefore  it  may  happen  that  while  the  mortgagor  is  barred  from  re- 
covery the  mortgagee  is  not.^-'^  The  payment  of  interest  by  the  mort- 
gagor may  prevent  the  running  of  the  statute  against  the  mortgagee, 
while  the  person  in  possession  under  the  mortgagor,  holding  for  more 
than  twenty  years  without  paying  rent  or  making  acknowledgment  of 
any  kind,  has  acquired  title  against  him. 

An  adverse  possession,  which  includes  the  period  during  which  a 
stay  law  was  in  force,  is  not  eifectual  against  a  mortgagee.^^^ 

§  1209.  An  action  to  enforce  an  equitable  lien  for  purchase- 
money  is,  on  the  contrary,  barred  when  the  debt  itself  is  barred. ^^'^ 
Such  a  lien  arises  by  operation  of  law,  and  is  not  created  or  evidenced 
by  deed.    It  must  coexist  with  the  debt  and  cannot  survive  that. 

§  1210.  The  statute  runs  in  favor  of  the  mortgagor  from  the 
time  the    mortgagee's  right  of    action  accrues,  that  is,  from    the 

•"Clinton   v.    Cox,   37   Iowa,    570;  and  also  between  an  action  to  foreclose 

Brown  v.  Rockhold,  49  Iowa,  282,  7  a  mortgage  and  one  to  enforce  a  lien. 

Cent.  L.  J.  416;   Emory  v.  Keighan,  The  action  to  foreclose  a  mortgage 

94  111.  543.  is  brought  upon  an  instrument  un- 

•"  Emory   v.   Keighan,   88   111.    482,  der    seal,    which    acknowledges    the 

11  Chicago  L.  N.  32;  Benson  v.  Stew-  existence  of  the  debt  to  secure  which 

art,  30  Miss.  49.  the     mortgage    is    given;     and,     by 

'=°  7  Wm.  IV.  &  1  Vict.  ch.  28.  reason  of  the  seal,   the  debt  is  not 

'"Palmer  v.   Eyre,   17  Q.   B.    366;  presumed    to    have    been    paid    until 

Baddeley   v.    Massey,   17   Q.   B.    373;  the     expiration     of     twenty     years 

Ford  v.  Alger,  2  H.  &  C.  279,  8  L.  T.  after   it   becomes    due   and    payable. 

N.  S.  546.  The  six  years'  limitation  has  no  ap- 

'='*  Lynch  v.  Hancock,  14  S.  C.  66.  plication  to  a  mortgage.    In  fact,  all 

'="  Borst   v.    Corey,    15   N.    Y.    505.  instruments  under  seal  are  expressly 

Mr.  Justice  Bowen  said:  "There  is  a  excepted  therefrom."     To  the  same 

material  distinction  between  a  mort-  effect  see  Trotter  v.  Erwin,  27  Miss. 

gage  and  the  equitable  lien  for  the  772;    Littlejohn  v.  Gordon,  32   Miss. 

purchase-price  of  land  given  by  law,  235. 


§    1211.]  WHEN    RIGHT    TO    FORECLOSE    TS    BARRED.  184 

time  the  condition  of  the  mortgage  is  broken. ^^°  Unless  the  time 
commences  to  run  from  the  time  when  the  right  to  foreclose  accrues, 
it  could  have  no  commencement  except  in  rare  instances,  and  the  right 
to  foreclose  might  be  asserted  against  the  continued  possession  of  the 
mortgagor  at  the  most  remote  period.  From  that  time  the  mortgagor 
holds  subject  to  the  right  of  the  mortgagee  to  foreclose;  and  if  the 
mortgagee  sleeps  upon  that  right,  if  any  lapse  of  time  is  to  bar  his 
claim  upon  the  presumption  that  it  has  been  paid,  the  period  must 
commence  from  the  accruing  of  his  right  of  action.  There  is,  there- 
fore, no  presumption  by  reason  of  a  long  lapse  of  years,  from  the  date 
of  the  mortgage,  that  the  statute  of  limitations  has  run  against  it,  in 
the  absence  of  proof  as  to  the  time  when  the  same  matured.^^^ 

If  a  suit  for  foreclosure  be  regarded  as  a  proceeding  in  rem,  the  ab- 
sence of  the  mortgagor  from  the  State  does  not  prevent  the  running 
of  the  statute  on  the  mortgagee's  right  to  foreclose.  His  absence  does 
not  interfere  with  the  prosecution  of  his  remedy,  or  render  it  less  ef- 
fectual.^^^  But,  on  the  other  hand,  if  such  a  suit  be  regarded  as  a 
proceeding  in  personam  rather  than  one  in  rem,  a  provision  of  a  stat- 
ute of  limitations,  that,  in  case  the  defendant  be  absent  from  the  State 
when  the  cause  of  action  accrues,  the  action  may  be  commenced  within 
the  time  limited  after  his  return  to  the  State,  applies  to  a  foreclosure 
suit.^^^ 

A  stipulation  in  a  mortgage  that  upon  default  in  the  payment  of  in- 
terest the  right  of  foreclosure  should  immediately  accrue  would  not  set 
the  statute  of  limitations  running  from  the  date  of  such  default,  where 
the  default  had  not  been  claimed  by  the  mortgagee.^^* 

§  1211.  The  possession  of  the  mortg-agor  or  his  grantees  is  pre- 
sumed to  be  subordinate  to  the  mortgage,  until  it  is  shown  by  some 
act  that  such  possession  is  inconsistent  with  the  rights  of  the  mort- 
gagee.^^^  To  constitute  an  adverse  possession  in  the  mortgagor  his 
possession  must  be  hostile  in  its  inception,  and  must  continue  hostile, 
actual,  visible,  and  distinct.^'^"     So  long  as  the  relation  of  mortgagor 

""  Nevitt  v.  Bacon,  32  Miss.  212,  66  "'  Whalley   v.    Eldridge,    24   Minn. 

Am.  Dec.  609;  Benson  v.  Stewart,  30  358:  Bardwell  v.  Collins,  44  Minn.  97, 

Miss.   49;    Wilkinson  v.   Flowers,  37  46  N.  W.  315;   Carson  v.  Cochran  52 

Miss.  579,  75  Am.  Dec.  78;   Coyle  v.  Minn.   67,  53   N.   W.   1130;    Town  v. 

Wilkins,   57  Ala.   107;    Smith  v.  Ni-  Washburn,  14  Minn.   268;    Foster  v. 

agara  F.  Ins.  Co.  60  Vt.  682,  15  Atl.  Johnson,  44  Minn.  290,  40  N.  W.  350. 

353.  ^'*  First  Nat.   Bank.  v.   Parker,   28 

"'  McCrath  v.  Myers,  126  Mich.  204,  Wash.  234,  68  Pac.  756. 

85  N.  W.  712.  "^  Maxwell  v.   Hartmann,   50  Wis. 

"-Anderson  v.  Baxter,  4  Oreg.  105;  660.  8  N.  W.  103. 

Richey   v.    Sinclair,    167    111.    184,    47  ""  §  672;   Medley  v.  Elliott,  62  111. 

N.  E.  364;  Emory  v.  Keighan,  88  111.  532;    Martin   v.   Jackson,   27   Pa.   St. 

482.  504,    67    Am.    Dec.    489;     Parker    v. 


185  WHEN    RIGHT    TO    FORECLOSE    IS   BARRED.  [§    1211. 

and  mortgagee  continues,  the  statute  cannot  commence  to  run  in  favor 
of  the  mortgagor  or  his  heirs.  The  recovery  of  a  judgment  on  scire 
facias  to  foreclose  a  mortgage  does  not  extinguish  the  relation;  until 
the  time  of  redemption  allowed  by  law  after  a  foreclosure  sale  has  ex- 
pired, so  that  the  purchaser  is  entitled  to  a  deed  of  the  premises,  the 
statute  does  not  begin  to  run.^^^  After  a  foreclosure  sale  the  statute 
of  limitations  begins  to  run  against  the  purchaser,  at  least,  when  the 
deed  under  the  sale  is  given,  whether  the  purchaser  be  the  mortgagee 
'or  a  third  person.^^^ 

The  possession  of  the  mortgagor  being  in  the  beginning  consistent 
with  the  right  of  the  mortgagee,  it  becomes  important  to  determine 
when  it  becomes  adverse,  and  such  that  the  limitation  begins  to  run  in 
the  mortgagor's  favor.  Is  it  adverse  from  the  time  that  he  ceases  to 
pay  interest  upon  the  mortgage  debt?  "It  seems  to  me,"  says  Lord 
Denman,  Chief  Justice,  "that  it  is  not  so.  The  possession  of  the  mort- 
gagor is  consistent  with  the  right  of  the  mortgagee ;  and,  therefore,  the 
possession  is  not  adverse  at  any  assignable  period,  unless  the  jury, 
from  renunciation  by  the  mortgagor  or  some  other  circumstances,  are 
induced  to  find  the  fact  of  adverse  possession."^^^ 

Where  the  owner  of  the  equity  of  redemption  had  been  the  mort- 
gagee's agent  in  selling  the  land,  and  in  taking  a  mortgage  for  a  bal- 
ance of  the  purchase-money,  and  had  afterwards  purchased  the  land, 
but  concealed  the  transaction  from  his  principal,  and  always  held  him- 
self out  to  his  principal  as  being  true  to  the  confidential  relation  as 
his.agent,  and  never  claimed  any  interest  in  the  land,  and  the  principal 
never  cancelled  the  agent's  power  of  attorney  or  learned  of  his  un- 
faithfulness, it  was  held  that  the  agent's  possession  of  the  land  was 
not  adverse,  and  that  though  the  notes,  to  secure  which  the  mortgage 
was  given,  had  been  barred  by  the  statute  of  limitations,  the  right  of 
action  on  the  mortgage  was  not  barred.^*** 

Possession  by  one  who  has  entered  upon  the  land,  under  a  contract 

Banks,  79  N.  C.  480;  Birnie  v.  Maine,  scribe  the  relation  of  mortgagor  in 

29  Ark.  591;   Coldcleugh  v.  Johnson,  possession  and  mortgagee.     In  Par- 

34    Ark.    312;    Coyle   v.    Wilkins,    57  tridge  v.  Bere,  5  B.  &  Aid.  604,  such 

Ala.  108;  St.  Louis  v.  Priest,  103  Mo.  mortgagor   is   held   to  be   tenant  to 

652,  15  S.  W.  988;  Scruggs  v. Scruggs,  the  mortgagee;  sometimes  he  is  said 

43  Mo.  142;   Bowman  v.  Lee,  48  Mo.  to  be  the  bailiff  of  the  mortgagee-; 

335;  Gray  v.  Givens,  26  Mo.  291.  and  in  a  late  case  Lord  Tenterden 

'^'Rockwell  v.  Servant,  63  111.  424;  said  that  his  situation  was  of  a  pe- 

Jamison  v.  Perry.  38  Iowa,  14.  culiar  character.    But  it  is  clear  that 

"^  Grether  v.   Clark,  75   Iowa,  383,  his  possession  is,  at  all  events,  not 

39  N.  W.  655,  9  Am.  St.  Rep.  491.  adverse    to    the    title    of    the    mort- 

""  Jones  V.  Williams,  5  Ad.  &  El.  gagee." 
291.     Mr.   Justice   Patterson   in   this        ^^'>  Combs  v.  Goldsworthy,  109  Mo. 

case  said:  "One  is  much  at  a  loss  as  151,  18  S.  W.  1130. 
to  the  proper  terms  in  which  to  de- 


§    1211a.]  WHEN    RIGHT    TO    FORECLOSE   IS    BARRED.  186 

with  the  mortgagor  to  pay  off  the  mortgage  debt,  is  not  adverse  to  the 
mortgagee."^ 

It  is  not  material  to  make  out  that  the  mortgagor's  possession  from 
that  time  is  actually  adverse  to  the  right  of  the  mortgagee,  if  it  is  from 
that  time  without  recognition  of  it.  It  is  deemed  adverse  in  law  after 
breach  of  the  condition.^*- 

The  period  of  limitation  runs,  of  course,  from  the  time  when  the 
mortgagee's  right  of  action  accrues,  and  not  from  the  date  or  delivery 
of  the  mortgage. ^*^  When  a  mortgage  is  payable  in  instalments  fall- 
ing due  at  different  times,  the  mortgagor's  possession  is  not  adverse 
until  the  maturity  of  the  last  instalment.  The  condition  of  the  mort- 
gage in  such  case  is  a  continuing  one,  and  the  mortgagee  may  await 
the  maturity  of  the  last  note  before  an  entry  and  sale,  or  before  treat- 
ing the  non-payment  of  the  earlier  instalments  as  a  forfeiture  of  the 
mortgage.^** 

When  a  mortgage  is  in  the  form  of  an  absolute  conveyance  and  the 
grantor  continues  in  possession,  such  possession  is  not  adverse,  so  as 
to  start  the  running  of  the  statute  orf  limitations,  until  the  grantor 
disclaims  the  trust  relation  of  his  possession,  and  gives  notice  of  that 
fact  to  the  grantee.^*^ 

If  the  grantee  enters  into  possession  under  an  absolute  deed  and 
holds  the  same  continuously  for  the  statutory  period  of  limitation, 
without  in  any  way  recognizing  the  title  of  the  grantor,  a  bill  in  equity 
to  establish  such  deed  to  be  a  mortgage  is  barred."*' 

§  1211a.  To  constitute  a  disseisin  of  the  mortgagee  by  the 
mortgagor,  the  claim  of  the  latter  must  be  adverse  to  the  mortgagee's 
title,  and  this  claim  must  in  some  way  be  made  known  to  the  mort- 
gagee. It  has  even  been  said  that  "a  mortgagor,  especially  after  entry, 
cannot  disseize  his  mortgagee,  or  defeat  his  right  of  possession.  All 
such  acts  are  held  to  be  done  in  subordination  to  the  title  of  his  mort- 
gagee.""'^ It  is  at  any  rate  well  settled  that  the  mortgagee  must  be 
informed  of  the  claim  adverse  to  the  mortgage  before  the  disseisin  be- 
gins."^    It  has  been  held,  too,  that  "exclusive  possession  by  a  mort- 

"'Wilkerson  v.  Allen,  67  Mo.  502.  "^  §  703;  Lennon  v.  Porter,  5  Gray 

1"  Wilkinson  v.   Flowers,  37  Miss.  318. 

579    75  Am    Dec.  78.  "^  Holmes  v.  Turner's  Falls  Lum 

'"Prouty  v.   Eaton,  41  Barb.   409;  ber  Co.  150  Mass.  535,  23  N.  E.  305 

Delano  v.  Smith,  142  Mass.  490,  8  N.  Murphy    v.    Welch,    128    Mass.    489 

E    644.  Sheridan    v.    Welch,    8    Allen,    166 

^"Parker  v.  Banks,  79  N.  C.  480.  Tripe  v.  Marcy,  39  N.  H.  439;  Medle? 

"'Flynn  v    Lee    31  W.  Va.  487,  7  v.    Elliott,    62    111.    532;    Maxwell    v 

S   E   430.  Hartmann,  50  Wis.  660,  8  N.  W.  103 

^^oRichter  v.  Noll,  128  Ala.  198,  30  Parker  v.  Banks,  79  N.  C.  480;  Cold 

So.  740.  cleugh    v.    Johnson,    34    Ark.    312 


187   WHEN  RIGHT  TO  FORECLOSE  IS  BARRED.  [§§  1212,  1213,  1214. 

gagor,  and  those  claiming  under  him,  with  a  claim  of  exclusive  own- 
ership, does  not  of  itself  amount  to  a  disseisin  of  the  mortgagee,  so 
as  to  invalidate  a  transfer  of  the  mortgage  title,"  or  the  valid  execution 
of  a  power  of  sale  contained  in  a  mortgage. ^^'^  Either  the  occupation 
of  the  mortgagor  must  be  of  such  a  character  as  of  itself  to  give  notice 
to  the  mortgagee  that  he  repudiates  his  title,  and  claims  title  adversely 
to  him,  or  the  mortgagee  must  be  shown  to  have  had  actual  notice  or 
knowledge  of  such  a  claim. 

§  1212.     If   the   mortgagor   has   not   been   in   possession   of   the 

mortgaged  land,  the  debt  being  unpaid,  the  right  to  foreclose  is  not 
barred  by  the  lapse  of  the  statutory  period  of  limitation.  This  con- 
dition of  things  frequently  happens  when  the  mortgaged  lands  are 
wild  and  unimproved.  The  lapse  of  thirty  years  has  been  held  to  be 
no  bar  to  a  foreclosure  in  such  a  case.^^°  Even  the  lapse  of  thirty-five 
years,  during  the  most  of  which  period  the  mortgagor  was  out  of  the 
State  and  had  apparently  abandoned  his  equity  of  redemption,  and  the 
mortgagee  had  asserted  his  claim  by  the  sale  of  a  part  of  the  premises, 
and  by  paying  taxes  every  year  on  the  remainder,  was  held  not  to  bar 
him.i" 

§  1213.     If  the  mortgage  be  one  of  indemnity    to  a  surety,  his 

right  of  action  does  not  accrue  until  he  has  paid  the  debt  which  the 
mortgage  was  given  to  secure  him  against,  and  therefore  the  time  of 
limitation  for  his  bringing  an  action  to  foreclose  the  mortgage  com- 
mences to  run  only  from  that  time.^^^ 

§  1214,  The  same  rule  applies  in  case  of  a  debt  barred  by  a 
special  statute  of  limitations.  Thus,  the  rule  applies  to  a  particular 
statute  limiting  the  time  within  which  claims  against  the  estate  of  a 
deceased  person  must  be  presented  or  sued.  The  debt  is  not  paid  or 
satisfied  by  failure  to  present  or  sue  it  within  the  time  limited ;  and 
the  remedy  on  the  mortgage  may  still  be  pursued,^^^  though  the  mort- 

Coyle  v.  Wilkins,  57  Ala.  108;  Mar-  bility  of  the  mortgagor.     When  the 

tin  v.  Jackson,  27  Pa.  St.  504;  Zeller  maker  of  the  note  and  mortgage  are 

v.  Eckert,  4  How.  289.  the   same   person,    the   court   say    it 

""  Johnson    v.    Bean,    119    Mass.  may  be  that  it  would  be  necessary  to 

271;    Lincoln  v.  Emerson,  108  Mass.  present  the  claim  to  prevent  a  bar, 

87;  Hunt  v.  Hunt,  14  Pick.  374.  and  keep  the  remedy  alive  as  to  the 

1'"  Chouteau    v.    Burlando,    20    Mo.  debt,  in  order  to  uphold  the  remedy 

482.  on    the    mortgage.      This,    however, 

''"  Locke  v.  Caldwell,  91  111.  417.  would  be  on  account  of  the  excep- 

>■"  M'Lean    v.    Ragsdale,    31    Mass.  tional   character   of   the   statutes   of 

701.  limitation  in  that  State,  and  of  the 

""  Sichel   v.    Carrillo,   42    Cal.    493.  exceptional  views  taken  there  of  the 

In  this  case  the  mortgage  was  given  force    and    effect    of    the    mortgage, 

to  secure  the  note  of  another  person.  The    rule    stated    in    the    text    is   of 

so  that  there  was  no  personal  lia-  general  application,  and  without  any 


§§  1214a,  1214b.]    when  right  to  foreclose  is  barred.  188 

gagee's  right  to  have  decedent's  other  estate  applied,  on  any  deficiency 
that  may  remain  after  exhausting  the  land,  is  barred  by  failure  to 
present  the  claim  within  the  time  limited.^^* 

§  1214a.     A  bill  in  equity  to  have  the  mortgage  cancelled  and 

to  remove  the  cloud  from  the  title  may  be  maintained  by  the  mortgagor 
or  by  his  vendee  or  mortgagee  after  the  mortgage  has  become  barred  by 
the  statute.  The  title  is  then  clouded  with  an  invalid  lien,  and  any 
party  interested  in  the  title  is  entitled  to  have  the  cloud  .removed.^^^ 

§  1214b.  The  privilege  of  the  plea  of  the  statute  of  limitations 
may  be  set  up  not  only  by  the  mortgagor  but  by  a  subsequent  pur- 
chaser of  the  property.  In  the  latter  case  the  plea  must  show  that  the 
action  is  barred  as  l^etween  the  parties  to  the  debt,  because  it  is  that 
debt  the  purchaser  has  to  pay.^^^ 

Generally,  however,  the  privilege  is  regarded  as  a  personal  one, 
which  the  mortgagor  may  avail  himself  of  or  not,  as  he  may  choose, 
and  a  subsequent  purchaser  cannot  have  a  foreclosure  sale  set  aside 
because  the  mortgagor  did  not  plead  the  bar  of  the  statute.^^''  A  third 
person  cannot  interpose  the  defence. ^^®  The  statute  can  only  be  set 
up  by  the  mortgagor,  or  by  some  one  claiming  under  him.  Certainly, 
when  the  statute  is  not  available  for  him,  it  is  not  available  for  any 
other  person.  Thus  it  cannot  be  interposed,  by  the  holder  of  a  tax- 
title,  to  a  note  and  mortgage  not  barred  at  the  commencement  of  the 
action  against  the  original  mortgagor.^^^ 

such     qualification     elsewtiere.       In  "^  Fox  v.  Blossom,  17  Blatchf.  352. 

Texas,  under  special  requirement  of  See  Delano  v.  Smith,  142  Mass.  490, 

statute,  the  debt  must  be  presented  8  N.  E.  644. 

against   the   estate   of   the   deceased  ''"  Ewell  v.  Daggs,  108  U.  S.  143,  2 

before  any  action  can  be  had  on  the  bup.  Ct.  408. 

mortgage.    Graham  v.  Vining,  1  Tex.  '"  Sanger  v.  Nightingale,  122  U.  S. 

639;  Duty  v.  Graham,  12  Tex.  427,  62  176,  7  Sup.  Ct.  1109;  Gault  v.  Equit- 

Am.    Dec.    534;    Allen    v.    Moer,    16  able  Trust  Co.  100  Ky.  578,  38  S.  W. 

Iowa,    307;    Fisher    v.    Mossman,    11  1065. 

OhioSt.  42;  Willard  v.  Van  Leeuwen,  >'*  Baldwin   v.   Boyd,   18   Neb.    444, 

56  Mich.  15,  22  N.  W.  185;   McClure  25    N.    W.    580;    Waterson   v.    Kirk- 

v.   Owens,   32   Ark.   443;    Richardson  wood,  17  Kans.  9. 

v.  Hickman,  32  Ark.  406;   Waughop  '^'' Ordway  v.  Cowles,  45  Kans.  447, 

v.  Bartlett,  165  111.  124,  46  N.  E.  197.  25  Pac.  862. 

'^^Scammon  v.  Ward,  1  Wash.  St. 
179,  23  Fac.  339. 


CHAPTE.R  XXVII. 


REMEDIES  FOR  ENFORCING  A  MORTGAGE. 


I.  Are  concurrent,  1215-1219. 
II.  Personal    remedy    before   fore- 
closure, 1220,  1226. 
III.  Personal    remedy    after    fore- 
closure,  1227,   1228. 


IV.  Sale  of  mortgaged  premises 
on  execution  for  mortgage 
debt,  1229,  1230. 

V.  Remedy  as  affected  by  bank- 
ruptcy, 1231-1236. 


I.     Are  concurrent. 


§  1215.  The  mortg'agee  may  pursue  all  his  remedies  concur- 
rently or  successively.^  He  may  at  the  same  time  sue  the  mo-rtgagor 
in  an  action  at  law  upon  the  note,  or  other  personal  debt;  may  enter 
to  foreclose,  and  file  a  certificate  thereof;  may  maintain  a  writ  of 
entry  or  ejectment  to  recover  possession  of  the  land,  and  a  bill  in 
equity  to  foreclose  the  mortgage.  Eecovery  of  judgment  upon  the  note 
does  not,  without  payment,  take  it  out  of  the  mortgage,  or  bar  pro- 


'  Garforth  v.  Bradley,  2  Ves.  Sen. 
678;  Burnell  v.  Martin,  2  Doug.  417; 
Hughes  V.  Edwards,  9  Wheat.  489; 
Gilman  v.  111.  &  Miss.  Tel.  Co.  91 
U.  S.  603;  Torrey  v.  Cook,  116  Mass. 
163;  Ely  v.  Ely,  6  Gray,  439;  Draper 
V.  Mann,  117  Mass.  439;  Trustees  v. 
Connolly,  157  Mass.  272;  Montague 
V.  Dawes,  12  Allen,  397;  Burtis  v. 
Bradford,  122  Mass.  129;  Heburn  v. 
Warner,  112  Mass.  271;  Smith  Chari- 
ties V.  Connolly,  157  Mass.  272;  Colby 
V.  McClintock,  68  N.  H.  176,  40  Atl. 
397,  73  Am.  St.  557;  Brown  v.  Stew- 
art, 1  Md.  Ch.  87;  Wilhelm  v.  Lee,  2 
Md.  Ch.  322;  Pratt  v.  Muggins,  29 
Barb.  277;  Jackson  v.  Hull,  10  Johns. 
N.  Y.  481;  Jones  v.  Conde,  6  Johns. 
Ch.  77;  Very  v.  Watkins,  18  Ark. 
546;  Smith  v.  Shuler,  12  S.  &  R.  240; 
Coit  V.  Fitch,  Kirby  (Conn.),  254,  1 


Am.  Dec.  20;  Wilkinson  v.  Flowers, 
37  Miss.  579,  75  Am.  Dec.  79;  Wis- 
well  V.  Baxter,  20  Wis.  680;  Whipple 
V.  Barnes,  21  Wis.  327;  Knox  v. 
Galligan,  21  Wis.  470;  Banta  v. 
Wood,  32  Iowa,  469;  Brown  v.  Cas- 
caden,  43  Iowa,  103;  Knetzer  v.  Brad- 
street,  1  Greene,  382;  Cross  v.  Burns, 
17  Ind.  441;  Micou  v.  Ashurst,  55 
Ala.  607;  Scott  v.  Ware,  64  Ala.  174; 
Stephens  v.  Greene  County  Iron  Co. 
11  Heisk.  71;  Delespine  v.  Campbell, 
52  Tex.  4;  Hazle  v.  Bondy,  173  111. 
302,  50  N.  E.  671.  In  the  present  state 
of  the  law,  when  there  is  no  pro- 
hibition by  statute,  it  is  competent 
for  the  mortgagee  to  pursue  three 
remedies  at  the  same  time.  Mr. 
Justice  Swayne  in  Gilman  v.  111.  & 
Miss.  Tel.  Co.  91  U.  S.  603;  Morris- 
son  V.   Buckner,   Hemp.   442. 


189 


§    1215.]  REMEDIES    FOR    ENFORCING   A    MORTGAGE.  190 

ceedings  to  foreclose.  The  cause  of  action  on  the  deht  is  personal 
a'gainst  the  person  and  property  of  the  debtor ;  and  the  proceedings  to 
foreclose  are  to  enforce  the  lien  upon  the  debtor's  real  estate  which  he 
has  charged  with  the  payment  of  the  debt.-  A  mortgagee  who  has  been 
fraudulently  induced  to  lend  money  on  land  in  excess  of  its  value  may 
retain  and  enforce  his  security  against  the  land,  and  at  the  same  time 
maintain  an  action  against  the  borrower  to  recover  damages  for  the 
fraudulent  representations.^ 

The  mortgage  and  the  evidence  of  debt  are  usually  separate  instru- 
ments and  afford  independent  remedies.  The  mortgage  may  be  wholly 
discharged  or  released  without  affecting  the  personal  liability  of  the 
mortgagor;  and  on  the  other  hand,  the  personal  liability  may  be  ter- 
minated by  the  statute  of  limitations,  or  by  a  discharge  in  bankruptcy 
or  insolvency,  or  may  be  waived  in  any  manner,*  without  extinguishing 
the  mortgage.'"^  Such  is  also  the  case  if  the  mortgage  note  be  made  in- 
valid by  alteration.''  So  long  ago  as  the  case  of  Burnell  v.  Martin,'' 
Lord  Mansfield  declared  that  "it  had  been  settled  over  ancT  over  again 
that  a  person  in  such  case  is  at  liberty  to  pursue  all  his  remedies  at 
once."  He  may  pursue  his  legal  and  equitable  remedies  at  the  same 
time;  he  may  foreclose,  take  possession  of  the  estate,  or  bring  eject- 
ment for  it,  and  sue  the  mortgagor  on  his  covenant  or  other  obligation 
for  the  debt.*  When  not  restrained  from  entering  he  may  maintain 
ejectment  without  previous  demand  of  payment,  or  entry,  or  notice  to 
quit.^  After  a  mortgage  is  due,  the  mortgagee  may  at  any  time,  with- 
out notice  or  demand  of  payment,  take  proceedings  to  collect  the  debt 
or  to  realize  his  security.^" 

But  in  those  States  in  which  the  practice  is  established,  that  in  a 
foreclosure  suit  the  mortgagee  is  entitled  to  a  personal  judgment  for 
a  deficiency  remaining  after  a  sale  of  the  property,  it  would  seem  that 

^  In    Michigan:      The    remedy    by  taining  that  which  he  has  received, 

suit  at  law  is  by  statute  suspended  and   suing  for  the  damages  he  has 

pending  foreclosure  proc  e  e  d  i  n  g  s.  sustained  by  reason  of  the  fraud." 

Steele    v.    Kent    Circuit    Judge,    109  "  Hersner  v.   Martin,   8  Wash,  698 

Mich.    647,    67    N.    W.    963.     Also   in  36    Pac.    1096. 

Nebraska,  Maxwell  v.  Home  F.  Ins.  =  Toplis    v.    Baker,    2    Cox,    123; 

Co.  57  Neb.  207,  77  N.  W.  681;  Jones  Thayer  v.   Mann,   19  Pick.   535;    Bu- 

v.  Burtis,  57  Neb.  604,  78  N.  W.  261.  chanan  v.  Berkshire  L.   Ins.   Co.   96 

Conn.   Mut.   L.   Ins.   Co.   v.   Jones,   1  Ind.   510,  519. 

McCrary,  388.  "  Gillette  v.  Smith,  18  Hun,  10. 

=  Union     Cent.     Life     Ins.     Co.    v.  '  2   Doug.   417. 

Schidler,  130  Ind.  214,  29  N.  E.  1071.  «  Cockell  v.  Bacon,  16  Beav.  158. 

Per    Miller    J.:     "We    know    of    no  "  New    Haven    Sav.    Bank    v.    Mc- 

rule  of  law  that  would  prevent  the  Partlan,  40  Conn.   90. 

application,    to   this   transaction,    of  "  Letts  v.  Hutchins,  L.  R.  13  Eq. 

the  ordinary  rule  that  a  defrauded  176;    Harris  v.  Mulock,  9  How.   Pr. 

party  may  affirm  the  contract  by  re-  402. 


191  ARE  CONCURRENT.    [§§  1216,  1217,  1218. 

an  action  at  law  to  recover  the  debt  should  not  be  allowed  concurrently 
with  an  equitable  suit  fo'r  foreclosure  by  sale," 

When  a  mortgage  is  given  by  a  corporation  to  secure  a  large  loan 
it  is  usual  to  divide  the  mortgage  debt  into  numerous  bonds  or  notes, 
which  are  payable  to  bearer  and  are  transferred  by  delivery,  and  are 
widely  distributed,  while  the  mortgaged  property  is  held  by  trustees 
for  the  protection  of  all  the  numerous  holders.  In  such  case,  while  the 
individual  bondholders  may  obtain  judgments  for  their  several  bonds, 
they  cannot  levy  execution  upon  the  mortgaged  property  and  acquire 
a  preference  over  other  bondholders  secured  by  the  same  mortgage.^- 
The  mortgage  security  must  usually  be  enforced  by  the  trustees  of  the 
mortgage  title,  though  in  certain  contingencies,  as  when  the  trustees 
neglect  or  refuse  to  perform  the  trust,  individual  bondholders  may  in- 
stitute proceedings  to  foreclose  the  mortgage.  But  they  must  do  this 
in  behalf  of  all  the  bondholders. 

§  1216.  This  rule  is  an  exception  to  the  general  principle  that 
a  debtoT  shall  not  be  harassed  by  a  multiplicity  of  suits  for  the  same 
debt  at  the  same  time.  Lord  Eedesdale^^  states  the  general  rule  to  be, 
that  wkere  a  party  is  suing  in  equity  he  shall  not  be  allowed  to  sue 
at  law  for  the  same  debt.  "But  the  case  of  a  mortgagee  is  an  excep- 
tion to  this  rule ;  he  has  a  right  to  proceed  on  his  mortgage  in  equity 
and  on  his  bond  at  law  at  the  same  time."  There  may  be  some  special 
equity  in  favor  of  the  mortgagor  which  will  make  an  exception  to  this 
rule  ;^*  and  in  some  States  this  right  of  concurrent  action  has  been  re- 
stricted by  statute.^^ 

§  1217.     A  mortgagee  may  maintain  a  creditor's  bill  in  equity 

to  reach  and  apply,  in  payment  of  his  debt,  property  of  the  debtor 
which  cannot  be  come  at  to  be  attached  or  taken  on  execution.  This 
remedy  is  in  the  nature  of  an  attachment  by  an  equitable  trustee  pro- 
cess ;  and  there  is  no  reason  why  it  should  not  be  pursued,  just  as  the 
mortgagee  might  make  direct  attachment  of  any  property  other  than 
the  mortgaged  estate.^*' 

§  1218.  The  right  to  foreclose  is  not  waived  or  impaired  by 
the  recovery  of  a  judgment  at  law  upon  the  mortgage  debt.^^    The 

"  Anderson   v.    Pilgram,   30   S.    C.  "  Booth    v.    Booth,    2    Atk.    343; 

499,  9  S.  E.  587;  Bennett  v.  Ellis,  13  Newbold  v.  Newbold,  1  Del.  Ch.  310. 

S.  D.   401,  83  N.  W.   429.  ''  See  §    1223. 

"  Jones  on  Corp.  Bonds  and  Mort-  ''  Tucker  v.  McDonald.  105   Mass. 

gages,   §   393.  423;  Palmer  v.  Foote,  7  Paige,  437. 

"  In  Schoole  v.  Sail,  1  Sch.  &  Lef.  "  Duck    v.    Wilson,    19    Ind.    190 

176.  O'Leary    v.    Snediker,    16    Ind.    404 

Wahl     V.     Phillips,     12     Iowa,     81 


§    1219.]  REMEDIES    FOR    ENFORCING   A   MORTGAGE.  193 

causes  of  action  are  not  legally  the  same;  one  is  a  personal,  the  other 
a  real  action.  Obtaining  a  judgment  on  the  note  does  not  take  it  out 
of  the  mortgage  ;^^  and  while  it  remains  unsatisfied  the  conditional 
judgment  in  the  suit  to  foreclose  must  be  entered  the  same  as  if  the 
note  had  not  been  the  subject  of  a  suit.  Nor  does  a  provision  in  the 
mortgage,  that  in  case  of  a  breach  of  the  condition  the  mortgagee  may 
enter  and  receive  the  rents  and  profits  for  his  indemnity,  prevent  a 
foreclosure  and  sale  as  in  other  cases. ^^  The  judgment  in  a  foreclosure 
suit  and  the  judgment  in  a  suit  upon  the  note  secured  may  each  be  for 
the  full  amount  of  the  debt.^° 

The  fact  that  the  mortgagee  has  proved  his  claim  against  the  estate 
of  his  deceased  mortgagor  and  obtained  an  order  for  its  payment  does 
not  constitute  a  bar  to  a  proceeding  to  foreclose  the  mortgage.^^  On 
the  other  hand,  the  mortgage  creditor  is  not  barred,  in  his  action  to 
foreclose  his  mortgage,  by  reason  that  he  has  not  proved  his  claim 
against  the  estate  of  a  deceased  debtor  and  there  has  been  a  final  set- 
tlement of  that  estate.^^ 

It  is  sometimes  provided  that  the  mortgage  shall  not  be  foreclosed 
until  the  personal  remedy  is  first  had.  A  stipulation  in  such  a  mort- 
gage, that  the  property  of  the  makers  of  the  note  should  be  exhausted 
before  foreclosure,  is  complied  with  when  a  judgment  has  been  ob- 
tained on  the  note  and  the  execution  has  been  returned  unsatisfied  for 
want  of  property.  The  creditor  is  not  bound  to  try  to  collect  the  judg- 
ment out  of  the  equities  of  the  judgment  debtors  in  the  mortgaged 
premises,  or  out  of  other  property,  when  these  are  wholly  insufficient.^' 

§  1219.  Subsequent  payment  will  discharge  both  the  judgment 
against  the  person  and  that  against  the  property.^*  Satisfaction  of 
the  debt  in  whatever  way  it  l)e  made,  whether  it  be  upon  a  judgment 
at  law,  or  upon  a  decree  in  equity  made  in  respect  of  the  same  mort- 
gage, satisfies  and  discharges  all  the  proceedings  taken  to  enforce  the 
debt  either  against  the  person  or  the  property.^^ 

Although  as  a  general  rule  a  mortgagor  upon  payment  of  the  mort- 
gage is  entitled  to  have  the  property  restored  or  released  to  him,  yet 

Thornton     v.     Pigg,     24     Mo.     249;  297;   Jones  v.  Null,  9  Neb.  57,  1  N. 

Karnes  v.  Lloyd,  52  111.  113;  Vansant  W.    867. 

V.    Allmon,   23   111.   30,   33;    Banta  v.        "  McCallam  v.   Pleasants,   67  Ind. 

Wood    32  Iowa,  469;  Home  v.  Seisel  542;  Bell  v.  Hobaugh,  65  Ind.  598. 
92  Ga    683,  19  S.  E.  709;    Gibson  v.        -^  Riblet  v.  Davis,  14  Ohio  St.  114. 
Green,  89  Va.  524,  16  S.  E.  661.  "  Ely  v.  Ely,  6  Gray,  439;    Colby 

''  See  §  936.  v.  McClintock,  68  N.  H.  176,  40  Atl. 

"  Harkins    v.    Forsyth,    11    Leigh,  397.     See    §   904. 
294.  -^  Fairman  v.  Farmer,  4  Ind.  436; 

="  Colby   V.    McClintock,   68   N.    H.  Ryan  v.  Rice,  108  Ga.  448,  34  S.  E. 

176,  40  Atl.   397.  569. 

■'■  Simms    v.    Richardson,    32    Ark. 


193  PERSONAL  REMEDY  BEFORE  FORECLOSURE.      [§  1220. 

this  right  cannot  be  claimed  after  a  sale  under  a  power  when  suit  is 
brought  upon  the  mortgage  debt  for  a  balance  remaining  unsatisfied 
by  the  sale.2« 


II.     Personal  Remedy  before  Foreclosure. 

§  1220.  The  holder  of  the  note  and  mortgage  is  not  required 
first  to  foreclose  the  mortgage,  but  may  bring  his  action  on  the  note 
alone.  The  fact  that  the  mortgagor  has  sold  the  mortgaged  premises 
to  a  third  person  subject  to  the  mortgage  debt,  even  if  the  purchaser 
has  assumed  the  mortgage  debt,  does  not  change  the  right  of  the  holder 
to  pursue  the  personal  remedy.  The  debt  is  the  primary  obligation  be- 
tween the  parties,  and  the  note  is  the  primary  evidence  of  that  debt.^'^ 
The  giving  of  a  mortgage  or  other  security  for  a  subsisting  debt  does 
not  extinguish  or  merge  the  personal  liability.  But  of  course  it  is 
competent  for  the  parties  to  agree  that  the  mortgagee  shall  look  only  to 
the  security  for  his  reimbursement,  and  that  the  debtor  shall  be  ab- 
solved from  all  personal  obligation.^^  Where  a  mortgage  is  made  to 
secure  a  note,  but  contains  a  stipulation  that  "general  execution  shall 
not  issue  herein,"  the  remedy  is  limited  to  the  property  alonc^** 
When  there  is  no  such  stipulation  a  judgment  upon  the  note  may  be 
enforced  by  a  sale  of  the  mortgaged  land  upon  execution.^^ 

Where  a  mortgage  secures  the  note  of  a  third  person  the  mortgagor 
cannot  require  the  mortgagee  to  resort  to  the  note  before  proceeding 
upon  the  mortgage.^^ 

Even  a  surety  of  a  note  of  his  principal  secured  by  a  mortgage  of 
land  of  the  principal  has  no  right  to  demand  that  the  holder  of  the 
note  shall  first  exhaust  the  security  before  maintaining  an  action  on 
the  note  against  the  surety. ^- 

The  fact  that  the  mortgagor  has  conveyed  the  land  to  another  sub- 
ject to  the  mortgage  debt  does  not  affect  the  mortgagee's  right  to  bring 
a  personal  action  on  the  note.^^ 

That  the  equity  of  redemption  has  been  sold  on  execution  for  other 

=«  Rudge  v.  Richens,  L.  R.  8  C.  P.  388;  Frank  v.  Pickle,  2  Wash.  T.  55, 

358.     A  plea  to  this  effect  was  struck  3   Pac.    584. 

out  as  bad  and  dishonest.  "  Ball  v.  Wyeth,  99  Mass.  338. 

"  Anthony  Investment  Co.  v.  Law,  ="  Kennion  v.  Kelsey,  10  Iowa,  443. 

62  Kan.  193,  61  Pac.  745;    Grable  v.  ™  Hunt  v.  Bowman,  62   Kan.   448, 
Beatty,   56   Neb.    642,    77   N.   W.   49;  63  Pac.  747. 

Hargreaves  v.  Menken,  45  Neb.  668,        "  Clare  Co.  Bank  v.  Goodman,  119 

63  N.  W.  951;  Meehan  v.  First  Nat.     Mich.  338,  78  N.  W.  135. 

Bank,   44   Neb.    213,   62    N.   W.    490;  ^-  Allen  v.  Woodard,  125  Mass.  400, 

Licht'y  V.   McMartin,   11   Kans.    565;  28  Am.   Rep.   250. 

Vansant  v.  Allmon,  23  111.  30;  Conn.  '^  Anthony    Inv.    Co.    v.    Law,    62 

Mut.  L.  Ins.  Co.  v.  Jones,  1  McCrary,  Kan.  193,  61  Pac.  745. 


§§  1321,  1222.]  REMEDIES  FOR  ENFORCING  A  MORTGAGE.         194 

indebtedness  does  not  deprive  the  mortgagee  of  his  right  to  sue  the 
mortgagor  on  the  mortgage  note.  The  purchaser  at  such  execution 
sale  does  not  become  liable  to  the  mortgagor  for  the  mortgage  debt, 
and  the  mortgagor  is  not  by  such  purchase  released  from  it  either  at 
law  or  in  equity.^* 

The  general  rule  is  also  in  some  States  changed  by  statute.  Thus, 
in  California,  Minnesota,  Nebraska,  and  ISTevada,  an  action  cannot  be 
maintained  on  a  promissory  note  secured  by  a  mortgage,  until  the 
mortgage  security  is  exhausted.^^  If,  in  consequence  of  the  illegality 
of  the  sale,  the  property  brings  less  than  its  value,  this  is  a  defence  to 
an  action  for  the  balance  due  on  the  note.^® 

§  1221.  The  holder  of  the  mortgage  need  not  wait  to  ascer- 
tain the  amount  of  the  deficiency  by  a  sale  under  the  power,  or 

even  that  there  will  be  a  deficiency,  before  proceeding  to  enforce  the 
personal  liability  of  the  mortgagor  on  the  note  or  other  debt.  He  may 
in  the  first  place  sue  on  the  note  or  any  instalment  of  it,  if  due,  and 
attach  other  property  of  the  mortgagor,  and  afterwards  proceed  to  sell 
under  the  power  contained  in  the  mortgage,  if  the  debt  be  not  satis- 
fied.^^ Of  course  this  right  must  yield  to  a  special  agreement  of  the 
parties  that  the  personal  liability  shall  not  be  enforced  until  the  rem- 
edy upon  the  property  is  first  exhausted. 

When  the  security  for  a  debt  is  in  the  form  of  a  deed  absolute,  which 
is  in  fact  a  mortgage,  the  mortgagee  may  sue  and  recover  upon  the 
debt,  and  he  is  not  required  to  reconvey  as  a  condition  precedent  to  the 
recovery  of  a  judgment.^^ 

§  1222.  Neither  is  the  pendency  of  a  suit  to  foreclose  the  mort- 
gage any  bar  to  an  action  at  law  to  recover  the  debt  secured  by  it.^* 
If  a  bill  o£  foreclosure  be  dismissed  on  the  merits,  this  is  no  bar  to  a 
suit  on  the  note,  for  the  debt  may  be  due  although  the  land  is  not 
bound.*"  Neither  is  a  judgment  against  the  validity  of  the  mortgage 
necessarily  a  bar  to  a  suit  upon  the  note.*^    The  mortgage  debt  may  be 

"  Rogers  v.   Meyers,   68   111.   92.  "  Conn.  Mut.  L.  Ins.  Co.  v.  Jones, 

'"  California:      Code    Cir.    Proc.    §  1    McCrary,    388;    Colby    v.    McClln- 

720;    Stockton   Sav.   &   Loan   Soc.   v.  tock,  68  N.  H.  176,  40  Atl.  397. 

Harrold,    127   Cal.    612,   617,   60   Pac.  ''  Kingsbury    v.    Fisher,    4    Colo. 

165;    Bartlett  v.  Cottle,  63  Cal.  366;  App.   431,  36  Pac.   309. 

Clapp    v.    Maxwell,   13   Neb.    542,    14  ^^  Copperthwait  v.  Dummer,  18  N. 

N.    W.    653;    Johnson    v.    Lewis,    13  J.  L.  258. 

Minn.  364;   Weil  v.  Howard,  4  Nev.  *"  Longworth    v.    Flagg,    10    Ohio, 

384;    Hyman    v.    Kelly,    1    Nev.    179.  300. 

And  see  §   1223.  "  Lander  v.  Arno,  65  Me.  26. 
"  Lowell  v.  North,  4  Minn.  32 


195  PERSONAL    REMEDY    BEFORE    FORECLOSURE.  [§    1223. 

valid  althooigh  the  mortgage  itself  be  illegal  and  void."  The  suit  at 
law  may  be  before,  at  the  time  of,  or  after,  the  suit  in  equity.*^ 

The  mere  filing  of  the  mortgage  debt  against  the  decedent  mort- 
gagor's estate  while  a  foreclosure  suit  is  pending  does  not  release  the 
mortgage,  or  prevent  a  foreclosure  of  it  by  action  or  by  other  mode  of 
foreclosure,** 

Upon  the  death  of  the  mortgagor,  the  holder  of  the  mortgage  may 
foreclose  it  without  proving  the  debt  against  the  mortgagor's  estate.*^ 
If  he  waives  all  recourse  to  the  personal  obligation  of  the  mortgagor, 
he  is  not  barred  by  failure  to  commence  suit  within  the  time  for  the 
presentation  of  claims  against  the  deceased  mortgagor's  estate.*® 

Though  the  mortgagee  files  a  claim  of  several  items  against  the 
mortgagor's  estate,  and  one  of  the  items  is  a  mortgage  note,  and  the 
claim  is  allowed  to  an  amount  not  exceeding  the  items  other  than  the 
note,  parol  evidence  is  admissible  to  show  that  the  note  was  withdrawn 
before  the  adjudication,  and  was  not  passed  upon  by  the  probate 
court.*'^ 

§  1223.    By  statute  in  some  States  no  proceedings  at  law  can 

be  had  for  the  recovery  of  the  debt  after  the  filing  of  a  bill  for  fore- 
closure unless  authorized  by  the  court;  and  if  proceedings  at  law  are 
already  pending  when  the  bill  is  filed,  although  they  need  not  be  ac- 
tually discontinued  they  must  be  suspended,  unless  the  authority  of 
the  court  be  obtained  to  prosecute  the  suit.*^  This  provision  limits 
the  prosecution  of  a  suit  at  law  not  only  against  the  mortgagor,  but 

"  Shaver  v.  Bear  River  &  Auburn  men  v.  Ward,   1  Wash.   St.   179,  23 

Water  Mining  Co.  10  Cal.  396.  Pac.   439. 

"  Downing  v.    Palmateer,   1   Mon.  "  Palmer  v.  Sanger,  143  111.  34,  32 

64,   68.  N.   E.   390,   28   N.   E.   930. 

'"  National    L.    Ins.    Co.    v.    Fitz-  "*  It    is    provided    by    statute    that 

gerald,  61  Neb.   692,  85   N.  W.   948;  the  mortgagee  shall  not  at  the  same 

Kohli   v.    Hall,   141    Ind.   411,   40   N.  time  pursue  his  remedy  against  the 

E.   1060.                                                ■  property,  and  by  a  separate  action 

«  Dreyfuss   v.    Giles,    79    Cal.    409,  against     the     person.      Indiana:      § 

21   Pac.   840;    Andrews  v.   Morse,   51  1334.     Iowa:     §    1335.     Michigan:     § 

Kan.    30,    32    Pac.    640;    Graham    v.  1342.     Nebraska:      §    1347.     Meehan 

Graham,   38  Kan.   440,   17   Pac.   152;  v.    First    Nat.    Bank,    44    Neb.    213, 

Crooker  v.  Pearson,  41  Kan.  410,  21  62  N.  W.  490;  Hargreaves  v.  Menken, 

Pac.  270;  Davies  v.  Nichols,  52  Ark.  45  Neb.  668,  63  N.  W.  951;   Maxwell 

554   13  S  W.  129;  Simms  v.  Richard-  v.    Home    L.    Ins.    Co.    57    Neb.    207, 

son      32     Ark.     297;     McCallam     v.  77  N.  W.   681.     New  York:      §   1351. 

Pleasants,     67     Ind.     542;      Grafton  North    Dakota:       §     1352    a.     South 

Bank  v.  Doe,  19  Vt.  463.  Dakota:     §  1352  a.     Washington:     § 

« German   Sav.   Soc.   v.   Fisher,   92  1363. 

Cal.    502,   28   Pac.   Rep.   591;    Anglo-  The  proper  way  to  take  advantage 

Nev.   Corp.   v.   Nadeau,   90   Cal.   393,  of  the  pendency  of  a  foreclosure  suit 

27  Pac.  302,  followed;  Reed  v.  Miller,  is  to  move  for  a  stay  of  the  legal 

1  Wash.  St.  426,  25  Pac.  334;  Scam-  proceedings.     Goodrich  v.  White,  39 

Mich.  489. 


8    1233.]  UEMEDIES    FOR    ENFORCING   A    MORTGAGE.  196 

against  one  who  has  assumed  the  mortgage  debt.*^  Under  the  statutes 
of  these  States,  an  equitable  suit  for  foreclosure  affords  complete  rem- 
edy against  all  persons  liable  for  the  debt,  and  at  the  same  time  for 
the  recovery  of  a  judgment  for  any  deficiency  there  may  be  after  the 
sale,  and  therefore  there  is  no  occasion  for  a  suit  at  law;  and  to  pre- 
vent a  multiplicity  of  suits,  the  court  in  which  the  foreclosure  suit  is 
pending  is  given  complete  control  over  all  the  remedies  for  the  collec- 
tion of  the  debt,  even  after  all  the  relief  asked  for  in  that  suit  is  ex- 
hausted. An  application  to  prosecute  a  suit  at  law  is  addressed  to  the 
sound  discretion  of  the  court.^*^  Leave  to  prosecute  should  not  be 
granted  ex  parte  when  the  defendant  is  within  reach.^^  Such  leave 
may  be  granted  after  the  action  has  been  commenced.^^  If  persons 
against  whom  a  judgment  for  deficiency  might  have  been  had  in  the 
foreclosure  suit  have  not  been  made  parties  to  it,  a  subsequent  action 
at  law  might  properly  be  refused.^^  If  no  judgment  for  a  deficiency  is 
asked  for,  a  satisfactoTy  reason  for  a  separate  suit  must  be  shown. ^* 
The  fact  that  a  person  liable  for  the  debt  was  not  within  the  jurisdic- 
tion of  the  court  when  the  foreclosure  suit  was  commenced  would 
doubtless  be  sufficient  reason  for  allowing  a  separate  suit  against  him 
for  a  deficiency.^'^  Upon  application  foT  leave  to  sue  for  a  deficiency 
after  judgment  of  foreclosure,  the  court  in  the  exercise  of  its  discre- 
tion will  consider  the  equitable  rights  of  the  defendant  which  he  can- 
not plead  in  an  action  at  law.^® 

When  a  suit  r\  law  is  pending  at  the  time  of  commencing  the  fore- 
closure suit,  and  there  are  advantages  in  testing  in  that  action  the 
validity  of  a  defence,  the  court  will  permit  its  prosecution,^'^  and  it 
will  be  allowed  to  proceed  when  it  is  necessary  in  this  way  to  protect 
the  plaintiff's  rights.^^  A  new  suit  after  the  commencement  of  the 
foreclosure  suit  would  not  generally  be  permitted  until  the  remedy 
upon  the  decree  obtained  has  been  exhausted.^" 

In  the  same  States,  if  a  judgment  at  law  has  already  been  obtained 

*'See  §   1721;   Pattison  v.  Powers,  Campbell  v.   Smith,  71  N.  Y.  26,  27 

4  Paige,  549;   Scofleld  v.  Doscher,  72  Am.  Rep.  5. 

N.  Y.  491.     See,  in  connection,  Com-  "*  Equitable  Life  Ins.  Co.  v.  Stev- 

stock  V.  Drohan,  71  N.  Y.  9;   Camp-  ens,  63  N.  Y.  341. 

bell  V.   Smith,  71  N.   Y.  26,  27  Am.  "Bartlett  v.  McNeil,  60  N.  Y.  53. 

Dec.  5;   and  comments  in  19  Alb.  L.  "  United     States    L.     Ins.     Co.     v. 

J.   383.  Poillon,  7  N.   Y.  Supp.  834. 

'"Equitable  Life  Ins.   Co.  v.  Stev-  "  Suydam  v.  Bartle,  9  Paige,  294; 

ens    63  N.   Y.  -341,  1  N.   Y.   Weekly  Comstock    v.    Drohan,    8    Hun,    373, 

Dig.    465,   63   N.    Y.    341;    Scofield   v.  71  N.  Y.  9. 

Doscher,  72  N.  Y.  491.  =*  Thomas  v.  Brown,  9  Paige,  370. 

"  Goodrich  v.  White,  39  Mich.  489.  And  see  Engle  v.  Underbill,  3  Edw. 

"  Earl  V.  David,  21  Hun,  527.  249. 

"  Suydam   v.  Bartle,  9  Paige,  294;  "^»  Nichols  v.   Smith,  42  Barb.  381; 

Comstock    v.    Drohan,    8    Hun,    373;  Scofield  v.  Doscher,  72  N.  Y.  491. 


197        PERSONAL  REMEDY  BEFORE  FORECLOSURE.  [§§  1224,  1225. 

before  the  filing  of  the  bill  to  foreclose,  no  proceedings  can  be  had  upon 
this  until  the  remedy  upon  the  judgment  has  been  exhausted.''"  A  bill 
which  shows  that  Judgment  has  been  obtained  on  one  of  the  mortgage 
notes  and  nearly  paid,  but  does  not  show  that  an  execution  had  been 
issued  and  returned  unsatisfied,  cannot  be  maintained  unless  a  decree 
as  to  that  note  be  waived.®'  The  court  would  not  make  a  decree  against 
a  defendant  when  it  appears  that  the  execution  has  not  been  returned 
unsatisfied,  although  he  has  allowed  it  to  be  taken  as  confessed  against 
him.®2  On  the  other  hand,  after  a  decree  has  been  entered  in  a  fore- 
closure suit,  proceedings  at  law  to  recover  the  debt  are  prohibited  un- 
less leave  of  court  be  obtained.*'^ 

§  1224.  A  decree  of  foreclosure  before  sale  is  no  bar  to  a  suit 
upon  the  mortgage  debt  while  the  decree  is  under  the  control  of  the 
court  rendering  it,  for  the  decree  or  the  sale  under  it  may  be  set  aside. 
Of  course  an  action  so  commenced  may  be  defeated  by  the  subsequent 
sale  of  the  property  and  satisfaction  of  the  debt  from  the  proceeds. 
Until  that  happens  the  debt  remains  precisely  the  same ;  and  if  there 
be  no  sale,  or  the  sale  be  set  aside,  the  action  may  be  prosecuted  to 
judgment.''*  Until  the  sale  is  consummated  there  is  no  absolute  satis- 
faction. When  the  sale  is  complete  it  relates  back  to  the  day  of  sale, 
and  any  proceedings  then  pending  upon  the  note  or  other  debt  are 
then  defeated."^ 

§  1225.  Express  covenant  to  pay. —  The  form  of  mortgage  used 
in  England  almost  always  contains  an  express  covenant  to  repay  the 
money,  and  frequently  no  note  or  bond  is  used  in  connection  with  the 
mortgage.  The  loan  is  then  a  specialty  debt,  and  the  mortgagee  has  a 
personal  remedy  by  action  upon  the  covenant.'"'  This  covenant  is  ex- 
tended also  to  the  payment  of  interest.  When  the  mortgage  is  executed 
by  a  trustee,  it  is  usual  for  the  equitable  owner  to  execute  the  personal 
covenants,  so  that  the  trustee  may  incur  no  personal  liability."^  This 
personal  remedy  upon  the  covenant  the  mortgagee  may  enforce  at  the 
same  time  that  he  proceeds  with  his  remedy  against  the  land  by  a  fore- 
closure suit,  or  by  sale  under  the  power;  or  he  may  use  the  personal 

'"See  Shufelt  v.  Shufelt,  9  Paige,  "Morgan  v.  Sherwood,  53  111.  171. 

137,  37  Am.   Dec.   381;    North  River  See  §  950. 

Bank  v.   Rogers,   8  Paige,   G48.  "'  Morgan  v.  Sherwood,  53  111.  171. 

"Dennis    v.    Hemingway,    Walker  ""See  §§  72,  678;  Mathew  v.  Black- 

(Mich.)    Ch.    387.  more,  1   H.  &  N.   762,  26  L.   J.   Ex. 

"^Grosvenor  v.  Day,  Clark  (N.  Y.),  150;   Browne  v.  Price,  4  C.  B.  N.  S. 

109;  Shufelt  v.  Shufelt,  9  Paige.  137,  598,  L.  J.  C.  P.  290;  Frank  v.  Pickle, 

37  Am    Dec.  381.  2  Wash.  T.  55,  3  Pac.  Rep.  584. 

"=  In  New  York:    2  R.  S.  191,  §  155.  "'  1  Prideaux  Conv.  570,  7th  ed. 


§    1225.]  LEMEDIES    FOR    ENFORCING   A    MORTGAGE.  198 

covenant,  after  he  has  realized  what  he  can  from  the  land,  for  the  de- 
ficiency.'^^ 

Although  there  be  no  note  or  bond  or  other  distinct  obligation  which 
the  mortgage  secures,  yet  if  the  mortgage  itself  contains  an  express 
covenant  for  the  payment  of  a  sum  of  money,  the  mortgagor  thereby 
becomes  liable  to  a  personal  action  for  the  debt;^**  unless  the  covenant 
implies  that  there  is  no  personal  liability,  as  in  the  case  of  a  trustee 
covenanting  for  the  repayment  out  of  the  money  that  may  come  into 
his  hands  from  the  mortgaged  property,  or  from  money  that  he  may 
otherwise  receive  in  such  official  capacity.^"  But  an  ordinary  mortgage 
or  deed  of  trust  containing  no  covenant  for  the  payment  of  a  debt  is 
not  an  evidence  of  indebtedness.'^^ 

If  there  be  no  personal  obligation  and  no  personal  covenant  in  the 
mortgage,  then  the  only  remedy  is  against  the  property  mortgaged." 
The  proviso  or  condition  in  a  mortgage  that  the  deed  shall  be  void  if 
the  mortgagor  pay  a  sum  of  money,  or  perform  some  other  act,  is  no 
ground  for  a  personal  action  ;^^  and  neither  is  a  mere  acknowledgment 
or  recital  of  the  consideration  or  of  the  debt  without  an  express  cove- 
nant to  pay.'^*  It  has  been  held,  however,  that  the  mortgagee  may  .re- 
cover against  the  mortgagor  upon  proof  of  his  parol  agreement  to  pay 
the  mortgage  debt.'^^ 

A  covenant  for  the  payment  of  the  debt  may  be  implied  from  a 
stipulation  for  payment  on  a  certain  day,  or  from  an  admission  of  lia- 
bility for  the  pa}Tnent  of  it.^®  When  the  debt  is  not  evidenced  by  a 
note,  but  the  mortgage  contains  a  recital  that  the  mortgagor  is  "justly 

"' Brown  V.  Cascaden,  43  Iowa,  103.  87;    Spencer    v.    Spencer,    95    N.    Y. 

Where  there  is  a  covenant  for  pay-  353;     Halderman    v.    Woodward,    22 

ment  or  a  recital  of  indebtedness  in  Kans.    734;    Weil   v.    Churchman,   52 

the     mortgage    without    any    other  Iowa,  253,  3  N.  W.  38;    Von  Campe 

written  obligation  of  the  mortgagor  v.    Chicago,    140    111.    361,    29    N.    B. 

the  period  of  limitation  in  Arkansas  892;    Baum  v.   Tonklin,   110   Pa.    St. 

is    five    years    applicable    to    instru-  569. 

ments    in    writing,    and    not    three  So   by   statute   in   Indiana:      Acts 

years  applicable  to  contracts  not  in  1881,    §    713   of  Civil   Code, 

writing.     Gatens  v.   Neely,   70   Ark.  "Smith  v.  Stewart,  6  Blackf.  162; 

122,  66  S.  W.  438.  Drummond  v.  Richards,  2  Munf.  337. 

"»' Elder  v.  Rouse,  15  Wend.  218.  '*  Scott    v.    Fields,    7    Watts,    360; 

'"Mathew    v.    Blackmore,    1    H.    &  Fidelity  Co.  v.  Miller,  89  Pa.  St.  26; 

N.  762.  Henry  v.   Bell,  5  Vt.  393. 

"  Schifferstein  v.   Allison,   123   III.  ''  Tonkin  v.  Baum,  114  Pa.  St.  414, 

662.  15  N.  E.  948;   Scott  v.  Fields,  7  7  Atl.  185. 

Watts,  360;  Fidelity  Co.  v.  Miller,  89  '» Hart  v.  Eastern  Union  R.  Co.  7 

Pa.  St.  26;  Baun  v.  TonKin,  110  Pa.  Exch.   246,  8  Exch.   116;    Marryat  v. 

St.   569,  1  Atl.   535;    Reap  v.  Battle,  Marryat,  28  Beav.  224;    Saunders  v. 

155  Pa.  St.  265,  26  Atl.  439.  Milsome,    L.    R.    2    Eq.    573.     But    it 

"  §  677;   Culver  v.  Sisson,  3  N.  Y.  is    provided    by    statute    in    several 

264;    Weed   v.   Covill,   14  Barb.   242;  States  that  no  covenant  for  payment 

Coleman  v.  Van  Rensselaer,  44  How.  shall  be  implied.     §   678. 
Pr.  368;   Gaylord  v.  Knapp,  15  Hun, 


199  PERSONAL    REMEDY    BEFORE    EORECLOSURE.  [§§    1225a,    1226. 

indebted"  in  a  certain  sum,  the  mortgagee  may  maintain  an  action 
upon  the  debt  without  first  foreclosing  the  mortgage,  although  the 
mortgage  contains  the  further  covenant  that  if,  from  any  cause,  said 
property  should  fail  to  satisfy  the  debt,  the  mortgagor  will  pay  the  de- 
ficiency.^^ 

It  is  held,  moreover,  that  the  recitals  in  a  mortgage  are  not  by  them- 
selves prima  facie  evidence  of  indebtedness  on  the  part  of  the  mort- 
gagor to  the  mortgagee,  upon  which  alone  a  personal  judgment  can  be 
rendered  against  him.  The  recitals  may,  however,  be  sufficient  to  sup- 
port a  promise,  as  where  they  are  to  the  effect  that  the  mortgagor  is 
justly  indebted  to  the  mortgagee  in  a  sum  named ;"  and,  of  course,  an 
express  covenant  by  the  mortgagor  to  pay  the  mortgagee  a  certain  sum 
is  a  good  ground  for  a  personal  judgment.'^^  But  where  a  mortgage 
recited  that  the  mortgagor  was  indebted  to  the  mortgagee  in  a  sum 
named,  evidenced  by  his  promissory  notes  together  amounting  to  that 
sum,  and  the  notes  referred  to  were  never  executed,  it  was  held  that  the 
recital  was  not  sufficient  to  support  a  promise  to  pay  the  sums  men- 
tioned ;  that  the  promise  rested  in  parol  and  was  barred  by  the  statute 
applicable  to  such  a  promise,  and  that  the  statute  of  limitations  ap- 
plicable to  the  mortgage  did  not  apply.^^ 

§  1225a.  Where  a  mortgage  is  made  by  a  husband  and  wife 
upon  her  land  to  secure  their  joint  and  several  promissory  note, 

the  note  will  be  regarded  after  his  death,  upon  the  petition  of  his  ex- 
'ecutor  to  obtain  the  instructions  of  the  court,  as  his  own  personal  debt, 
if  that  conclusion  seems  justified  by  the  facts,  though  meager,  with  the 
inferences  that  may  be  drawn  from  them ;  and  the  wife  or  her  heir, 
after  the  death  of  the  husband,  will  be  entitled  to  have  it  exonerated 
out  of  the  estate  of  the  husband.^"* 

When  a  mortgage  is  executed  by  a  husband  and  wife  upon  her  land 
to  decree  her  debt  as  evidenced  by  her  promissory  note,  and  it  appears 
from  the  recitals  of  the  mortgage  that  she  received  the  money  from 
the  mortgagee,  although  the  note  is  void  under  the  statute,  where  the 
mortgage  does  not  show  upon  its  face  that  the  debt  it  purports  to  se- 
cure is  invalid,  it  may  be  foreclosed.*°t 

§  1226.     Circumstances     that     exclude    personal    remedy.— The 

holder  of  a  mortgage  may  be  debarred  from  resorting  to  the  personal 

"  Newbury  v.  Rutter,  38  Iowa,  119.  '"  *Minot  Petitioner,  164  Mass.  38, 

"See  §  1223.  41,  N.  E.  63,  citing  Savage  v.  Win- 

"See  §§  1223,  1225  and  349.  Chester,  15  Gray,  453,  455;   Deane  v. 

^  Coleman   v.    Fisher,   67   Ark.   27,  Caldwell,  127  Mass.  242,  246. 

53  S    W    671;  Holiman  v.  Hance,  61  ^"  tMeads   v.    Hutchinson,   111   Mo. 

Ark.  115,  32  S.  W.  488.  620,  19  S.  W.  1111. 


§  1227.]      REMEDIES  FOR  EXFORCIXG  A  MORTGAGE.  200 

liability  of  the  mortgagDr  by  reason  of  equities  or  agreements  between 
the  parties  of  which  the  holder  has  knowledge;  as  when  the  owner  of 
land,  having  mortgaged  it,  subsequently  sold  the  equity  of  redemption 
by  a  deed  which  stipulated  that  the  grantee  should  assume  and  pay  the 
mortgage,  and  took  back  a  second  mortgage  to  himself  reciting  this 
stipulation.  The  assignee  of  the  second  mortgage,  who  also  took  an 
assignment  of  the  first  mortgage,  was  not  allowed  to  sue  on  the  first 
mortgage  note.^^ 

A  mortgagee  will  lose  his  right  to  sue  the  mortgagor  for  the  debt 
by  so  dealing  with  the  mortgaged  property  as  to  put  it  out  of  his  power 
to  restore  the  property  upon  a  tender  of  full  pa}Tiient.  Thus  he  loses 
his  right  by  releasing  the  security  to  a  subsequent  purchaser  of  the 
property.  If  a  mortgagee  concurs  with  a  purchaser  of  the  equity  of 
redemption  in  a  sale  of  the  property,  and  allows  the  purchaser  to  re- 
ceive the  purchase-money,  he  cannot  afterwards  sue  the  original  mort- 
gagor for  the  debt.®^ 

Wlien  the  mortgagor,  with  the  knowledge  of  the  mortgagee,  sells  the 
mortgaged  estate  to  one  who  assumes  the  pajinent  of  the  mortgage 
debt,  his  relation  to  the  mortgagee  is  thenceforth  that  of  a  surety  of 
the  mortgage  debt.  The  property  is  moreover  the  primary  fund  for 
the  payment  of  the  debt,  and  a  release  to  the  purchaser,  or  an  exten- 
sion of  the  time  of  payment,  may  discharge  the  mortgagor. ^^ 

When  a  mortgage  is  made  to  secure  the  debt  of  another,  and  it  does 
not  by  its  terms  or  otherwise  impose  any  personal  liability  upon  the 
mortgagor,  he  is  not  personally  bound  for  the  debt,  and  there  can  be 
no  general  execution  against  him.^* 

No  personal  judgment  can  be  rendered  against  the  wife  of  the  mort- 
gagor, when  it  is  not  alleged  that  the  debt  is  one  for  which  her  sepa- 
rate estate  is  liable.®^ 


III.     Personal  Remedy  after  Foreclosure. 

§  1227.  Suit  for  deficiency  after  a  sale  under  power. —  If  an 
action  at  law  on  the  debt  be  pending  at  the  time  of  a  sale  under  the 
mortgage,  there  can  be  no  judgment  if.  the  proceeds  of  the  sale  equal 
or  exceed  the  whole  mortgage  debt;  but  if  the  proceeds  be  insufficient 
to  pay  the  debt,  there  may  be  judgment  for  the  balance  after  deducting 

"  Swett  v.  Sherman,  109  Mass.  231.  was    a    case    in    which    one    of    the 

*^  Palmer  v.  Hendrie,  28  Beav.  341,  mortgagors    was    personally    liable. 

27  Beav.  349.  New  Orleans  Canal  &  Banking  Co. 

«^  §§    7  0-742.  V.  Hagan,  1  La.  Ann.  62. 

^*  Chittenden  v.  Gossage,  18  Iowa,        ^'-  McGlaughlin     v.     O'Rourke,     12 

157;  Deland  v.  Mershon,  7  Iowa,  70,  Iowa,  459. 


201  PERSONAL  REMEDY  AFTER  FORECLOSURE.      [§  1238. 

the  proceeds  of  sale.^**  Where  suit  is  brought  upon  certain  instalments 
of  a  note,  and  subsequently  the  mortgaged  property  is  sold  for  a  less 
sum  than  the  whole  mortgage  debt,  the  mortgagee  is  not  obliged  to  ap- 
ply the  proceeds  of  the  sale  to  the  payment  of  the  instalments  first 
due,  and  sought  to  be  recovered  in  the  action  at  law.  He  has  the  right 
to  appropriate  the  amount  so  received  to  the  payment  of  either  in- 
stalment.^^ The  holder  O'f  the  mortgage  being  entitled  to  recover  the 
full  amount  of  the  mortgage  debt,  if  there  be  a  deficiency  after  fore- 
closure of  the  mortgage,  either  by  suit  or  under  a  power  of  sale,  he 
may  maintain  an  action  on  the  debt  for  what  remains  due;®**  and  a 
judgment  for  the  deficiency  does  not  open  the  sale  and  authorize  the 
debtor  to  redeem.^®  A  sale  under  a  power  bars  the  equity  of  redemp- 
tion as  efi^ectually  as  does  a  foreclosure  and  sale  by  decree  of  court. 

In  a  suit  for  a  deficiency  against  a  mortgagor  who  was  not  the 
owner  of  the  equity  of  redemption  at  the  time  of  the  foreclosure  sale, 
he  can  show  that  the  sale  was  not  properly  conducted,  and  that  a 
higher  price  should  have  been  obtained  for  the  property,  especially  if 
the  holder  of  the  mortgage  was  the  purchaser.®^* 

§  1228.  Suit  at  law  may  be  maintained  for  a  deficiency  after  a 
sale  under  a  decree  in  equity,  if  the  plaintifE  has  not  taken  a  judg- 
ment in  the  foreclosure  suit  for  any  deficiency  there  may  be  after  the 
sale  of  the  property.®''  The  foreclosure  operates  as  a  payment  of  the 
debt  to  the  amount  received  from  the  sale,  or  to  the  value  of  the  prop- 
erty in  case  of  a  foreclosure  without  sale.®^ 

If  the  mortgage  provides  that  the  whole  debt  shall  become  due  upon 
default  in  the  payment  of  any  instalment  of  principal  or  interest,  a 
suit  at  law  may  be  maintained  for  the  balance  due  upon  the  mortgage 
note  after  foreclosure,  though  the  note  by  its  terms  be  not  due.®^ 

^'' See  §§  950-953,  and  chapter  xl;  be  obtained  of  the  court  in  which 

Wing  V.    Hayford,   124   Mass.    249.  the  foreclosure  proceedings  are  had; 

"  Draper  v.  Mann,  117  Mass.  439.  §   1351.     But  if  a  foreclosure  is  had 

^  Marston  v.  Marston,  45  Me.  412.  in  New  Yorl<,  and  a  personal  judg- 

*'•'  Weld  V.   Rees,  48  111.  429.  ment  is  sought  against  the  defend- 

89  *Boutelle  v.  Carpenter,  182  Mass.  ant  in  another  State,  prior  permis- 

417.  sion  of  the  New  York  court  is  not 

""See     §§      1709-1721;      Omaly     v.  a   necessary   condition   precedent   to 

Swan,  3  Mason,  474;   Globe  Ins.  Co.  the      maintenance      of      an      action 

V.  Lansing,  5  Cow.  380,  15  Am.  Dec.  against    a    resident    of    such    other 

474;   Lansing  v.  Goelet,  9  Cow.  346;  State    for    the    unpaid    balance    of 

Porter    v.     Pillsbury,    36    Me.     278;  the  mortgage  debt.    Williams  v.  Fol- 

Stevens    v.    Dufour,    1    Blackf.    387;  left,   17  Colo.   51,   28  Pac.   Rep.   330. 

Watson    V.    hiawkins,    60    Mo.    550;  «^  §  953;     Johnson    v.    Candage,    31 

Doyle  v.  West,  60  Ohio  St.  438,  443,  Me.    28;    Hunt    v.    Stiles,    10    N.    H. 

54    N.    E.    469;    Blumberg   v.    Birch,  466;     Bassett    v.    Mason,    18    Conn. 

99    Cal.    416,    34    Pac.    102,    37    Am.  131;    Duval  v.  McLoskey,  1  Ala.  708. 

St.    67.      In    New    York,    prior    per-  °-  Gregory  v.   Marks,  8  Biss.   44. 

mission  to  bring  such  action  must 


§    1229.]  REMEDIES    FOR   EXFORCING   A   MORTGAGE.  202 

Where  a  sale  of  the  whole  of  the  mortgaged  premises  is  made  in  sat- 
isfaction of  the  first  instalment  of  the  mortgage,  the  usual  clause  of 
the  decree,  allowing  the  plaintiff  to  apply  for  a  further  order  of  sale 
upon  the  falling  due  of  the  subsequent  instalment,  and  for  an  execu- 
tion for  any  deficiency,  becomes  inoperative,  and  is  no  bar  to  a  per- 
sonal action  against  the  mortgagor  for  the  subsequent  instalment. 
After  the  sale  of  all  the  property,  the  only  remedy  remaining  is  the 
enforcing  of  the  personal  liability  of  the  mortgagor  upon  a  note  or  in- 
stalment of  debt  subsequently  falling  due,  and  there  could  be  no  fur- 
ther order  of  sale,  and  therefore  nothing  on  which  there  could  prop- 
erly be  a  further  decree.  The  only  remedy  is  by  suit  at  common  law.^^ 
This  cannot  be  maintained  until  the  debt  is  due  and  payable  by  its 
terms.®* 


IV.  Sale  of  Mortgaged  Premises  on  Execution  for  Mortgage  Debt. 

§  1229.  Generally  a  mortgagee  cannot,  upon  a  judgment  recov- 
ered for  the  debt  secured  by  a  mortgage,  levy  the  execution  upon  the 
mortgaged  property,  tliough  it  may  be  levied  upon  any  other  property 
of  the  debtor."^  Such  a  proceeding  would  amount  to  a  foreclosure  in 
a  way  not  contemplated  by  the  parties  or  provided  for  by  law.  The 
levy  would  therefore  be  ineffectual,  and  would  leave  the  mortgage  as  it 
stood  before,®^  subject  to  redemption.®^  The  mortgagee  is  just  where 
he  began.®* 

A  first  mortgagee  may  sue  his  mortgage  debt  and  levy  execution 
upon  the  mortgagor's  right  to  redeem  a  second  mortgage  of  the  same 
land;  for  in  such  case  he  does  not  violate  the  contract  contained  in, 

=»•  Bliss  v.  Weil,  14  Wis.  35,  80  Am.  Indiana:  R.  S.  1888,  §1105;  Lin- 
Dec.  766.  ville    v.    Bell,    47    Ind.    547.      North 

^*  Danforth    v.    Coleman,    23    Wis.  Carolina:    Camp   v.    Coxe,   1   Dev.   & 

528.  Bat.    L.    52.      Kentucky:    Goring    v. 

^'Hill    V.    Smith,    2    McLean,    446.  Shreve,  7  Dana,  64;   Waller  v.  Tate, 

Massachusetts:    Atkins  v.   Sawyer,   1  4    B.    Mon.    529.      Alabama:     Porter 

Pick.   351,  11   Am.   Dec.   188;    Wash-  v.  Wheeler,  105  Ala.  451,  17  So.  221; 

burn  v.  Goodwin,  17  Pick.  137.  New  Powell    v.    Williams,    14    Ala.    476, 

York:    Code    Civ.    Pro.    §  1432;    Tice  48    Am.    Dec.    105;    Boswell    v.    Car- 

V.  Annin,  2  Johns.  Ch.  125,  130,  per  lisle,  55  Ala.  554;  Barker  v.  Bell,  37 
Kent,  C,  who  expressed  the  opin-  Ala.  354.  Missouri:  Young  v.  Ruth, 
ion  that  the  true  and  only  remedy  55  Mo.  515.  North  Carolina:  Code 
for  the  mischief  is  for  the  court  of  of  Remedial  Justice  1876,  §  1432. 
equity  to  prevent  the  mortgagee  "' Young  v.  Ruth,  55  Mo.  515; 
from  proceeding  at  law  to  sell  the  Lumley  v.  Robinson,  26  Mo.  364. 
equity  of  redemption.  Delaplaine  "  Powell  v.  Williams,  14  Ala.  476, 
v.  Hitchcock,  6  Hill,  14;  Trimm  v.  48  Am.  Dec.  105;  Boswell  v.  Carlisle, 
Marsh,    3    Lans.    509.       Mississippi:  55  Ala.  554. 

Carpenter    v.    Bowen,    42    Miss.    28;         "*  Thornton  v.  Pigg,  24  Mo.  249. 
Davis    v.    Hamilton,    50    Miss.    213. 


203  SALE  ON  EXECUTION  FOR  DEBT.  [§  1339. 

and  the  relations  created  by,  the  mortgage  deed."^  And  for  the  same 
reason  the  indorsee  of  one  of  two  notes  secured  by  mortgage,  to  whom 
no  assignment  of  the  mortgage  has  been  made,  may  levy  upon  the* 
equity  of  redemption  to  satisfy  a  judgment  recovered  by  him  on  the 
note."**  The  purchaser  in  such  case  takes  subject  to  the  lien  of  the 
mortgage."^ 

Doubts  have  even  been  expressed  whether  a  mortgagee  could  sell 
under  execution  for  any  other  debt  due  him."-  But  these  doubts  were 
not  well  founded ;  for  upon  such  a  sale  the  sum  bid  is  the  value  of  the 
land  above  the  mortgage  debt,  just  as  it  is  in  case  of  a  sale  made  upon 
an  execution  obtained  by  a  third  person."^  If  a  stranger  purchases  at 
such  sale,  the  relations  of  the  mortgagor  and  mortgagee  are  not  dis- 
turbed any  more  than  they  are  when  the  sale  is  upon  an  execution  ob- 
tained by  a  stranger.  And  if  the  mortgagee  purchases,  the  effect  is 
equally  in  the  one  case  as  in  the  other  to  extinguish  the  mortgage 
debt."* 

In  some  States,  however,  it  is  held  that  the  mortgaged  property  may 
be  sold  under  sn  execution  issued  upon  a  judgment  for  the  mortgage 
debt."^  In  such  case,  not  merely  the  equity  of  redemption  is  sold  but 
the  entire  mortgaged  estate,  so  that  the  purchaser  takes  the  premises 
free  of  the  mortgage,"*^  though  the  price  ohtained  is  not  sufficient  to 
pay  the  mortgage  debt.  The  debt,  however,  is  extinguished  only  to 
the  amount  of  the  purchase-money  received.^°^  Such  sale  is,  of  course, 
a  waiver  of  the  mortgage,  which  cannot  afterwards  be  foreclosed;  or 
it  may  be  regarded  as  operating  as  a  foreclosure,  with  the  same  rights 

»» Johnson  v.  Stevens,  7  Cush.  431.  ^°^  Deare  v.  Carr,  3  N.  J.  Eq.  513; 

i""  Crane  v.  March,  4  Pick.  131,  16  Pierce  v.   Potter,   7  Watts,   475. 

Am.    Dec.    329;    Andrews    v.    Piske,  In    Arkansas    it    seems    that    the 

101    Mass.    422.  equity    of    redemption    may   be   sold 

'"Whitmore   v.     Tatum,   54    Ark.  on  execution  for  the  mortgage  debt, 

457,  16  S.  W.  198.  and  the  purchaser  takes  subject  to 

1"=  Camp  V.  Coxe,  1  Dev.  &  Bat.  52;  the   lien  of  the   mortgage.     Rice   v. 

Thompson    v.    Parker,    2    Jones    Eq.  Wilburn,  31   Ark.   108.     This  was  a 

475.  sale  by  a  vendor  for  purchase-money 

'"^  §    665.     Porter  v.   Wheeler,   105  and    was    subject    to    his    lien.      In 

Ala.    451,   17  So.   221.  Whitmore    v.    Tatum,    54    Ark.    457, 

'"*  Per    Rodman,    J.,    in    Barnes   v.  16   S.   W.    198,   the  sale   was   for  an 

Brown,  71  N.  C.  507,  510;   Porter  v.  instalment    of    the    mortgage    debt, 

Wheeler,  105  Ala.  451,  17  So.  221.  but    this    distinction    seems    not    to 

"^  Cottingham  v.   Springer,   88   111.  have    been    considered.      There,    of 

90;   Fitch  v.  Pinckard,  5  111.  69;  Ly-  course,    the    equity    of    redemption 

decker  v.  Bogert,  38  N.  J.  Eq.  136;  alone   was   sold.     Only   the   interest 

Lanahan    v.    Lawton,    50    N.    J.    Eq.  of  the  mortgagor  passed  by  such  an 

276,  23  Atl.  476.  execution   sale,   and   the  interest   of 

"^  Youse    V.    McCreary,  ,2    Blackf.  the  mortgagee  was  affected  no  fur- 

243;  Freeby  v.  Tupper,  15  Ohio,  467;  ther    than    the    price    paid    for    the 

Hollister  v.  Dillon,   4  Ohio  St.  197;  equity    of    redemption    went    to    di- 

Fosdick  v.  Risk,  15  Ohio,  84;  Pierce  minish  the  mortgage  debt.  This  view 

v.  Potter,  7  Watts,  475.  rests   upon    the   authority   of   Jack- 
son V.   Hull,  10  Johns.  481. 


§    1230.]  BEMEDIES    FOR   ENFORCIXG   A    MORTGAGE.  204 

of  redemption  in  the  debtor  and  his  creditors  as  arise  upon  a  sale  under 
a  decree  of  foreclosure.^*^**  If,  instead  of  a  sale,  the  mortgagee  levy  his 
execution  on  the  land  mortgaged  for  the  same  debt,  and  if  the  debtor 
neglects  to  redeem,  the  estate  becomes  absolute  in  the  mortgagee  not- 
withstanding the  mortgage.^*^^  A  mortgagee  may  waive  his  lien  on  the 
real  estate,  and  levy  an  execution  issued  upon  a  judgment  recovered 
on  his  mortgage  debt  upon  the  same  property,  just  as  he  might  upon 
any  other  property  of  his  debtor.^^" 

If  upon  such  execution  sale  the  mortgagee  himself  finally  pur- 
chases the  property,  and  afterwards  seeks  to  levy  his '  execution  upon 
other  land  of  the  mortgagor  in  order  to  make  up  a  deficiency,  the 
mortgagor  is  not,  ipso  facto,  entitled  to  an  injunction  to  restrain  him 
from  selling  such  other  land,  on  the  ground  that  the  purchase  of  the 
equity  of  redemption  extinguished  the  debt,  but  the  mortgagor  may 
have  the  sale  enjoined  until  it  shall  have  been  determined  whether  the 
mortgage  debt  has  teen  paid,  and  how  much  still  remains  to  be  satis- 
fied.^" 

In  those  States  in  which  it  is  provided  by  statute  that  executions 
shall  be  levied  upon  real  estate  by  sale  only  when  the  property  is 
subject  to  mortgage,  it  may  well  be  that  a  mortgagee  cannot  levy  his 
execution  by  sale  of  the  equity  raised  by  his  own  mortgage  given  to 
secure  payment  of  the  same  debt ;  for  he  cannot  waive  his  security  and 
at  the  same  time  treat  it  as  still  subsisting  and  constituting  the  foun- 
dation of  an  equity.  But  the  holder  of  a  junior  mortgage  may  in  such 
case  sell  his  debtor's  equity  growing  out  of  a  prior  mortgage.^^^ 

§  1230.  But  an  execution  for  the  mortgage  debt  may  be  levied 
upon  any  other  land  of  the  debtor,  or  upon  liis  personal  property,  in 
the  same  manner  as  any  other  debt.^^^ 

Other  property  of  the  debtor  may  be  attached  in  a  suit  at  law  upon 
the  mortgage  debt,  or  a  bill  in  equity'may  be  maintained  to  reach  and 
apply  in  payment  of  such  debt  property  of  the  debtor  which  cannot 
be  come  at  to  be  attached  or  taken  on  execution.^^* 

After  a  redemption  from  a  mortgage  sale,  a  judgment  for  the  de- 
ficiency may  be  levied  upon  the  same  property,  although  the  debtor 
has  other  property  subject  to  execution.^^^ 

"'Cottingham  v.   Springer,   88  111.  "'§665;    Roosevelt   v.    Carpenter, 

90;    Starts  v.  Await,  73  Ind.  304.  28  Barb.  426;  Simmons  Hardware  Co. 

^<'-' Crocker  v.  Frazier,  52  Me.  405;  v.  Brokaw,  7  Neb.  405. 

Porter  v.  King,  1  Me.  297.  "*  Tucker  v.  McDonald,  105  Mass. 

""Lord  V.  Crowell,  75  Me.  399.  423. 

"'  Lydecker    v.    Bogert,    38    N.    J.  "'^  Cauthorn     v.      Indianapolis     & 

Eq.   136.  Vincennes   R    Co.   58   Ind.   14. 

"^Forsyth  v.  Rowell,   59  Me.   131. 


205  EEMEDY   AS   AFFECTED    BY    BANKRUPTCY.  [§    1331, 

V.     Remedy  as  affected  by  Bankruptcy. 

§  1231.  Although  a  discharge  in  bankruptcy  will  prevent  a 
judgment  for  a  deficiency  on  the  note  or  debt,  it  will  not  prevent  a 
judgment  of  foreclosure."''  Neither  will  the  foreclosure  suit  be  con- 
tinued to  await  a  discharge  in  bankruptcy,  because  the  discharge,  if 
had,  will  not  affect  the  mortgage  lien."^  The  lien  of  the  mortgage  is 
not  affected  by  the  proceedings.  The  assignee  takes  the  property  sub- 
ject to  all  the  legal  and  equitable  rights  of  the  mortgagee  and  of 
others."^  The  assignee  takes  only  the  rights  that  the  debtor  himself 
had,  and  must  recognize  all  the  equities  of  other  parties  which  the 
debtor  would  be  held  to  recognize  in  a  court  of  equity.  Thus  an  agree- 
ment by  the  debtor  to  give  a  mortgage  may  be  treated  as  a  specific  lien 
upon  the  land ;  and  a  mortgage  made  in  pursuance  of  the  agreement, 
although  made  just  previous  to  the  debtor's  bankruptcy,  so  that  by 
itself  it  would  be  open  to  objection  as  a  fraudulent  preference,  by 
reference  to  the  agreement,  may  be  sustained  as  a  valid  security."^ 
And  so  a  mortgage  given  a  short  time  prior  to  the  mortgagor's  bank- 
ruptcy, but  in  renewal  of  a  security  which  was  not  a  preference  under 
the  bankrupt  act,  is  not  open  to  that  objection.^-"  Adjudication  alone 
does  not  divest  the  bankrupt's  title,  but  this  remains  in  him  until  the 
appointment  of  an  assignee.  Therefore,  where  one  was  adjudged  a 
bankrupt,  but  no  assignee  was  appointed,  and  no  further  proceedings 
had,  for  the  reason  that  the  debtor  compromised  with  his  creditors, 
giving  notes  secured  by  a  mortgage,  it  was  held  that,  when  a  year 
afterwards  he  again  became  involved  and  an  assignee  was  appointed, 
the  mortgage  was  valid  and  might  be  foreclosed. ^^^ 

Inasmuch  as  a  mortgage  taken  by  a  surety  inures  to  the  benefit  of 
the  principal  creditor,  the  surety  may  assign  the  mortgage  to  such 
creditor;  and  the  subsequent  discharge  of  both  the  surety  and  the 
principal  debtor  does  not  destroy  the  lien  of  the  mortgage,  or  affect 
the  mortgagee's  right  to  foreclose  it.^^-  But  even  w^ithout  such  an 
assignment  a  court  of  bankruptcy  will  enforce  the  mortgage  for  the 
benefit  of  the  creditor  to  whom  the  surety  has  become  bound."^ 

1.8  gee  §  1438;  Roberts  v.  Wood,  38  '^^  Toler  v.   Passmore,   62   Ga.   263. 

Wis.  60;  Brown  v.  Hoover,  77  N.  C.  "« Gibson  v.  Warden,  14  Wall.  244. 

40;    Oliphint    v.    Eckerley,    36    Ark.  ""Hewitt  v.  Northup,  9  Hun,  543; 

69;    Carter    v.    People's    Nat.    Bank,  Burdick  v.  Jackson,  15  N.  Bank.  R. 

109  Ga.  573,  35  S.  E.  61;   Broach  v.  318. 

Powell    79  Ga.  79,  3  S.  E.  763;  Evans  '-'' Burnhisel   v.    Firman,   22   Wall. 

V.    Rounsaville,    115    Ga.    684,    42    S.  170. 

E.  100;   Johnson  v.  Whitley  Grocery  '-'Robinson   v.  Hall,  8  Benedict  61. 

Co.  112  Ga.  449,  37  S.  E.  766;   Reed  '"Carlisle  v.  Wilkins,  51  Ala.  371. 

V.  Equitable  Trust  Co.  115  Ga.  780,  '^^  In  re  Pierce,  2  Lowell,  343;    In 

42  S.  E.  102.  re  Jaycox,  8  N.  Bank.  R.  241. 


§    1232.]  REMEDIES    FOR    ENFORCING   A    MORTGAGE.  206 

If  proceedings  to  foreclose  are  commenced  after  the  mortgagor  has 
filed  his  petition  in  bankruptcy,  although  no  judgment  can  be  had 
against  him  personally,  a  decree  may  be  rendered  against  the  prop- 
erty.^^* 

After  the  assignee  has  taken  actual  possession  of  the  mortgaged  es- 
tate, the  mortgagee  cannot  by  an  action  of  ejectment  disturb  his  pos- 
session. The  possession  of  the  assignee  is  the  possession  of  the  court 
in  bankruptcy,  and  if  the  mortgagee  would  enter  he  must  first  obtain 
permission  of  that  court.  If  the  mortgagee  be  already  in  possession, 
he  cannot  be  disturbed  by  the  assignee,  except  upon  redemption  of  the 
mortgage.  If  the  assignee,  for  the  reason  that  the  incumbrance  is 
greater  than  the  value  of  the  property,  does  not  assume  possession  of 
it,  then  the  bankruptcy  proceedings  do  not  prevent  the  mortgagee 
from  recovering  possession  of  the  property  from  a  third  person  not 
connected  with  the  assignee.  No  permission  from  the  bankruptcy 
court  is  necessary  to  authorize  the  mortgagee  in  such  case  to  main- 
tain an  action  of  ejectment. ^^^  Although  all  the  property  and  rights 
of  the  bankrupt  pass  to  the  assignee  by  operation  of  law,  and  become 
vested  in  him  as  soon  as  he  is  appointed,  he  is  not  bound  to  take  pos- 
session of  all  the  property.  If  the  property  be  so  incumbered  as  to  be 
of  an  onerous  or  unprofitable  character,  or  if  it  is  liable  to  become  a 
burden  rather  than  a  profit  to  the  estate,  the  assignee  is  not  bound  to 
take  the  property  into  possession,  or  to  take  measures  to  sell  it;^^® 
but  rather  it  is  his  duty  not  to  do  so.  If  he  elects  not  to  take  the 
property,  it  remains  in  the  bankrupt.  If  he  does  not  elect  to  take  pos- 
session of  the  property  within  a  reasonable  time,  he  is  deemed  to  have 
elected  to  abandon  it.  The  title  of  the  bankrupt  to  the  equity  of  re- 
demption is  good  against  all  the  world  except  the  assignee,  as  the  pre- 
sumption is  that  the  property  was  regarded  as  onerous,  and  that  the 
assignee  elected  not  to  take  it  into  possession.^" 

§  1232.  In  what  court  the  mortgage  lien  may  be  enforced. — 
Although  it  is  now  generally  held  that  the  state  courts  may,  with  the 
assent  of  the  assignee,  be  employed  not  only  to  ascertain  the  amount 
of  a  mortgage  lien,  but  to  enforce  it  as  well,  it  was  formerly  held  that 
the  only  proper  tribunal  for  these  purposes  was  the  district  court  in 
bankruptcy;  and  that,  if  the  creditor  remained  outside  this  court,  he 
did  so  at  the  risk  of  being  refused  the  right  to  enforce  his  lien  in  the 
state  court.^^^     The  commencement  of  proceedings  in  bankruptcy  at 

"^Cockrill  V.  Jolinson,  28  Ark.  ^"  Amory  v.  Lawrence,  3  Cliff. 
193.  523. 

^"Eyster  v.  Gaff,  2  Colo.  228.  '-« Blum    v.    Ellis,    73    N.    C.    293. 

"'McHenry v.LaSocieCe  Frangaise,  Judge  Settle  in  this  case  said:  "In- 
95  U.  S.  58.  deed,  when  we  behold  the  obscurity 


807  REMEDY    AS    AFFECTED   BY    BANKRUPTCY.  [§    1332. 

once  gives  to  the  court  of  bankruptcy  full  and  exclusive  jurisdiction 
over  all  the  bankrupt's  property,  and  it  retains  this  jurisdiction  so 
long  as  the  proceedings  in  bankruptcy  are  pending.  It  matters  not 
that  these  proceedings  are  in  a  district  and  State  other  than  that 
where  the  property  is  situated ;  the  courts  of  the  State  where  the  prop- 
erty is  do  not  thereby  acquire  any  rights  over  it.^-'' 

Therefore,  if  proceedings  to  foreclose  a  mortgage  are  instituted  in 
a  state  court  after  an  adjudication  of  bankruptcy,  they  will,  upon  mo- 
tion, be  stayed  until  these  proceedings  are  closed.^^"  The  bankruptcy 
court  may  order  the  assignee  to  sell  the  property  subject  to  the  mort- 
gage, and  thus  leave  the  mortgage  to  be  enforced  against  the  property 
in  the  hands  of  the  purchaser.  After  such  sale,  it  would  seem  that 
proceedings  to  foreclose  would  be  no  longer  stayed.  But  on  the  other 
hand,  the  court  sitting  in  bankruptcy  may  authorize  the  assignee  to 
redeem  the  mortgage ;  or  may  order  the  entire  property  to  be  sold  free 
from  the  mortgage  lien,  and  that  the  proceeds  be  paid  into  court,  in 
which  case  the  validity  of  the  mortgage  is  there  investigated  in  deter- 
mining the  distribution  of  the  proceeds,  and  the  purchaser  takes  the 
estate  discharged  of  the  mortgage.^^^ 

The  state  courts,  however,  have  prima  facie  jurisdiction  to  fore- 
close mortgages,  although  the  suits  for  the  purpose  are  commenced 
after  the  adjudication  in  bankruptcy.^^^  The  provisions  of  the  bank- 
rupt law,  that  the  property  covered  by  a  mortgage  shall  be  sold  in  such 
manner  as  the  bankruptcy  court  shall  direct,  are  for  the  benefit  and  pro- 
tection of  the  unsecured  creditors  represented  by  the  assignee,  and  he 
may,  for  himself  and  them,  waive  such  benefit,  and  permit  the  prop- 
erty to  be  sold  in  a  suit  in  a  state  court.^-''^  If  the  assignee  submits 
himself  to  the  jurisdiction  of  a  state  court  he  is  bound  by  its  judg- 
ment.^^*  The  jurisdiction  of  the  state  courts  of  suits  for  the  settle- 
ment of  conflicting  claims  to  property  belonging  to  the  estate  of  the 
bankrupt  is  not  divested. ^^^     The  mortgagee  may,  with  leave  of  the 

in  which  this  subject  has  been  in-  ruptcy  stays  proceedings  in  a  state 

volved   by   the   conflicting   decisions  court  to  enforce  a  mechanic's  lien; 

of  different  courts,  we  are  inclined  Clifton  v.   Foster,   103  Mass.   233;    4 

to   ihink   that   it   would    have    been  Am.    Rep.    539;    or    to    set    aside    a 

better    had    Congress    withheld    en-  fraudulent    conveyance.      Gilbert    v. 

tirely  from  state  tribunals  all  ques-  Priest,    65   Barb.    444,   overruling  63 

tions    touching    the    bankrupt,    his  Barb.  329. 

creditors,  and  his  assets."  ^^-  Broach  v.  Powell,  79  Ga.  79,  3 

"»Markson   v.   Hanev,   47   Ind.   31.  S.    E.    763. 

""Levy  v.  Haake,  53  Ala.   267.  "'Mays  v.   Fritton.   20  Wall.   414; 

"^  Markson  v.   Haney,  47  Ind.   31;  In    re    Moller.    7    Benedict.    726. 

Newman  v.  Fisher,  37  Md.  259;  Brig-  "*  Mays  v.  Fritton,  20  Wall.  414. 

ham  v.    Claflin,  31  Wis.   607;    Voor-  "^  Eyster  v.  Gaff,  91  U.  S.  521,  525; 

hies  V.  Frisbie,  25  Mich.  476.  12  Am.  Jerome  v.  McCarter,  94  U.  S.  734. 
Rep.    291.      In    like    manner    bank- 


§    1333.]  REMEDIES    FOR    ENFORCING   A    MORTGAGE.  208 

bankruptcy  court,  institute  foreclosure  proceedings  in  the  state 
court  j^^"  or  the  assignee  may  sue  in  a  state  court  to  collect  the  as- 
sets.^^^  Objection  that  leave  was  not  given  by  the  bankruptcy  court 
to  file  a  bill  of  foreclosure  will  not  be  sustained  if  made  a  year  and  a 
half  after  the  bill  was  filed,  and  when  the  party  objecting  had  in  the 
meantime  appeared  and  answered,  especially  when  the  premises  were 
at  the  time  in  the  possession  of  a  receiver  appointed  in  a  former  suit 
in  the  same  court.^^^  The  homestead  of  a  bankrupt  never  comes  with- 
in the  jurisdiction  of  the  bankruptcy  court;  and  therefore  a  creditor 
having  a  lien  upon  that  alone  may  enforce  it  by  suit  while  the  bank- 
ruptcy proceedings  are  pending,  without  obtaining  leave  of  that 
court. ^^® 

The  federal  courts  have  exclusive  jurisdiction  "of  all  matters  and 
proceedings  in  bankruptcy."^*"  These  matters  include  all  things 
treated  of  or  affected  by  the  legislation  upon  the  subject  of  bank- 
ruptcy. It  is  therefore  held  that  a  state  court  has  no  jurisdiction  to 
cancel  a  mortgage  valid  under  the  laws  of  the  State,  upon  the  ground 
that  it  was  made  in  contravention  O'f  the  federal  bankrupt  law.^*^ 

§  1233.  Proceedings  in  bankruptcy  against  the  owner  of  the 
equity  do  not  suspend  a  suit  already  commenced  in  a  state  court 

for  the  foreclosure  of  the  mortgage,  and,  unless  restrained  by  injunc- 
tion from  the  United  States  court  in  bankruptcy,  the  plaintiff  may 
proceed  to  judgment  and  sale  of  the  premises,  and  the  purchaser  ac- 
quires a  good  title  against  the  parties,  including  any  assignee  who  may 
afterwards  be  appointed. ^*^  Upon  the  principle  that  a  decree  of  fore- 
closure is  binding  upon  one  who  purchases  the  equity  of  redemption  or 
acquires  any  interest  in  it  pending  the  suit  for  foreclosure,  it  is  held 
that  an  assignee  in  bankruptcy  appointed  pending  such  suit  is  barred 
by  a  decree  against  the  mortgagor.  The  assignee  stands  as  any  other 
grantee  of  the  mortgagor  would  stand  who  had  acquired  title  after  the 
commencement  of  the  foreclosure  suit.^*^ 

'="'  McHenry    v.    La    Societe    Fran-  ""  In  re  Sinnett,  4  Sawyer,  250. 

caise,    etc.    95    U.    S.    58;    Miller    v.  ^^^  R.  S.  U.  S.  §  711. 

Hardy,  131  Ind.  13,  29  N.  E.  776.     If  "'  Brewster    v.    Dryden,    53    Iowa, 

in   such   case   the  bankruptcy   court  657,  6  N.  W.  16.     And  see  Hecht  v. 

authorizes    its   assignee   to   abandon  Springstead,   51  Iowa,  502,  1  N.   W. 

all   claims   on  the   lands   upon   con-  773. 

dition   that   the   mortgagee    releases  "=  Lenihan   v.    Hamann,   55   N.    Y. 

the  estate  from  further  liability,  this  652,  14  Abb.   (N.  S.),  274;  McGready 

gives  the  state  court  jurisdiction  to  v.  Harris,  54  Mo.  137.     In  the  latter 

foreclose,  as  against  all  persons  con-  case  there  had  been  no  adjudication 

cerned.  prior  to  the  sale. 

"'Claflin   V.    Houseman,    93   U.    S.  '"  Eyster    v.    Gaff,    91    U.    S.    521; 

130.  Stout   v.    Lye,    103    U.    S.    66;    Sedg- 

"« Jerome    v.    McCarter,    94    U.    S.  wick  v.  Grinnell,  9  Ben.  429. 
734. 


209  REMEDY    AS   AFFECTED    BY    BANKRUPTCY.  [§    1234. 

If  the  assignee  in  bankruptcy  does  not  assume  possession  of  an  es- 
tate mortgaged  by  the  bankrupt,  proceedings  to  foreclose  the  mort- 
gage whenever  commenced  may,  by  his  tacit  consent,  go  on  in  the  state 
court.^** 

Upon  the  institution  of  proceedings  in  bankruptcy,  and  the  ap- 
pointment of  an  assignee,  the  bankrupt's  property  comes  under  the 
jurisdiction  of  the  national  courts,  and  the  state  courts  can  act  no 
further  in  relation  to  it  while  such  proceedings  are  pending,  except 
with  the  consent  of  the  bankruptcy  court  or  of  its  officer,  the  assignee, 
in  whom  the  property  is  vested  by  the  assignment.  A  suit  to  foreclose 
a  mortgage  upon  the  bankrupt's  property,  if  brought  subsequently, 
should  be  brought  in  a  court  of  the  United  States  sitting  in  bank- 
ruptcy, and  the  assignee  should  be  made  a  party  to  it.  This  court 
may  take  the  entire  administration  of  the  bankrupt's  estate,  and  may 
ascertain  and  liquidate  all  liens  thereon,  and  for  this  purpose  may 
restrain  the  holder  of  a  mortgage  or  other  lien  from  proceeding  in 
any  suit  to  enforce  such  lien ;  and  it  is  generally  proper  f ot  the  court 
to  do  so  when  the  value  of  the  property  exceeds  the  amount  secured  by 
the  lien,  or  when  the  amount  or  validity  of  the  lien  is  in  doubt.^*^ 
A  mortgagee  or  trustee  under  a  deed  of  trust  will,  upon  the  application 
of  the  assignee,  be  enjoined  from  selling  under  a  power  of  sale.^*''  If 
the  foreclosure  suit  is  already  pending  in  a  state  court  at  the  time 
the  bankruptcy  proceedings  are  commenced,  it  may  be  allowed  to  pro- 
ceed upon  making  the  assignee  a  party  to  it.  In  the  case  of  a  volun- 
tary assignment  of  the  mortgaged  property  after  the  commencement 
of  a  suit  to  foreclose,  i't  is  not  necessary  to  bring  in  the  assignee  as  a 
party  to  the  suit;  but  if  the  assignment  is  by  operation  of  law,  as  in 
cases  of  bankruptcy  or  under  the  insolvent  acts,  the  assignee  should 
be  made  a  party  before  further  proceedings  are  had.  If  he  is  not  made 
a  party,  the  foreclosure  is  of  no  effect  as  to  him,  and  his  equity  of 
redemption  remains  unimpaired.^*'' 

§  1234.  If  the  bankruptcy  proceedings  are  pending  in  a  State 
other   than   that   in   which   the   mortgaged    property    is    located,  ^ 

although  the  bankruptcy  court  may  exercise  extra-territorial  jurisdic- 
tion in  collecting  the  estate,  and  adjusting  the  claims  of  creditors,  yet 

"*  Hatcher  v.  Jones,  53  Ga.  208.  v.  Morrison,  11  Paige,  327;   Deas  v. 

"'^  In  re  Iron  Mountain  Co.  of  Lake  Thorne,    3    Johns.    544;    Springer   v. 

Champlain,    5    Blatchf.    320;     In    re  Vanderpool,   4   Edw.    362;    Burnham 

Sacchi,  10  Blatchf.  29,  v.    De    Bevorse,    8    How.    Pr.    159; 

"''Dooley    v.    Va.    F.    Ins.    Co.    2  Winslow    v.    Clark,    47    N.    Y.    261, 

Hughes,  482.  263;   Russell  v.  Clark,  7  Cranch,  69; 

"'Sedgwick  v.  Cleveland,  7  Paige,  In  re  Wynne,  4  N.  Bank  R.  23;  Ey- 

287,  290;  Anon.  10  Paige,  20;  Lowry  ster  v.  Gaff,  2  Colo.  228,  239. 


§    1235.]  REMEDIES    FOR    ENFORCING   A   MORTGAGE.  210 

matters  affecting  the  real  estate  of  the  bankrupt  are  of  a  local  char- 
acter, and  the  rights  of  parties  must  be  determined  by  the  local  courts. 
Therefore  it  is  held  that  a  suit  to  foreclose  a  mortgage  on  the  bank- 
rupt's property,  situate  in  another  State,  may  be  commenced  after  he 
is  adjudicated  a  bankrupt,  and  prosecuted  in  the  State  where  the  land 
is  situated.  The  mortgagee  is  entitled  to  have  a  foreclosure  of  his 
mortgage,  and,  as  he  cannot  have  any  remedy  in  the  District  Court 
of  the  United  States  in  which  the  bankruptcy  proceedings  are  pend- 
ing, he  is  allowed  to  proceed  in  the  courts  of  the  State  where  the  lands 
are.    The  assignee  is  protected  in  his  rights  by  being  made  a  party.^** 

§  1235.  The  bankruptcy  court  may  order  a  sale  subject  to  the 
mortgage.  As  already  observed,  the  bankruptcy  court  may  allow  the 
mortgagee  to  foreclose  his  mortgage  in  the  usual  way  in  a  state  court, 
or  may  take  upon  itself  the  duty  of  ascertaining  and  enforcing  the 
lien  by  a  sale  of  the  mortgaged  property.  It  may  also  have  the  mort- 
gaged premises  sold  subject  to  the  lien,  and  leave  the  mortgagee  to 
proceed  to  a  foreclosure  against  the  pu.rchaser ;  or  it  may  direct  a  re- 
lease of  the  mortgaged  premises  to  the  mortgagee  in  satisfaction  of 
the  debt."» 

If  the  mortgagee  goes  into  the  bankruptcy  court,  that  court  must 
take  possession  of  the  mortgaged  property  and  sell  it ;  and  in  that  case 
this  court  must  determine  the  order  of  priority  of  different  liens  upon 
the  property,  and  the  rights  of  the  mortgagor  under  any  claims  he 
may  set  up,  as,  for  instance,  his  right  to  a  homestead  exemption.  When 
the  homestead  of  tlie  debtor  has  been  sold  as  a  part  of  the  mortgaged 
property,  the  court  has  jurisdiction  to  order  the  bankrupt  to  deliver 
possession  to  the  purchaser  upon  the  bankrupt's  refusal  to  surrender 
the  property  to  the  purchaser.^^" 

The  District  Court  in  bankruptcy  has  no  jurisdiction  of  a  summary 
petition  by  a  mortgagee  against  the  assignee  to  order  a  sale  of  the 
property  when  it  appears  that  the  title  of  the  applicant^"  is  in  dis- 
pute, or  that  the  estate  is  in  the  actual  possession  of  a  third  person 
claiming  title ;  as,  for  instance,  when  it  is  in  the  possession  of  receivers 
appointed  by  a  state  court.^^^ 

"'  Whitridge   v.    Taylor,    66   N.    C.  ""In  re  Betts,  4  Dill.  93,  7  Report- 

273.     In  this  case  the  assignee  ac-  er,  522. 

cepted  service  and  was  willing  the  "^  In  re  Casey,  10  Blatchf.  376. 

case  should  proceed.  "^Bradley    v.    Healey,    1    Holmes, 

"'In  re  Ellerhorst,  2  Sawyer,  219.  451,  and  cases  cited;  Knight  v.  Che- 

And  see  Clifton  v.  Foster,  103  Mass.  ney,    5   N.    Bank.    R.    305.      And   see 

233,    4    Am.    Rep.    539;     Broach    v.  Hayes    v.    Dickinson,    9    Hun,    277; 

Poweil,  79  Ga.  79,  3  S.  E.  763.  Smith  v.  Mason,  Wall.  419. 


211  REMEDY   AS   AFFECTED   BY    BANKRUPTCY.  [§    1236. 

§  1236.  If  a  mortgagee  desires  to  prove  his  claim  against  the 
mortgagor's  estate  in  bankruptcy,  lie  may  release  his  security  to  the 
assignee  and  prove  for  the  whole  of  his  claim;  or  he  may  have  the 
property  sold  under  direction  of  the  bankruptcy  court,  and  prove  for 
any  balance  of  his  claim  remaining  unsatisfied;  or  he  may  instead 
have  his  security  valued,  and  prove  for  the  balance  after  deducting 
the  value  of  the  property.^^^  But  the  mortgagee  need  not  take  either 
of  these  courses.  He  may  rest  upon  his  security,  in  which  case  the 
discharge  of  the  bankrupt  mortgagor  constitutes  no  defence  to  a  sub- 
sequent action  to  foreclose  the  mortgage,^^*  so  far  as  the  mortgaged 
property  is  concerned,  but  would  be  a  bar  to  any  personal  judgment 
against  the  bankrupt. 

The  fact  that  the  mortgagee  has  proved  his  claim  in  bankruptcy 
does  not  prevent  his  foreclosing  his  mortgage  in  a  state  court  upon 
leave  granted  by  the  bankruptcy  court.^^^ 

In  Illinois,  where  foreclosure  may  be  had  by  scire  facias,  the  recov- 
ery of  a  Judgment  in  such  suit  is  no  defence  to  a  bill  in  equity  to  fore- 
close the  same  mortgage. ^^"^  The  m'ortgagee  may  use  both  these  reme- 
dies and  all  others  as  well,  but  of  course  can  have  but  one  satisfac- 
tion. 

^'^  Bankrupt  Act  of  1867,   §    1075;  ^-'^  Pierce    v.    Wilcox,    40    Ind.    70; 

Bankrupt  Act  of  1898  §  57,  h.  Wicks    v.    Perkins,    1    Woods,    383; 

The  proof  of  the  debt  as  unsecured  Price  v.  Amis,  58  Ga.  604. 

is  not  a  waiver  of  a  mortgage  given  '"  Societe  D'Epargnes  v.  McHenry, 

to  secure  it  by  a  person  other  than  49  Cal.  351. 

the    bankrupt.      National    Bank    v.  "« Erickson  v.  Rafferty,  79  111.  209. 
Wood,  53  Vt.  491. 


CHAPTEE  XXVIII. 


FORECLOSUKE  BY  ENTRY  AND  POSSESSION. 


I.  Nature    of    the    remedy,    1237, 

1238. 
II.  Statutory  provisions,  1239-1245. 

III.  The  entry,  1246-1257. 

IV.  The  possession,  1258. 

V.  The    certificate    of    witnesses, 
1259,  1260. 
VI.  The    certificate    of    the    mort- 
gagor, 1261. 


VII. 

VIII. 
IX. 

X. 


When  the  limitation  com- 
mences, 1262. 

Record  of  the  certificate,  1263. 

Effect  of  the  foreclosure  upon 
the  mortgage  debt,  1264. 

Waiver  of  entry  and  fore- 
closure, 1265-1275. 


I.     Nature  of  the  Remedy. 


§  1237.  Foreclosure  by  means  of  the  mortgfagee's  entering 
upon  the  premises  and  holding  them  for  a  limited  time  seems  to  fol- 
low naturally  from  the  principle  established  in  equity,  that  after  for- 
feiture of  the  condition,  although  the  mortgagee  may  enter,  yet  the 
mortgagor  shall  be  allowed  within  a  reasonable  time  to  redeem.^  Tlie 
entry  serves  to  give  notice  to  the  mortgagor  that  his  right  of  redemp- 
tion will  be  lost  unless  he  discharges  the  obligations  of  his  deed.  The 
mortgagee  immediately  receives  the  rents  and  profits,  which,  as  part 
of  his  security,  should  go  to  him  after  the  mortgagor's  default.  This 
default  continuing,  the  property  is  applied  to  the  discharge  of  the 
debt  by  becoming  the  absolute  estate  of  the  mortgagee.  The  length  of 
possession  generally  required  to  perfect  the  mortgagee's  title  to  the 
property  makes  the  remedy  a  slow  one  for  obtaining  money  in  dis- 
charge of  a  mortgage  debt.  But  the  remedy  is  inexpensive,  and  is 
ready  at  hand  to  be  applied  by  the  mortgagee  himself,  while  the  mort- 
gagor cannot  complain  that  it  is  an  oppressive  one. 

§  1238.     Where   used. — This   mode   of   foreclosure   is   in   use   in 


'  For  the  mode  of  obtaining  pos-    S' 
session     by     process     of     law,     see 

213 


1276-1316. 


313  STATUTORY  PROVISIONS.  [§  1239, 

Maine,  New  Hampshire,  Massachusetts,  and  Rhode  Island,  and  is  the 
usual  remedy  in  these  States  to  secure  the  discharge  of  the  mortgage 
out  of  the  property,  except  in  case  of  power  of  sale  mortgages^  which, 
by  reason  of  the  promptness  of  the  remedy  afforded  by  them,  have  of 
late  come  into  very  general  use.  The  statutory  provisions  of  these 
States  in  respect  to  the  entry  and  the  evidence  of  possession,  though 
similar,  are  in  important  details  unlike,  and  therefore  a  brief  state- 
ment will  be  made  of  these  provisions;  but  the  general  rules  govern- 
ing the  subject,  being  of  universal  application,  will  be  stated  under  the 
general  divisions  of  the  following  sections. 

II.     Statutory  Provisions. 

§  1239.  Maine.^ — After  breach  of  the  condition,  if  the  mortgagee, 
or  any  one  claiming  under  him,  desires  to  obtain  possession  of  the 
premises  for  the  purpose  of  foreclosure,  he  may  proceed  in  either  of 
the  following  ways,  viz :  I.  He  may  obtain  possession  under  a  writ  of 
possession  issued  on  a  conditional  judgment,  duly  executed  by  an  offi- 
cer. An  abstract  of  such  writ,  stating  the  time  of  obtaining  possess- 
ion, certified  by  the  clerk,  shall  be  recorded  in  the  registry  of  deeds  of 
the  district  in  which  the  estate  is,  within  thirty  days  after  possession 
has  been  obtained.^  II.  He  may  enter  into  possession,  and  hold  the 
same  by  consent  in  writing  of  the  mortgagor,  or  the  person  holding 
under  him.*  III.  He  may  enter  peaceably  and  openly,  if  not  opposed, 
in  the  presence  of  two  witnesses,  and  take  possession  of  the  premises ; 
and  a  certificate  of  the  fact  and  tiniic  of  such  entry  shall  be  made, 
signed  and  sworn  to  by  such  witnesses  before  a  justice  of  the  peace; 
and  such  certificate  or  consent,  with  the  affidavit  of  the  mortgagee  or 
his  assignee  to  the  fact  and  time  of  entry  endorsed  thereon,  shall  be 
recorded  in  each  registry  of  deeds,  in  which  the  mortgage  is  or  by  law 
ought  to  be  recorded,  within  thirty  days  after  the  entry  is  made.  In 
addition  to  the  modes  now  provided  by  law,  mortgages  of  real  and  per- 
sonal property  may  be  foreclosed  by  suit  in  equity.^ 

'  Stats.  Supp.  1885,  1895,  ch.  90,  §  3.  eluded  any  jurisdiction  in  equity, 
»R.  S.  1883,  ch.  90,  §§3-6.  Amend-  and  tiiat  the  language  of  the  stat- 
ed 1891,  ch.  91,  p.  76.  Mortgages  of  ute  quoted  as  to  foreclosure  in 
real  and  personal  property  may  be  equity  was  inadvertently  used, 
foreclosed  in  equity.  Laws  1891,  ch.  Chase  v.  Palmer,  25  Me.  341. 
91;  Reed  v.  Reed,  75  Me.  264.  Al-  ^  Such  agreement  inserted  in  a 
though  the  Revised  Statutes,  ch.  mortgage  binds  the  mortgagee  with- 
96,  in  terms  authorized  the  Supreme  out  his  signature  to  the  mortgage. 
Court  to  take  cognizance,  as  a  court  Such  agreement  need  not  be  insert- 
of  equity,  of  "suits  for  the  redemp-  ed  in  the  notice  of  foreclosure, 
tion  and  foreclosure  of  mortgaged  Stowe  v.  Merrill,  77  Me.  550,  1  Atl. 
estates,"   it  was  held  that  the   spe-  68.4. 

cific    provisions    of    the    statute    for  ^  Jones  v.   Bowler,  74  Me.   310. 
the    foreclosure    of    mortgages    pre- 


1240.] 


FORECLOSURE    BY    ENTRY   AND   POSSESSION. 


214 


§  1240.  Maine — foreclosure  by  advertisement. —  Another  mode 
of  foreclosure  without  entry,  but  based  on  the  same  principle  of  notice 
to  the  mortgagor,  is  provided  for  in  Maine.  The  mortgagee  gives  pub- 
lic notice  in  a  newspaper  published  and  printed  in  whole  or  in  part  in 
the  county  where  the  premises  are  situated,**  if  any,  or,  if  not,  in  the 
state  paper,  three  weeks  successively,  of  his  claim  by  mortgage,  de- 
scribing the  premises  intelligibly, '^  naming  the  date  of  the  mortgage, 
and  stating  that  the  condition  of  it  is  broken,  by  reason  whereof  he 
claims  foreclosure;^  a  copy  of  this  printed  notice,  with  the  name  and 
date  of  the  newspaper  in  which  it  was  last  published,  is  recorded  in 
each  registry  of  deeds  in  which  the  mortgage  is  or  ought  to  be  re- 
corded, within  thirty  days  after  the  last  publication  of  it.^  Instead  of 
such  publication  an  attested  copy  of  the  notice  may  be  served  on  the 
mortgagor  or  his  assignee,  if  in  the  State,  by  the  sheriff  or  his  deputy, 
by  delivering  it  to  him  in  hand  or  leaving  it  at  his  place  of  last  and 
usual  abode,  when  the  notice  with  the  sheriff's  return  is  recorded 
within  thirty  days  after  service;  and  in  all  cases  the  certificate  of  the 
register  of  deeds  is  prima  facie  evidence  of  the  fact  of  such  entry,  no- 
tice, puJ)lication  of  foreclosure,  and  of  the  sheriff's  return.^" 

If  the  premises  are  not  redeemed  within  three  years  after  the  first 
publication  or  the  service  of  notice,  or  within  such  time,  not  less  than 

'  Welch  v.   Stearns,  74  Me.  71.     A    misnomer  contained  in  a  recital  of 


foreclosure  is  fatally  defective  if 
the  certificate  recites  that  the  notice 
was  given  in  a  newspaper  "publish- 
ed," instead  of  "printed,"  in  the 
county  where  the  premises  are  situ- 
ated. Hollis  V.  Hollis,  84  Me.  96, 
24  Atl.  581;  Blake  v.  Dennett,  49 
Me.  102;  Bragdon  v.  Hatch,  77  Me. 
433,  1  Atl.   140. 

'  The  description  should  be  suf- 
ficient to  enable  those  interested  in 
the  premises  to  identify  them  with 
reasonable  certainty.  On  this  ground 
the  following  was  held  insufficient: 
"On  the  22d  day  of  June,  1850,  Lewis 
Dela,  of  Portland,  mortgaged  to  the 
undersigned  certain  property  partic- 
ularly described  in  the  deed  situated 
at  the  corner  of  Fore  and  India 
streets,  in  this  city."  Dela  v.  Stan- 
wood.  61  Me.  51. 

*  A  notice  stating  that  "the  condi- 
tion had  been  broken,  and  now  the 
mortgagees  give  notice  of  the  same, 
and  that  they  claim  a  foreclosure  of 
said  mortgage,"  is  sufficient.  It 
may  be  inferred,  though  not  declar- 
ed, that  the  foreclosure  is  claimed 
by  reason  of  the  breach  of  condition. 
Pearce    v.    Savage,    45    Mo.    90.     A 


the  deed  excepting  a  small  portion 
of  the  premises,  and  repeated  in  a 
notice  of  foreclosure,  does  not  in- 
validate the  notice.  Wilson  v.  Page, 
76  Me.  279. 

"  It  is  essential  that  the  "date  of 
the  newspaper  in  which  the  notice 
was  last  published"  should  be  re- 
corded. Hollis  V.  Hollis,  84  Me.  96, 
24  Atl.  581.  A  notice  published  in 
three  successive  weekly  issues  of  a 
newspaper,  and  recorded  the  next 
day  after  the  last  publication,  is  a 
compliance  with  the  statute.  Wil- 
son V.  Page,  76  Me.  279;  Stowe  v. 
Merrill,  77  Me.  550,  1  Atl.  684. 

Evidence  that  a  notice  was  given 
in  a  newspaper  "published"  in  the 
county  is  not  evidence  of  a  notice 
in  a  newspaper  "printed"  in  a  coun- 
ty. Bragdon  v.  Hatch,  77  Me.  433, 
1  Atl.   140. 

It  must  appear  that  the  notice 
was  in  a  "newspaper  printed  in  the 
county."  Blake  v.  Dennett,  49  Me. 
102. 

"  The  certificate  of  the  mortgagee 
is  not  sufficient  evidence  of  publica- 
tion of  the  notice.  Bragdon  v 
Hatch,  77  Me.  433,  1  Atl.  140. 


215  STATUTORY  PROVISIONS.  [§  1341. 

one  year,  as  the  parties  have  agreed  upon,  after  the  first  publication, 
or  after  the  service  of  the  notice,  the  right  of  redemption  is  fore- 
closed.^^ 

Under  this  statute,  notice  by  a  mortgagee  after  he  has  assigned  his 
mortgage  is  ineffectual.^-  It  should  then  be  given  by  the  assignee. 
Notice  by  the  assignee  to  be  effectual  must  be  given  after  his  assign- 
mjent  has  been  lecorded;  if  the  notice  be  given  before  the  assignment  is 
recorded,  and  the  person  entitled  to  redeem  has  no  actual  notice  of  the 
assignment,  the  mortgage  will  not  be  foreclosed  at  the  expiration  of 
three  years  from  the  time  of  publication.^^  Tlie  mortgage  without  the 
record  of  the  assignment  is  notice  to  the  owner  of  the  equity  that  the 
title  is  in  the  mortgagee,  and  he  may  act  upon  this  assumption,  and 
disregard  all  claims  by  other  persons  ;^*  whether,  by  a  subsequent  rec- 
ord of  the  assignment,  the  foreclosure  would  be  complete  in  three  years 
from  the  time  of  record,  is  questionable.^^  The  notice  must  describe 
the  premises  so  intelligibly  that  those  entitled  to  redeem  may  know 
with  reasonable  certainty  what  premises  are  intended.^"  The  publica- 
tion of  it  is  no  bar  to  a  subsequent  writ  of  entry  to  foreclose  the  mort- 
gage ;^^  and  it  would  seem  to  be  no  bar  to  an  open  and  peaceable  entry 
by  the  mortgagee  for  this  purpose. 

§  1241.  In  New  Hampshire^^  a  mortgage  may  be  foreclosed  by 
peaceable  entry,  and  continued  actual  peaceable  possession  for  the 
space  of  one  year,^^  or  by  entry  and  possession  for  one  year,  and  by 

"  R.  S.  1883,  ch.  90,  §§  5,  6;   Acts  possession  without  having  attorned 

1893    ch    168  to  the  mortgagee.     Ray  v.  Scripture, 

''  Gushing  v.  Ayer,  25  Me.  383.  67  N.  H.  260,  29  Atl.  454.     Doe,  C  J., 

"Reed  v.  Elwell,  46  Me.  270.  said:     "The  meaning  of  our  statute, 

"  Mitchell  v.  Burnham,  44  Me.  286.  settled  by  practice  and  general  un- 

"  Reed  v.  Elwell,  46  Me.  270.  derstanding,    does    not    sustain    the 

'"  Chase  v.  McLellan,  49  Me.  375.  sufficiency  of  the  fictitious  and  pre- 

"  Concord  Union  Mut.  F.  Ins.  Co.  sumed  possession  in  this  case.     For 

V.  Woodbury,  45  Me.  447.     And  see  some    purposes,    possession    held   by 

Stewart  v.  Davis,  63  Me.  539.  the  mortgagor,  or  any  one  claiming 

'"P.   S.   1891,  and  1901,   ch.   139,   §  under     him     by     title     subsequent 

14.     Entry  may  also  be  made  by  pro-  to  the  mortgage,  is  presumed  to  be 

cess  of  law,  in  which  case  no  publi-  in    subordination    to    the    mortgage, 

cation    of    notice    is    necessary,    and  and    not    adverse.     Howard    v.    Hil- 

foreclosure  is  complete  after  a  con-  dreth,    18   N.    H.    105,   107;    Tripe   v. 

tinned     actual     possession    for    one  Marcy,    39    N.    H.    439;    Hodgdon   v. 

year.     Gray    v.    Gillespie,    59    N.    H.  Shannon,  44  N.  H.  572,  578;  Bellows 

469;   Ray  v.  Scripture,  67  N.  H.  260,  v.  Railroad,  59  N.  H.  491,  492.     But 

§  1278.  the    presumption    is    not    conclusive 

"'  The  mortgagee's  possession  must  for  all  purposes." 

be    actual.     His    possession    is    con-  If  the  lot  be  wild  and  unoccupied, 

structive     and     not     actual     if     the  all    the    possession    for    foreclosure 

mortgagor's    second    grantee    be    in  that  is  practicable  is  a  compliance 

actual  and  exclusive  possession  dur-  with    the    statute.     Green    v.    Cross, 

ing    the    whole    of    the    same    year,  cited  in  Green  v.  Pettingill,  47  N.  H. 

Bartlett    v.    Sanborn,    64    N.    H.    70,  375,  379. 
or  if  the  mortgagor's  tenant  is   in 


§§    1242,    1243.]    FORECLOSURE   BY    ENTRY   AND   POSSESSION.  216 

publishing  in  some  newspaper  printed  in  the  same  county,  if  any  there 
be,  otherwise  in  some  newspaper  printed  in  some  adjoining  county, 
three  weeks  successively,  a  notice  stating  the  time  at  which  such  pos- 
session for  condition  broken  commenced,  the  object  of  the  possession, 
the  name  of  the  mortgagor  and  mortgagee,  the  date  of  the  mortgage, 
and  a  description  of  the  premises,  the  first  publication  to  be  six  months 
at  least  before  such  right  to  redeem  would  be  foreclosed.  The  publi- 
cation of  such  notice  is  constructive  notice  of  the  commencement  of 
the  foreclosure,^"  but  it  is  not  notice  of  the  continuance  of  possession 
for  the  time  necessary  to  complete  the  foreclosure.^^ 

§  1242.  New  Hampshire : — Foreclosure  may  also  be  effected  "by 
a  mortgagee  already  in  possession  of  the  mortgaged  premises  by  pub- 
lishing in  some  newspaper  printed  in  the  same  county,  if  any  there  be, 
otherwise  in  some  newspaper  printed  in  an  adjoining  county,  three 
weeks  successively,  a  notice  stating  that  from  and  after  a  certain  day, 
which  shall  be  specified  in  the  notice,  and  not  more  than  four  weeks 
from  and  after  the  last  day  of  publication,  such  possession  of  the 
premises  will  be  held  for  the  purpose  of  foreclosing  the  right  of  the 
mortgagor  and  all  persons  claiming  under  him  to  redeem  the  same, 
for  condition  broken, — stating  the  namje  of  the  mortgagor  and  of  the 
mortgagee,  the  date  of  the  mortgage,  and  a  description  of  the  prem- 
ises; and  by  retaining  actual  peaceable  possession  of  the  premises  for 
one  year  from  and  after  the  day  specified  in  the  printed  notice. 

The  affidavit  of  the  party  making  an  entry,  and  of  the  witnesses  to 
it,  as  to  the  time,  manner,  and  purpose  of  said  entry,  and  a  copy  of  the 
published  notice,  verified  by  affidavit  as  to  the  time,  place,  and  mode 
o^  publication,  recorded  in  the  registry  of  deeds  for  the  county  in 
which  the  lands  lie,  are  evidence  of  the  entry,  possession,  and  publica- 
tion.22 

§1243.  New  Hampshire: — The  provisions  of  the  statute  must 
be  strictly  followed  in  order  to  effect  a  change  of  title  by  foreclosure, 
and  the  proof  that  these  provisions  have  been  followed  must  be  such  as 
the  statute  makes  competent.  The  affidavit  of  one  witness  to  the 
entry,-^  without  the  affidavit  of  the  party  making  the  entry,  is  not 
evidence  of  the  entry.    When  a  copy  of  the  published  notice,  verified 

="  Howard  v.  Handy,  35  N.  H.  315.  is  not  a  part  of  the  process  of  fore- 

-'  Ross   v.    Leavitt,    70   N.    H.    602,  closure,  but  only  a  mode  of  preserv- 

50  Atl.  110;  Ray  v.  Scripture,  67  N.  ing   the   evidence   of   it.     Thompson 

H.  260,  29  Atl.  454;  Bartlett  v.  San-  v.  Ela,  58  N.  H.  490. 

born,  64  N.  H.  70,  6  Atl.  486.  -^Wendell  v.  Abbott,  43  N.  H.  68. 

"P.  S.  1891  and  1901.   ch.   139.   §S  And  see  Storer  v.  Little,  41  Me.  69. 

14-16.     The  record  of  the  aflldavits 


217  STATUTORY  PROVISIONS.  .    [§  1244. 

by  affidavits  properly  recorded,  is  introduced  in  evidence,  it  is  not 
necessary  to  produce  the  original  notice,  ot  the  papers  in  which  it 
was  published.-*  It  is  not  necessary  that  knowledge  of  the  published 
notice  should  be  brought  home  to  the  party  interested.^^  Even  notice 
of  the  mortgagee's  entry  and  possession,  under  the  statute  requiring 
publication  of  notice,  is  insufficient  without  publication. -°  The  pub- 
lished notice  must  show  that  possession  was  taken  for  condition 
broken,  and  that  the  object  of  such  possession  is  to  foreclose  the  mort- 
gaged'^ A  mistake  in  the  notice  that  the  entry  was  for  the  purpose  of 
foreclosing  "the  right  in  equity  of  the  mortgagee"  is  fatal,  as  it  is 
liable  to  mislead,  and  the  statute  must  be  sitrictly  pursued.-^  The  ac- 
knowledgment in  writing  by  the  mortgagor  of  the  mortgagee's  entry 
and  possession  is  not  evidence  of  actual  possession  or  of  a  foreclosure, 
as  against  a  stranger.^^ 

§  1244.  In  Massachusetts^"  the  mortgagee  after  breach  of  the  con- 
dition may  recover  possession  by  action,  or  may  make  an  open  and 
peaceable  entry  on  the  mloTtgaged  premises;  and  such  possession  con- 
tinued peaceably  for  three  years  forever  forecloses  the  right  of  re- 
demption. To  make  such  entry  effectual,  a  certificate  in  proof  thereof 
must  be  made  on  the  mortgage  deed  and  signed  by  the  mortgagor  or 
the  person  claiming  under  him ;  or  a  certificate  of  two  competent  wit- 
nesses to  prove  the  entry  must  be  made  and  sworn  to  before  a  justice 
of  the  peace;  and  such  certificate  must  within  thirty  days  after  the 
entry  be  recorded. ^^ 

•*  Farrar   v.    Fessenden,   39   N.    H.  there   are   special   facts    calling   for 

268.  equitable  relief.     Hallowell  v.  Ames, 

^^  Howard  v.  Handy,  35  N.  H.  315,  165  Mass.  123,  42  N.  E.  558.     A  mort- 

323,  375.  gage    of    a    railroad    franchise,    and 

-"  Ashuelot    R.    Co.    v.    Elliot,    52  property  incidential  to  its  exercise, 

N.   H.   387;    Deming  v.   Comings,  11  is  within  the  equity  jurisdiction  of 

N.  H.  474,  484.  the  court,  the  remedy  at  law  being 

-'  Green    v.    Davis,    44    N.    H.    71.  inadequate.     Shaw  v.  Norfolk  Co.  R 

The    notice    merely    stated    that    on  Co.  5  Gray,  162. 

August  5,  1856,  the  mortgagee  took        ^^  P.    S.   1882,   ch.   181,   §§    1,   2,   R, 

quiet  possession  of  the  premises  by  L.  1902,  ch.  187,  §§  1,  2. 
entering  on  the  same,  and  therefore        A  second  mortgage  of  land  may  be 

claims    a    foreclosure    of    the    mort-  foreclosed  by  an  entry  and  recording 

gage  for  condition  broken.  of  a  certificate  thereof,  although  be- 

-^  Abbot  V.  Banfield,  43  N.  H.  152  fore    the   expiration   of   three   years 

155.  therefrom  the  first  mortgagee  fore- 

^°  Worster   v.    Great   Falls   Manuf.  closes  his  mortgage  and  enters  into 

Co.  41  N.  H.  16.  and     maintains    possession     of    the 

•'"'  Jurisdiction  in  equity  to  foreclose  premises,  claiming  an  absolute  title 
mortgages  is  limited  to  cases  where  thereto.  Holmes,  C.  J.,  delivering 
there  is  not  a  plain,  adequate,  and  opinion  said:  "The  requirement  by 
complete  remedy  at  the  common  the  statute  of  continued  peaceable 
law;  and  consequently  foreclosure  possession  refers  to  the  relations  be- 
in  equity  can  seldom  be  had.  There  tween  the  mortgagor  and  mortgagee 
is   no   jurisdiction   in    equity    unless  as  such,  and  not  to  the  relation  of 


§    1244.]  -FORECLOSURE    BY    ENTRY   AND   POSSESSION.  218 

Prior  to  the  statute  of  1785  any  peaceable  entry  made  by  the  mort- 
gagee, by  himself,  without  the  presence  of  witnesses  and  without  proc- 
ess of  law,  was  sufficient,  provided  an  actual  entry  was  made  for  the 
purpose  of  foreclosure,^-  followed  by  open  and  continued  possession. 
The  statute  of  1785,  and  the  subsequent  one  of  1798,  made  no  pro- 
vision for  the  recoTding  of  a  certificate  of  entry,  and  it  was  necessary 
either  that  the  mortgagor  should  have  actual  notice  of  the  entry  or 
thai  possession  should  be  continued.  The  record  of  a  memorandum  of 
the  entry  availed  nothing ;  actual  notice  only  would  supply  the  want  of 
peaceable  possession  f^  although  an  entry  in  the  presence  of  witnesses 
was  one  of  the  prescribed  modes  of  foreclosing,  there  was  no  provision 
made  for  taking  or  preserving  the  evidence.  Under  these  statutes  the 
fact  of  entry,  which  constituted  the  commencement  of  the  time  of 
foreclosure,  could  be  proved  by  any  competent  evidence.  The  testi- 
mony of  the  witnesses  of  the  entry  to  the  fact  and  purpose  of  it  was 
the  proof  ordinarily  made.^*  Although  no  certificate  by  them  was  re- 
quired, yet  it  was  the  common  practice  to  take  such  a  certificate,  as  a 
means  of  presenting  the  evidence,  which,  in  the  lapse  of  time,  would 
l>e  apt  to  pass  cut  of  the  memory  of  the  witnesses.  Such  certificate 
verified  by  the  witnesses  was  competent  evidence;  and  although  they 
might  not  be  able  to  recall  the  facts  stated  in  the  certificate,  their 
testimony  that  they  signed  the  certificate,  and  that  they  should  not 
have  put  their  names  to  it  except  to  certify  their  knowledge  of  the 
facts  stated,  was  held  to  be  a  sufficient  verification.''" 

An  entry  by  the  mortgagee  upon  condition  broken  was  presumed  to 
be  for  the  purpose  of  foreclosure,  unless  the  contrary  appeared  f^  but 
no  such  presumption  followed  an  entry  before  condition  broken ;"  and 
if  the  possession  was  commenced  before  condition  broken  and  con- 
tinued afterwards,  either  actual  or  constructive  notice  to  the  mort- 
gagor of  the  purpose  of  the  mortgagee  to  hold  for  a  foreclosure  was 
necessary  in  order  to  constitute  a  commencement  of  the  limitation  of 

third  persons,  or  of  the  mortgagor  possession    thereof,    and    continued 

in  some  other  capacity  than  that  of  that      possession      peaceably      three 

mortgagor,   to   the   land."     Long  v.  years." 
Richards,  170  Mass.  120  129.  ^^  Thayer  v.   Smith,  17  Mass.   429; 

'=WhitBey  v.  Guild,  11  Gray,  496;  Skinner  v.  Brewer,  4  Pick,  468. 
Newall    v.    Wright,    3    Mass.    138.    3        ^*  Gordon  v.  Lewis,  1  Sumn.  525. 
Am.  Dec.  98;   Boyd  v.  Shaw,  14  Me.        ''Crittenden    v.    Rogers,    8    Gray, 

58.     Statute  of  1785,  ch.  22,  §  2,  pro-  452;   Smith  v.  Johns,  3  Gray,  517. 
vided  that  the  mortgagor  might  re-        •'"  Taylor  v.  Weld,  5  Mass.  109,  121 ; 

deem,     "unless     the     mortgagee     or  Hadley    v.    Houghton,    7    Pick.    29; 

person  claiming  under  him  hath,  by  Skinner  v.  Brewer,  4  Pick.  468. 
process    of    law,    or    by    open    and        '•  Erskine    v.    Townsend.    2    Mass. 

peaceable   entry  made   in  the  pres-  493,  3  Am.  Dec.  71;  Pomeroy  v.  Win- 

ence  of  two  witnesses,  taken  actual  ship,  12  Mass.  514,  7  Am.  Dec.  91. 


219  STATUTORY  PROVISIONS.  [§  1245. 

the  right  to  redeem.^*'  If  the  mortgagee  entered  under  a  lease  or  by 
other  lawful  means,  and  afterwards  undertook  to  hold  as  mortgagee 
for  tlie  purpose  of  foreclosure,  it  was  held  that  he  must  give  notice 
of  his  intention  to  the  party  entitled  to  redeem,  in  order  that  the  latter 
might  know  when  the  limitation  of  his  right  to  redeem  began. -^^ 

The  object  of  the  open  and  peaceable  entry,  and  of  the  continued 
possession  under  it,  was  to  give  the  mortgagor  such  notice  that  he 
might  know  when  commenced  the  limitation  of  the  three  years,  be- 
yond which  his  right  of  redemption  would  cease. 

Notice  to  the  mortgagor  being  the  material  thing,  it  was  no  objec- 
tion, after  an  open  and  peaceable  entry  such  as  would  necessarily  give 
him  actual  notice  had  once  been  made,  that  the  possession  was  not  con- 
tinued by  the  mortgagee  personally.  He  might  occupy  by  a  tenant, 
and  as  his  tenant  the  mortgagor  might  remain  in  possession." 

These  decisions  under  the  statutes  in  force  before  the  Eevised  Stat- 
utes of  1836  introduced  the  system  of  giving  notice  of  the  entry  by 
requiring  a  record  of  the  certificate,  though  not  directly  applicable 
now,  yet  serve  to  illustrate  the  force  and  effect  of  the  present  law, 
which,  being  generally  the  same  in  the  several  States  in  which  this 
mode  of  foreclosure  prevails,  will  be  stated  under  the  appropriate  di- 
visions of  the  subject  in  subsequent  sections. 

§  1245.  In  Rhode  Island"  the  right  of  redemption  is  barred  un- 
less paymjent  of  the  debt  and  interest  is  made  within  three  years  next 
after  the  mortgagee  or  other  person  claiming  under  him,  either  by 
process  of  law,*^  or  by  peaceable  and  open  entry  made  in  the  presence 
of  two  witnesses,  has  taken  actual  possession  of  the  mortgaged  estate, 
and  continued  the  same  during  said  term.  When  possession  is  taken 
in  the  presence  of  witnesses,  they  must  give  a  certificate  of  such  pos- 
session being  taken;  and  the  person  delivering  possession  must  ac- 
knowledge before  a  justice  of  the  peace  within  the  town  where  the  es- 
tate lies  that  the  same  was  voluntarily  done,  which  certificate  and  ac- 
knorwledgment  must  be  recorded  in  the  office  of  the  town  clerk  of  such 
town.*^ 

Tbe  possession  must  be  continued  "during  said  term."  It  must  be 
accompanied  throughout  by  a  right  on  the  part  of  the  mortgagor  to  re- 
deem, and  to  maintain  a  bill  for  that  purpose.  But  after  the  owner 
of  the  equity  of  redemption  has  surrendered  possession,  an  absolute 

'«  Scott  v.  McParland,  13  Mass.  309.        *-  This    is    ejectment,    or    trespass 

5='  Ayres  v.  Waite,  10  Cush.  72.  and  ejectment.     See  chapter  xxix. 

^"Hadley  v.  Houghton,  7  Pick.  29.        "P.  S.  ch.  176,  §§  4,  5;  G.  L.  1896, 

""  Foreclosure  may  be  had  also  by  43   ch.   207. 
a  bill  in  equity.     P.  S.  ch.  176,  §  14; 
G.  L.  1896  ch.  207,  §§  S  and  4. 


88  1246,  1247.]  foreclosure  by  entry  and  possession.  220 

conveyance  by  him  to  a  third  person  of  a  portion  of  the  premises  is 
not  such  an  interruption  of  possession  as  will  prevent  the  completion 
of  the  foreclosure  in  three  years  from  the  entry.** 


III.     The  Entry. 

§  1246.  In  general. —  A.s  already  stated,  under  the  earlier  laws 
open  and  visible  entry  in  the  presence  of  witnesses  was  solely  for  the 
purpose  of  giving  notice  to  the  mortgagor  that  his  right  of  redeeming 
would  be  gone  in  three  years.  The  entry,  like  a  judgment,  fixed  the 
time  from  which  the  three  years  began  to  run,  and  at  the  same  time 
gave  notice  of  it.  After  the  adoption  of  the  system  of  certifying  and 
recording  the  entry,  the  registration  of  the  certificate  became  full  con- 
structive notice  to  all  persons  of  the  fact  and  date  of  the  entry,  of  the 
cause  and  the  purpose  of  it.  The  entry  and  possession  under  it  thus 
became  of  much  less  consequence  than  the  certificate,  which,  being 
properly  made  and  recorded,  effects  the  foreclosure. 

After  an  entry  to  foreclose  a  mortgage,  the  mortgagor  and  those 
claiming  under  him  become  tenants  at  sufferance  of  the  mortgagee, 
and  in  the  absence  of  any  evidence  of  an  adverse  holding,  they  are  as- 
sumed to  hold  under  him,  and  their  possession  is  his  during  the  three 
years  until  the  completion  of  the  foreclosure.*^ 

§  1247.  The  entry  should  be  made  by  the  person  holding  the 
legal  title  to  the  mortgage  or  by  his  authorized  agent.  An  entry 
made  by  an  agent  of  the  miortgagee  without  express  authority  may  be 
subsequently  ratified  by  him  and  made  effectual.  Where,  after  an 
entry  by  an  attorney  claiming  to  act  for  the  mortgagee,  the  latter  paid 
taxes  on  the  premises  assessed  in  his  name,  and  he  and  his  heirs 
claimed  to  be  and  were  generally  recognized  as  the  owners,  and  it  ap- 
peared that  the  attorney  had  the  mortgage  in  his  possession  at  the 
time  of  the  entry,  it  was  held  that  these  facts  were  sufficient  evidence, 
nearly  forty  years  having  elapsed,  of  the  attorney's  authority  to  make 
the  entry.**'  An  entry  made  by  an  attorney  or  officer  of  a  corporation 
without  legal  authority  may  be  made  the  act  of  the  corporation  by 
express  ratification,  or  by  a  recital  of  it  in  a  subsequent  agreement  or 
deed  executed  by  the  corporation  to  the  owner  of  the  equity.*^  A  per- 
son holding  two  mortgages  upon  the  same  land  may  enter  under  the 

^^  Daniels  v.  Mowry,  1  R.  I.  151.  "'  Barnes  v.   Boardman,   149   Mass. 

"Cunningham  v.  Davis,  175  Mass.     106,  21  N.  E.  308. 
213   56  N.  E.  2.  '''  Cutts  v.  York  Manuf.  Co.  18  Me. 

190. 


221  THE  ENTRY.  [§§  1248,  1249,  1250. 

first;  his  possession  is  under  that  only,  and  redemption  may  be  had 
from  til  at  without  redeeming  from  the  second. ^^ 

§  1248.  Upon  the  death  of  the  mortgagee,  the  entry  should  be 
made  by  his  executor  or  administrator.*"  His  heirs  at  law  cannot  make 
an  effectual  entry,  as  the  mortgage  is  personal  assets  and  goes  to  the 
personal  representative.  The  mortgagor's  right  to  redeem  remains 
unaffected  by  such  an  entry,  unless  possession  under  it  be  continued  so 
long  that  the  statute  of  limitations  may  be  pleaded  in  favor  of  the 
right  to  redeem. ^°  After  the  foreclosure  is  complete,  the  legal  estate 
vests  in  the  heirs,  subject,  like  other  real  estate  of  the  deceased,  to  be 
used  for  the  purposes  of  administration;  but  until  the  title  is  thus 
made  complete  in  the  heirs,  they  can  do  nothing  with  the  mortgage 
or  with  the  premises  covered  by  it. 

Although  a  mortgagee  cannot  make  an  effectual  entry  after  he  has 
assigned  all  his  interest  in  the  mortgaged  premises,  even  if  he  remains 
in  possession,^^  yet,  after  he  has  quitclaimed  to  a  third  person  his  in- 
terest in  a  portion  of  them,  his  entry  is  sufficient  to  foreclose  the  mort- 
gage as  to  all  the  premises  covered  by  it,  even  that  portion  in  the  pos- 
session of  his  grantee.^^ 

§  1249.  It  is  the  mortgagee's  right  to  foreclose  the  whole  estate 
embraced  in  the  mortgage ;  but  where  the  owner  of  the  equity  has  con- 
veyed a  part,  there  may  be  a  possession  and  foreclosure  of  the  part  not 
conveyed,  though  nothing  be  done  to  foreclose  the  rest,  and  the  mort- 
gage will  be  paid  to  the  extent  of  the  value  of  the  land  taken.^^  A 
mortgagor,  however,  cannot  under  any  circumstances,  except  with  the 
consent  of  the  holder  of  the  mortgage,  have  a  part  of  the  mortgaged 
premises  estimated  in  payment  of  his  debt;  and  it  would  seem  that 
without  the  mortgagor's  consent  there  could  be  no  foreclosure  of  a 
part  of  the  premises,  and  that  so  long  as  he  has  a  right  to  redeem  any 
part  he  may  redeem  the  whole.^* 

§  1250.  Assignment  of  the  entry. — An  entry  made  by  a  holder  of 
the  mortgage  inures  to  the  benefit  of  any  one  to  whom  it  may  be  as- 
signed during  the  time  limited  for  redemption.  If  after  an  entry  the 
mortgage  be  assigned  at  the  request  of  the  mortgagor  to  a  friend  of 
his  to  hold  for  his  benefit,  the  foreclosure  is  not  postponed  or  pre- 

*'Gerrish  v.  Black,  122  Mass.  76.  ='Sisson    v.    Tate,    109    Mass.    330; 

*=  Gibson   v.   Bailey,   9   N.    H.   168;  Call  v.  Leisner,  23  Me.  25. 

Fifield  v.  Sperry,  20  N.  H.  338.  •■-Raymond   v.   Raymond,   7   Gush. 

'^-'Haskins    v.    Hawkes,    108    Mass.  605;  Colby  v.  Poor,  15  N.  H.  198. 

379;  Palmer  v.  Stevens.  11  Cush.  147;  •>=  Green  v.  Cross.  45  N.  H.  574,  582 

Fay    V.    Cheney,    14    Pick.    399,    404;  "  Spring  v.  Haines,  21  Me.  126.  And 

Smith  V.  Dyer,  16  Mass.  18.  see  Treat  v.  Pierce,  53  Me.  71. 


§    1251.]  FORECLOSURE   BY    ENTRY   AND   POSSESSION.  222 

vented  unless  the  mortgage  be  in  fact  paid.  Where  one  at  the  re- 
quest of  the  mortgagor,  after  the  foreclosure  had  been  running  more 
than  two  years,  paid  the  amount  due  and  took  an  assignment  of  it, 
orally  agreeing  with  the  mortgagor  to  hold  the  mortgage  subject  to 
his  claim  for  the  amount  paid,  and  to  permit  the  mortgagor  to  sell  the 
land  in  lots,  paying  over  the  proceeds,  and  to  allow  the  mortgagor  to 
redeem  at  any  time  by  paying  the  amount  so  advanced  with  interest, 
it  was  held  that  the  foreclosure  was  not  stopped.^^  Even  if  a  purchaser 
from  a  mortgagor,  after  an  entry  by  the  mortgagee,  pays  him  the 
amount  of  the  mortgage  and  enters  into  possession,  the  foreclosure 
may  still  go  on  and  be  perfected  under  an  agreement  with  the  mort- 
gagee that  he  should  hold  the  mortgage  and  consummate  the  fore- 
closure.^® Although  one  of  the  notes  has  been  transferred  to  a  third 
person,  an  entry  by  the  holder  of  the  mortgage  is  considered  as  made 
for  that  as  well  as  for  the  note  held  by  him,  and  will  operate  as  pay- 
ment of  both,  if  the  premises  be  of  sufficient  value ;"  if  not  of  sufficient 
value,  the  notes,  in  the  absence  of  any  agreement  to  the  contrary, 
would  be  paid  pro  rata.  On  completion  of  the  foreclosure  the  mort- 
gagee would  hold  a  proportionate  interest  in  the  land  in  trust  for  the 
holder  of  the  other  note. 

§  1251.     A  second  mortgagee  may  enter  and  take  possession  for 

the  purpose  of  foreclosure,  as  against  all  subsequent  mortgages  and 
the  equity  of  redemption.^^  Tlie  second  mortgagee  may  lose  his  es- 
tate, if  he  does  not  redeem  it  from  the  first  mortgage;  but  as  against 
every  other  title  the  foreclosure  is  as  perfect  as  if  the  first  mortgage 
did  not  exist.  The  entries  under  the  two  mortgages  are  not  incon- 
sistent. The  second  mortgagee  holds  a  constructive  possession,  which 
is  all  that  is  required,  and  his  certificate  of  entry  is  notice  to  all  sub- 
sequent parties,  and  will  bar  their  rights  after  such  possession  has 
continued  for  three  years.^^ 

A  first  mortgagee  has  the  right  to  retain  possession  of  the  estate  for 
the  purpose  of  foreclosing  against  the  original  mortgagor  and  all  per- 
sons claiming  under  him.  But  a  second  mortgagee  has  also  a  right  to 
foreclose  against  the  right  to  redeem  from  his  mortgage,  so  that  a 
foreclosure  of  both  mortgages  may  be  going  on  at  the  same  time.  If 
the  first  mortgagee,  after  having  taken  possession  for  the  purpose  of 
foreclosure,  takes  a  third  mortgage  or  a  conveyance  of  the  equity  of 

"  Capen  v.  Richardson,  7  Gray,  364.        "  Lincoln    v.    Emerson,    108   Mass. 
'^'  Cutts  v.  York  Manuf.  Co.  18  Me.     87. 
190.  '■'  Palmer  v.   Fowler,   5   Gray,   545. 

"  Haynes  v.  Wellington,  25  Me.  458.     And  see  Cavis  v.  McClary,  5  N.   H. 

529. 


233  •  THE  ENTRY.  [§§  1252,  1253. 

redemption  from  the  mortgagor,  the  second  mortgagee  is  still  entitled 
to  such  a  judgment  for  possession  of  the  mortgaged  premises  as  will 
enable  him  to  foreclose  the  right  which  the  first  mortgagee  has  of  re- 
deeming from  the  second  mortgage,  subject  to  the  prior  right  of  the 
first  mortgagee  to  hold  possession  for  the  purpose  of  foreclosing  his 
mortgage. ''^ 

A  subsequent  mortgagee  has  only  an  equity  of  redemption  as  to 
prior  mortgagees.  He  may  enter  and  take  possession  of  the  mort- 
gaged premises  as  against  the  mortgagor,  but  is  himself  liable  to  be 
ousted  of  his  possession  by  the  entry  of  a  prior  mortgagee.  A  first 
mortgagee  after  entry  may  authorize  the  mortgagor  to  occupy  as  his 
agent ;  but  the  death  of  the  first  mortgagee  is  a  revocation  of  such  au- 
thority, and  the  mortgagor  cannot  by  virtue  of  his  agency  afterwards 
hold  the  premises  against  a  second  mortgagee.*'^  A  mortgagor  who 
gives  a  second  mortgage  containing  full  covenants  of  warranty,  and 
subsequently  acquires  title  to  the  first  mortgage  after  possession  taken 
under  it,  cannot  hold  possession  against  the  second  mortgagee,  because 
he  is  estopped  by  the  covenants  of  warranty."^ 

§  1252.  A  married  woman  cannot  enter  to  foreclose  a  mortgage 
of  land,  the  equity  of  redemption  of  which  is  held  by  her  husband. 

The  statutes  removing  the  disabilities  of  married  women  do  not  allow 
the  adverse  relation  of  debtor  and  creditor  to  exist  between  husband 
and  wife.  She  could  not  maintain  a  writ  of  entry  against  her  hus- 
band, and  the  process  of  foreclosure  by  entry  and  possession  is  equally 
adverse.®^  Her  right  to  enforce  a  forfeiture  of  the  land  in  this  way 
revives  as  soon  as  a  conveyance  of  it  is  made  by  her  husband. 

§  1253.  The  mortgagee  may  enter  at  any  time  after  breach  of 
the  condition,®*  and  he  does  not  lose  the  right  by  bringing  an  action 
to  foreclose;  but  he  may  take  possession  during  the  two  months  al- 
lowed to  the  mortgagor  under  the  conditional  judgment  to  pay  the 
amount  due.*^^  If  a  writ  of  possession  be  subsequently  issued  upon 
such  judgment,  and  possession  delivered  to  the  mortgagee  by  virtue  of 
the  writ,  then  the  previous  entry  is  waived  by  the  entry  under  the 
writ.^® 

«°Cronin  v.  Hazeltine,  3  Allen,  324;  "'Tucker  v.  Fenno,  110  Mass.  311. 

Doten  V.  Hair,  16  Gray,  149;  Palmer  "*  See    chapter    xxv.;     Shepard    v. 

V.   Fowley,   5   Gray,   545;    George  v.  Richardson,  145  Mass.  32,  11  N.  E. 

Baker.  3  Allen,  326.  738. 

"'  Lincoln    v.    Emerson,    108   Mass.  "^  Mann  v.  Earle,  4  Gray,  299. 

87.  ""Pay   v.    Valentine,    5    Pick.    418; 

"-  Lincoln  v.  Emerson,  108  Mass.  Fletcher  v.  Gary,  103  Mass.  475,  480. 
87. 


§§    1354-1257.]    FORECLOSURE   BY   ENTRY   AND   POSSESSION.  -  224 

§  1254.  An  entry  upon  a  part  of  the  land  mortgaged  by  one 
general  description  is  sufficient  ;'^^  and  when  several  distinct  and  de- 
tached parcels  in  the  same  county  are  mortgaged  in  one  deed  for  the 
performance  of  one  condition,  an  entry  upon  any  one  is  a  good  entry 
upon  the  whole.^^  Even  if  the  mortgagor  remains  in  possession  of  a 
part  of  the  premises,  and  does  various  acts  of  ownership,  such  as  blast- 
ing, quarrying,  and  carrying  away  stone,  he  does  not  defeat  the  entry 
and  possession  of  the  mortgagee.  These  acts  are  held  to  be  done  in 
subordination  to  the  title  of  the  mortgagee,  whom  the  mortgagor  can- 
not disseise.^®  The  recording  of  the  evidence  of  entry  is  notice  to  all 
persons  of  the  relation  the  mortgagor  holds  to  the  property ;  and  he  is 
conclusively  prevented  from  holding  adversely  to  the  mortgagee. 

§  1255.  In  making  the  entry  the  mortgagee  should  have  the 
mortgage  deed  with  him,  to  enable  the  witnesses  to  certify  that  the 
entry  is  made  under  that  particular  mortgage ;  but  if  they  certify  that 
the  entry  is  made  under  the  mortgage,  the  certificate  is  conclusive  of 
the  identity  of  the  mortgage,  whether  the  witnesses  have  any  proper 
knowledge  of  it  or  not.'^° 

§  1256.  An  entry  is  peaceable  if  not  opposed  by  the  mortgagor  or 
other  person  claiming  the  premises.  If  it  be  opposed,  the  mortgagee 
must  resort  to  his  action  at  law  to  recover  possession.  Though  forcibly 
repelled,  he  cannot  resort  to  the  process  of  forcible  entry  and  de- 
tainer.'^^  The  remedies  are  confined  to  those  specifically  given  by 
statute. 

§  1257.  The  entry  is  sufficiently  open  if  made  in  the  presence  of 
two  competent  witnesses,  whose  certificate  is  sworn  to  and  duly  re- 
corded within  thirty  days  in  the  registry  of  deeds  for  the  county  where 
the  land  lies.'^^    Even  though  the  entry  be  made  in  the  night-time,  and 

'^  Lennon  v.   Porter,   5  Gray,  318;  whereof  he  hath  title  of  entrie,  as  if 

Spring  v.  Haines,  21  Me.  126;  Colby  he    had    entered    indeed    into    every 

v.  Poor,  15  N.  H.  198.  porcell."      Litt.    Sec.    417.      "If    the 

'^  Bennett    v.     Conant,     10     Cush.  lands  lie  in  several  counties,"  says 

163;    Green   v.    Pettingill,    47   N.    H.  Coke,    "there    must    be    several    ac- 

375,    93    Am.    Dec.    444;    Shapley    v.  tions,  and  consequently  several  en- 

Rangley,  1  Wood.  &  M.  213.     "If  a  tries."  Coke,  Litt.  252  b. 

man   hath   cause   to  enter   into   any  ■■'''  Hunt   v.    Hunt,   14   Pick,   374,   25 

lands      or      tenements      in      diverse  Am.  Dec.  400. 

townes   in   one  same  countie,   if   he  '"  See   Skinner  v.   Brewer,  4  Pick, 

enter   into   one   porcell   of   lands   or  468. 

tenements  which  are  in  one  towne,  "Walker  v.  Thayer,  113  Mass.  36; 

in  the  name  of  all  the  lands  or  tene-  Hastings    v.    Pratt,     8     Cush.      121; 

ments  into  which  he  hath  right  to  Larned  v.   Clarke,  8  Cush.  29;    Ger- 

enter  within  all  the  townes  of  the  rish  v.   Mason,  4  Gray,  432. 

same    countie;    by    such    entrie    he  '-  Thompson  v.  Kenyon,  100  Mass. 

shall  have  as  good  a  possession  and  108. 
seizin  of  all  the  lands  and  tenements 


335  THE   POSSESSION.  [§    1258. 

purposely  in  secret,  it  is  sujffieient  if  the  certificate  of  the  entry  be  duly 
sworn  to  and  recorded. ''•'  No  publicity  need  be  given  to  the  entry 
other  than  the  record  of  it.  Although  the  mortgagee  be  already  in 
occupation  of  the  premises,  he  may  make  an  entry  in  the  presence  of 
witnesses,  for  the  purpose  of  foreclosure,  without  giving  other  notice 
of  it  than  recording  the  certificate.  After  a  breach  of  the  condition 
has  given  the  mortgagee  the  right  to  enter,  it  is  for  the  mortgagor  to 
find  out  from  the  registry  whether  he  has  entered.'^* 

The  entry  is  valid  although  the  mortgagee  is  owner  of  the  equity  of 
redemption,  subject  to  a  second  mortgage,  and  although  the  second 
mortgagee  does  not  know  of  the  entry  until  after  the  expiration  of  the 
three  years.'^^ 

After  a  breach  of  the  condition  of  a  mortgage,  an  entry  by  the  mort- 
gagee upon  the  premises  is  presumed,  in  the  absence  of  evidence  to 
the  contrary,  to  have  been  for  the  purpose  of  foreclosure.''® 


IV.     The  Possession. 

§  1258.  The  possession  taken  is  a  constructive  rather  than  a 
literal  one.  The  formal  entry  being  made,  the  law  presumes  that  pos- 
session continues  unless  its  interruption  be  proved.  The  mortgagor 
may  be  permitted  to  remain  in  occupation  without  in  any  way  defeat- 
ing the  operation  of  the  entry;  and  the  mortgagee  need  not  take  the 
rents  and  profits.  The  mortgagor  holds  in  subordination  to  his  mort- 
gagee's paramount  right.  His  possession  is  the  possession  of  the  mort- 
gagee, and  not  adverse."  Even  under  a  statute  requiring  "actual  pos- 
session" by  the  mortgagee,  "actual  occupation"  by  him  is  not  required. 
The  occupation  may  continue  in  the  mortgagor,  who  will  be  regarded 
as  a  tenant  at  will  of  the  mortgagee,  in  whom  is  the  possession.  It  is 
only  necessary  that  the  possession  of  the  mortgagor  or  other  tenant 
should  not  be  adverse.'^^    In  Maine,  however,  the  possession  required  is 

'« Ellis    V.    Drake,    8    Allen,    161;  163;   Thompson  v.  Vinton,  121  Mass. 

Hobbs  V.  Fuller,  9  Gray,  98.  139;    Porter  v.    Hubbard,    134   Mass. 

■*  Davis    V.    Rodgers.    64    Me.    159;  233;  Morse  v.  Bassett,  132  Mass.  502; 

Chase  v.  Marston,  66  Me.  271.  Tarbell  v.  Page,  155  Mass.  256.     New 

'^  Tompson    v.    Tappan,    139    Mass.  Hampshire:    Deming  v.  Comings,  11 

506,  1  N.  E.  924.  N.  H.  474;   Howard  v.  Handy,  35  N. 

"'Walker   v.    Thayer,     113     Mass.  H.  315,  323;    Gibson  v.  Bailey,  9  N. 

S6;    Ayres    v.    Waite,    10    Cush.    72;  H.  168,  172;   Kittredge  v.  Bellows,  4 

Taylor  v.  Weld,  5  Mass.  109;   Whit-  N.    H.    424.     Maine:     Hurd   v.    Cole- 

nev  V.  Guild,  11  Grav.  496;   Hunt  v.  man,  42  Me.  182;   Chase  v.  Marston, 

Stiles,  20  N.  H.  466,  468.  66  Me.  271. 

Massachusetts:       Ellis     v.     Drake.        '"Palmer  v.   Fowley,   5  Gray,  545, 

8  Allen,   161;    Fletcher  v.   Cary.   103  546;   Swift  v.  Mendell,  8  Cush.  357; 

Mass.  475;  Swift  v.  Mendell,  8  Cush.  Gilman  v.  Hidden,  5  N.  H.  30. 
357;    Bennett    v.    Conant,    10    Cush. 


§    1259.]  FORECLOSURE    BY    ENTRY   AND   POSSESSION.  226 

equivalent  to  an  actual  possession."  The  mortgagee's  formal  entry 
does  not  amount  to  anything  without  continued  possession  for  three 
years.®" 

A  second  mortgage  of  land  may  be  foreclosed  by  an  entry  and  re- 
cording of  a  certificate  thereof,  as  provided  by  statute  in  Massachu- 
setts, although  before  the  expiration  of  three  years  therefrom  the  first 
mortgagee  forecloses  his  mortgage  and  enters  into  and  maintains  pos- 
session of  the  premises,  claiming  an  absolute  title  thereto.  "The  re- 
quirement by  statute  of  continued  peaceable  possession  refers  to  the 
relations  between  the  mortgagor  and  mortgagee  as  such,  and  not  to 
the  relation  of  third  persons,  or  of  the  mortgagor  in  some  other  ca- 
pacity than  that  of  mortgagor,  to  the  land."®^ 

The  legal  possession  is  in  the  mortgagee  although  the  mortgagor  is 
in  actual  possession,  and  the  title  to  the  crops  growing  or  afterwards 
raised  upon  the  premises  is  in  the  mortgagee.  If  after  entry  the 
mortgagee  of  a  farm  makes  an  arrangement  with  the  mortgagor  by 
which  the  latter  is  to  carry  on  the  farm,  but  instead  of  doing  so  he 
sells  the  equity  of  redemption,  and  the  purchaser  takes  possession 
without  the  knowledge  of  the  mortgagee,  and  raises  and  gathers  the 
crops,  and  delivers  a  portion  of  them  to  a  creditor  who  had  notice  of 
the  mortgagee's  claim,  the  mortgagee  may  take  possession  of  the  crops 
so  delivered,  without  incurring  liability  to  an  action  of  tort  for  a  con- 
version.®^ 

A  mortgagee  in  possession,  under  a  certificate  of  entry  for  a  breach 
of  the  condition,  has  a  sufficient  title  to  the  land  to  enable  him'  to  main- 
tain an  action  of  trespass  for  damages  done  to  the  mortgaged  property 
by  the  tearing  down  and  carrying  away  a  dwelling-house.®^ 

V.     Tlie  Certificate  of  Witnesses. 

§  1259.  What  it  must  state.— The  purpose  of  the  certificate  being 
to  give  notice  to  all  persons  concerned  that  the  mortgagee  has  entered 
for  foreclosure,  its  allegation  must  be  definite,  and  must  cover  all  the 
matters  necessary  to  effect  this  change  of  title.  The  mortgage  to  be 
foreclosed  must  be  identified.  The  fact  of  entrv^  and  the  date  of  it®* 
are  the  most  essential  particulars.  The  purpose  of  it  should  be  de- 
clared ;®^  but  the  manner  in  which  the  entry  is  made  is  not  of  material 

"  Chamberlain  v.  Gardiner,  38  Me.  '-  Porter  v.  Hubbard,  134  Mass.  233. 

54g  ^=  Tarbell  v.  Page,  155  Mass.  256. 

^»  Chase   v.    Marston,    66   Me.    271;  "' Snow  v.  Pressey,  82  Me.  552.  20 

Jarvis  v.  Albro,  67  Me.  310.  Atl.  78. 

"  Long  V.  Richards,  170  Mass.  120,  ''  In  Massachusetts  the  purpose  ot 

129    48  N.  B.  1083,  per  Holmes,  J.  the  entry,  after  a  breach  of  the  con- 


22^ 


THE    CERTIFICATE   OF    WITNESSES. 


[§  1260. 


importance  so  far  as  the  certificate  goes.  The  omission  to  state  in 
terms  that  the  entry  was  "open  and  peaceable"  does  not  make  the  cer- 
tificate defective  f^  it  is  enough  to  state  that  it  was  made  in  the  pres- 
ence of  two  witnesses.  It  seems,  however,  that  it  is  open  to  the  mort- 
gagor to  prove  that  the  entry  was  not  in  fact  open  and  peaceable  if 
this  be  not  alleged  in  the  certificate." 

§  1260.  The  certificate  duly  made  and  recorded  is  conclusive 
evidence  of  the  acts  and  statements  of  the  mortgagee  with  reference 
to  the  entry,  and  its  allegations  of  any  fact  necessary  to  establish  fore- 
closure as  of  an  actual  entry  having  been  made  cannot  be  controlled  by 
oral  evidence.**  The  certificate  cannot  be  contradicted  by  proof  that 
the  mortgagee  did  not  actually  go  upon  the  lands.  If  it  omit  to  state 
any  essential  fact,  it  cannot  be  cured  by  subsequent  testimony  of  wit- 
nesses. All  the  facts  necessary  to  the  foreclosure  must  appear  by  the 
certificate,  which  is  the  only  proper  evidence  of  them.***  The  certificate 
is  not,  however,  conclusive  evidence  that  there  has  been  a  breach  of  the 
condition  of  the  mortgage.  Whether  there  has  been  a  breach  or  not 
may  be  shown  by  parol  evidence.®^ 


dition,  would  be  presumed  to  be  for 
the  purpose  of  foreclosure.  See  § 
1257.  But  in  Maine  it  is  held  that  a 
statement  that  the  purpose  of  the 
entry  is  to  foreclose  the  mortgage  is 
essential,  though  the  mortgagee's  in- 
tention to  foreclose  may  clearly  ap- 
pear. Morris  v.  Day,  37  Me.  386. 
The  certificate  in  this  case  concluded 
thus:  "The  condition  of  said  mort- 
gage having  been  broken,  the  said 
Day  claims  to  foreclose  the  same. 
We,  the  subscribers,  at  the  request 
of  said  Day,  went  with  him  on  all 
the  premises  described  in  the  mort- 
gage deeds,  on  the  sixteenth  day  of 
May,  A.  D.  1839,  and  saw  him  enter 
and  take  peaceable  possession  of  the 
premises."  This  was  held  ineffectual 
to  establish  a  foreclosure. 

*"  Hawkes  v.  Brigham,  16  Gray, 
561;  Thompson  v.  Kenyon,  100  Mass. 
108. 

*^  The  form  of  certificate  in  general 
use  is  as  follows:  — 

"We  hereby  certify  that  we  were 
this  day  present  and  saw  ,  the 

mortgagee  named  in  a  certain  mort- 
gage deed  given  by  ,  dated 
,  and  recorded  ,  make 
an  open,  peaceable,  and  unopposed 
entry  on  the  premises  described  in 
the  said  mortgage,  for  the  purpose 
by  him  declared  of  foreclosing  said 


mortgage  for  breach  of  the  condition 
thereof.      In    witness    whereof    we 
hereto  set  our  hands  this 
day  of 

"A.  B. 
"C.  D." 

This  should  be  sworn  to. 

It  is  not  competent  for  the 
mortgagee  to  act  as  a  magis- 
trate in  taking  the  oath  of  the 
witnesses  to  a  certificate  of  his 
own  open,  peaceable,  and  unop- 
posed entry  upon  land  for  the  pur- 
pose of  foreclosure.  The  certificate 
is  in  effect  a  deposition  in  per- 
petuam,  taken  ex  parte,  which  con- 
clusively and  finally  establishes,  as 
between  the  mortgagee  and  the 
mortgagor,  the  facts  therein  stated. 
The  mortgagee  cannot  be  allowed  to 
take  a  deposition  in  a  suit  to  which 
he  is  himself  a  party.  Judd  v. 
Tryon,  131  Mass.  345.  The  certificate 
may  be  sworn  to  before  a  notary 
public,  though  the  statute  specifies 
a  justice  of  the  peace.  Murphy  v. 
Murphy,  145  Mass.  224,  13  N.  E.  474. 

'*'*  Oakham  v.  Rutland,  4  Gush.  172; 
Swift  V.  Mendell,  8  Gush.  357;  Ellis  v. 
Drake,  8  Allen,  161;  Thompson  v. 
Kenyon,  100  Mass.  108,  112. 

"•'Morris  v.  Day,  37  Me.  386. 

'•'"Hill  v.  More,  40  Me.  515;  Pettee 
V.  Gase,  11  Gray,  478. 


1261,    1263.]    FORECLOSURE    BY    ENTRY   AND   POSSESSION. 


228 


The  certificate  of  witnesses  to  prove  the  entry  need  not  be  on  the 
mortgage  deed,  but  may  be  on  a  separate  paper.^^  The  signature  of  a 
witness  is  sufficient  if  made  by  his  mark.®- 

VI.     The  Certificate  of  the  Mortgagor. 

§  1261.  When  the  mortgagor  consents  to  the  entry,  and  makes 
a  certificate^^  of  the  fact,  this  is  conclusive  evidence  of  it.  He  is  estop- 
ped to  deny  the  fact  of  such  entry.  It  is  of  no  consequence  that  he 
continues  in  occupation  of  the  premises ;  for  after  entry  he  must  hold 
as  tenant  of  the  mortgagee,  or  in  subordination  to  his  right  of  posses- 
sion.''* After  the  mortgagor  has  conveyed  the  equity  of  redemption  to 
a  third  person,  and  has  no  further  interest  in  it,  he  cannot  give  a  good 
certificate  although  he  remains  in  possession  of  the  premises.®^  If, 
however,  he  has  taken  back  a  mortgage  of  the  premises  on  conveying 
them,  he  as  well  as  the  purchaser  should  consent  to  the  entry.^^ 


VII.     When  the  Limitation  commences. 

§  1262.  The  limitation  of  three  years  commences  after  the 
entry  has  been  made  and  possession  acquired  for  a  breach  of  the  con- 
dition of  the  mortgage;  and  as  the  law  does  not  take  notice  of  frac- 
tional parts  of  a  day,  the  continuance  of  the  possession  commences  the 
day  following  that  of  the  entry,  so  that  in  the  computation  of  the  three 
years  that  day  is  excluded."  The  possession  commences  on  the  day 
of  entry,  although  the  certificate  he  not  recorded  till  afterwards.*'^  If 
the  entry  was  before  breach  of  the  condition,  the  time  limited  for  re- 

"1  Bartlett  v.  Johnson,  9  Allen  530.  In    Maine    it    is    held    actual    pos- 

^^ Thompson  v.  Kenyon,  100  Mass.  session    must   be   taken;    the   mort- 

108.  gagor's  consent  to  entry  and  decla- 

^  The  following  is  a  usual  form  of  ration     that    "possession    is     hereby 

a  mortgagor's  certificate:  given"  is  not  sufficient,  unless  actual 

"I,   the  within  named   mortgagor,  entry    was    made.      Chamberlain    v. 

hereby  acknowledge  and  certify  that  Gardiner,  38  Me.  548;   Storer  v.  Lit- 

,    the    within    named    mort-  tie,  41  Me.  69;    Pease  v.  Benson,  28 

gagee,  has  this  day  made  an  open.  Me.  336.     In  Massachusetts  this  cer- 

peaceable.and  unopposed  entry  upon  tificate  must  be  made  on  the  mort- 

the  premises  described  in  the  within  gage  deed.     P.  S-.  1882,  ch.  181,  §  2; 

mortgage,  for  breach  of  the  condi-  R.  L.  1902,  ch.  187,  §  2. 

tion  therein  contained.    Witness  my  ^=  Sisson  v.  Tate,  109  Mass.  230. 

hand  this                day  of              .  »« Chase  v.  Gates,  33  Me.  363. 

"A.  B."  "Fuller   v.    Russell,   6   Gray,   128; 

'*  Lawrence    v.    Fletcher,    10    Met.  Jager  v.  Vollinger,  174  Mass.  521,  55 

344;  Oakham  v.  Rutland, 4  Cush.172;  N.   E.  458. 

Bennett  v.  Conant.  10  Cush.  163,  166;  «<  Thompson  v.   Vinton,  121  Mass. 

Swift  v.  Mendell,  8  Cush.  357.  139. 


329  RECORD  OF  THE  CERTIFICATE.  [§  1263. 

demption  does  not  commence  to  run  until  the  condition  is  broken,  and 
notice  in  writing  given  by  the  mortgagee  that  he  will  from  that  time 
hold  the  premises  for  a  breach  of  the  condition,  or  a  new  and  formal 
entry  for  breach  of  the  condition  is  made.  A  certificate  of  such  notice 
or  new  entry  must  be  recorded.^® 

If  a  mortgagee  or  his  assignee,  while  a  writ  of  entry  for  the  fore- 
closure of  the  mortgage  is  pending,  enter  for  the  purpose  of  foreclos- 
ure, and  hold  possession  of  the  premises  until  the  writ  of  possession  is 
issued  in  the  suit,  he  may  justify  his  possession  as  "by  process  of  law" 
under  the  statute,  as  commencing  at  the  date  of  such  writ;  and  the 
foreclosure  will  be  complete  in  three  years  from  that  time.^°*'  If  the 
action  for  possession  be  brought  after  an  entry  in  pais,  and  judgment 
is  obtained  and  possession  delivered  upon  the  execution,  the  three 
years  will  run  from  the  time  of  delivery  of  possession  under  the  exe- 
cution."^ 

In  Maine-,  when  foreclosure  is  effected  under  provision  of  statute  by 
the  publication  of  notice  of  an  entry  to  foreclose,  the  limitation  of 
three  years  for  redemption  runs  from  the  first  publication  of  notice."^ 

In  New  Hampshire  the  limitation  of  one  year  runs  from  the  time 
of  entry,  if  notice  of  it  is  published  as  provided  by  statute."^ 

The  foreclosure  is  defeated  by  a  tender  of  payment  of  the  amount 
due  on  the  mortgage  before  the  expiration  of  the  three  years.  If  the 
last  day  of  the  three  years  falls  on  Sunday,  a  tender  of  the  amount  on 
the  day  following  is  too  late."* 


VIlI.     Record  of  the  Certificate. 

§  1263.     The  certificate,  whether  made  by  the  mortgagor  or  by 

the  witnesses,  must  be  recorded  within  the  time  specified  by 
statute,  to  render  it  effectual  as  evidence  of  the  entry.  The  record  of 
the  certificate  being  all  the  notice  of  the  entry  required  to  be  given, 
it  is  essential  that  the  record  be  made  as  required,  or  the  certificate 

"''Massachusetts:     P.  S.  ch.  181,  §§  statute  for  the  publication  of  a  no- 
lo, 11,  R.  L.  1902,  ch.  187,  §  11,  adopt-  tice  by  a  mortgagee  already  in  pos- 
ing the  law  as  laid  down  in  Pomeroy  session,  stating  that  from  a  certain 
V.  Winship,  12  Mass.  514,  7  Am.  Dec.  day  he  will  hold  for  the  purpose  of 
91;  Scott  V.  McFarland,  13  Mass.  309.  foreclosure.    P.  S.  1891,  ch.  139,  t  14. 
313;  Ayres  v.  Waite,  10  Cush.  72,  78;         ""' Hurd  v.  Coleman,  42  Me.  182. 
Merriam    v.    Merriam,    6    Cush.    91:         "'Fay   v.   Valentine,   5   Pick.    418; 
Erskine   v.    Townsend,   2   Mass.   495,  Page  v.  Robinson,  10  Cush,  99  101. 
3  Am.  Dec.  71;  Hunt  v.  Stiles,  10  N.        '"^  R.  S.   1883,  ch  90,   §S   5,  6.     See 
H    466-    Willard  v.  Henry,  2  N.   H.  Holbrook  v.  Thomas,  38  Me.  256. 
120.  "'P.  S.  1891,  ch.  139,  §  14;  Howard 

In    New    Hampshire,     as     already  v.  Handy,  35  N.  H.  315. 
seen,  there  is  a  special  provision  of        ">*  Haley  v.  Young,  134  Mass.  364. 


§§    1264,    1265.]    FORECLOSURE    BY    ENTRY   AND   POSSESSION.  230 

is  wholly  inoperative.'^''^  If  the  date  of  the  entry  be  not  stated  the 
certificate  is  insufficient,  although  this  be  dated  and  recorded,  for  it 
is  not  certain  that  the  record  was  made  within  thirty  days  from  the 
time  of  the  entry.^°®  When  so  recorded  it  is  constructive  notice  of  the 
entry  to  all  persons  who  claim  by  any  title  acquired  subsequently  to 
the  ^ortgage.^"'^  It  is  sufficient  evidence  of  an  eviction  of  the  holder 
of  the  equity  of  redemption  to  enable  him  to  sustain  an  action  against 
his  g/antor  for  breach  of  a  covenant  of  warranty.^"^ 


IX.     Effect  of  the  Foreclosure  upon  the  Mortgage  Debt. 

§  1264.     The   foreclosure,   when   complete,   operates   as  payment 

of  the  debt  to  the  extent  of  the  value  of  the  land  at  the  time  when  the 
foreclosure  became  absolute.^"®  It  has  the  effect  of  a  payment,  and 
makes  absolute  the  title  of  the  mortgagee,  although  the  note  secured 
was  void  for  any  reason;  as,  for  instance,  a  note  given  for  the  price 
of  intoxicating  liquors  sold  in  violation  of  law,  and  therefore  void  by 
statute.^***  In  such  case,  although  the  mortgage  could  not  be  enforced, 
and  the  owner  of  the  equity  of  redemption  could  have  defeated  it  at 
any  time  before  the  foreclosure  was  completed,  yet,  the  mortgagee  hav- 
ing entered  and  kept  possession  till  the  right  to  redeem  is  foreclosed, 
he  then  has  an  absolute  title ;  and  the  land  is  applied  by  operation  of 
law  to  the  payment  of  the  debt. 


X.     Waiver  of  Entry  and  Foreclosure. 

'  §  1265.  By  express  or  implied  agreement. —  An  entry  to  fore- 
close, or  a  foreclosure,  when  completed,  may  be  waived  by  the  express 
agreement  of  the  parties,  or  by  facts  from  which  such  agreement  may 
be  inferred.^"  It  is  waived  by  the  mortgagee's  giving  a  bond  just  be- 
fore the  completion  of  the  possession,  with  condition  to  discharge  the 
mortgage  upon  pa}Tnent  of  the  debt  at  a  future  day;"-  or  by  giving  an 

"' Robbins    v.    Rice,    7    Gray,    202;  Mass.   4,   per  Mr.   Justice   Chapman. 

Souther  v.  Wilson,  29  Me.  56;  Potter  "In  a  case  like  the  present,  it  is  as 

V.  Small,  47  Me.  293.  if  the  mortgagor  had  purchased  the 

'""  Freeman  v.  Atwood,  50  Me.  473.  liquors    and    paid    for    them    by    an 

*'''  Lennon   v.   Porter,   5   Gray,   318,  absolute    conveyance    of    the    land." 

319;  Robbins  v.  Rice,  7  Gray,  202.  See  §  617. 

^'•'  Furnas  v.  Durgin,  119  Mass.  500,  "•  Ross  v.  Leavitt,  70  N.  H.  602,  50 

20  Am.  Rep.  341.  Atl.    110;    Couch    v.    Stevens,    37   N. 

^■^See  §  952;  Smith  v.  Packard.  19  H.  169. 

N.  H.  575.  "^  Joslin  v.  Wyman,  9  Gray,  63. 

""McLaughlin     v.     Cosgrove,      99 


231  WAIVER    OF    ENTRY    AND    FORECLOSURE.  [§    12GG. 

agreement  that  if  the  debt  be  paid  by  a  certain  time  no  advantage  shall 
be  taken  of  the  foreclosure;^'^  or  by  stipulating  in  writing  to  recon- 
vey  whenever  the  debt  should  be  satisfied  out  of  the  rents  and  profits, 
or  in  any  other  way;"*  or  by  promising  to  allow  the  mortgagor  six 
months  for  redemption  after  the  expiration  of  the  regular  time  lim- 
ited ;"^  or  by  a  statement  made  a  month  before  the  time  of  redemption 
would  expire  that  he  would  give  some  time,  but  would  not  wait  long 
without  taking  advantage  of  the  mortgage."^ 

In  all  cases,  however,  when  the  waiver  is  not  absolute,  but  is  for  a 
limited  time,  advantage  can  be  taken  of  it  only  within  the  time  lim- 
ited."^ The  condition  of  the  waiver  or  extension  must  be  complied 
with."®  An  express  waiver  of  entry,  though  executed  under  seal,  is 
not  effectual  unless  it  is  delivered  to  the  holder  of  the  equity  of  re- 
demption.^^^ 

If  the  mortgagor  remains  in  occupation  of  the  mortgaged  premises 
for  many  years  after  the  expiration  of  the  time  of  redemption,  and 
pays  taxes  upon  them,  and  interest  to  the  mortgagee,  these  facts  are 
consistent  only  with  tlie  relation  between  the  parties  of  mortgagor  and 
mortgagee,  and  justify  the  conclusion  that  the  mortgage  has  not  been 
foreclosed.'-"  Giving  permission  to  the  mortgagor  to  cut  timber  on 
the  mortgaged  land,  and  receiving  stumpage  from  him,  is  not  incon- 
sistent with  the  further  prosecution  of  foreclosure  by  notice  in  the 
newspapers  in  the  mode  permitted  by  statute  in  Maine,  as  this  mode 
does  not  involve  the  actual  possession  of  the  premises  by  the  mort- 
gagor.'^' 

§  1266.  An  assignment  of  a  mortgage  after  an  entry  does  not  of 
itself  stay  the  foreclosure.  The  assignee  takes  all  the  benefits  of  the 
entry  and  possession.'^^  An  assignment  of  both  the  mortgage  and 
note,  after  the  expiration  of  three  years  from  the  entry,  to  a  subsequent 
mortgagee,  is  no  release  of  the  foreclosure.'^^ 

"» McNeil    v.    Call,    19    N.    H.    403,  108.      The    assignment   in    this    case 

416,  51  Am.  Dec.  188.  was  by  a  quit-claim  deed  for  a  con- 

i'-*  Quint  V.  Little,  4  Me.  495.  sideration  equal  to  the  amount  due 

"^  Chase  v.  McClellan,  49  Me.  375.  on   the   first  mortgage   and   interest 

"» Danforth  v.  Roberts,  20  Me.  307.  accrued.     The  mortgagor  had  filed  a 

"•  Danforth  v.  Roberts,  20  Me.  307.  bill  in  equity  to  redeem  just  before 

"'  Clark  v.   Crosby,  101  Mass.  184.  the    expiration    of    the    three    years. 

""  Cutts  V.  York  Manuf.  Co.  14  Me.  While  the  suit  was  pending  the  three 

326.  years    expired,    but    the    mortgagor 

120  Trow  V.  Berry,  113  Mass.  139.  subsequently      abandoned    the    suit. 

'-'■  Smith  V.  Larrabee,  58  Me.  361.  The   second    mortgagee,   by   the   as- 

1"  Deming   v.    Comings,   11   N.     H.  signment,  succeeded  to  all  the  rights 

474;   Hill  v.  More.  40  Me.  515;   Hurd  of  the  first  mortgagee,  and  held  the 

V.    Coleman.    42    Me.    182;    Cutts    v.  land  by  an  indefeasible  title  under  a 

York  Manuf.  Co.  14  Me.  326.  completed  foreclosure. 

''•■'  Thompson  v.  Kenyon,  100  Mass. 


§    1267.]  FORECLOSURE   BY   ENTRY   AND   POSSESSION.  232 

Foreclosure  is  not  waived  or  postponed  by  an  assignment  of  the 
mortgage  before  the  expiration  of  the  time  of  redemption  to  one  who, 
at  the  request  of  the  mortgagor,  pays  the  mortgagee  the  amount  of  the 
mortgage,  and  agrees  orally  with  the  mortgagor  to  hold  the  estate  sub- 
ject to  such  advance  for  the  use  of  the  mortgagor,  and  to  permit  him 
to  sell  the  land  in  lots  and  pay  over  the  proceeds,  or  to  redeem  on 
paying  the  amount  so  advanced  at  any  time.^^*  The  assignee  in  such 
case  takes  all  the  legal  rights  of  the  mortgagee,  and  the  foreclosure 
goes  on.  He  holds  the  property  under  no  resulting  trust,  because 
the  consideration  is  wholly  paid  by  him;  and  under  no  express  trust, 
because  not  declared  in  writing.  The  agreement  does  not  constitute  a 
mortgage,  because  it  was  not  made  with  one  from  whom  an  absolute 
title  was  taken  simultaneously. 

But  an  assignment  made  for  the  purpose  of  preventing  a  redemp- 
tion, as,  for  instance,  if  it  be  made  immediately  before  the  time  of  re- 
demption wo'uld  expire,  so  that  the  mortgagor  does  not  know  to  whom 
to  make  pa}Tnent,  may  have  the  effect  to  keep  the  redemption  open  till 
a  tender  can  be  made  to  the  assignee  ;^^^  and  even  if  it  be  made  without 
■such  intent,  it  may  have  the  effect  to  keep  the  equity  open  until  the 
mortgagor  can  find  the  assignee  and  offer  to  perform  the  condition.^-" 

§  1267.  The  waiver,  to  be  effectual,  must  be  by  the  holder  of 
the  mortg'age.  One  who  has  not  acquired  any  interest  in  the  mort- 
gage cannot  by  his  agreement  extend  the  time  of  redemption  beyond 
the  period  when  it  would  otherwise  be  foreclosed  ;^^^  though,  if  he 
should  afterwards  take  an  assignment  of  the  mortgage,  he  would  doubt- 
less be  concluded  by  this,  and  the  foreclosure  opened  accordingly.  The 
assignee  of  a  mortgage  assigned  to  him  by  the  mortgagee  as  security 
for  the  payment  of  a  debt  of  his  may,  after  entering  with  the  knowl- 
edge of  the  mortgagee  to  foreclose,  waive  and  release  this  entry  with- 
out the  assent  of  the  mortgagee.  The  assignee  has  full  control  of  the 
remedies  pro'vided  by  law,  and  may  enter  into  or  relinquish  possession 
at  his  discretion. ^^^ 

If  after  entry  the  mortgagee  be  put  under  guardianship  as  a  spend- 
thrift, the  guardian  has  authority  to  restore  possession  to  the  mort- 
gagor, to  hold  as  before  the  entry,  and  to  prevent  a  foreclosure.^^®  Such 
restoring  of  possession  will  do  away  with  the  effect  of  the  entry  and 
prevent  foreclosure.^^" 

'"  Capen    v.    Richardson,    7    Gray,  '"  Fisher  v.  Shaw,  42  Me.  32. 

364.  ""  Cutts  v.  York  Manuf.  Co.  14  Me. 

'"  McNeil  v.  Call,  19  N.  H.  403,  414,  326. 

51  Am.  Dec.  188.  ""'  Botham  v.  M'Intier,  19  Pick.  346. 

'"  Deming  v.  Comings,  11  N.  H.  "» Botham  v.  M'Intier,  19  Pick.  346. 
474. 


233  WAIVER  OF  EXTRY  AND  FORECLOSURE.  [§§  1268,  12G9. 

§  1268.  An  entry  does  not  waive  rights  acquired  under  a  pre- 
vious purchase  at  a  sale  under  a  power.  Where  a  mortgagee  has 
indirectly  become  a  purchaser  at  a  sale  made  under  a  power  contained 
in  the  mortgage,  which  gave  him  no  right  to  purchase,  and  the  sale  is 
for  this  reason  voidable,  he  may  enter  to  foreclose,  and  record  his  cer- 
tificate of  entry  without  waiving  or  abandoning  any  rights  acquired 
by  the  purchase.     The  entry  in  itself  does  not  show  such  intention. ^^'^ 

§  1269.  Payment  works  a  waiver.  An  entry  to  foreclose,  as  well 
as  a  foreclosure  itself,  is  of  course  waived  by  subsequently  receiving 
payment  of  the  mortgage  debt,^^*^  ^j.  of  ^ny  part  of  it;^^='  or  by  receiv- 
ing articles  which  the  mortgagor  had  agreed  in  the  condition  of  the 
mortgage  to  furnish  in  support  of  the  mortgagee,  who  continued  to 
reside  with  the  mortgagor  ;^^*  or  by  receiving  interest  as  such  on  the 
mortgage  debt.^^^  But  the  mere  fact  that,  after  the  three  years,  pay- 
ments are  made  on  account  of  the  mortgage  debt,  will  not  open  the 
foreclosure.  Such  payments  may  have  been  made  because  the  premises 
were  not  of  sufEcient  value  to  satisfy  the  debt.  The  intention  of 
the  parties  to  waive  the  foreclosure  should  be  shown  by  other  evi- 
dence.^^°  If  the  mortgagee,  after  the  expiration  of  three  years  from 
his  entry,  at  the  request  of  the  mortgagor,  conveys  the  premises  to  a 
third  person  by  a  deed  reciting  that  it  is  made  at  the  request  of  the 
mortgagor,  and  is  intended  to  discharge  all  title  acquired  by  the  mort- 
gagee, the  grantee  having  paid  the  amount  due  on  the  mortgage,  the 
grantee  takes  a  title  subject  to  redemption  by  the  mortgagor."'^  But  a 
quitclaim  deed  by  a  mortgagee  after  foreclosure  to  one  of  two  mort- 
gagors, in  consideration  of  a  sum  equal  to  the  original  mortgage  debt, 
is  not  sufficient  evidence  of  an  opening  of  the  foreclosure  to  revest  any 
title  in  the  other  mortgagor  as  a  joint  owner.^^^  After  the  foreclosure 
there  was  no  privity  between  the  mortgagors.  The  grantee  had  as 
good  a  right  to  purchase  as  a  stranger.  The  fact  that  he  paid  a  sum 
equal  to  that  due  on  the  mortgage  at  that  time  is  no  presumption  that 
the  transaction  was  a  redemption  for  the  benefit  of  both. 

"1  Learned  v.  Foster,  117  Mass.  365.  ""  Lawrence    v.    Fletcher,    10    Met. 

"^Robinson  v.  Batchelder,  4  N.  H.  344;   Tompson  v.  Tappan,  139  Mass. 

40-  Batchelder  v.  Robinson,  6  N.  H.  506,  1  N.  E.  924.     In  New  Hampshire 

12;    Gould  V.   White,  26   N.   H.   178;  the  mere  receipt  of  part  of  the  money 

Green  v.  Cross,  45  N.  H.  574,  577.  secured  by  the  mortgage  is  held  to 

"^And  see  Winchester  v.  Ball,  54  waive    the    foreclosure.      McNeil    v. 

Me.  558;   Ross.  v.  Leavitt,  70  N.  H.  Call,  19  N.  H.  403,  51  Am.  Dec.  188; 

602,  50  Atl.  110;    Scott  v.  Childs,  64  Deming  v.   Comings,   11   N.   H.   474; 

N    H    566    568    15  Atl.  206;  Moore  v.  Moore  v.  Beasom,  44  N.  H.  215;  Ross 

Beasom    '44    N.    H.    215;     Gould    v.  v.  Leavitt  70  N.  H.  602,  50  Atl.  110. 

White    26  N.  H.  178,  190;  McNeil  v.  >"  Rangely  v.   Spring,   28  Me.   127. 

Call,  19  N.  H.  403,  414.  "'  Crittenden    v.    Rogers,    8    Gray, 

'^^Villard  v.  Henry,  2  N.  H.  120.  452. 

t35  Trow  V.  Berry,  113  Mass.  139. 


§§  1270,  1271,  1272.]  foueclosure  by  entry  and  possession.  234 

§  1270.  If  the  payment  be  made  and  received  under  an  express 
understanding  that  the  foreclosure  is  to  be  opened,  there  can  be  no 
question  that  it  is  opened.'^'^  Facts  and  circumstances  from  which  an 
express  understanding  may  be  clearly  inferred  avail  equally.""  But 
the  acts  of  the  parties  will  not  have  this  effect  when  they  are  such  as 
to  leave  their  intention  doubtful  in  this  respect,  or  when  they  may  be 
explained  consistently  with  the  right  of  the  mortgagee  to  retain  the 
estate  under  the  foreclosure.^*^ 

After  a  mortgagee  has  entered  under  a  judgment  in  an  action  to 
foreclose  the  mortgage,  a  release  of  the  judgment  does  not  of  itself 
operate  as  a  waiver  in  law  of  the  foreclosure,  which  will  be  complete 
if  he  retains  continued,  actual  possession  during  the  time  provided  by 
statute  for  the  purpose  of  foreclosing.  His  possession  is,  by  virtue  of 
his  mortgage  title,  established  by  the  judgment,  and  not  under  the 
process.^*^ 

§  1271.  The  entry  is  not  waived  by  the  mortgagee's  rendering 
an  account  charging  himself  with  rent  for  a  period  after  the  entry  ;"^ 
nor  by  his  neglect  or  refusal  to  render  an  account  to  the  mortgagor  at 
his  request  of  the  amount  due  on  the  mortgage."*  If  a  mortgagee  in 
his  answer  made  in  a  suit  in  equity  to  redeem  the  mortgage  expressly 
waives  all  objection  to  redemption,  upon  payment  of  all  sums  due 
upon  it,  he  cannot  afterwards  claim  that  the  mortgage  had  been  fore- 
closed before  the  suit  was  commenced.^*^ 

§  1272.  Conditional  waiver. — :  A  mortgagee  does  not  waive  a  fore- 
closure which  has  already  become  absolute,  or  extend  the  time  of  re- 
demption, by  agreeing  to  allow  the  mortgagor  to  redeem  the  premises 
upon  the  payment  before  a  certain  date  O'f  an  amount  equal  to  what 
was  due  on  the  mortgage  on  that  day,  if  the  agreement  be  not  fulfilled 
by  payment  or  tender  of  the  money  within  the  time  limited."''  And 
so  if  a  surety  or  other  person  in  behalf  of  the  mortgagor  pays  the  con- 
ditional judgment,  and  takes  an  assignment  of  it  either  before  or  after 
the  lapse  of  the  three  years  from  the  time  possession  was  taken,  under 
an  agreement  with  the  mortgagor  to  assign  it  to  him  if  he  should  pay 
the  amount  within  a  certain  time,  if  the  agreement  be  not  kept  there 
is  no  waiver  of  the  foreclosure,  which  becomes  perfect  in  the  hands  of 
the  assignee.^*''  And  so  also  an  agreement  by  the  mortgagee  to  sell  his 

"'  Dow  v.  Moor,  59  Me.  118.  '"  Sanborn  v.  Dennis,  9  Gray,  208. 

"» Stetson  v.  Everett,  59  Me.  376.  "'  Strong    v.    Blanchard,    4    Allen, 

">  Lawrence   v.   Fletcher,    8    Met.  538. 

153.  '^o  Clark  v.  Crosby,  101  Mass.  184. 

"=  Couch  v.  Stevens,  37  N.  H.  169.  ^"Worthy    v.    Warner,    119    Mass. 

"'Hobbs  v.  Fuller,  9  Gray,  98.  550. 


235  WAIVER   OF    ENTRY    AND    FORECLOSURE.    [§§    1273,    127-i. 

foreclosure  title  to  the  mortgagor  for  the  amount  of  the  mortgage 
debt,  to  be  paid  within  a  certain  time,  is  not  sufficient  to  open  the  fore- 
closure.^*^ 

§  1273.  The  entry  is  not  waived  by  the  mortgagees  bringing 
a  writ  of  entry  against  a  tenant  at  will  of  the  mortgagor,  and  ob- 
taining judgment  for  possession,  although  in  such  a  writ  the  demand- 
ant describes  himself  as  out  of  possession,  and  the  tenant  as  wrong- 
fully withholding  possession  from  him.  This  is  only  a  technical  and 
formal  admission  made  for  the  purpose  of  enforcing  a  convenient 
remedy.  It  is  no  admission  that  the  mortgagee  is  out  of  possession, 
or  that  he  waives  the  benefit  of  his  formal  entry."®  Even  the  bringing 
of  a  writ  of  entry  against  the  owner  of  the  equity  of  redemption  for 
the  purpose  of  foreclosure  is  not  an  abandonment  of  the  possession 
previously  taken  ;^^°  but  if  a  conditional  judgment  be  entered  and  a 
writ  of  possession  issue,  under  which  the  mortgagee  is  put  in  posses- 
sion, this  is  a  waiver  of  a  previous  entry.^^^  The  bringing  of  an  action 
of  trespass  for  waste  against  the  mortgagor  is  not  an  abandonment  of 
a  previous  entry  to  foreclose.^^^  A  mortgagee  after  commencing  a 
foreclosure  by  publication  under  the  statutes  of  Maine  may  enter  and 
take  possession  of  the  premises  without  waiving  the  proceedings  to 
foreclose  ;^^^  and  if  he  is  ousted  of  his  possession  after  such  entry  he 
may  maintain  a  writ  of  entry  at  common  law,  and  obtain  judgment 
for  possession,  without  waiving  the  foreclosure  commenced  by  publica- 
tion.^^* 

§  1274.  A  recovery  of  judgment  for  the  mortgage  debt  or  any 
part  of  it  after  foreclosure,  on  the  ground  that  the  value  of  the  prem- 
ises at  the  time  of  the  foreclosure  was  less  than  the  sum  due,  opens  the 
foreclosure.^^^  A  recovery  of  judgment  against  the  mortgagor  for 
rent  of  the  premises  during  the  three  years  after  entry  operates,  like 
a  recovery  of  judgment  for  the  debt,  to  open  the  forclosure.^^*' 

After  foreclosure  is  complete,  a  promise  or  agreeemnt  made  by  the 

"*  Stetson  V.  Everett,  59  Me.  376.  Dec.  595;  Tufts  v.  Maines,  51  Me.  393. 

"'Fletcher  v.  Gary,  103  Mass.  475;         '"Page  v.  Robinson,  10  Gush.  99. 
Smith    Charities    v.    Connolly,    157,        '"'  Concord  Union  Mut.  F.  Ins.  Go. 

Mass.  272.  v.  Woodbury,  45  Me.  447,  453. 

""  §     1287;     Beavin    v.    Gove,    102        "'  Stewart  v.  Davis,  63  Me.  539. 
Mass.  298;  Devens  v.  Bower,  6  Gray,        '"  Massachusetts,    P.    S.    1882,    ch. 

126;    Mann    v.    Barle,    4    Gray,    299;  181,   §   42.     Suit  to  redeem  must  be 

Merriam    v.    Merriam,    6    Gush.    91;  brought  within   one   year   after   the 

Fletcher    v.    Gary,    103    Mass.    475;  recovery  of  the  judgment.     But  not 

Page  V.  Robinson,  10  Gush.  99;  Dor-  after  foreclosure  by   power  of  sale, 

rell  V.  Johnson.  17  Pick.  263.  Acts  (Mass.)  1896,  c.  203,  R.  L.  1902, 

'"Fay  V.   Valentine,   5   Pick.   418;  c.  187,  §  35. 
Smith  V.  Kelley,  27  Me.  237,  46  Am.        '=^=  Morse  v.  Merritt,  110  Mass.  458. 


§    1275.]  FORECLOSURE   BY    ENTRY    AND   POSSESSION.  236 

mortgagee  to  receive  the  debt  and  release  the  land  cannot  be  enforced 
unless  made  on  a  legal  and  sufficient  consideration.^" 

§  1275.     If  by  accident  or  mistake  the  time  of  redemption  goes 

by,  the  person  entitled  to  redeem  must  not  delay  in  seeking  relief. 
Ordinarily  the  foreclosure  of  a  mortgage  by  entry  and  three  years' 
possession  is  conclusive,  both  in  law  and  equity,  and  will  not  be  dis- 
turbed without  good  cause  shown.  ■  Where  a  bill  in  equity  to  redeem 
was  brought  on  the  day  before  foreclosure  would  have  become  abso- 
lute, and  by  reason  of  being  brought  in  the  wrong  county  was  dis- 
missed, and  there  was  no  tender,  or  agreement  to  extend  the  time  of 
redemption,  the  court  refused  to  open  the  foreclosure  on  a  new  bill 
brought  nearly  a  year  after  the  dismissal  of  the  former  one.^^« 

'^"Smalley  v.  Hickok,  12  Vt.  153.        ""Webb  v.  Nightingale,  14  Allen, 

374. 


CHAPTER  XXIX. 


FORECLOSURE  BY  WRIT  OF  ENTRY. 


I.  Nature    of    and    where    used, 

1276-1279. 
IT.  Who  may  maintain,  1280-1289. 
III.  Against  whom  the  action  may 
be    brought,    1290,    1292. 


IV.  The    pleadings    and    evidence, 

1293-1295 
V.  The  defences,  1296-1305. 
VI.  The  conditional  judgment,  1306- 

1316. 


I,     Nature  of  and  where  used. 

§  1276.  The  process  of  foreclosure  by  a  writ  of  entry  as  used 
in  Massachusetts  and  Maine,  although  in  form  a  suit  at  law,  is  in  ef- 
fect a  bill  in  equity.  When  used  for  this  purpose  the  technical  rules 
applicable  to  this  action  at  common  law  are  not  in  all  respects  fol- 
lowed. A  judgment  does  not  necessarily  give  possession;  it  provides 
for  this  only  upon  the  default  of  the  owner  of  the  equity  of  redemp- 
tion to  perform  the  condition  of  the  mortgage  within  a  specified  time. 
The  amount  due  on  the  mortgage  for  which  conditional  judgment  is 
entered  is  ascertained  according  to  equity  and  good  conscience,  and  by 
the  same  rules  as  this  amount  is  determined  in  a  bill  in  chancery  to 
redeem  the  same  mortgage ;  insomuch  that  such  conditional  judgment 
is  conclusive  evidence,  on  the  hearing  of  a  subsequent  bill  to  redeem 
the  same  mortgage,  of  the  amount  due  on  it.^ 

'  Holbrook  v.  Bliss,  9  Allen,  69;  "forfeiture  of  estates  on  condition, 
Saunders  v.  Dunn,  175  Mass.  164,  55  executed  by  deed  of  mortgage,  or 
N.  E.  893;  Hannan  v.  Hannan,  123  bargain  and  sale,  with  defeasance," 
Mass.  441;  Fletcher  v.  Gary,  103  were  empowered  "to  moderate  the 
Mass.  475,  479;  Palmer  v.  Fowley,  5  rigor  of  the  law,  and,  on  consider- 
Gray,  545;  Sparhawk  v.  Wills,  5  ation  of  such  cases  according  to 
Gray,  423,  427;  Walcutt  v.  Spencer,  equity  and  good  conscience,  to  chan- 
14  Mass.  409;  Amidown  v.  Peck,  11  cer  the  forfeiture,  and  enter  up  judg- 
Met.  467;  Peck  v.  Hapgood,  10  Met.  ment  for  the  just  debt  and  damages, 
172;  Doten  v.  Hair,  16  Gray,  149.  In  and  to  award  execution  accord- 
Massachusetts,  by  the  Prov.  Stat,  of  ingly;  only  in  real  actions  upon  mort- 
10  Wm.  III.  ch.  14,  entitled  "An  act  gage,  or  bargain  and  sale,  with  de- 
for  hearing  and  determining  of  cases  feasance,  the  judgment  to  be  con- 
in  equity,"  the  courts,  in  all  cases  of  ditional  that  the  mortgagor  or  ven- 

337 


§§    1377,    1278.]     FORECLOSURE   BY   WRIT   OF   ENTRY.  338 

This  process  is  used  only  in  those  States  in  which  foreclosure  is  ef- 
fected by  entry  in  pais  and  possession. 

§  1277.  In  Massachusetts-  and  Maine,^  instead  of  possession 
obtained  by  entry,  the  mortgagee  may  recover  possession  by  writ  of 
entry,  declaring  on  his  own  seisin,  stating  that  it  is  in  mortgage ;  and 
if  it  appears  that  he  is  entitled  to  possession  for  breach  of  the  condi- 
tion, the  court  on  motion  of  either  party  awards  a  conditional  judg- 
ment, if  the  defendant  be  the  mortgagor  or  any  one  claiming  under 
him,  that  if  he  within  two  months  after  the  judgment  pays  to  the  plain- 
tiff the  sum  found  due  on  the  mortgage  with  interest  and  costs  the 
mortgage  shall  be  void ;  otherwise  that  the  plaintiff  shall  have  his  exe- 
cution for  possession.  If  but  part  of  the  mortgage  money  is  due,  or 
the  condition  of  the  mortgage  be  for  the  doing  of  any  other  thing,  the 
terms  of  the  judgment  are  varied  as  the  case  may  require.* 

The  action  may  be  brought  by  an  assignee  of  the  mortgagee,  and 
after  his  death  by  his  executor  or  administrator.  It  may  be  brought 
against  whoever  is  tenant  of  the  freehold,  and  the  mortgagor  may  in 
all  cases  be  joined  as  a  defendant,  whether  he  then  has  any  estate  in 
the  premises  or  not;  but  he  is  not  liable  for  costs  when  he  has  no  es- 
tate, and  makes  no  defence  to  the  suit.  Possession  obtained  in  this 
way  must  be  continued  for  three  years  to  foreclose  the  right  of  re- 
demption. 

§  1278.  In  New  Hampshire,  also,  possession  may  be  obtained  by  a 
writ  of  entry.  The  process  should  be  against  the  party  in  possession 
claiming  title.*^  The  judgment  is  conditiooial,  that  if  the  mortgagor 
shall  pay  the  sum  found  due  within  two  months  after  judgment  ren- 
dered, with  interest,  the  judgment  shall  be  void,  otherwise  a  writ  of 
possession  shall  issue.^ 

When  a  power  of  sale  is  contained  in  a  mortgage  and  a  conditional 
judgment  is  entered,  the  demandant  may,  instead  of  a  writ  of  posses- 
dor,  or  his  heirs,  executors,  or  ad-  *  See  Stewart  v.  Clark,  11  Met. 
ministrators,  do  pay  unto  the  plain-  384.  389;  Holbrook  v.  Bliss,  9  Allen, 
tiff  such  sum  as  the  court  shall  de-  69,  73.  An  abstract  of  the  writ  of 
termine  to  be  justly  due  thereupon,  possession,  with  the  time  of  obtain- 
within  two  months'  time  after  judg-  ing  possession,  must  be  recorded, 
ment  entered  up  for  discharging  of  Maine:  R.  S.  1883,  ch.  90,  §  3.  A 
such  mortgage  or  sale;  or  that  the  foreclosure  is  ineffectual  without 
plaintiff  recover  possession  of  the  such  record.  Bird  v.  Keller,  77  Me. 
estate    sued    for,    and    execution    be    270. 

awarded  for  the  same."     Prov.  Stat.        °  Green  v.  Cross,  45  N.  H.  574,  578. 
(ed.   1726)   109.     This  was  reenacted        "  P.  S.  1891  and  1901,  ch.  229,  §  8. 
in  1785.    St.  1785,  ch.  22,  §  1.  A  defendant  who  has  no  interest 

=  P.  S.  ch.  181,  §§  1-11;  R.  L.  1902,  in  the  premises  cannot  plead  a  set- 
ch.  187,  §  1-8.  off.    Moulton  v.  Adams,  67  N.  H.  102, 

'R.  S.  1883,  ch.  90,  §§  8,  9,  10,  13.     32  Atl,  760. 


239  WHO    MAY    MAINTAIN.  [§§    1279,    1280. 

sion,  have  a  decree  entered  that  the  property  be  sold  pursuant  to  such 
power,  and  thereupon  the  demandant  shall  give  such  notices  and  do  all 
such  acts  as  are  authorized  and  required  by  the  power  or  by  the  court  in 
its  decree.  The  party  selling  shall  within  ten  days  after  the  sale  mak« 
to  the  court,  under  oath,  a  report  of  the  sale  and  of  his  doings,  and 
file  the  same  in  the  clerk's  office,  and  the  same  may  be  confirmed  and 
allowed,  or  set  aside  and  a  new  sale  ordered,  as  to  the  court  seems  just 
and  lawful.  Any  person  interested  may  intervene  or  be  summoned 
and  heard  on  such  proceedings,  and  the  order  of  the  court  confirming 
the  sale  shall  be  conclusive  evidence  as  against  all  persons,  that  the 
power  was  duly  executed.'' 

§  1279.  In  Rhode  Island,  instead  of  a  writ  of  entry  for  obtaining 
possession  of  the  mortgaged  premises,  an  action  of  ejectment,  or  of 
trespass  and  ejectment,  is  used  for  the  purpose.  In  such  action,  where 
a  right  of  redemption  is  shown,  the  court  ascertains  the  sum  due  on 
the  mortgage,  and  renders  a  conditional  judgment,  that  if  the  mort- 
gagor, his  heirs,  executors,  administrators,  and  assigns,  shall  pay  to 
the  plaintiff,  or  deposit  in  the  clerk's  office  for  him,  the  sum  adjudged 
due,  within  two  months  from  the  entry  of  the  judgment,  with  interest, 
then  the  mortgage  shall  be  void,  otherwise  that  the  plaintiff  shall  have 
his  writ  of  possession.* 

II.     Who  may  maintain. 

§  1280.  A  leg^al  interest  in  the  realty  is  essential  to  sustain  a 
writ  of  entry  to  foreclose  a  mortgage.  The  action  must  therefore  be 
brought  by  the  mortgagee,  or  his  assignee,  or  by  the  personal  repre- 
sentatives of  the  holder  of  the  mortgage  upon  his  decease.  The  plain- 
tiff must  hold  the  legal  estate  at  the  time  he  brings  the  action,  and  it 
is  immaterial  that  he  holds  the  title  for  the  benefit  of  another;  a  cestui 
que  trust  cannot  maintain  the  action.^  If  the  plaintiff  be  the  assignee 
of  the  mortgage,  he  must  show  a  formal  assignment  of  the  mortgage 
to  himself.  An  equitable  assignment  merely  is  not  sufficient.  There- 
fore one  who  holds  a  mortgage  note  by  indorsement  alone,  without  an 
assignment  of  the  mortgage,  cannot  maintain  the  action  in  his  own 
name.    He  has  at  most  only  a  resulting  trust  in  the  mortgage  title.^** 

^P.  S.  1901,  ch.  139,  Acts  1899,  eh.  the    annual    interest,    although    the 

19,  §§  1  and  2.  principal  was  not  due.     Carpenter  v. 

8 P.  S.  1882,  ch.  216,  §  7;  G.  L.  1896,  Carpenter,    6    R.    I.    542. 

c.  246,  §  8.     A  conditional  judgment  '  Somes  v.   Skinner,  16  Mass.  348; 

may  be  entered  for  possession  where  Young  v.  Miller,  6  Gray,  152.  154. 

the   condition   of   the   mortgage  has  '"Johnson  v.  Brown.  31  N.  H    405; 

been  broken  by  the  non-payment  of  Young  v.  Miller,  6  Gray,  152,  154. 


§§    1281,    1283.]     FORECLOSURE  BY  WRIT  OF  ENTRY,  240 

Tlie  mortgagee  after  such  indorsement,  although  holding  only  a  bar- 
ren fee  without  beneficial  interest,  is  presumed,  in  the  absence  of  any 
agreement,  or  anything  to  indicate  the  intention  of  the  parties,  to  hold 
such  title  in  trust  for  the  indorsee,  to  whom  it  would  be  of  value  ;^^ 
and  the  mortgagee  might  maintain  a  writ  of  entry  to  foreclose  for  the 
benefit  of  such  assignee  at  his  request.  An  assignee  of  the  debt  merely 
has  the  right  to  use  the  name  of  the  m-ortgagee  in  a  writ  of  entry  to 
enforce  the  mortgage,  and  is  not  required  to  resort  to  a  court  of  equity 
for  that  purpose,  unless  the  mortgagee  refuses  to  permit  his  name  to 
be  used.^^  In  some  States  the  mere  transfer  of  the  note  is  held  to 
carry  with  it  the  mortgage  security,  and  the  right  to  enforce  that ;  but 
the  remedy  in  those  States  is  an  equitable  one  and  not  by  writ  of  entry. 

§  1281.  After  assignment. —  Although  a  mortgagee  who  has  for- 
mally assigned  his  mortgage  cannot  proceed  to  foreclose  it,  and  a  judg- 
ment obtained  by  him  would  be  nugatory,^^  yet,  if  the  assignee  rein- 
dorse  and  redeliver  the  mortgage  with  the  assignment  cancelled,  it 
never  having  been  recorded,  he  may  still  maintain  the  action.^*  By 
the  cancellation  of  the  assignment  it  is  rendered  useless  and  ineffectual 
to  the  assignee,  and  the  mortgage  remains  in  full  force  and  effect  in 
the  mortgagee,  who  alone  has  any  interest  in  it,  or  any  right  to  en- 
force it. 

§  1282.  A  mortgagee  who  has  made  an  assignment  absolute  in 
form,  but  really  intended  as  security  for  a  debt,  may  nevertheless 
maintain  an  action  to  foreclose  the  mortgage,  where  the  nature  of  the 
transaction  is  shown  by  an  acknowledgment  by  the  assignee  that  he 
has  "received  full  satisfaction  for  the  debt  secured  by  the  above  as- 
signment." This  acknowledgment  relates  back  to  the  time  of  the  mak- 
ing 'O'f  the  assignment,  and  is  conclusive  evidence  of  an  agreement  then 
made  by  the  assignee  to  reassign.  The  acknowledgment  is  a  defeasance 
of  the  assignment,  and  the  whole  transaction  a  mortgage  of  a  mort- 
gage.i^ 

The  mortgagee  who  holds  the  legal  title  under  the  mortgage  may 
maintain  the  writ  in  his  own  name  alone,  although  the  security  is 
partly  for  the  benefit  of  other  persons  mentioned  in  the  deed ;  as  where 
a  father  conveys  his  homestead  to  his  son,  and  takes  a  mortgage  back 

"Johnson  v.  Brown,  31  N.  H.  405.  ''Call  v.  Leisner,  23  Me.  25;  Gould 

"  Holmes   v.    French,    70   Me.    341.  v.  Newman,  6  Mass.  239. 

In  such  case  the  same  rules  of  law  "Howe  v.  Wilder,  11  Gray,  267. 

are  applicable  to  the  assessment  of  ''  Coffin   v.    Loring,    9    Allen,    154. 

the  amount  of  the  conditional  judg-  But  it  would  seem  that  the  nature 

ment    that    would    be    applicable    if  of  the  transaction  in  such  case  could 

the  debt  and  mortgage  were  owned  not  be  shown  by  parol.     Lincoln  v. 

by  the  mortgagee.  Parsons,   1  Allen,  388. 


241  WHO    MAY    MAlNTx\.lN.  [§    1383. 

in  his  own  name,  to  secure  the  maintenance  of  himself  and  wife,  and 
also  the  payment  to  other  children  of  certain  sums  as  their  portion  of 
their  father's  estate.  He  may  maintain  the  action,  although  the  object 
of  it  be  wholly  to  enforce  the  payment  of  the  sums  due  to  his  chil- 
dren.^" 

A  mortgagee  who  has  assigned  his  mortgage  and  note  as  collateral 
security  for  a  debt  of  his  own,  and  upon  paying  this  has  received  a  re- 
assignment of  the  mortgage,  may  maintain  a  writ  of  entry  to  foreclose 
it,  although  the  note  was  lost  while  in  the  hands  of  the  assignee. ^^  It 
does  not  matter  that  the  assignee  of  the  mortgage  also  purchases  the 
equity  of  redemption  on  execution  against  the  mortgagor ;  as  the  mort- 
gage does  not  merge,  and  the  mortgagee  has  a  remaining  right,  he  may 
recover  possession  of  the  land  by  writ  of  entry,  without  making  actual 
entry.  ^'' 

A  deed  by  the  mortgagee,  whether  a  warranty  or  quitclaim,  passes 
his  title  in  the  same  way  that  an  assignment  would ;  and  although  the 
notes  secured  by  the  mortgage  are  not  transferred  at  the  same  time, 
the  grantee  may  maintain  a  writ  of  entry  to  foreclose  the  mortgage, 
and  on  producing  the  notes  may  have  a  conditional  judgment.^^ 

If  the  mortgage  be  assigned  while  a  writ  of  entry  is  pending,  the 
assignee  may,  by  virtue  of  his  assignment,  prosecute  the  suit  in  the 
name  of  the  mortgagee  for  his  own  benefit  to  final  judgment,  and 
enter  under  the  writ  of  possession  when  it  is  issued  in  the  same  man- 
ner as  the  mortgagee  might  have  done.-" 

An  assignee  may  bring  his  action  for  possession,  although  the  as- 
signment to  him  has  not  been  recorded  at  the  time ;  but  it  would  seem 
that  before  trial  of  the  action  it  must  be  recorded,^^  in  order  to  author- 
ize its  introduction  in  evidence. 

§  1283.     One  of  two  or  more  joint  mortgagees  or  assignees  of  a 

mortgage  cannot  alone  maintain  a  writ  of  entry  to  foreclose  the  mort- 
gage. All  the  persons  having  a  legal  interest  in  the  mortgage  must 
join  in  enforcing  it.^^  If  it  be  held  by  them  in  trust,  the  abandon- 
ment of  the  trust  by  one  of  them  does  not  vest  the  title  in  the  others, 
without  deed  or  legal  process;  though,  on  the  death  of  one,  the  sur- 
vivors succeed  to  the  rights  and  remedies  to  which  all  of  them  were  be- 
fore jointly  entitled.-^     If,  however,  a  mortgage  be  given  to  secure 

'"Northy  v.  Northy,  45  N.  H.  141.  -^  Wolcott  v.  Winchester,  15  Gray, 

I'Ward  v.   Gunn,  12  Allen,  81.  461,   466. 

'^  Tuttle  v.  Brown,  14  Pick.  514.  --  Webster  v.  Vandeventer,  6  Gray, 

1"  Ruggles  v.  Barton,  13  Gray,  506.  428.     See  Dewey  v.  Brown,  2   Pick. 

=°§808;    Hurd  v.  Coleman,  42  Me.  387;   Aiken  v.  Gale,  37  N.  H.  501. 

182;    Frisbee  v.  Frisbee,  8C  Me.  444,  -'Blake  v.   Sanborn,   8  Gray,   154; 

29   Atl.    1115.  Burnett  v.  Pratt,  22  Pick.  556. 


§§    1284,    1285.]     FORECLOSURE  BY   WRIT  OF   ENTRY.  242 

serparate  debts  or  obligations,  each  mortgagee  is  entitled  to  enforce 
his  rights  in  his  own  name;  as,  for  instance,  a  mortgage  given  for  the 
support  of  a  father  and  mother,  ''each  and  severally,"  may  be  enforced 
by  the  father  alone.-*  When  a  mortgage  is  given  to  secure  several 
debts,  the  obvious  purpose  is  to  give  to  each  security  for  his  particular 
debt.  If  the  mortgagees  hold  separate  notes  secured  by  the  same 
mortgage,  each  has  a  right  to  enforce  his  claim  under  the  mortgage, 
and  there  is  of  course  no  right  of  survivorship.-^  In  Xew  Hampshire 
it  is  held  that  the  action  must  be  brought  in  the  names  of  all  the 
holders  of  the  several  notes.-^ 

Two  mortgages  given  by  the  same  mortgagor  at  the  same  time,  to 
two  mortgagees  severally,  make  them  tenants  in  common,  and  their 
rights  are  the  same  as  if  one  mortgage  had  been  made  to  both,  to  se- 
cure to  each  his  separate  debt.  Either  of  them  may  enforce  his  mort- 
gage by  separate  suit,  or  both  may  join  in  one  suit,  just  as  they  might 
in  a  chancery  suit.^^ 

If  a  mortgage  be  made  to  an  unincorporated  association,  or  to  a  firm 
by  a  corporate  or  firm  name,  a  writ  of  entry  to  foreclose  it  must  be 
brought  in  the  names  of  the  individuals  who  compose  the  firm  or  do 
business  under  such  general  name.^^ 

§  1284.  Two  mortgages  of  the  same  land  made  by  the  same 
mortgagor,  and  held  by  the  same  assignee,  though  given  at  different 
times  to  different  persons,  may  be  embraced  in  one  suit  of  foreclosure, 
and  a  conditional  judgment  for  the  amount  of  lx)th  debts  may  be  en- 
tered.^^  The  judgment  should  properly  specify  the  amount  due  on 
each  mortgage  as  well  as  the  aggregate  amount  due,  so  that  the  rights 
of  any  intervening  third  party  might  be  determined.  If  the  two  mort- 
gages embraced  distinct  parcels  of  land,  or  the  debts  were  due  from 
different  persons,  they  cannot  be  united  in  one  suit,  and  consolidated 
in  one  judgment.^" 

§  1285.  A  second  mortgagee  may  maintain  an  action  to  foreclose 
his  mortgage  against  the  owner  of  the  equity  of  redemption,  although 
such  owner  also  holds  the  first  mortgage.  The  judgment  in  such  case 
would  be  valid  and  effectual  to  foreclose  the  second  mortgage  as  against 
all  titles  subsequent  to  it,  but  qualified  as  to  disturbing  the  possession 

"  Gilson  V.  Gilson,  2  Allen,  115.  "  Pomeroy  v.  Latting,  2  Allen,  221. 

="  Burnett  v.  Pratt,  22  Pick.  556.  The   mortgage   In  this   case   was   to 

"Noyes  v.  Barnet,  57  N.  H.   605;  "The  Copake  Iron  Works,"  a  part- 
Johnson   V.    Brown,    31    N.    H.    405;  nership. 
Page  V.  Pierce,  26  N.  H.  317.  ■"  Pierce   v.    Balkam,    2    Cush.    374. 

"  Cochran    v.    Goodell,    131    Mass.  See,  also.  Grant  v.  Galway,  122  Mass. 

464.  135. 

="'Peck  v.  Hapgood,  10  Met.  172. 


243  WHO    MAY    MAINTAIN.  [§    1286. 

under  the  prior  mortgage.  The  first  mortgagee  has  the  right  to  hold 
tlie  estate  under  his  mortgage  for  the  purpose  of  foreclosure  as  against 
the  second  mortgagee ;  but  the  second  mortgagee  has  the  right  to  such 
possession  as  will  enable  him  to  foreclose  as  against  the  right  to  re- 
deem his  second  mortgage.  The  foreclosure  of  botli  mortgages  may  go 
on  at  the  same  time ;  the  first  mortgagee  having  such  possession  as  will 
operate  to  foreclose  against  the  right  of  the  second  mortgagee  to  re- 
deem; and  the  second  mortgagee  having  such  constructive  possession 
as  will  operate  to  foreclose  against  the  right  to  redeem  the  estate  from 
his  mortgage.  Tlie  possession  of  each  operates  according  to  his 
rights. ^^ 

In  such  case  it  is,  of  course,  immaterial  that  the  owner  of  the  equity 
of  redemption,  besides  holding  the  first  mortgage,  holds  a  third  mort- 
gage or  any  other  interest  in  the  property.  Under  the  execution  the 
second  mortgagee  may  be  put  temporarily  in  possession  without  an  ac- 
tual ouster  of  the  first  mortgagee,  and  such  possession  will  foreclose 
all  titles  subsequent  to  the  second  mortgage. ^^  It  is  all  the  same 
whether  the  first  mortgagee  be  in  possession  under  an  entry  in  pais,  or 
by  virtue  oi  a  writ  of  possession  issued  under  a  conditional  judgrnent 
for  foreclosure.^^ 

A  mortgagee  of  a  remainder  or  reversion  may  in  like  manner  main- 
tain such  action  during  the  lifetime  of  the  tenant  of  the  particular 
estate.^*  In  such  case  the  tenant  cannot  be  dispossessed,  but  the  officer 
may,  under  the  execution,  deliver  possession  as  against  the  mortgagor, 
sio  as  to  divest  him  of  all  his  legal  title  in  the  land.  One  joint  owner 
of  the  equity  of  redemption,  on  receiving  an  assignment  of  the  mort- 
gage, may  maintain  a  writ  of  entry  and  recover  a  conditional  judgment 
against  the  other.^^ 

§  1286.  Homestead  right. — This  action  may  be  maintained  and 
judgment  may  be  rendered  thereon  and  formal  possession  taken,  al- 
though there  be  an  outstanding  estate  'of  homestead.  The  entry  thus 
made  is  sufficient  to  bar  the  right  in  equity  to  redeem  the  reversionary 
estate  after  the  expiration  of  three  years,  though  subject  to  the  full  en- 
joyment of  the  homestead  estate.^® 

If  the  homestead  right  has  been  released  in  the  mortgage,  it  is  no  de- 

^' Kilborn  V.  Robbins,  8  Allen,  466;  469;    Walcutt   v.    Spencer,    14   Mass. 

Cronin   v.    Hazletine,    3    Allen,    324;  409. 

Doten  v.  Hair,  16  Gray,  149;    Coch-  "  Penniman    v.    Hollis,    13    Mass. 

ran  v.   Goodell,  131  Mass.  464.     See  429;    Colby  v.   Poor,   15   N.    H.    198; 

Palmer  v.    Powley,    5   Gray,   545.  Palmer  v.  Fowley,  5  Gray,  545;  Bart- 

==  Cronin    v.    Hazletine,    3    Allen,  lett  v.  Sanborn,  64  N.  H.  70,  6  Atl. 

324;    George  v.  Baker,  3  Allen,  326.  486. 

^'  Amidown  v.   Peck,   11   Met.    467,  ''  Aiken  v.  Gale,  37  N.  H.  501. 

^'' Doyle  V.  Coburn,  6  Allen,  71. 


§§    1287,    1288.]     FORECLOSURE    BY    WRIT    OF    ENTRY.  241 

fence  to  the  writ  of  entry  to  foreclose  the  mortgage  that  the  estate  is 
sufficient  to  satisfy  the  mortgage  without  having  recourse  to  the  home- 
stead.^'^ "The  power  of  a  court  of  chancery  to  compel  a  mortgagee  to 
resort  in  the  first  instance  to  one  of  several  estates  mortgaged  is  exer- 
cised only  for  protection  of  the  equities  of  different  creditors  or  incum- 
brancers, or  of  sureties,  and  not  for  the  benefit  of  the  mortgagor.  As 
against  him,  the  mortgagee  has  the  right  to  enforce  the  contract  be- 
tween them  according  to  its  terms,  and  is  not  obliged  to  elect  between 
different  remedies  or  securities.  The  right  of  homestead,  created  by  our 
statutes,  is  certainly  entitled  to  no  higher  degree  of  favor  than  the 
courts  have  always  accorded  to  the  common  law  right  of  dower.  The 
case  cannot  be  distinguished  in  principle  from  the  ordinary  one  in 
which  a  wife,  who  has  joined  by  way  of  releasing  dower  in  the  mort- 
gage of  her  husband,  is  held  to  pay  the  whole  mortgage  debt  as  a  con- 
dition of  asserting  her  right  of  dower  against  the  mortgagee."^^ 

§  1287.  A  mortgagee  who  has  entered  to  foreclose  in  the  pres- 
ence of  witnesses,  and  still  remains  in  possession,  may  nevertheless 
maintain  a  writ  of  entry  against  the  mortgagor  to  foreclose  the  mort- 
gage;^® and  such  previous  possession  is  not  waived  or  abandoned  by 
the  commencement  of  the  action  ;*°  though  it  is  upon  delivery  of  pos- 
session to  the  mortgagee  upon  an  execution  issued  on  the  judgment  ob- 
tained in  such  action.*^ 

The  fact  that  a  mortgage  contains  a  power  of  sale  is  no  objection  to 
a  foreclosure  by  writ  of  entry.  The  power  of  sale  is  merely  a  cumula- 
tive remedy  which  does  not  interfere  with  a  foreclosure  by  action,  or 
by  entry  and  possession.*^ 

§  1288.  If  the  holder  of  the  mortgage  die  before  entry  for  con- 
dition broken,  the  mortgage,  being  personal  assets,  goes  to  his  executor 
or  administrator,  who  alone  can  maintain  an  action  upon  it.  His  heirs 
have  no  such  interest  as  will  give  them  any  right  of  possession.*^ 

"  Searle    v.    Chapman,    121    Mass.  that    this    might    prove    ineffectual, 

19.     See  §§  731,    1632.  brought   suit   on   the   mortgage   and 

^*' Per    Gray,    C.    J.,    in    Searle    v.  obtained  a  conditional  judgment,  it 

Chapman,  121  Mass.  19.  was    held    that    the    foreclosure    by 

^^  Trustees  v.   Connolly,  157  Mass.  suit    operated    as    a    waiver    of    the 

272;   31  N.  E.  1058;  Beavin  v.  Gove,  attempted    foreclosure    by    publica- 

102  Mass.  298;   Merriam  v.  Merriam,  tion.      Burgess    v.    Stevens,    76    Me. 

6    Cush.    91;     Devens    v.    Bower,    6  559. 

Gray,    126;     Page    v.    Robinson,    10  "Fletcher  v.  Gary,  103  Mass.  475. 

Cush.    99;    Mann    v.    Earle,    4    Gray,  "Furbish    v.    Sears,    2    Cliff.    454; 

299,    300;    Massachusetts:    P.    S.    ch.  Trustees  v.  Connolly,  157  Mass.  272, 

181,   §§  1,  11,  R.   L.   1902,  ch.   187.  31  N.  B.  1058. 

"'Page   v.   Robinson,   10  Cush.   99.  "^  Smith    v.    Dyer,    16    Mass.     18; 

But   in   Maine,   where   a  foreclosure  Dewey  v.   Van  Deusen,  4  Pick.   19; 

was  commenced  by  publication,  and  Shelton  v.  Atkins,  22  Pick.  71.     See 

afterwards,     the     attorney,     fearing  G.  S.  of  Mass.  ch.  96,  §  9,  ch.  140,  §  7. 


245  AGAINST   WHOM    THE   ACTION    MAY    BE   BROUGHT.  [§§    1289,    1390. 

§  1289.  When  right  af  action  accrues. — Unless  it  is  expressly 
stipulated  that  the  mortgagor  may  remain  in  possession,  or  the  neces- 
sary implication  from  the  deed  is  that  he  may  do  so,  the  mortgagee 
may  at  once,  before  breach  of  the  condition,  and  without  previous  no- 
tice of  the  suit,  maintain  a  writ  of  entry  for  the  possession."*  The 
provisions  or  conditions  in  the  mortgage  deed  may  be  such  that  they 
will  necessarily  imply  a  covenant  that  the  mortgagor  may  occupy  so 
long  as  he  fulfils  these  conditions,  and  they  may  thus  constitute  a  good 
bar  to  a  writ  of  entry  at  common  law  to  obtain  possession  ;*■''  thus, 
where  the  mortgage  recited  that  the  mortgagee  had  conveyed  the  prem- 
ises to  the  mortgagor  "for  the  future  maintenance  and  support"  of  the 
former,  and  that  the  mortgagor  had  "at  the  same  time  reconveyed  the 
same  to  the  mortgagee  as  security  for  such  maintenance  and  support," 
the  condition  being  that  the  mortgagor  should  support  the  mortgagee, 
it  was  held  to  be  a  necessary  implication  from  these  recitals  that  the 
mortgagor  should  retain  possession  so  long  as  he  performed  the  acts, 
the  performance  of  which  the  mortgage  was  given  to  secure.**'  In  the 
absence,  however,  of  anything  in  the  mortgage  to  show  that  the  mort- 
gagor is  entitled  to  possession,  it  cannot  be  shown  by  parol  evidence 
that  it  was  agreed  by  the  parties  that  the  mortgagor  should  retain  pos- 
session.*^ 

The  demandant  is  not  obliged  to  give  the  tenant  notice  to  quit  be- 
fore commencing  the  action.*^ 


III.     Against  whom  the  Action  may  he  brought. 

§1290.  The  action  is  brought  against  the  tenant  of  the  free- 
hold, who  is  a  necessary  party  defendant.*''  Action  cannot  be  main- 
tained against  a  tenant  at  will  or  for  years,  if  he  is  willing  to  give  up 
possession  of  the  premises.^"  If,  however,  such  tenant  refuses  to  yield 
possession  when  it  is  demanded  of  him,  he  may  be  regarded  as  a  dis- 

"  See  §  702;  Hobart  V.  Sanborn,  13         *"  Massachusetts:     P.     S.     ch.    181, 

N.   H.   226,  38  Am.   Dec.   483;    Dear-  §9,   R.    L.    1902,    §8.     Maine:    R.    S. 

born    v.    Dearborn,    9     N.     H.     117;  1883,  ch.  90,  §13;    Dooley  v.  Potter, 

Lackey    v.    Holbrook,    ll    Met.    458;  140  Mass.  49,  2  N.  E.  235,  per  Devens, 

Newall  v.  Wright,  3  Mass.  138,  155,  J. 
3  Am.  Dec.  98.  =»  Wheelwright     v.     Freeman,     12 

^^'Bean  v.  Mayo,  5  Me.  89.  Met.  154;  Raynham  v.  Snow,  12  Met. 

*«  Wales    v.    Mellen,    1    Gray,    512.  157.    Under  the  early  laws  of  Massa- 

See  §  668.  chusetts     it    could     be     maintained 

*"  Colman  v.  Packard,  16  Mass.  39.  against  a  tenant  at  will.     Keith  v. 

^«  Trustees  v.   Connolly,   157  Mass.  Swan,  11  Mass.  216;   Fales  v.  Gibbs, 

272;   31  N.  E.  1058;   Smith  v.  Johns,  5   Mason,    462. 
3   Gray,   517,   519. 


§§    1291,    1292.]      FORECLOSURE    BY    WRIT    OF    ENTRY.  246 

seisor,  and,  as  against  the  mortgagee,  the  tenant  of  the  freehold.^^  On 
this  ground  the  action  may  be  maintained  against  a  purchaser  of  the 
equity  of  redemption  after  he  has  conveyed  it  away  again,  but  still  re- 
tains possession  and  refuses  to  yield  it  on  demand ;  but  the  judgment 
will  be  for  possession  in  the  ordinary  form,  and  not  a  conditional  judg- 
ment.^^ 

The  fact  that  the  mortgagors  were  blind,  and  their  father  lived  with 
them,  and  was  the  only  manager  and  efficient  agent  on  the  premises, 
which  he  cultivated  and  improved,  does  not  make  him  a  tenant  of  the 
land  or  liable  to  the  action.^^ 

§  1291.  A  wife  who  has  signed  the  mortgage  merely  in  release  of 
dower  need  not  be  joined  in  the  suit;^*  but  if  the  husband  and  wife 
mortgage  her  real  estate  and  continue  in  possession  till  condition 
broken,  they  are  rightly  sued  together.^^  A  widow  to  whom  dower  has 
been  assigned  in  the  mortgaged  premises,  though  wrongfully,  is  a 
tenant  of  the  freehold  if  in  possession.^® 

The  action  cannot  be  maintained  against  the  mortgagor  alone  after 
he  has  conveyed  the  estate  to  a  third  person,  and  the  latter  has  con- 
veyed it  to  the  mortgagor's  wife  to  her  sole  and  separate  use,  although 
he  has  continued  to  occupy  the  premises  with  his  wife.  She  is  the 
tenant  of  the  freehold  and  a  necessary  party  to  the  action.  The  mort- 
gagor's possession  must  be  deemed  to  be  permissive  only,  and  subject 
to  and  in  the  right  and  interest  of  his  wife  as  owner  of  the  fee.^'^  But 
if  a  third  person  be  in  actual  possession  under  a  lease  for  a  term  of 
years  by  a  title  paramount  to  that  of  the  mortgage,  the  action  may  be 
maintained  against  the  owner  of  the  equity  of  redemption.^^ 

§  1292.  The  mortgagor  may  always  be  joined  as  a  defendant,  al- 
though he  has  parted  with  all  interest  in  the  premises  before  the  action 
is  brought.  If  he  conveys  his  equity  of  redemption  after  suit  is  com- 
menced against  him  as  the  tenant  in  possession,  this  does  not  defeat 
the  action,  but  it  may  proceed  to  judgment  just  the  same.^^  All  per- 
sons coming  in  under  him  after  the  suit  is  commenced  are  bound  by 
the  judgment  and  by  the  possession  taken  under  it.  Were  it  otherwise, 
the  suit  might  be  wholly  defeated  by  successive  alienations ;®°  and  it 

"  Johnson    v.    Phillips,    13    Gray,  ^^  Raynham  v.   Wilmarth,   13  Met. 

198;     Wheelwright    v.    Freeman,    12  414;  Golder  v.  Golder,  95  Me.  259,  49 

Met.    154;    Keith  v.   Swan,   11  Mass.  Atl.    1050. 

216;  Hunt  v.  Hunt,  17  Pick.  118,  121.  "Campbell  v.  Bemis,  16  Gray,  485. 

"  Johnson  v.  Phillips,  13  Gray,  198.  ''  Whittier  v.  Dow,  14  Me.  298. 

"Churchill    v.    Loring,    19    Pick.  "Straw  v.   Greene,  14   Allen;  206; 

465.  Hunt  v.  Hunt,  17  Pick.  118;  Wheel- 

"  Pitts  V.   Aldrich.   11  Allen,  39.  wright  v.  Freeman,  12  Met.  154. 

"  Swan  V.  Wiswall,  15  Pick.  126.  ""  Hunt  v.  Hunt,  17  Pick.  118. 


247  THE   PLEADINGS   AND   EVIDENCE.         [§§    1293,    1294. 

seems  that  those  who  have  acquired  title  under  the  mortgagor,  after 
the  giving  of  the  mortgage  and  before  the  commencement  of  the  ac- 
tion, are  equally  bound  by  the  action,  though  not  joined  as  defendants, 
if  the  execution  and  the  proceedings  upon  it  are  duly  recorded."^ 

An  action  may  be  maintained  against  a  mortgagor  to  foreclose  a 
m'ortgage  not  acknowledged  or  recorded,  for  it  conveys  the  property  as 
between  the  parties.®- 

If  the  mortgagor  has  conveyed  the  land  in  separate  parcels  to  differ- 
ent persons,  a  writ  of  entry  must  be  brought  against  each  tenant  hold- 
ing in  severalty.  A  judgment  against  one  of  them  for  the  whole  tract 
does  not  foreclose  the  rights  of  the  others.*'^ 


IV.     The  Pleadings  and  Evidence. 

N<o  attempt  is  made  to  give  any  statement  of  the  pleadings  and  evi- 
dence applicable  to  this  form  of  action;  recourse  must  be  had  to  the 
general  rules  on  these  matters,  and  to  the  practice  of  the  States  where 
this  form  of  foreclosure  is  used.    A  few  points  only  will  be  noticed. 

§  1293.  The  declaration  should  allege  the  seisin  to  be  "in  mort- 
gage."^* It  should  show  that  a  foreclosure  is  desired,  rather  than  pos- 
session for  the  purpose  of  taking  the  profits.*^^  A  judgment  for  pos- 
session at  common  law  is  entered  unless  a  conditional  judgment  is 
asked  for  by  one  of  the  parties ;  and  if  the  defendant  be  a  stranger,  or 
one  not  claiming  under  the  mortgagor,  the  judgment  will  not  be  con- 
ditional except  with  the  consent  of  the  plaintiff. 

The  identity  of  the  land  demanded  with  that  described  in  the  mort- 
gage is  for  the  judge  sitting  without  a  jury.^^ 

§  1294.  Answer. — 'Any  specific  matter  of  defence  should  be  set  up 
by  answer.     Under  the  general  issue  the  defendant  is  not  allowed 

"  Hunt  V.  Hunt.  17  Pick.  118;  Rob-  140,  §  3,  R.  L.  1902,  ch.  187,  §  3.  See 

bins  V.   Rice,  7  Gray,  202;    G.  S.  of  Jackson  on  Real  Actions,  with  Pre- 

Mass.   ch.   133,   §  55.  cedents. 

"-  Howard  Mut.  Loan  &  Fund  As-        "'  Fiedler  v.  Carpenter,  2  Wood.  & 

sociation  v.   Mclntyre,   3  Allen,  571.  M.   211;    York  Manuf.   Co.   v.   Cutts, 

"'•^Varnum  v.  Abbot,  12  Mass.  474;  18    Me.    204;    Grant   v.    Galway,    122 

Fosdick   V.    Gooding,    1    Me.    30,    50;  Mass.  135.     See,  also,  as  to  pleas  by 

Carll  V.  Butman,  7  Me.  102.    Accord-  the    defendant,    Olney    v.    Adams,    7 

ing   to   a   former  practice,   the   sev-  Pick.   31;   Wheelwright  v.   Freeman, 

eral  tenants  were  joined  as  defend-  12  Met.  154;   Richmond  Iron  Works 

ants.     4  Dane  Abr.  192.     This  prac-  v.   Woodruff,   8   Gray,  447;    Webster 

tice  was  corrected  by  Chief  Justice  v.  Vandeventer,  6  Gray,  428;    Roch- 

Parsons    in    Varnum    v.    Abbot,    12  ester  v.   Whitehouse,  15  N.   H.   468; 

Mass.  474,  7  Am.  Dec.  87.     And  see  Little  v.  Riley,  43  N.  H.  109. 
Taylor   v.    Porter,    7    Mass.    355.  '^  Trustees  v.   Connolly,  157  Mass. 

"G.   S.   of  Mass.   ch.   129,   §3;    ch.  272,  31  N.  E.  1058. 


§§    1295,    1296.]     FORECLOSURE    BY    WRIT    OF    ENTRY,  248 

to  show  that  he  was  not  in  possession  of  the  premises ;  or  that  they  are 
subject  to  a  mortgage  previous  or  paramount  to  that  held  by  the  de- 
mandant; or  that  they  are  in  possession  of  a  third  party,  who  has  ob- 
tained a  judgment  for  foreclosure  upon  that  mortgage.®'^ 

§  1295.  Evidence.—  The  demandant  makes  out  a  prima  facie  case 
by  proving  the  execution,  delivery,  acknowledgment,  and  recording  of 
a  mortgage  made  by  a  third  person.®*  If  the  demandant  holds  the 
mortgage  as  assignee,  he  must  also  prove  the  execution  and  delivery  of 
the  assignment  to  himself,  although  this  be  not  denied  in  the  plea.^* 
It  is  not  necessary  to  show  that  the  mortgagor  owned  the  land;  he 
cannot  dispute  the  mortgagee's  title.  On  the  production  of  a  note 
signed  by  a  husband  and  wife,  with  a  mortgage  to  secure  it  assented  to 
by  the  husband,  it  is  not  necessary  to  show  that  she  owned  the  land  in 
her  own  right.'"^ 

The  note  or  bond  secured  by  the  mortgage  should  be  produced,  al- 
though only  incidentally  in  question. ^^  If  lost,  the  contents  may  be 
proved,  for  the  purpose  of  showing  the  amount  for  which  conditional 
judgment  shall  be  entered.'^^  If  the  bond  offered  in  evidence  does  not 
correspond  to  that  described  in  the  mortgage  in  amount  or  date,  the 
variance  may  be  explained  by  parol  evidence."  A  breach  of  the  condi- 
tion must  of  course  be  shown. 


V.     The  Defences.  ■ 

§  1296.  Equitable  defences  are  allowed.  As  already  noticed,  a 
writ  of  entry  as  used  in  Massachusetts  and  Maine,  for  the  foreclosure 
of  a  mortgage,  is  in  effect  a  suit  in  equity  rather  than  a  real  action  at 
law,  inasmuch  as  the  plaintiff  is  entitled  only  to  a  conditional  judg- 
ment.^* As  regards  the  defences  that  may  be  taken  from  the  nature 
of  the  proceedings,  these  may  be  equitable  as  well  as  legal,  unless  the 
defendant  sets  up  some  title  other  than  that  of  mortgagor.     In  that 

«' Amidown  v.   Peck,  11  Met.   467;  In  Massachusetts  the  Supreme  or 

Devens  v.  Bower,  6  Gray,  126.  Superior  Court  may  appoint  an  aud- 

"^Burridge  v.  Fogg,  8  Cush.  183.  iter    to    examine    the     claims     and 

«"  Warner  v.  Brooks,  14  Gray,  109.  vouchers,  hear  the  parties,  and  make 

'"American   Mut.   Life  Ins.   Co.  v.  report  to  the  court.     A  rule  to  this 

Owen    15  Gray,  491.  effect    includes    a    reference    to    the 

"  Morse  v    Stafford,  95  Me.  31,  49  auditor  of  a  disputed  boundary  line. 

A.tl    45  Holmes    v.    Turner's    Falls    Lumber 

"Ward    V     Gunn,    12    Allen,    81;  Co.  150  Mass.  535,  23  N.  E.  305. 

Grimes  v.  Kimball,  3  Allen,  518;  An-  '*  See  supra,  §  1276.     In  Holbrook 

drews  v.  Hooper,  13  Mass.  472,  475.  v.  Bliss,  9  Allen,  69,  the  history  of 

"Baxter  v.  Mclntire,  13  Gray,  168.  the  law  in  this  respect  is  given  in 

See  Edgell  v.  Stanford,  3  Vt.  202.  a  learned  opinion  by  Judge  Gray. 


249  THE   DEFENCES.  [§    1297. 

case  his  claim  of  prior  independent  title  is  tried  and  decided  as  in  the 
ordinary  action  by  this  writ.  Otherwise  the  suit,  so  far  as  regards  the 
amount  of  the  judgment  and  the  conditional  form  of  it,  very  much  re- 
sembles a  bill  in  equity  when  used  for  the  same  purpose.  "The  prin- 
cipal difference  between  the  process  in  this  point  of  view  and  the  pro- 
ceedings for  the  like  purpose  in  the  English  courts  is,  that  here  our 
statute  fixes  the  time  within  which  the  defendant  shall  pay  the  sum 
found  due  on  the  mortgage,  in  order  to  prevent  the  foreclosure,  instead 
of  leaving  it  to  be  limited  in  such  cases  by  the  courts."^"^  The  amount 
for  which  the  conditional  judgment  shall  be  entered  "is  to  be  ascer- 
tained according  to  equity  and  good  conscience,  and  by  the  same  rules 
as  on  a  bill  in  chancery  to  redeem  the  same  mortgage."^''  Such  judg- 
ment, in  fact,  is  conclusive  evidence  of  the  amount  due  on  a  subsequent 
bill  to  redeem  the  same  mortgage,'^^  or  in  a  suit  upon  the  note  secured. '^^ 

In  general  the  same  defences  may  be  made  to  an  action  to  fore- 
close a  mortgage  that  may  be  made  in  an  action  upon  the  note  or 
other  evidence  of  debt  secured  by  the  mortgage,  excepting  only  the  de- 
fence of  the  statute  of  limitations  ;''^  for,  as  already  seen,  the  remedy 
on  the  mortgage  remains  good  after  an  action  on  the  debt  is  barred. ^"^ 

A  married  woman  might  show,  in  defence  to  an  action  upon  a  mort- 
gage made  by  her,  that  it  is  void  for  want  of  her  husband's  assent,  or 
a  judge's  approval  as  required  by  statute;  but  after  a  conditional  judg- 
ment has  been  rendered  in  a  suit  in  which  she  has  appeared  and 
pleaded,  she  would  be  estopped  to  set  up  such  invalidity  in  a  writ  of 
entry  by  her  against  the  mortgagee  or  his  grantee.^^ 

§  1297.  Want  of  consideration  is  of  course  a  good  defence ;  for  in 
such  case  there  is  nothing  on  which  to  found  a  conditional  judgment,®^ 
and  parol  evidence  is  admissible  to  show  that  no  debt  ever  existed  be- 
tween the  parties  to  the  mortgage.^^  The  fact  that  such  a  mortgage 
was  given  for  the  purpose  of  defrauding  the  mortgagor's  creditors  does 

^' Per   Jackson,   J.,   in   Walcutt   v.  Am.   Rep.   121;    Minot  v.   Sawyer,   8 

Spencer,  14  Mass.  409,  411;   Jackson  Allen,  78;    Northy  v.  Northy,  45  N. 

on     Real     Actions,     49;      Davis     v.  H.  141;  Ladd  v.  Putnam,  79  Me.  568, 

Thompson,   118  Mass.   497;    Cochran  12   Atl.   628;    Fuller   v.   Eastman,   81 

V.  Goodell,  131  Mass.  464.  Me.  284,  17  Atl.  67.    See  §  610. 

'"Per    Gray,    J.,    in    Holbrook    v.  *"  See     §§1204,     1205;     Thayer     v. 

Bliss,  9  Allen,  69.     See,  also.  Free-  Mann,    19   Pick.    535. 

land  V.  Freeland,  102  Mass.  475.  '^  Freison    v.    Bates    College,    128 

"Sparhawk  v.  "Wills,  5  Gray,  423,  Mass.  464. 

427.  ''Wearse  v.   Peirce,  24  Pick.   141 

'*  Fuller  V.    Eastman,   81   Me.   284,  Freeland  v.  Freeland,  102  Mass.  475 

17   Atl.   67.  Hannan  v.   Hannan,   123  Mass.  441 

"Vinton    v.    King,    4    Allen,    562;  Bigelow  v.   Bigelow,  93  Me.   439,   45 

Brolley    v.    Lapham,    13    Gray,    294,  Atl.  513.     See  §  612. 

297;    Davis  v.   Bean,  114  Mass.   360;  "Hannan    v.    Hannan,    123    Mass. 

Hannan  v.  Hannan,  123  Mass.  441,  25  441. 


§    1298.]  FORECLOSURE   BY   WRIT   OF   ENTRY,  250 

not  prevent  his  taking  advantage  of  the  want  of  consideration.  As 
regards  such  fraudulent  purpose  the  mortgagee  is  in  no  better  condi- 
tion than  the  mortgagor,  as  he  must  have  participated  in  it.'**  So 
the  fact  that  the  note  and  mortgage  were  originally  obtained  by 
duress  and  fraud  may  be  shown ;  or  that  the  consideration  was  illegal.*^ 
A  bona  fide  assignee  of  the  note  and  mortgage  before  maturit}'  might 
in  such  cases,  on  the  general  principles  applicable  to  negotiable 
paper,  recover  when  the  original  mortgagee  or  an  assignee  after 
default  could  not.®*^ 

§  1298.  Payment  of  the  mortgage  debt,  although  not  made  till 
after  breach  of  the  condition,  is  of  covirse  a  defence  to  a  writ  of 
entry  to  foreclose  the  mortgage.  There  can  be  but  one  satisfaction  of 
a  mortgage  debt.  The  receipt  of  payment  is  a  waiver  of  the  breach 
of  condition.  The  mere  legal  estate  is  not  sufficient  to  support  the 
action,  because  after  the  debt  is  paid  there  can  be  no  conditional 
judgment.^^  But  the  fact  that  no  money  is  due  upon  the  mortgage 
constitutes  no  defence  if  the  condition  be  to  do  any  other  act,  such 
as  to  provide  support,  and  this  has  not  been  performed.®^  After 
payment  the  writ  cannot  be  maintained  even  against  a  third  person, 
and  at  the  request  of  a  mortgagor  by  whom  the  payment  has  been 
made.^®  The  debt  is  not  discharged  by  a  tender  made  after  condition 
broken  and  before  the  action  was  brought;  it  is  only  in  equity  that 
the  mortgagor  can  avail  himself  of  it.  Therefore  a  tender  after 
condition  broken,  if  it  be  not  accepted,  constitutes  no  good  defence 
to  the  action.®" 

It  does  not  concern  the  defendant  whether  the  plaintiff  is  prose- 
cuting the  foreclosure  suit  for  his  own  benefit  or  for  the  benefit  of 
another,  unless  in  the  latter  case  payment  in  whole  or  in  part  has 
been  made   to  the   person   equitably   interested;    for   such   pa}Tnent 

'*  Wearse  v.  Peirce,  24  Pick.  141.  the  legal  seisin  which  he  holds  re- 
See  §  619.  suits  from  the  application  of  a  strict 

'^  Vinton  v.  King,  4  Allen,  562.  See  technical  rule  of  law,  and  any  tech- 

§§  624,  626.  nical  answer  to  a  claim  thus  formed 

*"  Clark  v.  Pease,  41  N.  H.  414.  See  is   good."     The   case   of  Parsons   v. 

§  834.  Welles,  17  Mass.  419,  so  far  as  it  as- 

"  Vose  v.  Handy,  2  Me.  322,  11  Am.  serts  that  a  writ  of  entry  may  be 

Dec.    101;    Slayton   v.    Mclntyre,   11  maintained  on  the  mortgagee's  bare 

Gray,  271;   Burke  v.  Miller,  4  Gray,  legal  title,  is  overruled. 

114,  116;  Wearse  v.  Peirce,  24  Pick.  »» Mason  v.  Mason,  67  Me.  546. 

141,  144;   Wade  v.  Howard,  11  Pick.  ^^  Prescott   v.    Ellingwood,    23    Me. 

289,    297.      And    see    Chadbourne    v.  345.     And   see   Bailey   v.   Metcalf,   6 

Rackliff,  30  Me.  354.  "When  the  debt  N.  H.  156. 

is  paid,  the  whole  substantial  pur-  '"See      §8  886-892;       Maynard      v. 
pose  is  accomplished;  a  mere  naked  Hunt,  5  Pick.  240;  Stanley  v.  Kemp- 
seisin,    without    any    beneficial    in-  too,  59  Me.  472. 
terest,    remains    in    the    mortgagee; 


251  THE  DEFENCES.  [§§  1299,  1300. 

would   be   a  defence.     Otherwise   the    plaintiff,   though   not   benefi- 
cially interested,  is  entitled  to  recover  on  his  legal  title.^^ 

The  mortgage  is  not  extinguished  by  an  assignment  of  it  to  an 
attaching  creditor  of  the  mortgagor  to  hold  instead  of  the 
attachment,  though  the  mortgagor  procures  tlie  assignment  by  pay- 
ing the  mortgagee  a  sum  equal  to  the  amount  due  on  the  mortgage; 
and  though  for  a  temporary  purpose  it  is  reassigned  to  the  mort- 
gagee and  afterward  assigned  back  again  by  him,  it  may  still  be 
enforced. "^ 

§  1299.  Surrender  obtained  by  fraud. — If  the  mortgage  has  not 
in  fact  been  paid  or  discharged,  but  delivered  up  to  the  mortgagor 
together  with  the  note  which  it  was  given  to  secure,  the  action  may 
still  be  maintained  on  proof  that  the  delivery  of  these  securities  was 
obtained  through  the  fraud  of  the  mortgagor  in  falsely  representing 
that  another  note  and  mortgage  which,  he  gave  the  mortgagee  in 
exchange  were  good  and  sufficient,  when  in  fact  they  were  worth- 
less.''^ In  such  case  the  action  may  be  maintained  not  only  against 
the  mortgagOT,  but  also  against  one  who  has  purchased  from  him 
in  ignorance  of  this  transaction  between  him  and  the  mortgagee, 
and  has  paid  the  purchase-money  partly  to  the  mortgagor  and 
partly  by  taking  up  a  subsequent  mortgage;  because,  the  mortgage 
remaining  undischarged  of  record,  the  purchaser  had  constructive 
notice  that  it  was  still  in  force  as  an  existing  incumbrance,  and  hav- 
ing such  notice  he  can  not  insist  that  in  equity  his  claim  shall  pre- 
vail over  the  legal  title  of  the  mortgagee.^* 

§  1300.  Usury  may  be  relied  upon  in  defence  to  the  forclosure 
suit,  in  the  same  manner  and  to  the  same  extent  as  in  a  suit  upon 
the  mortgage  note.^^  But  it  must  be  pleaded  and  can  not  be  set  up 
under  the  general  issue."*'  The  mortgagee  will,  however,  be  entitled 
to  a  conditional  judgment  unless  the  legal  penalties  for  the  usury 
exceed  the  whole  debt.^'^  The  penalties  go  to  reduce  the  amount  for 
which  the  conditional  judgment  will  be  rendered.  If  there  be  no 
usury  in  the  original  transaction,  a  payment  subsequently  made  to 
the  mortgagee  of  a  sum  over  and  above  the  interest  due  on  the  debt, 
in  consideration   of  his   forbearance  for   a  time  to   enter   upon  the 

"Sanderson  v.  Edwards,  111  Mass.  Arrington  v.  Jenkins,  95  N.  C.  462; 

335.  Gore  v.   Lewis,  109  N.  C.  539,  13  S. 

"■^Sheddy  v.  Geran,  113  Mass.  378.  B.  909.     See  §  633. 

"Grimes  v.  Kimball,  3  Allen,  518.  "^'§643;    Little  v.   Riley,  43  N.   H. 

"^Grimes  v.  Kimball,  8  Allen,  153.  109-;   Briggs  v.   Sholes,  14  N.  H.  262. 

"  Hart  V.  Goldsmith,  1  Allen,  145,  "  Manahan    v.    Varnum,    11    Gray, 

147;    Minot  v.   Sawyer,   8  Allen,  78;  405. 


§§    1301-1305.]        FORECLOSURE    BY    -WRIT    OF    EXTRY.  252 

premises  and  forclose  the  mortgage,  is  not  usurious,  and  is  not  de- 
ducted from  the  amount  of  the  debt  in  ascertaining  the  amount  of 
the  conditional  judgment."^ 

§  1301.  That  no  right  of  action  has  accrued  is,  of  course,  a 
defence  to  the  action."^ 

§  1302.  A  defence  may  be  maintained  as  to  a  part  of  the  prem- 
ises, by  showing  a  valid  release  of  the  mortgage  as  to  such  part,  though 
as  to  the  remainder  of  the  premises  there  be  no  defence.^*^ 


100 


§  1303.  A  purchaser  subject  to  a  mortg-age  can  not  set  up 
fraud  in  obtaining  the  mortgage.  If  he  holds  the  premises  by  a 
quitclaim  deed  from  the  mortgagor,  he  can  not  defend  an  action  to 
foreclose  the  mortgage  by  showing  that  the  mortgagee  obtained  the 
mortgage  by  false  and  fraudulent  representations  to  the  mortgagor; 
nor  can  he  for  this  reason  claim  a  reduction  of  the  amount  for 
which  the  conditional  judgment  is  to  be  entered.  If  any  such  claim 
exists  it  must  be  made  by  the  mortgagor,  as  it  does  not  pass  to  a  pur- 
chaser from  him  by  quitclaim  deed  ;^"  though  it  seems  that  the  for- 
mer might  confer  upon  the  latter  the  right  to  question  the  validity 
of  the  mortgage. ^"^ 

§  1304.  That  the  mortgagee  has  verbally  promised  not  to  en- 
force the  mortgage,  or  that  the  mortgagor  should  hold  the  land 
discharged  of  the  mortgage,  is  no  defence  to  the  action  ;^°^  and  a 
court  of  equity  will  not  restrain  the  prosecution  of  it.  A  legal 
instrument  under  seal  cannot  be  set  aside  by  such  a  verbal  agree- 
ment.^"* Moreover,  after  a  suit  to  foreclose  a  mortgage  has  been 
instituted,  the  prosecution  of  it  will  not  be  enjoined,  although  the 
holder  of  the  equity  of  redemption  offers  to  pay  any  sum  that  may 
be  due  under  the  mortgage,  for  that  may  just  as  well  be  determined 
in  the  foreclosure  suit.^"'* 

§  1305.  The  defendant  is  not  allowed  to  set  up  any  title  ac- 
quired  by   him    after    the    commencement    of   the    action;    as,    for 

instance,   the   tenant   cannot   defeat   an   action   by   the   holder   of   a 
second  mortgage  by  obtaining  an  assignment  of  the  first  mortgage 

'«  §  647;    Drury  v.  Morse,  3  Allen,  '"=  Bennett  v.  Bates,  94  N.  Y.  354. 

445.  "'  Maynard  v.   Hunt,   5   Pick.   240. 

"  Pettee  v.  Case,  11  Gray,  478.  And  see  Brolley  v.  Lapham,  13  Gray, 

""Wolcott  V.  Winchester,  15  Gray,  294. 

461.  ""  Hunt  V.  Maynard,  6  Pick.  489. 

"'  §§  744,  1807;   Fairfield  v.  McAr-  "*  Kilborn  v.  Robbins,  8  Allen,  466. 
thur,  15  Gray,  526;  Foster  v.  Wight- 
man,   123  Mass.   100. 


253  THE    CONDITIONAL    JUDGMENT.  [§    130G. 

to  himself,  and  offering  by  means  of  this  to  show  a  superior  title.^"* 
But  the  defendant  may  set  up  a  superior  title  acquired  before  the 
commencement  of  the  action,  and  the  title  may  be  tried  as  in  a 
common  law  writ  of  entry;  and  if  such  title  is  older  and  better 
than  the  mortgage  title,  he  will  prevail  in  the  suit.  If,  instead  of 
acquiring  such  outstanding  title,  a  stranger  holding  it,  pending  the 
suit,  ousts  him,  or  recovers  the  land  against  him,  the  writ  will  abate 
if  the  facts  are  specially  pleaded. 


107 


VI,     llie  Conditional  Judgment. 

§  1306.  The  judgment,  after  determining  the  amount  due  on 
the  mortgage,  is  conditioned  that  if  the  defendant  shall  pay  to 
the  plaintiff  the  sum  so  adjudged  to  be  due,  with  interest  thereon, 
within  two  months  from  the  time  of  entering  it,  then  the  mort- 
gage shall  be  void  and  discharged;  otherwise  the  plaintiff  shall 
have  his  execution  for  possession.  Possession  gained  in  this  way 
has  the  same  effect  as  an  entry  in  pais  in  the  manner  already  de- 
scribed, and  if  continued  for  three  years  the  right  of  redemption 
at  the  end  of  that  period  is  forever  foreclosed.  In  such  case  the 
time  limited  begins  to  run  from  the  date  when  the  officer  delivers 
seisin  and  possession  upon  the  execution.  The  officer's  return  on 
the  execution  is  not  conclusive  as  to  the  actual  date  of  the  deliv- 
ery of  possession.  Where  it  appeared  that  the  execution  was  dated 
May  6,  1869;  and  the  officer's  return  and  the  acknowledgment  of 
possession  were  dated  May  3,  1869;  and  the  execution  was  recorded 
June  10,  1869, — it  was  apparent  from  the  papers  themselves  that 
June  3  was  the  date  intended ;  but  the  court  held  that,  whether  this 
was  so  or  not,  the  whole  record  showed  that  possession  was  actually 
taken  on  some  day  between  the  date  of  the  execution  and  the  date 
of  the  record  of  it,  and  for  the  purposes  of  the  case  this  was  all 
that  it  was  necessary  to  determine.^'^^  Evidence  aside  from  the  record 
might  be  resorted  to  when  necessary,  to  show  when  the  possession 
actually  began.  A  voluntary  surrender  of  the  premises  after  judg- 
ment of  foreclosure  does  not  give  possession  under  the  judgment, 
but  merely  ordinary  peaceable  possession  under  the  mortgage.  Pos- 
session under  the  judgment  can  only  be  delivered  on  the  execution."^ 

""Hall  V.  Bell,  6  Met.  431;   Nash  409.     See,   however,  Dorr  v.   Leach, 

V.  Spofford,  10  Met.  192,  43  Am.  Dec.  58  N.  H.  18. 

425.     And  see  Den  V.  Vanness,  10  N.  »"« Worthy    v.    Warner.    119    Mass. 

J.  L.   102;   per  Jackson,  J.,  in  Wal-  550;   Dooley  v.  Potter,  140  Mass.  49, 

cutt  V.  Spencer,  14  Mass.  409,  411.  2  N.  E.  235,  per  Devens,  J. 

""  Walcutt    V.    Spencer,    14    Mass.  ^™  Briggs  v.  Sholes,  14  N.  H.  262. 


§    1307.]  FORECLOSURE   BY    WRIT    OF   ENTRY.  254 

In  Massachusetts  the  execution  and  the  officer's  return  thereon 
must  be  recorded  in  the  registry  of  deeds,  in  order  that  the  three 
years  necessary  for  foreclosure  shall  run  from  the  time  of  the  de- 
livery of  seisin,  as  against  any  person  other  than  the  parties  to 
the  action  and  their  heirs  and  devisees,  and  those  having  actual 
notice."" 

The  Judgment  will  include  the  entire  mortgaged  land,  although 
as  to  part  of  it  the  tenants  have  a  right  of  redemption.  Their 
remedy  for  this  is  by  a  bill  in  equity."^ 

§  1307.  The  fact  that  the  demandant  in  a  writ  of  entry  is  a 
mortgagee  does  not  preclude  him  from  maintaining  the  action 
simply  to  try  his  title,  and  to  recover  possession  from  one  who  has 
disseised  him.  When  the  controversy  is  between  a  mortgagee  in 
possession  and  a  stranger  to  the  title  who  has  disseised  him,  the 
statutory  provision  that  the  mortgagee  shall  count  on  his  own  seisin 
in  mortgage  has  no  application.  Although  he  has  entered  to  fore- 
close his  mortgage,  he  may  recover  in  a  writ  of  entry  just  as  if  he 
were  the  absolute  owner  in  fee."^  He  is  not  limited  to  a  conditional 
judgment  except  in  case  he  prosecutes  the  action  for  the  purpose  of 
foreclosing  the  mortgage."^  If  neither  party  moves  for  a  conditioual 
judgment,  judgment  will  be  entered  in  the  common  form."*  The 
mortgagee,  being  already  in  possession  of  a  portion  of  the  mort- 
gaged premises,  may  maintain  a  writ  of  entry  against  the  mortgagor 
for  the  remainder  by  declaring  on  his  own  seisin,  without  naming 
the  mortgage  cr  asking  a  judgment  as  upon  a  mortgage;  and  the 
defendant  cannot  restrict  him  to  such  a  judgment,  or  object  that 
the  plaintiff  is  attempting  to  foreclose  a  part  only  of  the  mortgaged 
land."^  Whether  the  writ  of  entry  is  brought  for  the  foreclosure 
of  the  mortgage,  or  to  try  the  title  and  recover  possession,  depends 
upon  the  case  disclosed  by  the  pleadings  and  proof,  and  not  upon 
the  form  of  the  writ."'' 

""G    S.   ch.   133,  §55;    Robbins  v.  »=  Simpson  v.  Dix,  131  Mass.  179. 

Rice   7  Gray,  202.    See  Walsh  v.  An-  "'  Boston   Bank   v.    Reed,    8    Pick, 

derson,  135  Mass.  65.  459;  Haven  v.  Adams,  4  Allen  80^  93; 

In  Maine   there   may  be  two  dis-  Stewart  v.  Davis,  63  Me.  539;    Part- 

tinct  judgments;  one  based  upon  the  ridge  v.  Gordon,  15  Mass.  486;   Dar- 

title,    the    other    as    to    the    amount  ling    v.     Chapman,     14    Mass.     101; 

due      Ladd  v.   Putnam,   79  Me.   568,  Loud  v.  Lane,  8  Met.  517;   Somes  v. 

12   Atl.    628;    Fuller  v.   Eastman,   81  Skinner,  16  Mass.  348,  3  Pick.  52. 

Me.    284,    17    Atl.    67.      Alias    execu-  "*  Provident    Inst,    for   Savings   v. 

tions    may    be    issued.      Belcher    v.  Burnham,  128  Mass.  458. 

Knowlton,  89  Me.  93,  35  Atl.  1019.  ^'^  Treat  v.  Pierce,  53  Me.  71.     And 

"1  Lewis    V.    Babb,    15    Mass.    488,  see  R.  S.  of  Me.  ch.  90,  §  7. 

note;    Johnson  v.  Brown,  31  N.   H.  ""  Blanchard   v.   Kimball,   13   Met. 

405.  300. 


255  THE    CONDITIONAL    JUDGMENT.  [§§    1308-1310. 

8  1308.  To  obtain  a  conditional  judgment  the  plaintiff  must 
produce  the  bond  or  note  on  which  the  mortgage  is  founded,  so 
that  it  may  be  known  what  payments  have  been  made,  and  how 
much  is  due  in  equity  and  good  conscience  upon  the  debt.  If  the 
mortgagee  has  assigned  the  bond  or  note,  and  has  no  interest  in 
the  claim,  there  is  no  reason  why  he  should  have  any  judgment, 
although  he  has  never  assigned  the  mortgage.  The  judgment 
should  only  be  rendered  upon  the  request  of  the  holder  of  the  note 
or  bond,  and  upon  his  producing  it."^ 

§  1309.  The  judgment  should  include  the  whole  amount  due 
and  payable  on  the  mortgage  at  the  time  of  entering  the  judg- 
ment, and  not  merely  the  amount  due  at  the  commencement  of 
the  action."®  It  should  include  the  whole  amount  secured  by  the 
mortgage,  whether  the  debt  be  absolute  or  contingent,  and  evidence 
is  admissible  to  show  what  is  the  actual  amount  secured."*  It  should 
include  the  costs  in  a  judgment  previously  obtained  upon  the  mort- 
gage debt,  as  well  as  the  costs  in  the  action  upon  the  mortgage.^^*' 
Neither  is  the  judgment  limited  to  the  amount  of  the  penalty  of  a 
bond  which  the  mortgage  secures.^^^ 

The  judgment  is  conclusive  as  between  the  parties  of  the  amount 
due  on  the  mortgage,^-^  though  not  conclusive  against  one  who  has 
purchased  the  equity  of  redemption  before  the  bringing  of  the  writ 
of  entry  and  is  not  a  party  to  the  action,  on  a  bill  by  him  to  redeem 
the  land.^2^ 

§  1310.  When  the  condition  of  the  mortgage  is  not  for  pay- 
ment of  a  sum  of  money,  but  is  for  the  performance  of  various 
duties  from  time  to  time  other  than  the  payment  of  money,  a  sim- 
ple conditional  judgment  in  the  usual  form  is  not  all  that  is  neces- 
sary; but  any  decree  which  may  be  made  in  a  suit  in  equity  may 
be  entered  from  time  to  time,  and  as  often  as  necessary,  in  order  to 
accomplish  the  purpose  of  the  mortgage. ^^* 

'"Vose  V.  Handy,  2  Me.  322,  332,  "="  Freeland  v.  Freeland,  102  Mass. 

11  Am.  Dec.  101;  Blethen  v.  Dwinal,  475. 

35  Me.  556;  Powers  v.  Patten,  71  Me.  '-"Holmes  v.   French,  70  Me.   341; 

583,   586;    Morse  v.   Stafford,   95  Me.  Hiird  v.  Coleman,  42  Me.  182;  Raw- 

31    49   Atl.   45.     And  see  George  v.  son  v.  Hall,  56  Me.  142. 

Ludlow,  67  Mich.  176,  33  N.  W.  169.  '^^  Pitts  v.  Tilden,  2  Mass.  118. 

A    motion    for    a    conditional    judg-  >"  Fuller  v.   Eastman,  81  Me.  284, 

ment  must  be  addressed  to  the  court.  17  Atl.  67. 

It  is  not  a  matter  for  the  jury.  Had-  '-'  Dooley  v.  Potter,  140  Mass.   49, 

ley  V.  Hadley,  80  Me.  459,  15  Atl.  47.  2  N.  E.  935.     To  hold  him  concluded 

•"Northy  V.  Northy,  45  N.  H.  141;  by    such    action    would    be    against 

Stewart  v.  Clark,  11  Met.  384;  Mohn  first  principles. 

V.  Hiester,  6  Watts,  53;  Carpenter  v.  '"Stewart  v.  Clark,  11  Met.  384. 
Carpenter,  6  R.  I.  542. 


gg    loll,    1313.]     FORECLOSURE  BY   WRIT   OF   ENTRY.  256 

In  such  case  the  court  may  liquidate  the  amount  due  upon  the 
mortgage  ;^-^  as,  where  it  is  conditioned  for  the  support  of  the  mort- 
gagee, judgment  may  be  entered  for  the  amount  of  expense  in- 
curred by  him  in  consequence  of  the  breach  of  the  condition  up  to 
the  time  of  rendering  judgment.^^"  A  mortgage  provided  that  the 
mortgagor  should  keep  a  cow  for  the  mortgagee;  but  he  kept  it  so 
poorly  that  the  mortgagee  vras  obliged  to  sell  the  cow.  In  an  ac- 
tion to  foreclose  the  mortgage,  a  conditional  judgment  was  entered 
for  the  cost  of  keeping  a  cow  subsequent  to  the  time  of  the  sale. 
The  mortgagor  not  having  offered  to  keep  another  cow,  or  give  any 
assurance  that  he  would  keep  one  properly,  it  was  not  regarded  as 
necessary  that  the  mortgagee  should  purchase  a  cow  and  ask  the 
mortgagor  to  keep  her,  in  order  to  hold  him  liable  for  the  keeping.^^^ 

Questions  of  fact  as  to  the  amount  due  may  be  submitted  to  a 
jury.^^^  Special  issues  may  be  framed  and  questions  proposed  for 
this  purpose,  to  be  tried  and  determined  by  the  jury  under  the  direc- 
tion of  court.^-^ 

§  1311.     Payments  made  by  the  mortgagee  for  protection  of  the 

estate,  he  is  entitled  to  have  included  in  the  judgment;  as,  for  in- 
stance, any  sums  he  has  paid  for  taxes,  premiums  of  insurance,  or 
in  other  ways  for  the  benefit  of  the  mortgagor,  so  far  as  the  mort- 
gage provides  that  such  payments  shall  become  a  charge'  upon  the 
estate. ^^°  But  a  mortgagee  who  has  taken  his  mortgage  in  part  pay- 
ment of  the  purchase-money  of  premises  conveyed  by  him  to  the 
mortgagor  at  the  same  time,  by  a  deed  with  full  covenants  of  war- 
ranty, cannot  charge  the  mortgagor  with  a  sum  since  paid  by  him 
to  relieve  the  premises  from  a  prior  mortgage  made  by  him  while 
owner  in  fee  of  the  premises,  by  proof  of  an  oral  agreement  at  the 
time  of  making  the  conveyances  that  the  mortgagor  should  assume 
the  payment  of  the  prior  mortgage,  and  of  a  mistake  in  the  drawing 
of  the  deeds.  The  written  deed  must  be  taken  as  proof  of  the 
agreement  of  the  parties.  The  mortgagee  can  avail  himself  of 
such  agreement  and  mistake  only  by  a  bill  in  equity  to  reform  the 
deed.^i 

§  1312.  Indemnity  mortgage. — Where  the  condition  of  a  mort- 
gage is  that  the  mortgagor  shall  pay  such  notes  as  the  mortgagee 
shall  sign  for  his  accommodation,   and  also   a  promissory  note   de- 

"'Erskine   v.   Townsend,   2   Mass.  ^'^  Slayton   v.    Mclntyre,    11    Gray, 

493,  3  Am.  Dec.  71.  271,  275. 

'-'  Wilder  v.  Whittemore,  15  Mass.  '■"  Foss  v.  Hildreth,  19  Allen,  76. 

262.  ""  See   §  1080. 

^"  Fiske  V.  Fiske,  20  Pick.  499.  "'  Ruggles  v.  Barton,  16  Gray,  151. 


357  THE    COXDITIONAL   JUDGMENT.         [§§    1313,    1314. 

scribed  in  the  mortgage,  but  the  only  consideration  for  the  mortgage 
and  mortgage  note  is  the  signing  of  an  accommodation  note  which 
the  mortgagee  paid  at  maturity,  on  a  writ  of  entry  to  foreclose, 
the  conditional  judgment  should  be  for  the  amount  of  the  note  paid 
by  the  mortgagee,  with  legal  interest  from  the  time  of  payment; 
and  even  if  the  mortgage  note  and  the  accommodation  note  be  for 
the  same  amount,  the  transaction  cannot  be  regarded  as  a  loan  of 
that  amount,  or  the  mortgage  note  regarded  as  the  principal  debt, 
so  as  to  carry  a  higlier  rate  of  interest  made  payable  by  that  note.^^^ 
If,  after  an  indemnity  mortgage  is  given,  the  parties  themselves 
agree  upon  the  amount  of  the  liability,  the  judgment  will  be  for 
this  amount,  though  it  be  only  a  part  of  the  original  claim."^ 

§  1313.  In  ascertaining  the  amount  of  the  judgment,  claims 
in  set-off  may  be  allowed  if  they  are  actually  mutual,  or  if  the 
parties  have  agreed  to  offset  them.^^**  Accordingly,  where  the  holder 
of  a  mortgage  was  indebted  to  the  mortgagor,  and  orally  agreed 
with  him  that  he  should  have  the  mortgage  for  the  amount  of  the 
debt,  it  was  held  that  the  debt  should  be  offset  against  the  mort- 
gage, although  such  holder  had  assigned  it  to  another  person  upon 
a  secret  trust  to  hold  for  him.^^^  But  distinct  debts  cannot  be  set 
off  aside  from  any  agreement  of  the  parties.  The  question  is  not 
what  would  be  due  between  the  parties  upon  a  settlement  of  their 
mutual  demands,  but  what  is  due  on  the  mortgage.""  If  there  are 
counter-claims,  which  by  agreement  have  become  an  equitable  set- 
off, they  should  be  proved  at  the  trial.  Merely  presenting  the 
claims  without  proof  on  the  one  side,  or  admission  upon  the  other, 
avails  nothing."^ 

§  1314.  Joint-tenants.— If  two  persons  owning  land  as  tenants 
in  common  mortgage  it  to  secure  the  payment  of  a  debt,  equitably 
as  well  as  legally  due  from  both,  and  one  is  made  to  pay  the  whole 
debt,  he,  by  reason  of  such  payment,  becomes  an  equitable  assignee 
of  the  mortgage  until  the  other  mortgagor  contributes  his  share, 
and  the  mortgagee  may  be  compelled  in  equity  to  execute  an  assign- 
ment to  him.^''^  If,  after  such  a  mortgage,  one  tenant  makes  a  second 
mortgage  of  his  undivided  half  of  the  same  property  to  secure  his 

"'Athol  Savings  Bank  v.  Pomroy,  ders  v.  Dunn,  175  Mass.  164,   55  N. 

115  Mass.   573.  E.  893;  Hannan  v.  Hannan,  123  Mass. 

'^^Rice  v.   Clark,  10  Met.   500.  441. 

"*Slayton    v.    Mclntyre,    11    Gray,  '"Davis   v.    Thompson,   118   Mass. 

271.  497. 

"'Holbrook  v.  Bliss,  9  Allen,  69;  "'Sargent    v.    McFarland,    8    Pick. 

Davis  V.  Thompson,  118  Mass.  497.  500;   Koboliska  v.  Swehla,  107  Iowa, 

"'Bird  v.  Gill,  12  Gray,  60;  Saun-  124,  127,  77  N.  W.  576. 


1315,    1316.]     FORECLOSURE  BY   WRIT   OF   ENTRY. 


258 


own  debt  to  the  same  mortgagee,  who,  after  entering  to  foreclose 
under  this  mortgage,  brings  a  writ  of  entry  against  the  other  ten- 
ant to  foreclose  the  first  mortgage,  the  conditional  judgment  should 
be  for  one  half  of  the  joint  debt:  for  if  this  tenant  were  compelled 
to  pay  the  whole  debt  he  would  be  entitled  to  the  security,  and, 
the  mortgagee  having  taken  possession  of  one  undivided  moiety 
under  the  second  mortgage,  the  result  is  the  same  in  the  end;  the 
mortgagee  has  the  benefit  of  all  the  security,  and  circuity  of  action 
is  avoided.^^^  If  the  money  raised  by  the  first  mortgage  had  been 
for  the  benefit  of  one  debtor  alone,  the  conditional  judgment  against 
him  would  be  for  the  whole  deht,  because  he  would  not  then  be 
entitled  to  any  protection  from  the  security. 

§  1315.     If  nothimg  is  due  to  the  plaintiff  upon  the  mortgage 

he  is  not  entitled  to  any  judgment  at  all,  although,  by  reason  that 
the  mortgage  debt  was  paid  after  it  became  due,  there  has  been  a 
breach  of  the  condition,  and  the  technical  legal  title  is  still  in  the 
mortgagee.^*" 

§  1316.  The  judgment,  with  all  benefit  of  the  security  and  of 
the  possession  taken  under  it,  may  be  assigned. — If  the  mortgage  be 
formally  assigned,  the  assignee  takes  the  legal  title ;  if  only  the  judg- 
ment be  assigned,  he  takes  the  equitable  title;  but  in  either  case  he 
has  the  benefit  of  all  the  proceedings  taken  towards  the  foreclosure  of 
the  mortgage.  If  the  assignment  be  made  to  a  surety,  or  any  person 
other  than  the  owner  of  the  equity  who  pays  the  judgment,  the  pay- 
ment does  not  avail  such  owner  as  a  payment  of  the  mortgage  debt. 
Even  without  any  formal  assignment  either  of  the  judgment  or  of  the 
mortgage,  the  surety  would  be  equitably  subrogated  to  all  benefit  of 
both."^ 

"» Sargent  v.  McFarland,  8  Pick.  "'  Worthy  v.  Warner,  119  Mass. 
500.  550.     See,  also,  Hedge  v.  Holmes,  10 

^^'Slayton  v.    Mclntyre,    11    Gray,    Pick.  380. 
271. 


CHAPTEE  XXX. 

STATUTORY  PROVISIONS  RELATING  TO   FORECLOSURE   AND  REDEMPTION. 

§  1317.  The  statutes  generally. — An  examination  of  the  statutes 
of  the  several  States  in  relation  to  the  foreclosure  of  mortgages  can 
hardly  fail  to  surprise  one  at  the  great  diversity  of  systems  in  use, 
and  at  the  difference  in  detail  between  those  which  are  based  upon 
the  same  general  principles/  In  general  it  may  be  said  that  a  bill 
in  equity  for  the  foreclosure  and  sale  of  the  property  is  the  prevail- 
ing method.  But  in  some  States  this  proceeding  is  left  to  the  in- 
herent and  general  jurisdiction  of  courts  of  chancery,  without  any 
statutory  regulations  whatever.  Formerly  the  general  principles 
of  equity  were  considered  sufficient  for  conducting  and  determining 
the  suit  in  all  cases,  and  there  were  statutes  regulating  it  in  hardly 
any  of  the  States.  Gradually,  however,  the  different  States  have 
enacted  provisions  covering  the  whole  proceeding  of  foreclosure, 
so  that  now  this  is  wholly  left  to  the  general  equitable  jurisdiction 
and  discretion  of  the  courts  in  chancery  only  in  one  State,  where  the 
common  mode  of  foreclosure  is  by  bill  in  equity;  though  in  several 
other  States,  as  in  Massachusetts  and  Pennsylvania,  where  a  fore- 
closure in  equity  is  allowed  only  in  exceptional  cases  when  the 
modes  in  common  use  are  inadequate,  the  proceedings  are  under 
the  general  equitable  jurisdiction  of  the  court.  The  statutes  in 
some  States  still  leave  much  to  the  equitable  discretion  of  the  court ; 
while  in  others  such  discretion  is  altogether  supplanted  by  provisions 
which  cover  the  whole  subject  in  detail. 

Aside  from  the  provisions  relating  directly  to  the  mode  of  fore- 

^  This  subject  well  illustrates  the  to  uniformity,  throughout  the  Unit- 
need  and  use  of  a  legal  reform  ed  States.  See  article  by  P.  N.  ^ow- 
which  shall  have  for  its  object  a  sys-  man,  in  3  Southern  L.  Rev.  573,  on 
tern  of  jurisprudence  which  shall  be,  Inter-State  Revision  and  Codifica- 
if  not  uniform,  at  least  an  approach    tion. 

259 


§§  1318,  1319.]  STATUTORY  PUOVISIOXS  RELATING  TO.  3G0 

closure,  and  the  rights  of  the  parties  before  and  after  foreclosure 
is  effected,  a  fundamental  change  has  been  made  in  the  manner  of 
judicial  procedure  in  several  States,  which  should  be  kept  in  mind 
in  examining  the  statutes  and  decisions  of  these  States  upon  this 
subject. 

§  1318.  Codes  af  procedure.— The  State  of  New  York,  in  1848, 
adopted  a  code  of  procedure,  the  fundamental  principle  of  which  is 
contained  in  the  provision,  that  "the  distinction  between  actions  at 
law  and  suits  in  equit}^  and  the  forms  of  all  such  actions  and  suits 
heretofore  existing,  are  abolished;  and  there  shall  be  in  this  State 
hereafter  but  one  form  of  action  for  the  enforcement  or  protection 
«f  private  riglits  and  the  redress  of  private  wrongs,  which  shall 
be  denominated  a  civil  action."^  The  Code  does  not  abolish  the 
distinction  between  law  and  equity,  which  is  too  deeply  impressed 
upon  the  jurisprudence  of  the  country  to  be  done  away  with  in  any 
State  by  any  enactment.  The  civil  action  is  an  equitable  proceed- 
ing, where  formerly  it  w^ould  have  been  a  bill  in  equity.  The  ac- 
tion for  foreclosure  under  the  Code  is  an  equitable  proceeding  as 
distinguished  from  an  ordinary  one,  and  is  governed  by  the  estab- 
lished principles  of  equity  except  where  statutes  regulate  it;  and 
these  statutes  in  general  are  only  embodiments  of  established  prin- 
ciples of  equity.  So,  therefore,  foreclosure  remains  an  equitable 
remedy,  although  it  is  obtained  under  a  new  name  and  form.  This 
pro'vision  of  the  New  York  Code,  quoted  above  as  comprehending 
the  whole  system,  has  been  enacted  in  substance,  and  generally  in 
the  same  words,  in  Arizona  Territory,  Arkansas,  California,  Colo- 
rado, Connecticut,  Florida,  Idaho,  Indiana,  Iowa,  Kansas,  Kentucky, 
Minnesota,  Missouri,  Montana,  Nebraska,  Nevada,  North  Carolina, 
North  Dakota,  Ohio,  Oklahoma  Territory,  Oregon,  South  Carolina, 
South  Dakota,  Utah,  Wisconsin,  and  Wyoming;  although,  in  Ar- 
kansas, Iowa,  Kentucky,  and  Oregon,  proceedings  in  equity  are  kept 
distinct  from  actions  at  law. 

§  1319.  In  this  chapter  a  statement  will  be  given  of  the  stat- 
utory provisions  of  each  State  in  relation  to  the  foreclosure  and 
redemption  of  mortgages,  excepting  only  such  provisions  as  relate 
to  power  of  sale  mortgages,  and  trust  deeds  with  powers  of  sale 
in  the  nature  of  mortgages,  and  the  provisions  relating  to  fore- 
closure by  entry  and  possession  used  in  some  of  the  New  England 
States.      Frequently,  where  the  mode  and  form  of    proceedings  to 

»  Code  of  Civ.  Pro.  §  69. 


261  FORECLOSURE  AND  UEDEMPTIOK.   [§§  1320,  1321, 

foreclose  are  not  regulated  by  statute,  these  are  stated  upon  the 
authority  of  the  decisions  of  the  courts.  In  the  notes  are  given 
the  judicial  interpretations  of  the  more  important  provisions  of 
these  statutes,  and  especially  such  decisions  as  illustrate  the  local 
laws  rather  than  general  principles  everywhere  applicable. 

§  1320.     A  mortgage  cannot  be  foreclosed  by  a  special  statute 

enacting  that  the  mortgage  has  been  foreclosed,  or  that  it  shall  be 
foreclosed  in  case  the  debt  be  not  paid  within  one  year  from  the 
passage  of  the  act.^  Such  a  statute  would  be  in  substance  and 
effect  a  judicial  decree.  It  is  not  properly  a  legislative  act.  It  is, 
therefore,  unconstitutional  under  a  government  in  which  the  legis- 
lative and  judicial  powers  are  vested  in  different  bodies,  and  also  in 
violation  of  the  Constitution  of  the  United  States  as  impairing  the 
obligation  of  the  contract  between  the  parties  to  the  mortgage, 
whereby  the  mortgagor  had  the  right  to  redeem  according  to  the 
general  laws  of  tlie  State. 

§  1321.  The  law  in  force  when  the  martgage  was  executed 
must  be  followed  in  foreclosing  it,  and  in  redeeming  from  sale, 
though  there  be  a  change  in  the  mean  time.*  The  remedy  so  provided 
becomes  a  part  of  the  contract  of  the  parties,  and  any  change  by  stat- 
ute substantially  affecting  it,  to  the  injury  of  the  mortgagee,  is  held  to 
be  a  law  impairing  "the  obligation  of  the  contract,"  within  the  mean- 
ing of  the  Constitution  of  the  United  States.  Thus  a  law  which  pro- 
vided that  the  equitable  estate  of  the  mortgagor  should  not  be  extin- 
guished for  twelve  months  after  a  sale  under  a  decree  in  chancery, 
and  which  prevents  any  sale  unless  tw^o  thirds  of  the  amount  at 
which  the  property  has  been  valued  by  appraisers  shall  be  bid 
therefor,  cannot  be  applied  in  the  foreclosure  of  a  mortgage  exe- 
cuted before  the  statute  was  enacted;  but  such  mortgage  must  be 
foreclosed  according  to  the  law  existing  when  it  was  executed.^ 

'Ashuelot    R.    Co.    v.    Elliott,    52  556;   State  v.  Sears,  29  Oreg.  580,  46 

N.    H.    387;     Martin    v.    Somerville  Pac.    785;    Hollister   v.    Donahoe,   11 

Water  Power  Co.   27   How.   Pr.   161.  S.  D.  497,  78  N.  W.  959;   Bauer  Gro- 

^Barnitz  v.  Beverly,  163  U.  S.  119,  cer  Co.  v.  Zelle,  172   111.   407,  50  N. 

16  S.   Ct.   1042,  reversing  Beverly  v.  E.  238. 

Barnitz,   55    Kan.    466,   42   Pac.    725;         ^  See    §1145.      Bronson   v.    Kinzi. 

49    Am.    St.    257,    31    L.    R.    A.    74;  1    How.    311;    Bronson    v.    Kinzie,  1 

see  Greenwood  V.  Butler,  52  Kan.  424,  H.    &    W.    (U.    S.),    311    Howard    v. 

34    Pac.    a67;     Wilber    v.    Campbell  Bugbee,  24  How.  (U.  S.),  461;  Brine 

(Ida.)    43  Pac.   677;    Malone  v.   Roy,  v.  Insurance  Co.  96  U.  S.  627;   Wil- 

134  Cal.  344,  66  Pac.  313;  Haynes  v.  liamson   v.    Doe,    7   Blackf.    12;    Mc- 

Tredway,  133  Cal.  400,  65  Pac.   892;  Cracken   v.    Hay  ward,    2    How.    608; 

Savings   Bank    v.    Barrett,    126    Cal.  Clark  v.  Reyburn,  8  Wall.  318,  322; 

413,    58   Pac.    914;    State   v.    Gilliam,  Ogden  v.  Walters,  12  Kans.  282.  See 

18  Mont.  94,  45  Pac.  661,  33  L.  R.  A.  Dow  v.  Chamberlin,  5  McLean,  28). 


§    1322.]  STATUTORY  PROVISIONS  RELATING  TO.  262 

§  1322.  Alabama.' — Foreclosure  may  be  had  by  bill  in  equity.® 
Tlie  decree  has  the  force  and  effect  of  a  judgment,  and  execution  may 
issue  after  the  property  has  been  sold,  the  sale  confirmed,  and  the 
balance  ascertained  by  decree  of  court.  Before  so  provided  by  stat- 
ute, it  was  held  that  the  balance  of  the  debt  could  only  be  enforced 
at  law.'^  The  proceeding  is  one  not  in  rem,  but  in  'personam,  and 
those  who  are  not  parties  to  it  are  not  bound  by  the  decree.*  A  strict 
foreclosure  may  be  decreed  in  proper  cases,  as  where  a  mortgagee  has 
obtained  a  release  of  the  equity  of  redemption  of  property  which  is 
worth  nothing  above  the  debt,  and  he  desires  to  quiet  the  title.^ 

The  fact  that  a  power  of  sale  is  conferred  upon  the  mortgagee 
does  not  deprive  a  court  of  chancery  of  its  jurisdiction  to  foreclose. 
The  fact  that  he  is  incapable  of  purchasing  at  his  own  sale  is  a 
reason  why  this  jurisdiction  should  be  retained.^" 

When  real  estate  is  sold  under  a  decree  in  chancery,  deed  of 
trust,  or  power  of  sale  in  a  mortgage,  it  may  be  redeemed  within 
two  years. ^^  The  possession  of  the  land  is  given  to  the  purchaser 
within  ten  days  after  the  sale  by  the  debtor,  if  in  his  possession, 
on  demand  of  the  purchaser.^-  If  the  land  is  in  the  possession  of  a 
tenant,  notice  to  him  by  the  purchaser,  or  his  vendee,  of  the  pur- 
chase, after  the  lapse  of  ten  days  from  the  time  of  sale,  vests  the 
right  of  possession  in  him  in  the  same  manner  as  if  such  tenant 
had   attorned  to  him.      The   debtor   in   order  to   redeem   must   pay 

In  Wisconsin,  however,  a  statute  'Hunt  v.  Acre,  28  Ala.  580;  Boy- 
providing  that  in  foreclosure  suits  kin  v.  Rain,  28  Ala.  332,  65  Am.  Dec. 
the  defendant  shall  have  six  months  349;  Duval  v.  McLoskey,  1  Ala.  708. 
to  answer,  and  that  there  should  be  "  Hitchcock  v.  U.  S.  Bank,  7  Ala. 
six  months'  notice  of  the  sale  after  386. 

judgment,   was   held   constitutional;  '"  Carradine   v.    O'Connor,    21   Ala. 

Von  Baumbach  v.  Bade,  9  Wis.  559,  573;   Marriott  v.  Givens,  8  Ala.  694; 

76    Am.    Dec.    283;    Starkweather   v.  McGowan   v.    Branch    Bank   at   Mo- 

Hawes,  10  Wis.  125;   but  not  appli-  bile,    7    Ala.    823;    Ala.    Life    Ins.    & 

cable  to  pending  actions.     Ogden  v.  Trust  Co.  v.  Pettway,  24  Ala.  544. 

Glidden,    9    Wis.    46;     Diedricks    v.  "Code   1896,   ch.    97,   §§    3505-3519. 

Stronach,  9  Wis.  548.  ^-  A  mortgagor  seeking  to  enforce 

In  general  it  may  be  stated  that  his  statutory  right  to  redeem  must 
a  change  of  law  as  to  matters  of  allege  and  prove  that  he  delivered 
practice,  such  as  length  of  notice,  possession  to  the  purchaser  within 
duration  of  advertising,  and  the  like,  ten  days.  This  involves  the  removal 
are  not  within  the  rule  above.  Webb  of  himself,  his  family,  personal  ef- 
V.  Moore,  25  Ind.  4;  Von  Baumbach  fects.  servants,  and  all  members  of 
v.  Bade,  9  Wis.  559;  Sims  v.  Stead-  his  household,  and  all  persons  ex- 
man,  62  S.  C.  300,  40  S.  E.  677;  Hoi-  cept  tenants,  who  may  attorn.  Nelms 
loway  V.  Sherman,  12  Iowa,  282;  v.  Kennon,  88  Ala.  329,  6  So.  744. 
Thompson  v.  Cobb,  95  Tex.  140,  65  Where  partnership  land  has  been 
S.  W.  1090.  sold  under  a  power  in  a  mortgage, 

°  Code  1886,  §§  1879-1891;  Code  1896,  one    partner,    after   dissolution,    has 

ch.    97.      Power    of    sale    mortgages  the  right  to  redeem  the  whole.  Leh- 

are  now  in  general  use.     See  §  1723.  man    v.    Moore,    93    Ala.    186,    9    So. 

'  Hunt  V.  Lewin,  4  Stew.  &  P.  138.  590. 


263 


FORECLOSURE   AND   REDEMPTION. 


[§  1322a. 


the  purchase-money,  with  interest  at  the  rate  of  ten  per  cent,  per 
annum,  and  all  lawful  charges."  If  the  purchaser  refuses  to  restore 
possession  to  the  debtor,  the  latter  may  recover  possession  by  suit 
for  unlawful  detainer..  Judgment  creditors  may  redeem  in  like 
manner,  upon  fui^her  offering  to  credit  the  debtor  upon  a  subsist- 
ing judgment  with  at  least  ten  per  cent,  of  the  amount  originally 
bid  for  the  land.  If  the  purchaser  offers  to  credit  the  debtor  on 
his  judgment  a  like  amount  he  may  retain  the  land,  unless  the  cred- 
itor makes  a  further  offer  to  credit  an  additional  sum  of  not  less 
than  ten  per  cent,  as  before,  to  which  the  purchaser  may  respond, 
if  he  choose,  with  a  like  offer.  One  judgment  creditor  may  in  like 
manner  redeem  from  another."  Any  person  redeeming  must  pay  to 
the  person  in  possession  the  value  of  all  permanent  improvements 
made  by  him  after  he  acquired  title.^^ 

§  1322a.     Alaska  T.^**      Mortgages  are  foreclosed  in  an  action  of 
an  equitable   nature  and   the   property   adjudged  to  be   sold.      If   a 

"  A  bill  to-  redeem  which  fails  to 
make  tender  of  the  purchase-money, 
with  interest  thereon  and  other  law- 
ful charges,  is  demurrable.  Beebe 
V.  Buxton,  99  Ala.  117,  12  So.  567. 
The  money  must  be  paid  into  court. 
Spoor  V.  Phillips,  27  Ala.  193;  Cald- 
well V.  Smith,  77  Ala.  157. 

^*  None  but  judgment  creditors 
have  this  right.  Owen  v.  Kilpat- 
rick,  96  Ala.  421,  11  So.  476.  A 
judgment  creditor  of  one  partner, 
who  alone  owned  land  mortgaged  by 
a  firm,  may  redeem.  Florence  Land 
Co.  V.  Warren,  91  Ala.  533,  9  So. 
384.  Redemption  from  redemption- 
er.  Owen  v.  Kilpatrick,  96  Ala.  421, 
4  So.  476. 

^^Code  1886,  §§1879-1891;  Code 
1896,  ch.  97;  Cramer  v.  Watson,  73 
Ala.  127.  The  right  to  redeem  after 
a  sale  can  be  enforced  only  in 
equity.  A  tender  does  not  restore 
the  title.  Smith  v.  Anders.  21  Ala. 
782.  This  right  is  a  personal  privi- 
lege of  the  debtor,  and  can  not  be 
asserted  by  a  purchaser  of  his  in- 
terest at  an  execution  sale  before 
the  statutory  right  had  arisen.  Chil- 
dress V.  Nonette,  54  Ala.  317.  The 
statutory  right  of  redemption  can 
only  be  exercised  by  the  persons 
named  in  the  statute,  and  not  by 
an  assignee  of  the  equity  of  redemp- 
tion. The  statutory  right  of  redemp- 
tion comes  into  existence  only  after 
the  equity  of  redemption  proper  has 


been  cut  off  by  sale  or  foreclosure. 
Powers  V.  Andrews,  84  Ala.  289,  4 
S.  O.  263,  overruling  Bailey  v.  Tim- 
berlake,  74  Ala.  221.  See,  also,  Wal- 
den  V.  Speigner,  87  Ala.  379,  6  So. 
81;  Commercial,  &c.  Asso.  v.  Parker, 
84  Ala.  298,  4  So.  268. 

The  right  can  not  be  waived  by  a 
contemporaneous  agreement  of  the 
mortgagor.  Parmer  v.  Parmer,  74 
Ala.  285. 

This  right  of  redemption  is 
neither  property  nor  a  right  of 
property.  Otis  v.  McMillan,  70  Ala. 
46.  It  is  not  suhject  to  levy  and 
sale  under  execution.  Junkins  v. 
Lovelace,  72  Ala.  303;  Bailey  v.  Tim- 
berlake,  74  Ala.   221. 

A  person  seeking  to  redeem  land 
under  the  statute  (Code  1896  §  3517) 
is  bound  to  pay  the  value  of  per- 
manent improvements  as  claimed 
by  the  person  from  whom  the  re- 
demption is  sought,  unless  he  de- 
mands the  arbitration  for  which  the 
statute  makes  provision;  and  if, 
without  demanding  such  arbitra- 
tion, with  full  knowledge  of  the 
facts,  he  pays  under  protest,  more 
than  the  fair,  reasonable  value  of 
the  improvements,  such  payment  is 
not  involuntary  or  compulsory,  and 
the  amount  so  paid  can  iwjt  be  re- 
covered back.  Prichard  v.  Sweeney, 
109  Ala.  651,  19  So.  730. 

'"Carter's  Annot.  Codes  1900,  Pt. 
IV,   §§    389-396. 


§    1322a.]  STATUTORY    PROVISIONS    RELATING   TO.  264 

promissory  note  or  other  personal  obligation  for  the  payment  of  the 
debt  has  been  given,  the  court  also  adjudges  a  recovery  of  the  amount 
of  such  debt.  Any  person  having  a  lien  subsequent  to  the  plaintiff 
upon  the  same  property,  and  a:ny  person  who  has  given  a  promissory 
note  or  other  personal  obligation  for  the  payment  of  the  debt,  must 
be  made  a  defendant  in  the  suit;  and  any  person  having  a  prior  lien 
may  be  made  defendant  at  the  option  of  the  plaintiff  or  by  order  of 
court.  Any  defendant  having  a  lien  may  have  a  judgment  in  the 
same  manner  as  if  he  were  plaintiff.  When  a  judgment  is  given  fore- 
closing two  or  more  liens  upon  the  same  property  or  any  portion 
thereof  in  favor  of  different  persons  not  united  in  interest,  such  judg- 
ment must  determine  and  specify  the  order  of  time  according  to  their 
priority,  in  which  the  debts  secured  by  such  liens  shall  be  satis- 
fied out  of  the  proceeds  of  the  sale  of  the  property. 

The  judgment  may  be  enforced  by  execution  as  an  ordinary  judg- 
ment for  the  recovery  of  money,  except  that,  when  a  judgment  of 
foreclosure  and  sale  is  given,  an  execution  may  issue  thereon  against 
the  property  adjudged  to  be  sold.  If  the  judgment  is  in  favor  of  the 
plaintiff  onlv,  the  execution  may  issue  as  in  ordinary  cases;  but 
if  it  be  in  favor  of  different  persons,  not  united  in  interest,  it  shall 
issue  upon  the  joint  request  of  such  persons,  or  upon  the  order  of 
the  court  or  judge  thereof,  on  the  motion  of  either  of  them.  When 
the  judgment  is  also  against  the  defendants  or  any  one  of  them 
in  person  and  the  proceeds  of  the  sale  of  the  property  upon  which  the 
lien  is  foreclosed  is  not  sufficient  to  satisfy  the  judgment,  as  to 
the  sum  remaining  unsatisfied,  the  judgment  may  be  enforced  by 
execution  as  in  ordinary  cases.  When  in  such  case  the  judgment 
is  in  favor  of  different  persons  not  united  in  interest,  it  shall 
be  deemed  a  separate  judgment  as  to  such  persons,  and  may  be  en- 
forced accordingly. 

A  judgment  of  foreclosure  shall  have  the  effect  to  bar  the  equity 
of  redemption,  and  property  sold  on  execution  issued  upon  a  judg- 
ment may  be  redeemed  in  like  manner  and  with  like  effect  as  real 
property  sold   on  an  execution  issued  on  a  judgment. 

During  the  pendency  of  an  action  for  the  recovery  of  a  debt  se- 
cured by  any  lien,  an  action  cannot  be  maintained  for  the  fore- 
closure of  such  lien,  nor  thereafter,  unless  judgment  be  given  in 
such  action  that  the  plaintiff  recover  such  debt  or  some  part  there- 
of, and  an  execution  thereon  against  the  property  of  the  defend- 
ant in  the   judgment  is   returned  unsatisfied   in   whole   or  in   part. 

When  an  action  commenced  to  foreclose  a  lien  by  which  a  debt 


365  rORECLOSUHE    AND    REDEMPTION,  [§    1322b. 

is  secured,  w'liich  debt  is  payable  in  instalments  either  of  inter- 
est or  principal,  and  any  of  such  instalments  is  not  then  due,  the 
court  shall  adjudge  a  foreclosure  of  the  lien,  and  may  also  adjudge 
a  sale  of  the  property  for  the  satisfaction  of  the  whole  of  such  debt, 
or  so  much  thereof  as  may  be  necessary  to  satisfy  the  instalment 
then  due,  with  costs  of  suit;  and  in  the  latter  case,  the  decree  of 
foreclosure  as  to  the  remainder  of  the  property  may  be  enforced  by 
an  order  of  sale  in  whole  or  in  part,  whenever  default  shall  be 
made  in  the  payment  of  the  instalments  not  then  due.  If,  before  a 
judgment  is  given,  the  amount  then  due,  with  the  costs  of  suit,  is 
brought  into  court  and  paid  to  the  clerk,  the  suit  shall  be  dismissed ; 
and  if  the  same  be  done  after  judgment  and  before  sale,  the  effect 
of  the  judgment  as  to  the  amount  then  due  and  paid  shall  be  ter- 
minated, and  the  execution,  if  any  have  issued,  be  recalled  by  the 
clerk.  When  an  instalment  not  due  is  adjudged  to  be  paid,  the 
court  shall  determine  and  specify  in  the  judgment  what  sum  shall 
be  received  in  satisfaction  thereof,  which  sum  may  be  equal  to  such 
instalment  or  otherwise,  according  to  the  present  value  thereof. 

Eedemption  may  be  had  from  a  foreclosure  sale,  in  like  manner 
as  upon  an  execution  sale,  within  four  months  after  the  date  of 
the  order  confirming  the  sale. 

1322b.  Arizona  T."  The  judgment  for  foreclosure  is  for  the 
entire  amount  found  due  with  taxes  and  costs.  An  execution  is 
issued  accordingly  and  if  the  property  does  not  sell  for  enough  to 
satisfy  the  execution  an  execution  for  the  balance  may  be  issued 
against  the  mortgagor  if  there  has  been  personal  service  upon  him 
or  he  has  appeared  in  the  action.  If  there  is  an  overplus  after  sat- 
isfying the  execution  and  there  is  no  other  lien  upon  the  property 
such  overplus  shall  be  paid  to  the  mortgagor. 

If  there  are  any  other  liens  on  the  property  sold,  or  other  pay- 
ments secured  by  the  same  mortgage,  they  shall  be  paid  off  in  their 
order.  And  if  the  money  secured  by  any  such  lien  is  not  yet  due, 
a  rebate  of  interest,  to  be  fixed  by  the  court  or  judge  thereof,  must 
be  made  by  the  holder,  or  his  lien  on  such  property  will  be  post- 
poaied  to  those  of  a  junior  date,  and  if  there  are  none  such,  the  bal- 
ance shall  be  paid  to  the  mortgagor. 

In  case  redemption  is  not  made,  and  the  mortgagor  or  his  as- 
signs refuse,  after  the  expiration  of  the  time  for  redemption,  to 
deliver  up  possession  of  any  foreclosed  property,  the  court,  upon  ap- 
plication, shall  cause  a  writ  of  possession  to  be  issued,  placing  the 
purchaser  or  his  assigns  in  possession. 

•'  R.   S.   1901,   §§  3275-3281. 


§    1323.]  STATUTORY    PROVISIONS   RELATING    TO.  266 

§  1323.     Arkansas.'^''*^ — Mortgages     are     foreclosed     by     complaint 

against  the  mortgagor,  and  the  actual  occupants^^  of  the  real  estate 
praying  judgment  for  the  debt,  and  that  the  equity  of  redemption  may 
be  foreclosed  and  the  property  sold.  This  must  be  filed  in  the 
county  where  the  premises,  or  some  part  of  them,  are  situate.^"  The 
proceedings  are  of  an  equitable  character,  and  are  governed  by  the 
principles  and  practice  of  courts  of  equity.^^  It  is  not  necessary 
to  enter  an  interlocutory  judgment,  or  give  time  for  the  payment 
of  money,  or  for  doing  any  other  act;  but  final  judgment  may  be 
given  in  the  first  instance.  A  sale  is  ordered  in  all  cases.  Judg- 
ment may  be  rendered  for  the  sale  of  the  property  and  for  the 
recovery  of  the  debt  against  the  defendant  personally. 

Before  any  mortgagee  or  trustee  shall  proceed  to  foreclose  any 
mortgage  or  deed  of  trust  he  shall  deliver  to  the  mortgagor  a  veri- 
fied statement  of  his  account  and  of  the  balance  due  except  in  case 
the  mortgagor  removes  from  the  county.  At  the  sale  the  property 
shall  not  be  sold  for  less  than  two-thirds  the  appraised  value  of  it. 
The  property  may  be  redeemed  by  the  mortgagor  at  any  time  within 
one  year.^^ 

All  sales  of  real  property  are  made  on  a  credit  of  not  less  than 
three  nor  more  than  six  months,  or  on  instalments  equivalent  to 
not  more  than  four  months'  credit  on  the  whole,  to  be  determined 
by  the  coiirt.^^  In  all  sales  on  credit  the  purchaser  must  execute 
a  bond,  with  a  good  surety  to  be  approved  by  the  person  making 
the  sale,  which  bond  has  the  force  of  a  judgment,  and  a  lien  is 
retained  on  the  property  for  its  price.  If  the  mortgage  be  not  sat- 
isfied by  the  sale,  an  execution  may  issue  against  the  defendant,  as 
in  ordinary  judgments.^* 

^«Dig.   of  Stat.   1894,   §§5684,  5856,  225;  Fletcher  v.  Hutchinson,  25  Ark. 

5860.     Trust  deeds  are  in  use  here.  30. 

Equity  has  no  jurisdiction  of  a  pro-  '"Dig.   of  Stats.   1894,   §  5684;    Dig. 

ceeding  in   rem   against   real   estate  of    Stats.     1894,     §§  5856-5860,    5110- 

to    foreclose    a    mortgage    upon    it,  5114. 

without  making  any  person  defend-  =' McLain    v.    Smith,    4    Ark.    244; 

ant.     This  could  be  authorized  only  Price  v.   State  Bank,  14  Ark.  50. 

by  statute.     State  v.  Bailey,  27  Ark.  "  Dig.  of  Stats.   1894,   §§  5110-5113. 

473.     The  fact  that  a  mortgage  con-  -^  It  is  error  in  the  court  to  direct 

tains  a  power  of  sale  does  not  ex-  a  sale  for  cash.    It  is  bad  practice  to 

elude  the  right  to  foreclose  by  suit  appoint    the    mortgagee    a    commis- 

in  equity.     Martin  v.  Ward,  60  Ark.  sioner  to  make   the  sale.     A  disin- 

510,   30   S.   W.    1041.  terested  person  should  be  appointed. 

^^  The  actual  occupant,  if  there  be  It    is    usual    to    appoint    a    master. . 

one,  must  be  made  a  party,  or  the  Worsham  v.  Freeman,  34  Ark.  55. 

petition  must  show  that  there  is  no  =*  At  all  sales  of  real  property  un- 

occupant,  or  that  the  mortgagor  is  der    mortgages   and    deeds    of   trust, 

the   occupant.     McLain  v.   Smith.   4  the   property   shall   not   be   sold   for 

Ark.  244;   Jett  v.  Cave,  5  Ark.  254;  less    than    two    thirds    of    the    ap- 

Buckner   v.    Sessions,    27    Ark.    219,  praised  value.    If  the  property  shall 


267 


FORECLOSURE   AND   REDEMPTION. 


[§    1324. 


§  1324.  Calif omia.-^ — Foreclosure  is  a  matter  of  equity  jurisdic- 
tion.^" There  can  be  but  one  action  for  the  recovery  of  any  debt,  or 
•the  enforcement  of  any  right  secured  by  mortgage  upon  real  estate." 

not  sell  at  the  first  offering  for  two 
thirds  of  the  amount  of  the  ap- 
Ijraisement,  another  offering  may  be 
made  twelve  months  thereafter,  at 
which  offering  the  sale  shall  be  to 
the  highest  bidder,  without  refer- 
ence to  the  appraisement. 

Redemption.  Real  property  sold 
hereunder  may  be  redeemed  by  the 
mortgagor  at  any  time  within  one 
year  from  the  sale  thereof,  by  pay- 
ment of  the  amount  for  which  the 
property  was  sold,  together  with  ten 
per  cent,  interest  thereon  and  costs 
of  sale.  When  such  sales  are  to  be 
made,  the  mortgagee,  trustee,  or 
other  person  authorized  to  make  the 
same,  shall,  before  the  day  fixed 
therefor,  apply  to  the  nearest  justice 
of  the  peace  for  the  appointment  of 
appraisers:  and  such  justice  shall 
thereupon  appoint  three  disinter- 
ested householders  of  the  county, 
who  shall  under  oath  proceed 
to  view  and  appraise  such  prop- 
erty, and  they,  or  any  two  of 
them,  shall  make  a  report  of 
their  appraisement  in  writing,  and 
shall  deliver  it  to  the  person 
making  the  sale,  to  be  held  by 
him  subject  to  inspection  by  all 
parties  interested.  Dig.  of  Stat. 
1894,  §§5110-5113;  Wood  v.  Holland, 
57  Ark.  198,  21  S.  W.  223.  Under 
this  statute  the  appraisers  have  no 
authority  to  deduct  incumbrances 
from  the  appraised  value,  and  a  sale 
under  a  power  for  less  than  two 
thirds  of  the  appraised  value  is  void. 
Ellenbogen  v.  Griffey,  55  Ark.  268, 
18  S.  W.  126.  Mortgagor  may  re- 
deem though  the  debt  be  for  pur- 
chase-money, but  he  must  pay  the 
whole  purchase-money  due.  Wood 
V.  Holland,  53  Ark.  69,  13  S.  W.  739, 
57  Ark.  198.  The  purchaser  of  a 
part  of  the  mortgaged  property  can 
not  redeem  the  entire  mortgaged 
premises  from  the  purchaser  at  the 
foreclosure  sale.  He  succeeds  to  the 
mortgagor's  rights  only  in  the  par- 
cel purchased.  Pine  Bluff,  &c.  Ry. 
Co.  V.  James,  54  Ark.  81,  15  S.  W. 
15. 

The  purchaser  at  the  mortgagee 
sale  can  not  recover  from  the  mort- 
gagor the  rents  accrued  during  the 
year  allowed  for  redemption,  where 


he  gave  the  mortgagor  no  notice  to 
quit  and  made  no  demand  for  the 
rents.  North  American  Trust  Co. 
V.   Burrow,   68   Ark.   584. 

The  statute  providing  for  redemp- 
tion from  mortgage  sales  has  no 
application  to  mortgages  executed 
before  the  passage  of  the  act.  Hud- 
gins  V.  Morrow,  47  Ark.  515,  2  S.  W. 
104;  Robards  v.  Brown,  40  Ark.  423. 
To  effect  a  redemption  under  this 
statute  it  must  be  complied  with. 
The  complainant  must  make  a  ten- 
der of  the  amount  designated  by  the 
statute.  He  can  not  seek  to  redeem 
under  the  mortgage,  and  at  the  same 
time  ask  that  the  sale  of  the  lands 
made  by  the  purchaser  at  the  mort- 
gage sale  be  confirmed  to  a  third 
person.  German  Nat.  Bank  v.  Bar- 
ham,  57  Ark.  533,  22  S.  W.  95. 

This  statute  does  not  apply  to 
sales  under  decree  of  court,  though 
the  mortgage  be  in  the  form  of  trust 
deed  or  power  of  sale.  Martin  v. 
Ward,  60  Ark.  510,  30  S.  W.  1041. 

==Code  of  Civil  Procedure,  §§726- 
728 

-"Willis  V.  Parley,  24  Cal.  490. 
This  provision  is  imperative,  and  a 
creditor  holding  a  mortgage  given 
as  security  must  bring  his  action 
of  foreclosure;  and,  though  the  se- 
curity proves  valueless,  he  can  not 
waive  it  and  bring  an  action  on  the 
debt.  But  this  provision  does  not 
prevent  a  new  action  on  the  mort- 
gage note  to  recover  a  deficiency 
left  on  foreclosure.  Blumberg  v. 
Birch,  99  Cal.  416,  34  Pac.  102. 

-^  Under  this  provision  a  mort- 
gagee who  had  prosecuted  an  ac- 
tion in  Ohio  to  final  judgment,  upon 
a  note  secured  by  mortgage  on  land 
in  California,  could  not  afterwards 
maintain  an  action  for  foreclosure. 
Ould  V.  Stoddard,  54  Cal.  61. 

Though  there  are  two  deeds  to 
the  same  party  to  secure  the  same 
debt,  there  can  be  but  one  action, 
and  failure  to  include  one  of  such 
deeds  in  the  action  extinguishes 
the  lien  given  by  it.  There  could 
be  no  personal  judgment  for  a  de- 
ficiency in  such  case,  because  the 
mortgagee  can  have  such  a  judg- 
ment only  after  he  has  exhausted 
his   security;    and  having  waived  a 


§    1324.]  STATUTORY    PROVISIONS    RELATING    TO.  268 

In  such  action  the  court  may  by  its  judgment  direct  a  sale  of  the 
incumbered  property,  or  so  much  thereof  as  may  be  necessary,  and 
the  application  of  the  proceeds  of  the  sale  to  the  payment  of  the 
costs  and  expenses  of  sale  and  the  amount  due  to  the  plaintiff,  and 
may  appoint  a  commissioner  to  make  the  sale;-®  and  if  it  appear 
from  the  sheriff's  return,  or  the  commissioner's  report,  that  the  pro- 
ceeds are  insufficient,  and  a  balance  still  remains  due,  judgment  can 
then  be  docketed  for  such  balance  against  the  defendant  or  defendants 
personally  liable  for  the  debt,  and  it  becomes  a  lien  on  the  real  estate 
of  such  judgment  debtor,  as  in  other  cases  in  which  execution  may 
be  issued.^^^  Subsequent  parties  in  interest  not  appearing  of  record 
need  not  be  made  parties  to  the  action,  and  judgment  is  conclusive 
against  them.  Any  surplus  there  may  be  the  court  may  cause  to 
be  paid  to  the  person  entitled  to  it,  and  in  the  mean  time  may  direct 
it  to  be  deposited  in  court.  When  the  debt  is  not  all  due,  so  soon 
as  sufficient  property  has  been  sold  to  pay  the  amount  due,  with  costs, 
the  sale  must  cease;  and  afterwards,  as  often  as  more  becomes  due 
for  principal  or  interest,  the  court  may  on  motion  order  more  to  be 
sold.^"  But  if  the  property  cannot  be  sold  in  portions  without  injury 
to  the  parties,  the  whole  may  be  ordered  to  be  sold  in  the  first  in- 
stance, and  the  entire  debt  and  costs  paid,  there  being  a  rebate  of 
interest  where  such  rebate  is  proper. 

The  officer  gives  the  purchaser  a  certificate  of  sale,  stating  the 
price  bid,  the  whole  price  paid,  and  whether  subject  to  redemption. 
Redemption  may  be  made  by  the  judgment  debtor,  or  his  successor 
in  interest  in  the  whole  or  any  part  of  the  property  f^  or  by  a  creditor 
having  a  lien  by  judgment  or  mortgage  on  the  property,  or  any  part 
of  it.  Such  creditors  are  called  redemptioners.  The  judgment 
debtor  or  redemptioner  may  redeem  within  twelve  months  after  the 
sale,  on  paying  the  purchaser  the  amount  of  his  purchase,  with  one 

part  of  the  security,  he  is  not  able  personal  judgment  can  not  be  dock- 
to  exhaust  the  security.  Hall  v.  eted  before  the  sale.  Cormerais  v. 
Arnott,  80  Cal.  348,  22  Pac.  200.  Genella,  22  Cal.  116.     It  should  first 

='  The  purpose  of  this  statute  is  be  ascertained  by  the  court  or  by  a 
to  compel  the  holder  of  a  mortgage  master  what  balance  is  due.  Hunt 
to  exhaust  his  security  before  hav-  v.  Dohrs,  39  Cal.  304;  Guy  v.  Frank- 
ing recourse  to  the  general  assets  lin,  5  Cal.  416.  The  clerk  of  court 
of  the  debtor.  Savings  Bank  v.  may  then  without  further  order 
Central  Market  Co.  122  Cal.  28,  54  docket  the  judgment  and  issue  a 
Pac  273;  Merced  Bank  v.  Casaccia,  general  execution.  Leviston  v. 
103  Cal.  641.  37  Pac.  648;  Otto  v.  Swan,  33  Cal.  480. 
Long,  127  Cal.  471,  59  Pac.  895;  ^^  The  decree  may  properly  show 
Blum'berg  v.  Birch,  99  Cal.  416,  34  the  amount  due  and  the  sums  yet  to 
Pac  102  37  Am.  St.  Rep.  67.  Code  become  due.  Bank  of  Napa  v.  God- 
of  Civ.   Proc.   1903,    §726.  frey,  77  Cal.  612,  20  Pac.  142. 

"  As    to    form    of    judgment,    see  ''  Southern  Cal.  Lumber  Co.  v.  Mc- 

Leviston  v.  Swan,  33  Cal.  480.  The  Dowell,  105  Cal.  99,  38  Pac.  627. 


269  FORECLOSURE   AND    REDEMPTION.  [§    132-1. 

per  cent,  per  month  thereon  in  addition,  with  any  taxes  the  purchaser 
may  have  paid,  and,  if  the  purchaser  be  a  creditor  having  a  prior 
lien,  the  amount  of  such  lien  with  interest. ^^  If  a  redemptioner 
redeem,  the  judgment  debtor  or  another  redemptioner  may,  within 
sixty  days  after  the  last  redemption,  again  redeem,  on  paying  the 
sum  paid  on  the  last  redemption,  with  two  per  cent,  thereon  in 
addition.^^  And  successive  redemptions  may  be  made  in  the  same 
manner.  If  no  redemption  be  made  within  six  months  after  sale, 
the  purchaser  is  entitled  to  a  conveyance. 

A  purchaser  from  the  time  of  sale,  and  a  redemptioner  till  another 
redemption,  is  entitled  to  receive  from  the  tenant  in  possession  the 
rents  of  the  property  sold,  or  the  value  of  the  use  and  occupation. 
The  amount  received  must  be  credited  on  the  redemption  money  to 
be  paid.^*  If  the  purchaser  be  evicted  for  any  irregularity  in  the 
sale,  he  may  recover  the  amovmt  of  the  purchase-money  with  interest 
from  the  judgment  creditor. ^^ 

When  a  personal  judgment  is  rendered  against  the  defendant,  and 
also  a  decree  in  equity  awarded  for  the  sale  of  the  property,  the 
plaintiff  may  pursue  either  remedy,  but  he  cannot  use  both  at  the 
same  time.  If  he  enforce  the  execution  on  the  personal  judgment 
first,^^  the  money  realized  on  it  must  be  applied  upon  it,  and  a  sale 
of  the  property  under  the  decree  made  for  the  balance,  or  vice  versa.^'' 
The  personal  judgment  does  not  become  a  lien  upon  other  real  estate 
of  the  defendant  until  the  mortgaged  property  has  been  sold,  and 
the  deficiency  of  the  debt  reported  and  docketed  by  the  clerk  of  the 
court.^^     It  then  applies  only  for  this  deficiency.^^ 

When  part  of  the  debt  is  not  due  at  the  time  of  the  decree,  there 
can  be  no  judgment  for  the  recovery  of  the  balance  not  due  from 

^-  Code    of    Civ.    Pro.    1903,    §  702.  ^=  Code  Civ.   Pro.    1903,   §  708. 

If  the  mortgagee  purchases  the  land  ^^  If  the  plaintiff  takes  a  personal 

at  the  foreclosure  sale  for  a  sum  less  judgment  only,  and  strikes  out  the 

than   the   amount  of   the  judgment,  prayer  for   a   sale   of  the  premises, 

and  takes  judgment  for  the  deficien-  he  waives   all   right  to  this.     Ladd 

cy,  the  mortgagee's  grantee,  pending  v.   Ruggles,   23   Cal.   232. 

the  time  for  redemption,  is  entitled  "  Englund   v.    Lewis,   25    Cal.    337. 

as   successor  in   interest  to   redeem  '^Rowland   v.    Leiby,   34   Cal.   156; 

the    mortgage    without    paying    the  Rowe  v.  Table  Mountain  Water  Co. 

amount  of  the  deficiency.  The  mort-  10  Cal.  441. 

gagee,  in  such  case,  is  not  a  cred-  '°  Culver   v.    Rogers,    28   Cal.    520; 

itor   having  a  prior  lien.     Simpson  Cormerais    v.    Genella,    22    Cal.    116. 

V.    Castle,   52    Cal.    644.  Where  a  deficiency  judgment  is  ren- 

'' Code      Civ.      Pro.      1903,      §703;  dered  on  the  foreclosure  of  a  mort- 

The  grantee  of  the  judgment  debt-  gage,    the    proceedings    will    not   be 

or    is    not    a    redemptioner    under  stayed   if  the   appeal    bond   fails   to 

§   701.     Phillips  V.   Hagart,  113  Cal.  provide  for  the  payment  of  such  de- 

552,    45    Pac.    843,    54    Am.    St.    369.  ficiency.      Spence    v.    Scott,    97    Cal. 

Amendments   1874,   p.   323.  181,   30  Pac.   202:    Johnson  v.   King, 

•♦  Code  Civ.   Pro.   1903,   §  707.  91  Cal.  307,  27  Pac.  644. 


§    1325.]  STATUTORY    PROVISIOXS    RELATING    TO.  270 

the  defendant.  The  decree  should  be  so  modified  as  to  exclude  the 
recovery  of  the  part  of  the  debt  not  due.  The  power  of  the  court 
under  the  statute  is  exhausted  by  decreeing  a  sale  of  the  entire 
property  though  only  part  of  the  debt  was  due.*°  In  all  cases  of 
foreclosure  the  attorney's  fee  is  fixed  by  the  court  in  which  the  pro- 
ceedings are  had,  without  reference  to  any  stipulation  in  the  mort- 
gage. 

§  1325.  Colorado.^^ — Actions  for  the  foreclosure  of  mortgages  of 
real  property  must  be  tried  in  the  county  in  which  the  subject  of  the 
action,  or  some  part  thereof,  is  situated;  provided  that,  where  such 
real  property  is  situated  partly  in  one  county  and  partly  in  another, 
the  plaintiff  must  bring  his  action  in  the  county  where  the  greater 
portion  of  such  real  estate  is  situate.  The  cooirt  has  power,  by  its 
judgment,  to  direct  a  sale  of  the  incumbered  property,  or  so  much 
as  may  be  necessary,  and  the  application  of  the  proceeds  of  the  sale 
to  the  payment  of  the  costs  of  the  court  and  expenses  of  the  sale 
and  the  amount  due  to  the  plaintiff;  and  if  it  appear  from  the 
sheriff's  return  that  the  proceeds  are  insufficient,  and  a  balance  still 
remains  due,  judgment  is  docketed  for  such  balance  against  the  de- 
fendant or  defendants  personally  liable  for  the  debt,  and  then  be- 
comes a  lien  on  the  real  estate  of  such  judgment  debtor,  as  in  other 
cases  in  which  execution  may  be  issued.  Ko  person  holding  a  con- 
veyance from  or  under  the  mortgagor,  or  of  the  property  mortgaged,- 
or  having  a  lien  thereon,  which  conveyance  or  lien  does  not  appear 
on  record  in  the  proper  office  at  the  time  of  the  commencement  of  the 
action,  need  be  made  a  party  to  such  action;  and  the  judgment 
therein  rendered,  and  the  proceedings  therein  had,  are  as  conclusive 
against  the  party  holding  such  unrecorded  conveyance  or  lien  as  if 
he  had  been  made  a  party  to  said  action,  and  in  all  respects  have 
the  same  force  and  effect.  If  the  debt  for  which  the  mortgage,  lien, 
or  incumbrance  is  held  be  not  all  due,  so  soon  as  sufficient  of  the 
property  has  been  sold  to  pay  the  amount  due  with  costs  the  sale 
must  cease,  and  afterw-ards,  as  often  as  more  becomes  due  for  prin- 
cipal or  interest,  the  court  may,  on  motion,  order  more  to  be  sold." 
But  if  the  property  cannot  be  sold  in  portions  without  injury   to 

^"Taggart   v.    San    Antonio   Ridge  sold  by  virtue  of  executions  issued 

Ditch  &  Mining  Co.  18  Cal.  460.  upon    judgments    at    common    law; 

"  Code   of    Civil    Procedure,    §§  25,  that    is,    the    principal    debtor    may 

252,  254,  in  Session  Laws  1887.  redeem  within  six  months,  and  his 

"The  mortgagor,  his  heirs,  execu-  creditors  within   nine   months  from 

tors,     or     administrators,     may     re-  the  date  of  sale.     Annot.  Stats.  1891, 

deem  the  same  in  the  manner  pre-  §§  2547,   2548,   2555. 
scribed  for  the  redemption  of  lands 


371  rORECLOSUIlE    AND    REDEMPTIOX.  [§    1326. 

the  parties,  the  whole  may  be  ordered  to  be  sold  in  the  first  in- 
stance, and  the  entire  debt  and  costs  paid,  there  being  a  rebate  of 
interest  where  such  rebate  is  proper. 

§  1326,  Connecticut.*^ — Mortgages  are  foreclosed  in  a  court  of 
chancery.  The  decree  is  for  a  strict  foreclosure,  whereby  the  title 
becomes  absolute  in  the  mortgagee,  on  the  mortgagor's  failure  to 
redeem  within  the  time  limited  by  the  decree,  which  is  usually  from 
two  to  six  months.  There  can  be  no  decree  for  the  sale  of  the  prop- 
erty.** The  court  may  enforce  a  delivery  of  possession  to  the  mort- 
gagee after  the  time  allowed  for  redemption  has  expired.  Formerly 
a  foreclosure  did  not  preclude  the  mortgage  creditor  from  recovering 
so  much  of  the  claim  as  the  property  mortgaged,  estimated  at  the 
expiration  of  the  time  limited  for  redemption,  is  insufficient  to 
satisfy;  and  the  bringing  of  an  action  upon  such  claim  after  fore- 
closure obtained  did  not  open  the  foreclosure.*^  The  value  of  the 
property  mortgaged,  at  the  expiration  of  said  time,  was  ascertained 
by  the  court  before  which  the  action  was  pending;  and  the  creditor 
recovered  only  the  difference  between  such  value  and  the  amount  of 
his  claim.  But  in  1878  it  was  provided  that  the  foreclosure  of  a 
mortgage  shall  be  a  bar  to  any  further  suit  or  action  upon  the  mort- 
gage debt  or  obligation,  unless  the  person  or  persons  who  are  liable 
for  the  payment  thereof  are  made  parties  to  such  foreclosure.*® 

Upon  motion  of  any  party  to  a  foreclosure,  the  court  appoints 
three  disinterested  appraisers,  who  shall,  under  oath,  appraise  the 
mortgaged  property  within  ten  days  after  the  time  limited  for  re- 
demption shall  have  expired,  and  shall  make  written  report  of  their 
appraisal  to  the  clerk  of  the  court  where  said  foreclosure  was  had, 
which  report  shall  be  a  part  of  the  files  of  such  foreclosure  suit,  and 
such  appraisal  shall  be  final  and  conclusive  as  to  the  value  of  said 
mortgaged  property;  and  the  mortgage  creditor,  in  any  further  suit 
or  action  upon  the  mortgage  debt,  note,  or  obligation,  shall  recover 
only  the  difference  between  the  value  of  the  mortgaged  property  as 
fixed  by  such  appraisal  and  the  amount  of  his  claim.  The  court 
m'ay  v^athin  ninety  days  after  the  time  for  redemption  has  expired 
render  supplementary  judgment  for  the  difference  between  the  ap- 

•"G.  S.  1888,  ch.  186,  §§3010-3017;  no    suit    for    the    balance    without 

G.  S.   1902,  §§4122-4126.  opening    the    foreclosure.      McEwen 

'**  In  Palmer  v.  Mead,  7  Conn.  149,  v.   Welles,  1  Root,  203,  1    Am.   Dec. 

152,  Chief  Justice  Hosmer  spoke  of  39. 

a  sale  of  the  mortgaged  premises  on  ^^  This    provision   applies    only    to 

foreclosure   as   "a  proceeding  never  foreclosure      procedings      instituted 

admitted  here."  after   the   act   took   effect.     Curtiss 

*''  Previous  to  the  statute,  passed  v.  Hazen,  56  Conn.  146,  14  Atl.  771 
originally    in    1833,    there    could   be 


§    1326.]  STATUTORY    PROVISIONS    RELATING    TO.  3?2 

praisal  and  j)laintiff's  claim.  When  a  mortgage  has  been  foreclosed, 
and  the  time  limited  for  redem^jtion  has  passed,  and  the  title  to  the 
premises  has  become  absolute  in  the  mortgage  creditor,  he  must  sign 
a  certificate  describing  the  premises,  the  deed  of  mortgage  on  which 
the  foreclosure  was  had,  the  book  and  page  of  record,  and  the  time 
when  the  title  becanje  absolute,  which  certificate  must  be  recorded 
in  the  records  of  the  town  where  the  premises  are  situated.*''  When 
the  mortgage  has  been  assigned,  the  title  to  the  premises,  upon  the 
expiration  of  the  time  limited  for  redemption  and  on  failure  to 
redeem,  vests  in  the  assignee,  in  the  same  manner  and  to  the  same 
extent  as  it  would  have  vested  in  the  mortgagee,  provided  the  per- 
son so  foreclosing  shall  forthwith  cause  the  decree  of  foreclosure  to  be 
recorded  in  the  records  of  the  town  where  the  land  lies. 

All  mortgages  executed  after  June  1,  1886,  may,  on  the  writ- 
ten motion  of  any  party  to  the  suit,  be  foreclosed  by  a  decree  of 
sale  instead  of  a  strict*  foreclosure,  at  the  discretion  of  the  court.*® 
When  the  court  is  of  opinion  that  a  foreclosure  by  sale  should  be 
decreed,  it  shall,  in  and  by  the  judgment  therein,  appoint  a  person 
to  make  such  sale  and  fix  a  day  therefor,  and  shall  direct  whether 
the  property  shall  be  sold  as  a  whole  or  in  parcels,  and  how  such 
sale  shall  be  made  and  advertised;  but  in  all  cases  in  which  such 
a  sale  is  ordered  the  court  shall  appoint  three  disinterested  persons, 
who  shall,  under  oath,  appraise  the  property  to  be  sold  and  make 
return  of  their  appraisal  to  the  clerk  of  the  court;  and  the  ex- 
pense of  such  appraisal  shall  be  paid  by  the  plaintiff  and  be  taxed 
with  the  costs  of  the  case.  If  after  the  judgment  the  amount  found 
to  be  due,  together  with  the  interest  and  the  costs,  shall  be  paid  to 
the  plaintiff  before  the  sale,  all  further  proceedings  in  the  suit  shall 
be  stayed. 

When  a  sale  has  been  made  pursuant  to  a  judgment  therefor,  a 
conveyance  of  the  property  sold  shall  be  executed  by  the  per- 
son appointed  to  make  the  sale,  which  conveyance  shall  vest  in 
the  purchaser  the  same  estate  that  would  have  vested  in  the  mort- 
gagee or  lien-holder  if  the  mortgage  or  lien  had  been  foreclosed 
by  strict  foreclosure,  and  to  this  extent  said  conveyance  shall  be 
valid  against  all  parties  to  the  cause  and  their  privies,  but  against 
no  other  persons,  and  the  court  may  order  possession  of  the  prop- 
erty sold  to  be  delivered  to  the  purchaser.     The  proceeds  of  every 

"  A  penalty  is  provided  by  §  3013,  can  not  be  recovered  further  back 

G.  S.  1888,  G.  S.  1902,  §  4126,  for  neg-  than  one  year  previous  to  the  time 

lect  to  file  the  certificate.     The  of-  of  suit.     Wells  v.  Cooper,  57  Conn, 

fence  is  complete  at  the  end  of  each  52,  17  Atl.  281. 

month,  but  under  §1379  the  penalty  "  G.   S.  1902,   §§4141-4147. 


273  FORECLOSURE   AND    REDEMPTION.  [§    1328. 

such  sale  shall  be  brought  into  court,  there  to  be  applied,  if  the 
sale  be  ratified,  in  accordance  with  the  provisions  of  a  supplemental 
judgment  then  to  be  rendered  in  said  cause,  specifying  the  parties 
who  are  entitled  to  the  same,  and  the  amount  to  which  each  is  en- 
titled ;  and  if  any  part  of  the  debt  or  obligation  secured  by  the  mort- 
gage or  lien  foreclosed,  or  by  any  subsequent  mortgage  or  lien,  was 
not  payable  at  the  date  of  the  judgment  of  foreclosure,  it  shall 
nevertheless  be  paid  as  far  as  may  be  out  of  the  proceeds  aforesaid 
as  if  due  and  payable,  with  rebate  of  interest,  however,  where  such 
debt  was  payable  without  interest.*" 

If  the  proceeds  of  the  sale  are  not  sufficient  to  pay  in  full  the 
mortgage  the  deficiency  shall  be  determined  and  a  judgment  rendered 
therefor  against  any  party  liable  who  is  served  with  process.  If  the 
property  shall  have  sold  for  less  than  the  appraisal  no  judgment  shall 
be  rendered  for  the  unpaid  portion  of  the  debt,  nor  shall  the  same  be 
collected  by  any  other  means  until  one  half  of  the  difference  between 
the  appraised  value  and  the  selling  price  has  been  credited  upon 
such  debt. 

§  1328.  Delaware.^" — Foreclosure  is  by  scire  facias.  Upon  breach 
of  the  condition  of  a  mortgage  by  non-pa}Tnent  of  the  mortgage- 
money,  or  non-performance  of  the  conditions  stipulated  in  such 
mortgage,  at  the  times  and  in  the  manner  therein  provided,  the 
mortgagee,  his  heirs,  executors,  administrators,  or  assigns,  may,  in 
the  county  where  the  premises  are  situated,'^^  sue  out  a  writ  of  scire 
facias,  directed  to  the  sheriff,  commanding  him  to  make  known  to 
the  mortgagor,  his  heirs,  executors,  or  administrators,  that  he  or 
they  show  cause  why  the  premises  ought  not  to  be  taken  on  execu- 
tion for  payment  of  said  money  and  interest,  or  to  satisfy  the  dam- 
ages which  the  plaintiff  shall  suggest  for  the  non-performance  of 
said  conditions.  The  dej'endant  may  plead  satisfaction  or  other 
plea  in  avoidance  of  the  deed.  Judgment  is  entered  that  the  plain- 
tiff have  execution  by  levari  facias,  under  which  the  premises  are 
sold,  and,  after  confirmation  of  t1ie  sale  conveyed  to  the  purchaser, 
who  takes  a   title   discharged   of   all  equity  of  redemption,   and   all 

^''G.    S.    1888,    §§3023-3027;    G.    S.  only  necessary  party;  if  he  be  dea'd 

.1902,  §§  4141-4146.  his  executor  or  administrator  is  the 

="R.  Code  1893,  ch.  Ill,  §§55-60.  only  necessary  party.  Seals  v.  Chad- 
A  court  of  chancery  also  has  juris-  wick,  2  Pennewell  (Del.),  381;  Ma- 
diction  of  a  bill  to  foreclose  a  mort-  ther  v.  Clark,  1  Watts  (Pa.),  491; 
gage.     Giles  v.  Lewis,  4  Del.  Ch.  51.  Mervey's  Appeal,  4  Pa.  St.  80;  Tryon 

•''When  the  mortgaged  land  is  in  v.    Munson,    77    Pa.     St.    250.      See 

two  counties  the  writ  may  be  sued  §  1333,  Illinois;    §1353,  Ohio;    §1355, 

out   in   either.     Laws   1887,   ch.   221.  Pennsylvania. 
If  the  mortgagor  be  living  he  is  the 


§§    1329,    1330.]    STATUTORY    PROVISIOXS    RELATING    TO.  274 

other  incumbrances  made  by  the  mortgagor,  his  heirs   or   assigns. 
Any  overplus  is  rendered  to  the  debtor  or  defendant. 

But  if  there  be  no  sale  for  want  of  bidders,  return  is  made  ac- 
cordingly, and  thereupon  a  liherari  facias  may  issue,  under  which 
the  officer  delivers  to  the  plaintiff  such  part  of  the  premises  as  shall 
satisfy  his  debt  or  damages  with  interest  and  costs,  according  to  the 
valuation  of  twelve  men,  to  hold  to  him  as  his  free  tenement  in  sat- 
isfaction of  his  debt,  or  so  much  of  it  as  the  premises  by  the  valu- 
ation amount  to.  If  they  fall  short  of  satisfying  the  whole  debt, 
the  plaintiff  may  have  execution  for  the  residue.  The  execution 
and  return  pass  the  title. 

§  1329.  District  of  Columbia.^^ — Foreclosure  is  under  the  gen- 
eral equity  jurisdiction  of  the  court.  The  only  statutory  provisions 
relating  to  it  are,  that  the  proceeding  to  enforce  any  lien  shall 
be  by  bill  or  petition  in  equity,  and  the  decree,  besides  subjecting 
the  thing  upon  which  the  lien  has  attached  to  the  satisfa,ction  ot 
the  plaintiff's  demand  against  the  defendant,  shall  adjudge  that  the 
plaintiff  recover  his  demand  against  the  defendant,  and  that  he 
may  have  execution  thereof  as  at  law;  and  that  publication  may  be 
substituted  for  personal  service  of  process  upon  any  defendant  who 
cannot  be  found.  Deeds  of  trust  are,  however,  almost  exclusively 
used. 

§  1330.  Florida.^^ — All  mortgages  are  foreclosed  in  chancery.  The 
original  mortgage  or  a  certified  copy  thereof,  certified  by  the  clerk 
of  the  circuit  court  in  whose  office  it  was  recorded,  shall  be  annexed 
to  the  bill  of  complaint  as  a  part  thereof.^''  When  a  mortgage  in- 
cludes land  lying  in  two  or  more  counties,  it  may  be  foreclosed  in 
any  one  of  said  counties,  and  all  proceedings  shall  be  had  in  that 
county,  as  if  all  the  mortgaged  land  lay  therein,  except  that  notice 
of  the  sale  must  be  published  in  every  county  wherein  any  of  the 
lands  to  be  sold  lie.  After  final  disposition  of  the  suit,  the  clerk  of 
the  circuit  court  shall  forward  a  certified  copy  of  the  entire  record  to 
the  clerk  of  the  circuit  court  of  every  county  wherein  any  of  the 
mortgaged  lands  lay,  to  be  filled  in  the  office  of  such  clerk,  the  costs 
.of  the  copy  and  of  the  filing  to  be  taxed  as  costs  in  the  cause. 

"R.    S.    1874,    §§787,    808.      There  U.  S.  445,  1  Sup.  Ct.  335;   Shepherd 

must     be     a     decree     in     personam  v.  Pepper,  133  U.  S.  626,  10  Sup.  Ct. 

against  the   debtor  for  the  balance  438. 

remaining  due  after  the  proceeds  of  =^  R.   S.   1892,   §§1987-1989. 

the   sale   have   been   applied   to  the  "The  copy  must  be  officially  cer- 

satisfaction   of  the   debt.     Dodge  v.  tified.     Browne   v.    Browne,   17   Fla. 

Freedman's    Sav.    &    Trust    Co.    106  607,  35  Am.  Rep.  96. 


275 


FORECLOSURE  AND  REDEMPTION. 


[§  1331. 


§  1331.  Georgia.^^ — Foreclosure  may  be  had  by  a  bill  in  equity 
when  the  mode  provided  by  statute  is  inadequate.'^"  Mortgages 
are  usually  foreclosed  by  petition,  which  must  be  to  the  superior 
court  in  the  county  where  the  property  is  situated.  But  if  the 
mortgaged  premises  consist  of  a  single  tract  of  land  divided  by  a 
county  line,  such  mortgage  may  be  foreclosed  on  the  entire  tract 
in  either  of  the  counties  in  which  part  of  it  lies;  provided,  how- 
ever, if  the  mortgagor  resides  upon  the  land,  the  mortgage  must 
be  foreclosed  in  the  county  of  his  residence.^^  This  is  a  proceed- 
ing at  law.  The  court  grants  a  rule  nisi  directing  the  principal, 
interest,  and  costs  to  be  paid  into  court  on  or  before  the  first  day 
of  the  next  term  immediately  succeeding  the  one  at  which  the  rule 
is  granted,  which  rule  is  published  once  a  month  for  four  months, 
or'  served  on  the  mortgagor,  or  his  special  agent  or  attorney,  at  least 
three  m^onths  previous  to  the  time  at  which  the  money  is  directed 
to  be  paid  into  court.^^  At  the  term  at  which  the  money  is  directed 
to  be  paid,  the  mortgagor  m'ay  set  up  and  avail  himself  of  any  de- 
fence which  he  might  lawfully  set  up  in  an  ordinary -suit  instituted  on 
the  debt  secured  by  such  mortgage.^®  The  issue  is  tried  by  a  special 
jury. 

^^^^Code  1882,  §§3962-3968;  Code, 
1895,  §§  2743-2752.  The  judgment  is 
binding  upon  a  purchaser  of  the 
equity  of  redemption,  although  he 
was  not  made  a  party  to  the  pro- 
ceeding. Knowles  v.  Lawton,  18 
Ga.  476,  63  Am.  Dec.  290;  Johnston 
V.  Crawley,  22  Ga.  348,  25  Ga.  316, 
71  Am.  Dec.  173;  Guerin  v.  Dan- 
forth,  45  Ga.  493,  496.  No  parties 
to  the  suit  are  necessary  other  than 
the  mortgagor  and  mortgagee.  If 
the  rights  of  other  persons  are  in- 
terfered with,  they  are  not  allowed 
to  interpose  any  claim  in  the  suit, 
but  may  have  their  remedy  when 
the  mortgage  execution  is  sought 
to  be  enforced  against  the  land. 
Jackson  v.  Stanford,  19  Ga.  14; 
Howard  v.  Gresham,  27  Ga.  347. 

A  junior  mortgagee  who  under 
the  statute  can  not  become  a  party 
to  the  proceedings,  is  entitled  to  re- 
deem after  the  foreclosure  sale  by 
paying  the  amount  of  the  senior 
mortgage  where  this  is  greater  than 
the  price  for  which  the  property 
was  sold  and  the  costs  of  foreclos- 
ure. American  Loan  &  Trust  Co. 
v.  Atlanta  Electric  Ry.  Co.  99  Fed. 
313.  As  to  jurisdiction,  a  court  in  an- 
other county,  though  it  be  the  coun- 


ty of  the  mortgagor's  residence,  has 
none.  The  proceedings  of  such 
court  would  be  void.  Hackenhull 
v.  Westbrook,  53  Ga.  285.  The  act 
of  1880,  allowing  mortgages  to  be 
foreclosed  in  equity,  conferred  fuller 
powers  upon  the  court  by  this  mode 
of  procedure  than  it  had  at  law; 
and  in  addition  to  the  foreclosure, 
a  personal  decree  may  be  rendered 
against  the  mortgagor.  Clay  v. 
Banks,   71   Ga.   363. 

'•■May  V.  Rawson,  21  Ga.  461;  Dix- 
on V.  Cuyler,  27  Ga.  248,  251.  A 
remedy  at  law  being  provided,  ju- 
risdiction in  equity  is  lost  when  this 
remedy   is   complete. 

"Code   1882,    §§  3962-3970. 

°*  When  the  rule  has  been  made 
absolute  there  is  no  appeal  from  it. 
Clifton  V.  Livor,  24  Ga.  91.  It  need 
not  show  on  its  face  what  particu- 
lar credits  were  allowed  in  fixing 
the  amount  of  the  debt.  Cherry  v. 
Home  Building  &  Loan  Asso.  57  Ga. 
361.  A  verdict  for  so  many  dollars 
as  principal,  with  interest,  is  suffi- 
ciently formal.  Byrd  v.  Turpin,  62 
Ga.  591. 

As  to  computation  of  time,  see 
English   V.    Ozburn,   59   Ga.   392. 

^^  Dixon  V.  Cuyler,  27  Ga.  248. 


§    1331a.]  STATUTORY    PROVISIOXS    RELATING    TO.  276 

It  is  not  competent  for  any  third  person  to  interpose  a  defence; 
nor  will  the  court  itself,  of  its  own  motion,  do  so.''°  Wlien  the  mort- 
gagor is  dead,  the  proceeding  may  be  instituted  against  his  executor 
or  adininistrator.**^  Judgment  is  entered  for  the  amount  due,  and 
the  property  is  ordered  to  be  sold  in  the  manner  of  a  sale  under 
execution,  from  which  there  is  no  redemption.*'-  The  proceeds,  after 
paying  the  mortgage,  are  paid  to  the  mortgagor  or  his  agent.  If 
the  mortgage  is  given  to  secure  a  debt  due  by  instalments,  and  is 
foreclosed  before  they  are  all  due,  and  there  is  a  surplus,  the  court 
may  retain  the  funds,  or  order  the  same  to  be  invested  to  meet  tho 
instalments  still  unpaid.®^ 

§  1331a.  Hawaii  T. — Foreclosure  is  by  a  proceeding  in  equity. 
The  court  may  assess  the  amount  due  upon  the  mortgages  withdut 
the  intervention  of  a  jury  and  may  enter  a  decree  for  the  amount 
awarded. 

All  prior  and  subsequent  creditors  whose  names  are  or  can  be  dis- 
covered by  the  party  foreclosing  a  mortgage,  shall  be  made  parties 
to  his  application,  and  if  discovered  before  the  day  appointed  for 
hearing,  they  shall  be  served  with  a  copy  of  the  petition.  Mortgage 
creditors  shall  be  entitled  to  payment  according  to  the  priority  of 
their  liens,  and  not  pro  rata,  and  decrees  of  foreclosure  shall  operate 
to  extinguish  the  liens  of  sul^sequent  mortgages  of  the  same  property, 
"without  enforcing  prior  mortgages  to  their  right  of  recovery." 

The  surplus  after  payment  of  the  mortgage  foreclosed  shall  be  ap- 

°"  Sutton    V.    Sutton,    25    Ga.    383;  close  the  mortgage.    Reed  v.  Aubrey, 

Jackson  v.   Stanford,  19  Ga.  14.  91  Ga.  435,  17  S.  E.  1022. 

"  If  there  is  no  administrator,  and        "^  See  Dickerson  v.  Powell,  21  Ga. 

the  equity   of  redemption  has  been  143.      This    proceeding    by    petition 

assigned,   the  proceeding  should  be  is  not  confined  to  mortgages  made 

in  equity.     May  v.   Rawson,  21  Ga.  to  secure  liquidated  demands.  Rich- 

461.  ards  v.  Bibb  Co.  Loan  Asso.  24  Ga. 

It  is  a  peculiarity  of  the  law  of  198.     The  judgment   is   not  conclu- 

Georgia  that  a  proceeding  to  fore-  sive   against   one   interested   in   the 

close  a  mortgage  upon  realty,  given  property  who  was  not  made  a  party 

by  an  intestate,  would   be  defeated  to  the  proceedings,  as,  for  instance, 

by  an  administrator's  sale  regular-  one  who  has  purchased  the  property 

ly  made,  and  that  the  mortgage  cred-  prior  to  the  commencement  of  pro- 

itor  would  have  to  look  to  the  pro-  ceedings.    Upon  the  levy  of  the  exe- 

ceeds    of    the   sale    in    the    adminis-  cution  he  may  go  behind  the  judg- 

trator's  hands.     Newsom  v.  Carlton,  ment,  and  claim  that  the  mortgage 

59   Ga.    516.     But  this   rule   presup-  was  barred  by  the  statute  of  limi- 

poses  a  valid  and  legal  sale.     If  the  tations.    Williams  v.  Terrell,  54  Ga. 

sale  be  either  void  or  voidable,  the  462. 

same  will  be  no  bar.    The  mortgage        ^  A  foreclosure  sale  on  one  instal- 

creditor  may  elect  to  ratify  a  void-  ment  of  the  debt  passes  the  entire 

able  sale,  and  such  election  may  be  title  to  the  property.    There  can  not 

made,    so    far    as    the    executor    is  be  several  foreclosures  of  the  same 

concerned,   by   continuing  to   prose-  mortgage.     Smith  v.  Bowne,  60  Ga. 

cute  his  p^  nding  proceeding  to  fore-  484. 


277  FORECLOSURE    AND    REDEMTTION.  [§    1332. 

plied  pro  tanto  to  the  next  junior  mortgage,  and  so  on  to  the  payment 
wholly  or  in  part,  of  mortgages  junior  to  the  one  assessed.  The 
mortgagor,  or  any  subsequent  mortgagee,  may  appear  and  answer 
matter  of  fact  or  of  law,  pleadable  in  defense  tO'  the  application  or 
petition  for  foreclosure,  and  shall  be  allowed  to  show  any  matter 
in  legal  or  equitable  avoidance  of  the  mortgage.* 

§  1332.  Idaho.*'* — Actions  for  the  foreclosure  of  mortgages  of  real 
property  must  be  tried  in  the  county  in  which  the  subject  of  the 
action  or  some  part  thereof  is  situated.  There  can  be  but  one  action 
for  the  recovery  of  any  debt,  or  the  enforcement  of  any  right  secured 
by  mortgage  upon  real  estate  or  personal  property,  in  which  action 
the  court  may,  by  its  judgment,  direct  a  sale  of  the  incumbered 
property,  or  so  much  thereof  as  may  be  necessary,  and  the  applica- 
tion of  the  proceeds  of  the  sale  to  the  payment  of  the  costs  of  the 
court  and  the  expenses  of  the  sale,  and  the  amount  due  to  the 
plaintiff;  and  if  it  appear  from  the  sheriff's  return  that  the  proceeds 
are  insufficient,  and  a  balance  still  remains  due,  judgment  can  then 
be  docketed  for  such  balance  against  the  defendant  personally  liable 
for  the  debt,  and  it  becomes  a  lien  on  the  real  estate  of  such  judg- 
ment debtor,  as  in  other  cases,  on  which  execution  may  be  issued."^ 
No  person  holding  a  conveyance  from  or  under  the  mortgagor  of 
the  property  mortgaged,  or  having  a  lien  thereon,  which  conveyance 
or  lien  does  not  appear  of  record  in  the  proper  office  at  the  time  of 
the  commencement  of  the  action,  need  be  made  a  party  to  such 
action;  and  the  judgment  therein  rendered,  and  the  proceedings 
therein  had,  are  as  conclusive  against  the  party  holding  such  un- 
recorded conveyance  or  lien  as  if  he  had  been  made  a  party  to 
the  action.  If  there  be  surplus  money  remaining  after  payment 
of  the  amount  due  on  the  mortgage,  lien,  or  incumbrance,  with 
costs,  the  court  may  cause  the  same  to  be  paid  to  the  person  en- 
titled to  it,  and  in  the  mean  time  may  direct  it  to  be  deposited 
in  court.  If  the  debt  for  which  the  mortgage,  lien,  or  incumbrance 
is  held  be  not  all  due,  so  soon  as  sufficient  of  the  property  has  been 
sold  to  pay  the  amount  due,  with  costs,  the  sale  shall  cease;  and 
afterwards,  as  often  as  more  becomes  due  for  principal  or  interest, 

*Civ.  Laws  1897,  §§  1506-1508.  It  is  not  necessary  to  allege  In  the 

«^R.  S.  1887,  §§4520-4522.  complaint   notice   to   the   mortgagor 

"'  The    mortgagee,    after    bringing  that  the  plaintiff  was  elected  to  con- 

his   action   of   foreclosure,    can   not  sider  the  whole  sum  due  for  default 

maintain   another   and   separate   ac-  of  payment  for  instalments  of  inter- 

tion   for   personal   judgment   on   the  est.     Broadbent  v.  Brumback,  2  Ida. 

mortgage    debt.      Winters    v.    Hub.  366,  16  Pac.  555. 
Min    Co.,   57   Fed.   287. 


§    1333.]  STATUTORY    PROVISIONS    RELATING    TO.  278 

the  court  may,  on  motion,  order  more  to  be  sold.  But  if  the  prop- 
erty cannot  be  sold  in  portions  without  injury  to  the  parties,  the 
whole  may  be  ordered  to  be  sold  in  the  first  instance,  and  the 
entire  debt  and  costs  paid,  there  being  a  rebate  of  interest  where 
such  rebate  is  proper. 

Eedemption  may  be  had  within  one  year  from  the  date  of  sale.^® 

§  1333.  Illinois.' — Mortgages  may  be  foreclosed  in  equity,  al- 
though the  statutory  provisions  relate  chiefly  to  proceedings  by 
scire  facias,  and  to  sales  under  powers  contained  in  mortgages.®'^ 
In  equity  a  decree  may  be  rendered  for  any  balance  of  money  that 
may  be  found  due  over  and  above  the  proceeds  of  the  sale,  and  exe- 
cution may  issue  for  the  collection  of  such  balance  in  the  same  way 
as  when  the  decree  is  solely  for  the  payment  of  money.  Such  de- 
cree may  be  rendered  conditionally  at  the  time  of  decreeing  the 
foreclosure,  or  it  may  be  rendered  after  the  sale  and  the  ascertainment 
of  the  balance  due.^^ 

Scire  facias. '^^^  If  default  be  made  in  the  payment  of  a  mortgage 
duly  executed  and  recorded,'^*^  and  if  it  be  payable  by  instalments, 
and  the  last  instalment  has  liecome  due,  a  writ  of  scire  facias  may 
be  sued  out  of  the  circuit  court  of  the  county  where  the  lands  or 
any  part  of  them  are  situated,  requiring  the  mortgagor  or  his  repre- 
sentatives to  show  cause  why  judgment  should  not  be  rendered  for 
the  amount  due  under  the  mortgage. '^^ 

*"  Laws  1895,  p.  34.     Prior  to  this  the  legal  title.     It  does  not  matter 

statute   the   redemption   period   was  that    the    note    has    been    assigned, 

six  months  under  R.  S.  §  4492.     This  Camp   v.   Small,   44   111.   37;    Olds  v. 

act  extending  the  time   of  redemp-  Cummings,  31  111.  188. 

tion  did  not  affect  sales  under  fore-  ™  A    mortgage    not    duly   executed 

closures    of    mortgages,    which    had  and  recorded  can  not  be  foreclosed 

been    executed    and    recorded    prior  in    this    way;    and    acknowledgment 

to  the  passage  of  the  act.    Wilder  v.  is  considered  a  part  of  the  due  exe- 

Campbell,    4    Ida.    695.  cution  of  it.     Kenosha  &   Rockford 

«^  See  §  1733.  R.  Co.  v.  Sperry,  3  Biss.  309. 

«» R.  S.  1889  and  1898,  ch.  95,  §  16.  '» No  declaration  need  be  filed.  The 

^R.  S.  1889  and  1898,  ch.  95,  §§17-  defendant  may  set  off  any  demand 

21.    For  form  of  this  writ  see  Wood-  in  his  favor.     Henderson  v.  Palmer, 

bury    V.    Manlove,    14    111.    213,    ap-  71  111.   579,  22  Am.  Rep.  117. 

proved  in  Osgood  v.  Stevens,  25  111.  No  defence  can  be  interposed  ex- 

89.     When   foreclosure    is   by   scire  cept  payment  of  the  mortgage  debt, 

facias,      subsequent     incumbrancers  a   release   of   the    lien,    or   that   the 

are  cut  off,  though  not  made  direct  mortgage   was    never    a   valid    lien, 

parties  to  the  proceeding.     Kenyon  Camp  v.  Small,  44  111.  37;  White  v. 

V.   Shreck,   52   111.    382;    Matteson  v.  Watkins,  23  111.  480. 

Thomas,  41  111.  110.    Failure  or  want  Judgment     is     rendered     for     the 

of  consideration  can  not  be  shown  amount  found  due,  and  the  premises 

in    this    proceeding.      Fitzgerald    v.  are   sold   to  satisfy  it.     Such  judg- 

Forristal,  48   111.   228;    Woodbury  v.  ment  does  not  create  a  lien  on  any 

Manlove,  14  111.  213.     This  is  a  pro-  other    lands     than     the     mortgaged 

ceeding    upon     the    mortgage,     and  premises,  nor  is  any  other  property 

must  be  by  the  mortgagee  holding  of   the   mortgagor   liable   to   satisfy 


279 


FORECLOSURE   AND   REDEMPTION. 


[§    1333. 


When  a  sale  is  made  by  virtue  of  an  execution,  judgment,  or 
decree  of  foreclosure,  the  officer  gives  a  cei'tificate  of  sale.'^^  The 
owner  of  the  equity  or  any  person  interested  in  it  may  redeem  at 
any  time  within  twelve  months  from  the  sale,  by  j^aying  the 
amount  bid,  with  interest  at  the  rate  of  six  per  cent,  per  annum. '^ 


the  same  except  such  other  prop- 
erty as  the  mortgagor  has  given  as 
collateral  security  for  this  purpose. 
This  is  purely  a  proceeding  at  law, 
and  is  governed  by  the  practice  of 
courts  of  law  and  not  of  equity. 
Tucker  v.  Conwell,  67  111.  552; 
Woodbury    v.    Manlove,    14    111.    213. 

The  action  must  be  brought  by 
the  person  who  holds  the  legal  title 
to  the  mortgage,  and  consequently, 
if  the  note  alone  has  been  assigned, 
the  suit  should  be  brought  by  the 
mortgagee.  Camp  v.  Small,  44  111. 
37.  But  the  assignee  may  foreclose 
by  scire  facias,  though  the  assign- 
ment has  not  been  acknowledged. 
Honore  v.  Wilshire,  109  111.  103. 

No  persons  but  the  mortgagor,  or, 
in  case  of  his  death,  his  executor  or 
administrator,  are  required  to  be 
made  parties.  If  the  wife  joined  in 
the  mortgage  she  is  a  necessary 
party.  The  mortgagor's  assignee 
in  bankruptcy  is  not  a  necessary 
party.  Gilbert  v.  Maggord,  2  111. 
471. 

All  persons  beyond  the  parties  to 
the  suit  are  required  to  take  no- 
tice of  the  proceedings  and  to  pro- 
tect their  rights.  Chickering  v. 
Failes,   26   111.    507. 

Usury  can  not  be  set  up;  Carpen- 
ter v.  Mooers,  26  111.  162;  nor  the 
want  or  failure  of  consideration. 
Hall  V.  Byrne,  2  111.  140;  McCumber 
V.  Oilman,  13  111.  542. 

This  form  of  foreclosure  can  not 
be  used  in  case  of  a  mortgage  made 
to  secure  the  delivery  of  specific  ar- 
ticles. It  can  not  be  maintained  till 
the  last  instalment  of  the  mortgage 
is  due,  and  this  fact  should  be 
alleged.  Any  remedy  before  this 
must  be  sought  by  ejectment,  or  by 
bill  in  chancery.  Osgood  v.  Stevens, 
25  111.  89;  Carroll  v.  Ballance,  26 
111.  9,  79  Am.  Dec.  354;  Pickes  v. 
Ersick,  2  Rawle  (Pa.),  166;  Day  v. 
Cushman,    2    111.    475. 

The  purchaser  at  a  sale  under  a 
judgment  in  such  action  takes  all 
the  interests  in  the  land  which  the 
mortgagor    had    when    he    executed 


the  mortgage.  State  Bank  v.  Wil- 
son, 9  111.  57. 

The  mortgagor,  or  his  grantees 
since  the  mortgage,  may  redeem,  as 
in  the  case  of  an  ordinary  sale  on 
execution.  The  judgment  is  against 
the  property  and  not  against  the 
person.  Os;::;ood  v.  Stevens,  25  111. 
89;  Marshall  v.  Maury,  2  111.  231; 
State  Bank  v.  Wilson,  9  111.  57. 

The  statute  does  not  give  redemp- 
tion from  a  judicial  sale  made  in 
execution  of  a  trust.  Hyman  v. 
Bogue,  135  111.  9,  26  N.  E.  40. 

'-  R.  S.  1898,  ch.  77,  §§  16,  19.  A  cer- 
tificate of  purchase  issued  to  a  per- 
son other  than  the  one  who,  by  the 
sheriff's  return,  is  shown  to  be  the 
purchaser,  is  void.  Dickerman  v. 
Burgess,  20  111.  266. 

"  Seligman  v.  Laubheimer,  58  111. 
124.  The  payment  required  is  the 
amount  bid  at  the  sale,  and  not  the 
amount  of  the  mortgage  debt.  The 
construction  of  the  Iowa  statute  is 
different,  requiring  payment  of  the 
amount  of  the  debt  instead  of  the 
amount  bid.  Stoddard  v.  Forbes, 
13  Iowa,  296;  Johnson  v.  Harmon, 
19  Iowa,  56.  The  case  of  Bradley 
V.  Snyder,  14  111.  263,  58  Am.  Dec. 
564,  is  not  contrary  to  this,  as  the 
redemption  in  the  latter  was  not 
strictly  a  statutory  right.  There 
can  be  no  decree  for  sale  without 
redemption.  Farrell  v.  Parlier,  50 
111.  274.  If,  on  foreclosure  of  a 
senior  mortgage,  the  mortgaged 
property  is  bid  in  by  the  mortgagee 
for  less  than  the  mortgage  debt,  a 
statutory  redemption  by  a  junior 
mortgagee  gives  the  latter  a  first 
lien  on  the  land,  regardless  of  the 
balance  still  due  the  senior  mort- 
gagee, since  by  the  foreclosure  the 
lien  of  the  senior  mortgage  is  ex- 
tinguished. Ogle  V.  Koerner,  140 
111.   170,   29   N.   E.   563. 

A  bill  to  redeem,  which  does  not 
allege  that  the  complainant  has  paid 
or  tendered  the  redemption  money 
to  any  one  authorized  to  receive  it, 
is  demurrable.  Hyman  v.  Bogue,  135 
111.  9,  26  N.  E.  40. 


1333a.] 


STATUTORY    PROVISIONS    RELATING    TO. 


280 


A  judgment  creditor  may  redeem  after  twelve  months  and  within 
fifteen  months  after  the  sale,  and  there  may  be  successive  redemp- 
tions within  sixty  days  from  the  last  redemption.'*  After  the  expi- 
ration of  the  time  of  redemption  the  party  entitled  to  possession, 
after  a  demand  in  writing,  may  have  summary  process  to  recover  it. 
Until  the  time  allowed  for  redemption  expires,  and  the  master's 
deed  is  executed,  the  owner  of  the  equity  of  redemption  is  entitled 
to  possession.''^ 

4 

§  1333a.  Indian  T. — Foreclosure  is  by  proceeding  in  equity.  All 
sales  of  real  property  under  mortgages  and  deeds  of  trust  shall  not  be 
for  less  than  two  thirds  of  the  appraised  value.  If  the  property  does 
not  sell  at  first  offering,  for  two-thirds  of  the  appraisement,  another 
offering  may  be  made  in  twelve  months  thereafter,  at  which  offer- 
ing the  sale  shall  be  to  the  highest  bidder.  There  may  be  a  redemp- 
tion by  the  mortgagor  at  any  time  within  one  year  from  the  sale  by 


'*  A  purchaser  of  the  equity  of  re- 
demption is  allowed  the  twelve 
months  for  redemption  prescribed 
for  the  mortgagor,  and  not  the  fif- 
teen allowed  a  judgment  creditor. 
Dunn  v.  Rodgers,  43  111.  260.  The 
judgment  creditor,  upon  redemption, 
is  subrogated  to  all  the  rights  of  the 
purchaser  under  the  foreclosure  sale. 
Lamb  v.  Richards,  43  111.  312.  He 
may  redeem  against  a  second  mort- 
gagee who  has  taken  an  assignment 
of  the  certificate  of  purchase.  Grob 
V.  Cushman,  45  111.  119.  A  junior 
mortgagee  who  purchases  the  cer- 
tificate of  sale  issued  in  a  suit  of 
foreclosure  under  a  senior  mortgage 
can  not  assert  the  lien  of  his  jun- 
ior mortgage  as  against  a  judgment 
creditor  who  redeems  from  the  sale 
after  the  junior  mortgagee's  time 
for  redemption  has  expired,  since 
the  judgment  creditor,  by  redeem- 
ing, acquires  the  rights  of  the  sen- 
ior mortgagee.  Lloyd  v.  Karnes,  45 
111.  62;  Shroeder  v.  Bauer,  140  111. 
135,  29  N.  E.  560. 

A  creditor's  right  to  redeem 
where  the  right  of  homestead  is 
waived  in  the  mortgage  is  not  af- 
fected by  Laws  1887,  p.  178,  whose 
purpose  is  to  prevent  a  "specific  re- 
lease, waiver,  or  conveyance"  of  the 
homestead  for  one  purpose  from 
being  used  for  a  different  purpose. 
Smith  V.  Mace,  137  111.  68,  26  N.  E. 
1092. 

Where  a  homestead  has  been  sold 


on  foreclosure  of  a  mortgage,  in 
which  the  homestead  estate  is  duly 
released,  and  the  mortgagor  does 
not  redeem  within  the  time  allowed 
him  by  statute  for  that  purpose,  a 
judgment  creditor,  who  afterwards 
redeems  and  buys  in  the  property 
at  execution  sale  under  his  judg- 
ment, takes  title  free  from  the 
homestead  estate,  since  the  effect  of 
the  redemption  is  to  vest  the  judg- 
ment creditor  with  the  title  ac- 
quired at  the  foreclosure  sale.  Herd- 
man  V.  Cooper,  138  111.  583,  28  N. 
E.   1094. 

One  who  purchases  a  master's 
certificate  of  sale,  after  the  holder 
has  made  a  valid  contract  to  sell  it 
to  another,  takes  the  certificate 
subject  to  the  contract.  Chytraus 
V.  Smith,  141  111.  231,  30  N.  E.  450; 
Whitehead  v.  Hall,  148  111.  253,  35  N. 
E.   871. 

A  purchaser  whose  certificate  has 
been  barred  by  the  Statute  of  Limi- 
tations has  no  equitable  right  to  a 
title.  Peterson  v.  Emmerson,  135 
111.  55,  25  N.  E.  842;  Lightcap  v. 
Bradley,  186  111.  510,  535,  58  N.  E. 
221. 

For  other  cases  relating  to  re- 
demption by  the  debtor  and  judg- 
ment creditors,  see  Bozarth  v.  Lar- 
gent,  128  111.  95,  21  N.  E.  218;  Light- 
cap  V.  Bradley,  186  111.  510,  58  N.  E. 
221. 

■=Kihlholz  V.  W^olff,  8  Bradw.  371. 


281  FORECLOSURE   AXD    REDEMPTION.  [§    1334. 

payment  of  tlic  amount  for  which  the  property  sold,  together  with  ten 
per  cent,  interest  thereon  and  cost  of  sale.* 

§  1334.  Indiana.'^*' — Foreclosure  is  by  complaint  in  the  circuit 
court,  of  the  county  where  the  land  lies."  A  sale  of  the  property 
must  in  all  cases  be  ordered.  It  is  sufficient  to  make  the  mort- 
gagee, or  the  assignee  shown  by  said  record  to  hold  an  interest 
therein,  defendants. 

When  there  is  no  express  agreement  for  the  payment  of  the 
sum  secured  thereby  contained  in  the  mortgage,  or  in  any  sepa- 
rate instrument,  the  remedy  is  confined  to  the  m.artgaged  prop- 
erty. In  rendering  judgment  the  court  gives  personal  judgment 
against  any  party  to  the  suit  liable  upon  any  agreement  for  the 
payment  of  the  debt  secured,  and  orders  the  mortgaged  premises 
to  be  first  sold  before  levy  of  execution  upon  other  property  of  the 
defendant. 

The  plaintiff  cannot  proceed  to  foreclose  his  mortgage  while  he 
is  prosecuting  any  other  action  for  the  same  debt  or  matter  which 
is  secured  by  the  mortgage,  or  while  he  is  seeking  to  obtain  execu- 
tion of  any  judgment  in  such  other  action;  nor  can  he  prosecute  any 
other  action  for  the  same  matter  while  he  is  foreclosing  his  mort- 
gage, or  prosecuting  a  judgment  of  foreclosure. 

When  the  complaint  is  in  consequence  of  the  non-payment  of  an 
instalment  of  interest  or  of  the  principal,  and  the  whole  debt  is  not 
due,  it  is  dismissed  on  payment  into  court  at  any  time  before  judg- 
ment of  the  amount  then  due;  if  the  payment  be  made  after  final 
judgment,   proceedings  thereon  are   stayed,   subject  to  be   enforced 

*Annot.  Stats.  1889,  §  3070;   as  to  county  the  court  of  either  has  ju- 

appraisement  see  §§  3071-3074.  risdiction.      Holmes    v.    Taylor,    48 

"=R.  S.  1888,  §§  307,  575,  1094-1105;  Ind.    169.      The    form    of    complaint 

Rev.    1901,    §§  1109-1119.      When    all  given  by  statute  is  as  follows:    "A. 

the  parties  are  properly  before  the  B.  complains  of  C.  D.,  and  says  that 

court  upon  the  complaint  and  cross-  the  defendant  executed  a  mortgage 

complaint,  the  court  may  adjust  and  conveying  to  the  plaintiff  the  tract 

settle  the  claims  and  equities  of  all  of    land    therein    described,    as    se- 

the   parties.     Quill   v.    Gallivan,   108  curity    for    the    payment   of   a   debt 

Ind.  235,  9  N.  E.  99.  evidenced  by  a  note,  a  copy  of  each 

Foreclosure  may  also  be  effected  of  which  is  filed  herewith,  amount- 
in  a  proceeding  in  garnishment,  ing  to  dollars,  which  yet  re- 
Sharts   v.    Await,    73    Ind.    304.  mains    unpaid;    wherefore    he    asks 

As   to   foreclosure    of   school-fund  judgment    for                   dollars,    and 

mortgages,    see   R.    S.    1888,    §§  4391,  the    foreclosure     of     the     mortgage, 

4392,    and   Haynes   v.    Cox,   118   Ind.  and  sale  of  the  property,  or  so  much 

184,  20  N.  E.  758.  thereof  as  may  be  necessary  to  pay 

As  to  time  within  which  the  deed  his  debt,  and  for  other  relief."  There 

must  be  given,  see  R.  S.  ch.  77,  §  30;  can  be  no  foreclosure  except  by  judi- 

Peterson   v.    Emmerson,   135   111.    55,  cial    sale,    and    therefore    power    of 

25  N.  E.  842.  sale  mortgages  and  trust  deeds  are 

"  If  the  land  lies  in  more  than  one  not  in  use. 


§    1334.]  STATUTORY    PROVISIONS    RELATING   TO.  •  282 

upon  a  subsequent  default.  In  the  final  judgment  the  court  directs 
at  what  time  execution  shall  issue.'^^  The  court  in  such  cases  ascer- 
tains whether  the  property  can  be  sold  in  parcels,  and  if  this  can 
be  done  without  injury,  it  directs  so  much  only  of  the  premises  to 
be  sold  as  will  be  sufficient  to  pay  the  amount  due  on  the  mortgage 
with  costs.  If  the  premises  cannot  be  sold  in  parcels  the  court 
orders  the  whole  to  be  sold,  and  the  proceeds  applied  first  to  the 
payment  of  the  principal  due,  interest,  and  costs,  and  then  to  the 
residue  secured  and  not  due,  with  a  proper  discount  of  interest. '^^ 

In  making  sale  the  sheriff  or  other  officer  issues  to  the  purchaser 
a  certificate,  wliich  entitles  the  holder  of  it  to  a  deed  of  conveyance, 
to  be  executed  by  the  officer  at  the  expiration  of  one  year  from  the 
date  of  the  sale,  if  the  property  has  not  been  previously  redeemed.^" 
The  debtor  is  in  the  mean  time  entitled  to  the  possession  of  the 
premises,  but  in  case  they  are  not  redeemed  he  is  liable  to  the  pur- 
chaser for  their  reasonable  rents  and  profits.®^ 

Redemption  may  be  made  by  any  one  holding  either  the  legal  or 
equitable  title  in  the  property,  at  any  time  within  one  year  from  the 
date  of  sale,  by  paying  to  the  purchaser,  or  to  the  clerk  of  the  court 
from  which  the  order  of  sale  was  issued,  for  the  use  of  the  pur- 
chaser, the  amount  of  the  purchase-money,  with  interest  at  the  rate 
of  eight  per  cent,  per  annum.^^    When  a  mortgagee  or  judgment  cred- 

'« See  Skelton  v.  Ward,  51  Ind.  46.  8  Blackf.  160.     If  the  land  is  situate 

"  Generally,     when     divisible     the  in    two   counties,    the    part    in   each 

premises  should  be  sold  in  parcels,  must    be    sold    at    the    door    of   the 

Frame  v.  Bell,  16  Ind.  229;   Dale  v.  court-house  of  the  county  where  it 

Bugh,  16  Ind.  233;  Piel  v.  Brayer,  30  is    situated.     Holmes   v.    Taylor,   48 

Ind.    332,    95    Am.    Dec.    699.      This  Ind.  169. 

statute,    however,    applies    only    to  Upon  foreclosure  and  satisfaction 

cases  where  part  of  the  mortgage  is  of     judgment    for    the   whole     debt, 

not   due.      Harris   v.    Makepeace,    13  the  clerk  of  the  court  shall  imme- 

Ind.    560;    Smith   v.    Pierce,    15    Ind.  diately  enter  satisfaction  on  the  rec- 

210;    Benton   v.   Wood,   11   Ind.   260;  ords  of  the  recorder's  office  of  the 

Denny  v.  Graster,  20  Ind.  20.  Wheth-  county.      Acts    1881,    §  715    of    Civil 

the  premises  are  susceptible  of  di-  Code. 

vision   is   a  question  for   the  court  ^"  The  certificate  of  purchase  may 

to  decide.     The  court  must  also  di-  be   assigned,   and   the   deed   is   then 

rect  the  order  of  sale.    A  decree  giv-  made    to    the    assignee.      Splahn    v. 

ing  the  plaintiff  the  right  to  direct  Gillespie,     48     Ind.     397;     Davis     v. 

the  sale  is  erroneous.    Knarr  v.  Con-  Langsdale,  41  Ind.  399.     On  the  de- 

away,   42    Ind.    260.     The  failure   of  cease   of   the   holder   of   the   certifl- 

the  court  to  determine  whether  the  cate,  the  deed  may  be  made  to  his 

premises  are  divisible  does  not  ren-  heirs  or  devisees.  Sumner  v.  Palmer, 

der  the  order  of  sale   void;    but  it  10  Rich.   L.  38;   McElmurray  v.  Ar- 

may  be  set  aside  on  seasonable  ap-  dis,  3  Strob.  212;    Swink  v.  Thomp- 

plication.     Cassel  v.  Cassel,  26  Ind.  son,  31  Mo.  336. 

90;   Thompson  v.  Davis,  29  Ind.  264.  "'Rev.  1901,  §§  778,  779. 

The  sale  must  be  made  according  to  "-  Rev.  1901,  §  780.     A  liberal  con- 

the  statute  in  force  when  the  mort-  struction    should    be    given    to    the 

gage  was  executed.     Wolf  v.  Heath,  right   of   redemption.      A   holder    of 

7  Blackf.  154;  Franklin  v.  Thurston,  one  of  several  mortgage  notes,  who 


283 


FORECLOSURE   AND    REDEMPTPON. 


[§    1335. 


itor  redeems,  he  retains  a  lien  on  the  premises  for  the  amount  paid 
for  redemption  against  the  owner  or  any  junior  incumbrancer.®^ 

§  1335.  lowa.^'* — All  deeds  of  trust  and  mortgages  of  real  estate, 
whether  they  contain  a  power  of  sale  or  not,  must  be  foreclosed  by 
an  equitable  proceeding  in  court  in  the  county  in  which  the  prop- 
erty or  some  part  of  it  is  situated. ^^  If  separate  suits  are  brought 
in  the  same  county  on  the  bond  or  note,  and  on  the  mortgage,  the 
plaintiff  must  elect  which  to  prosecute.*®  In  such  action  judgment 
is  entered  for  the  entire  amoimt  found  due,  and  under  a  special  exe- 
cution the  property,  or  so  much  as  is  necessary,  is  sold  to  satisfy  it 
with  interest  and  costs.  If  the  property  does  not  sell  for  enough  to 
satisfy  the  judgment,  a  general  execution  may  be  issued  for  the 
balance,  unless  the  parties  have  stipulated  otherwise.*'' 


has  filed  a  cross-bill  in  proceedings 
by  the  holder  of  another  note,  and 
obtained  a  judgment  for  foreclosure 
as  to  the  note  held  by  him,  may  re- 
deem from  the  foreclosure  sale,  as 
a  judgment  creditor.  Davis  v.  Langs- 
dale,  41  Ind.  399.  A  mortgagee  hav- 
ing a  judgment  for  a  deficiency  may 
also  redeem.  Green  v.  Doane,  57 
Ind.  186.  See  §  1069.  See,  also.  Teal 
v.  Hinchman,  69  Ind.  379.  As  to 
right  of  junior  mortgagee  to  redeem, 
see  Duesterberg  v.  Swartzel,  115  Ind. 
180,  17  N.  E.  155;  O'Brien  v.  Moffit, 
133  Ind.  660,  33  N.  E.  616.  No  re- 
demption after  the  lapse  of  a  year. 
Gordon  v.  Lee,  102  Ind.  125,  1  N.  E. 
290. 

There  is  a  very  plain  and  marked 
distinction  between  an  estate  m 
lands  and  a  title  to  lands.  An  es- 
tate in  land  is  the  degree,  quantity, 
nature,  or  extent  of  interest  which 
a  person  has  in  it.  His  title  to  it 
is  the  evidence  of  his  right,  or  of 
the  extent  of  his  interest.  A  person 
purchasing  lands  at  a  ?ale  under 
execution,  who  has  acquired  an  equi- 
table estate  thereiif  by  the  failure  of 
the  parties  in  interest  to  redeem 
within  a  year,  but  who  has  not  de- 
manded and  received  a  deed  from 
the  sheriff,  is  not  entitled  to  redeem 
such  lands  as  a  person  holding  the 
"leg.al  or  equitable  title"  thereof 
(Rev.  St.  1881,  §  768),  but  must  pro- 
ceed to  redeem  as  a  judgment  cred- 
itor or  lienholder  (§  772).  Robert- 
son V.  Vancleave,  129  Ind.  217,  29  N. 
E.   781. 

Where  land  has  been  sold  under 
a  decree  foreclosing  several  mort- 
gages, there  can  be  no  redemption 


by  the  holder  of  any  one  of  them, 
though  he  received  nothing  from  the 
sale,  the  entire  proceeds  having 
been  required  to  satisfy  prior  liens. 
Horn  V.  Indianapolis  Nat.  Bank,  125 
Ind.  381,  25  N.  E.  558.  See  Lauriat 
V.  Stratton,  11  Fed.  107. 

^  See  Smith  v.  Moore,  73  Ind.  388. 

«*Annot.  Code  1888,  §§4555-4562. 
Annot.  Code  1897,  §§  3428,  4284-4298. 
This  is  a  statutory  proceeding,  to 
which  the  court  will  apply  the  prin- 
ciples of  both  law  and  equity.  Kra- 
mer V.  Rebman,  9  Iowa,  114;  Mc- 
Dowell V.  Lloyd,  22  Iowa,  448;  Hart- 
man  V.  Clarke,  11  Iowa,  510;  Pack- 
ard V.   Kingman,  11   Iowa,  219,  221. 

*=  McDonald  v.  Second  Nat.  Bank, 
106  Iowa,  517,  76  N.  W.  1011.  This 
provision  is  not  open  to  the  consti- 
tutional objection  that  it  infringes 
upon  the  right  of  trial  by  jury. 
Clough  V.  Seay,  49  Iowa,  111. 

*"'  But  a  suit  on  the  note  is  brought 
in  one  county  and  suit  on  the  mort- 
gage in  another.  McDonald  v.  Sec- 
ond Nat.  Bank,  106  Iowa,  517,  76 
N.  W.  1011. 

"  Chittenden  v.  Gossage,  18  Iowa, 
157;  Kennion  v.  Kelsey,  10  Iowa, 
443;  Elmore  v.  Higgins,  20  Iowa,  250. 

A  personal  judgment  can  not  be 
rendered  against  a  subsequent  pur- 
chaser who  has  not  assumed  the 
mortgage.  Carleton  v.  Byington,  24 
Iowa,  172. 

But  a  subsequent  purchaser  who 
has  assumed  the  payment  of  the 
mortgage  debt  is  liable  to  a  per- 
sonal judgment,  and  parol  evidence 
is  admissible  to  prove  his  agreement 
to  assume  the  debt.  Bowen  v.  Kurtz, 
37  Iowa,  239. 


§    1335.]  STATUTORY    PROVISIONS    RELATING   TO.  284 

At  any  time  prior  to  the  sale,  a  person  having  a  lien  subsequent 
to  the  mortgage  is  entitled  to  an  assignment  of  all  the  interest  of 
the  holder  of  tlie  mortgage  on  paying  him  the  amount  secured,  with 
interest  and  costs,  together  with  the  amount  of  any  other  liens  of  the 
same  holder  which  are  paramount  to  his.*^ 

If  there  is  an  overplus  remaining  after  satisfying  the  mortgage 
and  costs,  and  if  there  is  no  other  lien  upon  the  property,  such 
overplus  shall  be  paid  to  the  mortgagor.  If  there  are  any  other 
liens  on  the  property  sold,  or  other  payments  secured  by  the  same 
mortgage,  they  shall  be  paid  off  in  their  order.  And  if  the  money 
secured  by  any  such  lien  is  not  yet  due,  a  suitable  rebate  of  in- 
terest must  be  made  by  the  holder  thereof,  or  his  lien  on  such  prop- 
erty will  be  postponed  to  those  of  a  junior  date,  and  if  there  are 
none  such  the  balance  will  be  paid  to  the  mortgagor.  As  far  as 
practicable,  the  property  sold  must  be  only  sufficient  to  satisfy  the 
mortgage  foreclosed. 

A  bond,  or  an  agreement  to  convey,  may  be  treated  as  a  mortgage 
and  foreclosed  in  the  same  manner.^® 

A  foreclosure  sale  is  subject  to  redemption  in  the  same  man- 
ner as  a  sale  under  general  execution.''"  The  owner  of  the  equity 
may  redeem  at  any  time  within  one  year  from  the  day  of  sale, 
and  in  the  mean  time  is  entitled  to  the  possession  of  the  property.^^ 
For  the  first  six  months  his  right  to  redeem  is  exclusive;  but  after 
that  any  creditor  of  his  may  redeem  at  any  time  within  nine  months 
from  the  sale.  Creditors  may  redeem  from  each  other  within  such 
time.®-  The  terms  of  redemption  are  the  reimbursement  of  the 
amount  paid  by  the  person  who  then  holds  under  the  sale,  together 

»« See  Mast  v.  Wells,  110  Iowa,  128,  of  the  debt  which  had  not  been  cred- 

81  N.  W.  230.  ited  on  the  judgment.     McConkey  v. 

8"  Annot.    Code   1888,    §§  4565,   4566.  Laub,  71  Iowa,  636,  33  N.  W.  146. 

But  the  vendor  may  at  his  election  As  to  damages  by  the  mortgagee 

recover  the  purchase-money  at  law.  during  the  year  allowed  for  redemp- 

Hershey    v.    Hershey,    18    Iowa,    24;  tion,    see    Conway    v.    Sherman,    78 

Hartman    v.    Clarke,    11    Iowa,    510.  Iowa,  588,  43  N.  W.  541. 

See,    also,    Blair   v.    Marsh,    8    Iowa,  The    lien   of   a.  junior   mortgagee, 

144;  Page  v.  Cole,  6  Iowa,  153;  Mul-  who  has  not  redeemed  from  a  sale 

lin  V.  Bloomer,  11  Iowa,  360;   Guest  under  a  senior  mortgage,  is  divested 

V.   Byington,   14  Iowa,   30;    Arms  v.  where  the  grantee  of  the  mortgagor 

Stockton,  12  Iowa,  327;  Wall  v.  Am-  has  redeemed.     Moody  v.   Funk,   82 

bier,  11  Iowa,  274.  Iowa,  1,  47  N.  W.  1008. 

^o  Annot.   Code  1897,   §§4045-4071.  ^=  The   statute   does   not   authorize 

"'  After  the  expiration  of  the  year  the    useless    and    fruitless    act   of   a 

of  redemption,  it  is  too  late  for  the  senior  lienholder  redeeming  from  a 

judgment  debtor  to  redeem  when  he  junior  lien.    If  a  junior  creditor  has, 

has  made  no  tender  of  the  amount  by  redemption  or  otherwise  become 

due,   nor  brought  it  into   court  be-  the  holder  of  a  paramount  lien,  jun- 

fore  the  expiration  of  the  year,  al-  ior    creditors    thereto    may    redeem 

though  he  had  paid  a  large  amount  therefrom  by  paying  as  provided  in 


285  FORECLOSURE   AND   REDEMPTION.  [§    1335. 

with  the  amount  of  his  own  lien,  with  interest  the  same  as  the  lien 
redeemed  bears.  When  redemption  is  made  from  a  mortgagee  whose 
debt  is  not  due,  he  must  rebate  interest  at  the  same  rate.  After  the 
expiration  of  nine  months,  creditors  can  no  longer  redeem  from  each 
other,  but  the  owner  of  the  equity  may  still  redeem  at  any  time  before 
the  end  of  the  year.  If  the  property  is  finally  held  by  a  redeeming 
creditor,  his  lien,  and  the  claim  out  of  which  it  arose,  will  be  held 
to  be  extinguished  unless  within  ten  days  after  the  nine  months 
limited  he  enters  o^n  the  sale  book  the  utmost  amount  he  is  willing 
to  credit  on  his  claim.  The  mode  of  making  redemption  is  by  pay- 
ing the  money  into  the  clerk's  office  for  the  use  of  the  persons  en- 
titled to  it.^^  At  the  end  of  the  year  the  sheriff  makes  the  deed  to 
the  person  entitled  to  it.'''* 

A  mortgagee  holding  two  or  more  m.ortgages  covering  the  same 
property  after  foreclosing  and  purchasing  the  property  under  his 
first  mortgage  may  redeem  from  himself  by  virtue  of  a  subsequent 
mortgage."^  But  if  without  making  any  reference  in  the  foreclosure 
proceedings  or  in  selling  to  subsequent  mortgages  held  by  him,  he 
purchased  the  property  at  the  sale,  under  his  first  m.ortgage,  and 
without  making  any  attempt  to  redeem  from  himself  he  accepts  the 
redemption  money  from  the  owner  of  the  equity,  the  lien  of  his  sub- 
sequent mortgages  is  thereby  extinguished,  and  the  redeeming  owner 

§  3107,  but  not  from  the  junior  lien,  by   creditors,   see  Woonsocket   Inst. 

Lysinger    v.    Hayer,    87    Iowa,    335,  for    Sav.    v.    Gouldin,    28    Fed.    900; 

54  N.  W.  145.  George  v.  Hart,  56  Iowa,  706,  10  N. 

If  tbe  owner  of  a  sheriff's  certifi-  W.  265;  Newell  v.  Pennick,  62  Iowa, 

cate  accepts  the  redemption   money  123,   17  N.  W.   472;    Goode  v.   Cum- 

from  one  who  was  mistaken  in  his  mings,  35  Iowa,  67.     The  lien  of  a 

belief  that  he  had  a  right  to  redeem,  junior  mortgagee,  who  redeems  after 

and  on  discovering  the  mistake  re-  six    and    before   nine    months    from 

turns  the  money  to  the  clerk's  cf-  the   foreclosure   of   the   prior   mort- 

fice    the    next    day,    and    afterwards  gage  without  making  the  statement 

tenders  it  to  the  redemptioner,  there  of   record    as   to   the   amount   he    is 

is    no    equitable    assignment    of    Ihe  willing  to  credit,  is  discharged.  West 

certificate.    Byer  v.  Healey,  84  Iowa,  v.  Fitzgerald,  12  Iowa,  306,  33  N.  W. 

1,   50  N.  W.   70.  688. 

"'See  Gilbert  v.  Husman,  76  Iowa,        Notwithstanding  the  statute  giving 

241,  41  N.  W.  3.  a  right  of  redemption,  a  confession 

"^'a    junior    mortgagee    redeeming  of    judgment    authorizing    a    decree 

more   than   six   and   less   than   nine  of  foreclosure  may  contain  an  agree- 

months   after   the   sheriff's   sale,    by  ment  that  the  sale  under  the  decree 

purchasing   the   certificate,   becomes  shall  be  absolute,  with  no  right  of 

the  absolute  owner  of  the  land,  and  redemption.     Cook  v.  McFarland,  78 

his  mortgage  is  fully  satisfied.  Lamb  Iowa,  528,  43  N.  W.  519.     A  decree 

V.    Feeley,    71    Iowa,    742,    30   N.    W.  which   does   not  allow   time  for  re- 

652;    Lamb   v.    West,    75    Iowa,    399,  demption  is  not  void  so  long  as  it 

39  N.  W.   666.     During  such  period  is  allowed   to  stand.     Evans  v.   At- 

redemption    may    be    made   between  kins.  75  Iowa,  448,  39  N.  W.  702. 
the   parties  without  the   aid   of  the        »-■  Stephens   v.   Mitchell.   103   Iowa, 

clerk.    Goode  v.  Cummings,  35  Iowa,  65;    Wells  v.  Ordway,  108  Iowa,   86. 
67.     As    to    successive    redemptions 


§    1336.]  STATUTORY    PROVISIONS    RELATING   TO.  386 

is  entitled  to  have  them  released  on  payment  of  the  amount  due 
upon  the  foreclosure  decree."" 

§  1336.  Kansas."' — Foreclosure  is  by  an  equitable  action  under 
the  Code.  The  action  is  a  local  one,  and  must  be  brought  in  the 
county  in  which  the  land  is  situated."'*  An  attachment  of  other  prop- 
erty may  be  made  in  the  foreclosure  suit,  as  in  other  actions  for  the 
recovery  of  money,  upon  an  affidavit  setting  forth  sufficient  grounds, 
among  which  is  the  insufficiency  of  the  security."" 

In  actions  to  enforce  a  mortgage,  deed  of  trust,  or  other  lien  or 
charge,  a  personal  judgment  is  rendered,  as  well  to  the  plaintiff  as 
other  parties  having  liens,  for  the  amount  due  with  interest,  and  for 
the  sale  of  the  property  and  application  of  the  proceeds.^^"  When 
the  same  mortgage  embraces  separate  tracts  of  land  situated  in  two 
or  more  counties,  the  sheriff  of  each  county  must  make  sale  of  the 
land  situated  in  the  county  of  which  he  is  sheriff.  There  can  be  no 
sale  of  the  mortgaged  real  estate,  pledged  or  assigned  as  security, 
except  in  pursuance  of  a  judgment  of  a  court  of  competent  jurisdic- 
tion ordering  such  sale."^ 

The  suit  is  always  for  the  debt,  whether  the  plaintiff  asks  to  have 
the  mortgaged  property  applied  in  payment  of  it  or  not;  and  the 

"Wells  V.   Ordway,   108   Iowa,   86,  "'Shields    v.    Miller,    9    Kans.    390, 

78  N.  W.  806.    In  Moody  v.  Funk,  82  397;  App.  v.  Bridge,  McCahon  (Kans.) 

Iowa,    1,   47   N.    W.    1008,    the   court  118. 

said:  "'"  Shedd    v.    McConnell,    18    Kans. 

"It  is  the  policy  of  the  law  to  se-  594. 
cure  to  the  debtor,  as  nearly  as  is  ""As  mortgages  can  be  foreclosed 
practicable,  the  full  value  of  his  by  suit  only,  power  of  sale  mort- 
property  sold  on  execution.  If  the  gages  and  trust  deeds  are  of  no 
execution  creditor  failed  to  bid,  for  practical  advantage, 
the  land  sold,  a  just  amount,  the  '"'  There  is  no  redemption.  The 
debtor  should  be  permitted  to  trans-  sale  cuts  off  all  right.  Kirby  v. 
fer  his  interest  to  another  for  a  Childs,  10  Kans.  639. 
fair  consideration;  and,  if  his  An  appraisement  of  real  estate 
grantee  redeems,  the  execution  proposed  to  be  sold  under  the  pro- 
creditor  has  no  right  to  complain,  visions  of  §  453  of  the  Civil  Code 
for  he  might  have  bid  for  the  land  a  must  be  made  upon  actual  view  had 
larger  sum.  Nor  is  a  junior  lien-  subsequent  to  the  time  the  apprais- 
holder  prejudiced  by  such  a  trans-  ers  are  called  and  sworn.  Alfred  v. 
fer.  It  does  not  affect  his  right  to  Bank,  48  Kans.  124,  29  Pac.  471. 
redeem  within  the  time  given  him  When  an  appraisement  has  been 
by  law,  and,  if  he  is  not  willing  to  made,  and  the  land  is  offered  for 
give  more  for  the  land  than  the  sale,  but  no  sale  is  made,  a  new  ap- 
amount  for  which  it  was  sold,  he  praisement  can  not  be  made  until 
should  not  prevent  the  debtor  from  the  first  appraisement  is  set  aside, 
realizing  what  he  can  for  his  prop-  Kline  v.  Camp,  49  Kans.  114,  30  Pac. 
erty."     See  also  Harms  v.   Palmer,  175. 

73  Iowa,  446,  35  N.  W.  515;   Bevans  By   Stat.    1893,   c.   109,   §§1,   2,   26, 

V.    Dewey,    82    Iowa,    85,    47    N.    W.  a  foreclosure  sale  is  subject  to  re- 

1009;   Kilmer  v.  Gallaher,  107  Iowa,  demption  within  18  months  from  the 

676,  78  N.  W.  685.  day  of  sale,  and  the  owner  is  in  the 

"2  G.  S.  1889,  §  4495;   G.  S.  1899,  mean  time  entitled  to  the  possession 

§  4663.  of   the   property,   and   any   contract 


387  FORECLOSURE   AND   REDEMPTION.  [§    1337. 

judgment  is  always  a  personal  judgment  for  the  debt,  whether  an 
order  is  obtained  to  have  the  property  sold  to  satisfy  the  debt  or 
not."^  A  judgment  requiring  the  defendant  to  pay  the  debt  and  costs 
within  one  day  after  its  rendition,  and  requiring  the  clerk  on  de- 
fault to  issue  a  special  execution  to  sell  the  real  estate  to  satisfy  the 
judgment,  is  not  erroneous  because  no  more  time  is  allowed  him  to 
pay  the  money  before  the  issuing  of  the  special  execution.^*^^ 

§  1337.  Kentucky."* — Foreclosure  is  made  under  the  jurisdiction 
of  a  court  of  equity.  The  bill  may  be  brought  in  any  county  in  which 
any  part  of  the  mortgaged  land  lies."'^  A  sale  of  the  premises,  or  so 
much  of  them  as  may  be  necessary,  must  in  all  cases  be  decreed."** 
Before  the  Code,  the  court  could  not  decree  the  payment  of  any 
balance  found  due  after  the  application  of  the  proceeds  of  sale,  if  the 
mortgagee  had  a  legal  remedy  for  obtaining  this."^ 

Under  the  Code  a  strict  foreclosure  is  forbidden."^.  In  an  action  to 
enforce  a  mortgage  or  lien,  judgment  may  be  rendered  for  the  sale 
of  the  property  and  for  the  recovery  of  the  debt  against  the  defend- 
ant personally.  A  sale  of  the  property  may  be  ordered  without 
giving  time  to  pay  money  or  do  other  act.  Before  ordering  a  sale 
of  real  property  for  the  payment  of  debt,  the  court  must  be  satisfied 
by  the  pleadings,  by  an  agreement  of  the  parties,  by  affidavits  filed, 
or  by  a  report  of  a  commissioner  or  commissioners,  whether  or  not 
the  property  can  be  divided  without  materially  impairing  its  value; 
and  may  cause  it  to  be  divided,  with  suitable  avenues,  streets,  lanes,  or 
alleys,  or  without  any  of  them.  If  it  be  necessary  to  sell,  for  the 
payment  of  debt,  a  parcel  of  real  property  which  cannot  be  divided 

in  the  mortgage  waiving  this  right  "=  Caufman   v.    Sayre,    2    B.    Men. 

of  redemption  is  void.  207;    Owings   v.    Beall,    3    Litt.    103; 

This    statute    is    not    retroactive,  Shiveley  v.  Jones,  6  B.  Mon.  274. 

and    therefore    does    not    apply    to  Service  may  be  made  by  nublica- 

mortgages  made  before  its  passage,  tion,  but  if  the  statute  in  regard  to 

Watlvins  v.  Glenn,  55  Kans.  417,  40  publication    be    not    complied    v/ith, 

Pac.    316;     Beverly    v.    Barnitz,    55  the  sale  will  not  divest  the  title  to 

Kans.  451,  466,  40  Pac.  325.  the   land.     Mercantile   Trust    Co.   v. 

'"=  As   to  foreclosure   of   purchase-  South    Park    Residence    Co.    94    Ky. 

money    liens    upon    real    estate,    see  271.   22   S.   W.   314. 

Laws   1901,   ch.    259;    Lichty   v.    Mc-  "'Formerly,     under     the     general 

Martin,    11    Kans.    565;    Jenness    v.  jurisdiction     in     equity,     the     court 

Cutler,    12    Kans.    510;    Gillespie    v.  might  order  a  strict  foreclosure.  See 

Lovell,  7  Kans.  419,  423.  §  1547. 

"^  Blandin  v.  Wade,  20  Kans.  251.  ""  Downing  v.   Palmateer,   1   Mon. 

"*  Civil  Code  1889,  §375.  64,  67;   Martin  v.  Wade,  5  Mon.  77; 

Power  of  sale  mortgages  and  trust  Morgan  v.   Wilkins,   6  J.   J.   Marsh, 

deeds  must  be  enforced  by  a  court  28;     Crutchfield    v.    Coke.    6    J.    J. 

of   equitv;    but   in   making  sale   the  Marsh.    89 

court   will   follow   the  terms  of  the  >»«  Civil  Code  1889,  §§  374-376,  694- 

power.     Campbell    v.     Johnston,    4  699. 
Dana,   178. 


§    1338.]  STATUTORY    PROVISIONS    RELATING    TO.  288 

without  materially  impairing  its  value,  the  officer  shall  sell  the  whole 
of  it,  though  it  bring  more  than  the  sum  to  be  raised;  and  the  court 
shall  make  proper  orders  for  the  distribution  of  the  proceeds.  The 
plaintiff  in  an  action  to  enforce  a  lien  on  real  property  must  state  in 
his  petition  the  liens,  if  any,  which  are  held  thereon  by  others, 
and  make  the  holders  defendants;  and  no  sale  of  the  property  shall 
be  ordered  by  the  court  prejudicial  to  the  rights  of  the  holders  of 
any  of  the  liens;  and  when  it  appears  from  the  petition  or  other- 
wise that  several  debts  are  secured  by  one  lien,  or  by  liens  of  equal 
rank,  and  they  are  all  due  at  the  commencement  of  the  action,  or 
become  so  before  judgment,  the  court  shall  order  the  sale  for  the 
•pro  rata  satisfaction  of  all  of  them;  but  if  in  such  case  the  debts  be 
owned  by  different  persons  and  be  not  all  due,  the  court  shall  not 
order  a  sale  of  the  property  until  they  all  mature.  If  all  such  liens 
be  held  by  the  same  party,  the  court  may  order  a  sale  of  enough  of 
the  property  to  pay  the  debts  then  due,  unless  it  appear  that  it  is 
not  susceptible  of  advantageous  division;  or  that,  for  some  other 
reason,  the  sale  would  cause  a  sacrifice  thereof,  or  seriously  prejudice 
the  interests  of  the  defendants.  Every  sale  made  under  an  order  of 
court  must  be  public,  upon  reasonable  credits  to  be  fixed  by  the 
court,  not  less,  however,  than  six  months  for  real  property;  and 
shall  be  made  after  such  notice  of  the  time,  place,  and  terms  of  sale 
as  the  order  may  direct  ;^°®  and,  unless  the  order  direct  otherwise, 
shall  be  made  at  the  door  of  the  court-house  of  the  county  in  which 
the  property,  or  the  greater  part  thereof,  may  be  situated;  and  the 
notice  of  such  sale  must  state  for  what  sum  of  money  it  is  to  be 
made.  A  lien  exists  on  real  property  sold  under  an  order  of  court, 
as  security  for  the  purchase-money;  and,  upon  payment  thereof,  the 
clerk  releases  the  lien  on  the  margin  of  the  record  of  the  deed  in  the 
office  of  the  clerk  of  the  county  court.^^" 

§  1338.  Louisiana. — The  civil  law  system  prevails  in  this  State, 
and,  as  this  differs  so  widely  as  regards  the  law  o^  mortgages  as  well 
as  in  other  respects  from  the  common  law  system  adopted  in  the 
other  States,  no  attempt  is  made  to  give  any  full  statement  of  the 
law  relating  to  mortgages  and  the  foreclosure  of  them.^^^     In  general 

"^  See,  as  to  sufficiency  of  notice,  ond   mortgagee   in   the  surplus,   see 

Barlow   V.    McClintock    (Ky.),   11   S.  Quertier   v.    Hille,    18    La.    Ann.    65. 

W.  29.  This  is  a  statutory  remedy,  hut  does 

^'"As  to  redemption  see  G.  S.  1903,  not   oust    the   equitable   jurisdiction 

§§  2362-2365.  of  the  United   States   courts  to  en- 

"'  Rev.  Civ.  Code  1889,  arts.  3278-  force    the    mortgage.      Benjamin    v. 

3411;     Merrick's     Rev.     Code     1900,  Cavaroc,  2  Woods,  168. 
arts.  3278-3411.     As  to  rights  of  sec- 


289  FORECLOSURE    AND   REDEMPTION.  [§    1339. 

it  may  be  said  that  a  mortgage  executed  according  to  the  law  of  this 
State  is  an  authentic  act  before  a  notary  public,  and  imports  a  con- 
fession of  judgment.  After  the  debt  is  due,  the  mortgage  is  fore- 
closed by  instituting  a  regular  suit  and  obtaining  judgment  thereon; 
or  upon  confession  of  judgment  the  court  may  order  the  sheriff 
to  proceed  at  once  to  seize  and  sell  the  mortgaged  property.^^^  The 
hypothecary  action  by  which  mortgages  are  foreclosed  is  a  real 
action,  or  a  proceeding  tn  rem,  whereby  the  property  is  followed 
wherever  it  may  be  found.  It  may  be  instituted  before  a  court  O'f 
ordinary  jurisdiction.  Thirty  days'  notice  to  the  debtoT  must  be 
given  as  a  prerequisite  to  the  bringing  of  the  action. ^^^^  If  the  prop- 
erty does  not  sell  for  enough  to  satisfy  the  mortgage,  the  mortgagee 
becomes  an  ordinary  creditor  for  the  balance.^^* 

A  mortgage  which  contains  the  pact  de  non  alienando  may  be 
enforced  by  proceedings  against  the  mortgagor  alone,  notwithstanding 
the  alienation  of  the  property,  whether  voluntary  or  in  proceedings 
for  confiscation.^ ^^ 

§  1339.  Maine. — A  mortgage  may  be  foreclosed  in  equity,"^  but 
the  modes  provided  by  statute  are  generally  pursued.  These  are 
by  entry  and  possession,  by  advertisement,  and  by  writ  of  entry.^^^ 

"-  Boguille    V.    Faille,    1    La.    Ann.  dence  of  that  State.    Pickett  v.  Fos- 

204.     And  see  Story's  Eq.   §  1007.  ter,  36  Fed.  514. 

"'  Gentis    v.    Blasco.    15    La    Ann.  Mere    informalities    or    irregulari- 

104;    Taylor  v.   Pearce,  15  La.   Ann.  ties    in    the    sale    are    not    sufficient 

564*  ground  for  setting  it  aside.     Stock- 

1'*  Salzman    v.    Creditors,    5    Rob.  meyer  v.  Tobin,  139  U.  S.  176,  11  Sup. 

241.     In  order  to  make  a  valid  sale  Ct.  504. 

of    land    under    a    foreclosure    of    a  '''  Avegno    v.    Schmidt,    113    U.    S. 

mortgage,    it    is    indispensably    nee-  293,    5    Sup.    Ct.    487;    New    Orleans 

essary  in  all  parishes,  except  Jeffer-  Nat.    Banking    Asso.    v.    Le    Breton, 

son  and  Orleans,  that  there  should  120  U.  S.  765,  7  Sup.  Ct.  772.    Shields 

be  an  actual  seizure  of  the  land;  not  v.  Schiff,  124  U.  S.  351,  8  Sup.  Ct.  510. 

perhaps  an  actual  turning  out  of  the  ""  §  1239;   Laws  1891,  ch.  91. 

party   in   possession,   but  some  tak-  •"  Ireland  v.   Abbott,   24   Me.   155; 

ing   possession   of  it  by   the   sheriff  Shaw  v.  Gray,  23  Me.  174;    Chase  v. 

not     merelv     constructively.      Wat-  Palmer,    25    Me.    341.      See    §§    1238, 

son  V.  Bondurant,  21  Wall.  123.   As  1239,  1277. 

to  where  the  sale  should  take"  place,  Laws  1887,  ch.  129,  provide  that, 
see  Walker  v.  Villavoso,  26  La.  Ann.  where  a  mortgage  secures  an  agree- 
42;  Stockmeyer  v.  Tobin.  139  U.  S.  ment  other  than  that  for  the  pay- 
176,  11  Sup.  Ct.  504.  As  to  the  dispo-  ment  of  money,  an  attaching  creditor 
sition  of  the  surplus,  see  Quertier  v.  may  file  a  bill  to  ascertain  the  con- 
Hille,  18  La.  Ann.  65;  Lacoste  v.  dition  of  the  mortgage,  and  may 
West,  19  La.  Ann.  446.  have  a  decree  enabling  him  to  ful- 
A  mortgage  or  deed  of  trust  executed  fil  it,  and  pending  such  bill  there 
in  another  State  on  property  in  shall  be  no  foreclosure.  This  pro- 
Louisiana,  to  secure  the  payment  of  vision  is  void  as  to  the  mortgages 
promissory  notes,  takes  effect  as  a  made  before  its  enactment,  as  im- 
conventional  mortgage,  and  may  be  pairing  the  obligations  of  contracts. 
enforced  as  such  under  the  jurispru-  Phinney  v.   Phinney,  81  Me.  450,  17 

Atl.  405. 


§    1340.]  STATUTORY  PROVISIONS  RELATING  TO.  290 

The  mortgagor  or  any  person  claiming  under  him  may  redeem  at 
any  time  within  three  years  after  the  mortgagee  has  obtained  pos- 
session by  entry  or  by  action,  or  after  the  first  publication  of  notice, 
or  the  service  of  it,  as  provided  in  that  mode  of  foreclosure;  but 
when  the  mortgagor  and  mortgagee  have  in  the  mortgage  agreed 
upon  a  less  time,  but  not  less  than  one  year,  in  which  the  mortgage 
shall  be  foreclosed,  redemption  must  be  had  accordingly.^"  Such 
redemption  applies  to  each  and  all  the  modes  prescribed  by  statute 
for  the  foreclosure  of  mortgages  of  real  estate.  After  payment  or 
tender  of  the  amount  due  on  the  mortgage,  a  bill  in  equity  may  be 
maintained  for  redemption  and  to  compel  the  mortgagee  to  release 
his  right.  When  the  bill  is  founded  on  a  tender  made  before  the 
commencement  of  the  suit,  it  must  be  commenced  within  one  year 
after  the  tender. ^^^ 

§  1340.  Maryland.^^*' — Mortgages  are  foreclosed  by  suit  in  chan- 
cery, in  which  there  may  be  a  decree  that,  unless  the  debt  and 
costs  are  paid  by  the  time  fixed  by  the  decree,  there  shall  be  a  sale 
of  the  property,  or  of  so  much  of  it  as  may  be  necessary.^^^  This, 
however,  is  merely  a  cumulative  remedy,  and  does  not  do  away 
with  a  strict  foreclosure.  The  heirs  of  the  mortgagee  need  not  be 
made  parties  to  the  bill,  but  any  decree  upon  a  bill  filed  by  the 
executor  or  administrator  of  the  mortgagee  has  the  same  effect  as 
if  his  heirs  were  parties  to  it.  The  sale  is  made  in  the  county 
or  city  where  the  premises  are  situated ;  but  if  situated  in  more  than 
one  county  the  sale  may  be  made  in  either.    There  is  no  redemption.^^^ 

When  any  suit  is  instituted  to  foreclose  a  mortgage,  the  court 
may  decree  that,  unless  the  debt  and  cost  be  paid  by  a  day  fixed 
by  the  decree,  the  property  mortgaged,  or  so  much  thereof  as 
may  be  necessary  for  the  satisfaction  of  said  debt  and  cost,  shall 
be  sold,  and  such  sale  shall  be  for  cash,  unless  the  plaintiff  shall 
consent  to  a  sale  on  credit;  and  if  upon  the  sale  under  such  decree 
of  the  whole  mortgaged  property  the  net  proceeds  thereof,  after 
the  costs  allowed  by  the  court  are  satisfied,  shall  not  suffice  to  sat- 

"^  R.  S.  1883,  ch.  90,  §  6.  his  answer,  or  by  previous  assent  in 

""For  proceedings  to  redeem,  see  ttie  mortgage  itself;   as  by  a  stipu- 

R.  S.  1883,  ch.  90,  §§  13-20.  lation    that    upon    any    default    the 

"°  Pub.   G.   L.   1888,  art.   16,   §   187.  mortgagee  "may  forthwith  foreclose 

As  to  foreclosure  sales  in  Baltimore  this  mortgage  and  sell  the  property." 

city  or  county,  see  IPub.  Local  Laws  Dorsey  v.  Dorsey,  30  Md.  522,  96  Am. 

1888,  p.  501;   Murguiondo  v.  Hoover  Dec.  633. 

72  Md.  9,  18  Atl.  907.  '-=  Ing     v.    Cromwell,    4    Md.    31; 

"•  This   provision,    that   the   court  Eichelberger  v.  Harrison,  3  Md.  Ch. 

may  decree  a  sale  unless  the  debt  be  39;    Andrews    v.    Scotton,    2    Bland, 

paid  by  a  day  fixed   in  the   decree,  029,  667. 
may  be  waived  by  the  mortgagor  in 


291  FORECLOSURE  AKD  REDEMPTION.   [§§  1341,  1342. 

isfy  the  mortgage  debt  and  accrued  interest,  as  this  shall  be  found 
by  the  judgment  of  the  court  upon  the  report  of  the  auditor  thereof, 
the  court  may,  upon  the  motion  of  the  plaintiff,  enter  a  decree  in 
personam  against  the  mortgagor,  or  other  party  to  the  suit  who  is 
liable  for  the  payment  thereof,  provided  the  mortgagee  would  be 
entitled  to  maintain  an  action  .at  law  upon  the  covenants  contained 
in  said  mortgage  for  said  residue  of  the  said  mortgage  debt  so  re- 
maining unsatisfied  by  the  proceeds  of  such  sale,  which  decree  shall 
have  the  same  effect  as  a  judgment  at  law,  and  may  be  enforced  only 
in  like  manner  by  a  writ  of  execution  in  the  nature  of  a  writ  of  fieri 
facias,  or  otherwise. ^-^ 

§  1341.  Massachusetts.^ — Foreclosure  in  equity  is  very  rare.  In 
the  absence  of  special  facts  calling  for  equitable  relief  a  court  of 
equity  has  no  jurisdiction  to  decree  a  foreclosure  and  sale  of  real 
estate  conveyed  by  a  mortgage  deed  which' does  not  contain  a  power 
of  sale.^^* 

§  1342.  Michigan.^^^' — Bills  for  foreclosure  are  filed  in  the  circuit 
court  in  chancery  of  the  county  where  the  premises,  or  any  part  of 
them,  are  situated.  The  court  has  power  to  decree  a  sale  of  the 
mortgaged  premises,  or  such  part  of  them  as  may  be  sufficient  to 
discharge  the  amount  due  on  the  mortgage,  and  the  costs  of  suit; 
but  no  lajids  are  to  be  sold  within  six  months  after  the  filing  of  the 
bill  of  foreclosure.^^"     If  redemption  is  made  within  that  time  the 

"'  Pub.   G.   L.   1888,  art.   16,  §   187.  Foreclosure  in  Equity  may  be  had 

If  the  mortgage  is  payable  by  instal-  of  a  mortgage  by  a  corporation  to 

ments,  a  sale  will  be  decreed  of  so  trustees    to    secure    its    bonds,    the 

much  of  the  property  as  will  pay  the  mortgage  containing  a  power  of  sale, 

amount    due,    and    the    decree    will  Shaw  v.  Norfolk  Co.  R.  Co.  5  Gray, 

stand   as   security   for   other   instal-  162;   Lowell  v.  Daniels,  2  Cush.  234, 

ments    as   they   fall    due;    and    if   it  61  Am.  Dec.  448. 

cannot  be  sold  in  parcels,  the  court  There  is  no  redemption  after  a  sale 

may    order   it   sold   entire,    and    the  under  a   power   or   after  possession 

whole  debt  paid,  with  a  rebate  of  in-  for   three   years   after   entry   in   the 

terest  for  sums  not  due.     Peyton  v.  manner  provided  by  statute,  or  ob- 

Ayres,  2  Md.  Ch.  64.  tained  by  writ  of  entry  and  a  con- 

'"  Hallowell    v.    Ames,    165    Mass.  ditional   judgment. 

123.    Knowlton,  J.,  said:  "No  case  in  '-'Annotated   Stats.   1882,   §§   6700- 

this     commonwealth    is    known     in  6716;    Comp.   Laws  1897,   §§    515-531. 

which  a  sale  has  been  decreed  by  a  Amended  by  Pub.  Acts.  1899,  No.  200. 

court  of  equity  so  as  to  accomplish  ""  The    purpose   of   this    provision 

a    foreclosure    in    less    than    three  being  to  give  the  mortgagor  time  to 

years,  in  the  absence  of  special  pro-  make  payment  and  save  the  lands, 

visions  in  the  mortgage  authorizing  that   purpose    is   not   served    by    al- 

a   sale.      To    hold    that   the    general  lowing    a    sale    within    six    months 

language  of  the  later  statutes  in  re-  after  he  first  has  notice  that  a  bill 

gard   to   equity  jurisdiction   has  re-  has   been   filed,   even   though   it  has 

pelled    or    modified    the    statutes    in  been  on  file  for  six  months  previous, 

regard  to  mortgages  would  give  it  a  The  court  may  postpone  the  sale  un- 

force  beyond  the  probable  intention  til    the    expiration    of   a   year   from 

of  the  legislature."  service  of  the  subpoena.     Detroit  F. 


§    1342.]  STATUTORY    PROVISIONS    RELATING    TO.  292 

deed  shall  be  void.  The  court  may  compel  the  delivery  of  the 
possession  of  the  premises  to  the  purchaser,  and  on  the  coming  in 
of  the  report  of  sale  may  decree  the  payment  by  the  mortgagor  of 
any  balance  of  the  mortgage  debt  that  may  remain  unsatisfied  after 
a  sale  of  the  premises,  in  the  cases  in  which  such  balance  is  recover- 
able at  law ;  and  for  that  purpose  may  issue  the  necessary  executions, 
as  in  other  cases  against  other  property  of  the  mortgagor. 

No  proceedings  at  law  for  the  recovery  of  the  debt  can  be  had 
while  the  bill  is  pending,  unless  authorized  by  the  court.^^^  If  the 
debt  be  secured  by  the  obligation  or  other  evidence  of  debt  of  any 
person  besides  the  mortgagor,  the  complainant  may  make  such  person 
a  party  to  the  bill,  and  the  court  may  decree  payment  of  the  bal- 
ance of  the  debt  unsatisfied  after  a  sale  of  the  premises,  as  well 
against  such  other  person  as  against  the  mortgagor.  Upon  the 
filing  of  the  bill,  the  complainant  must  state  in  it  whether  any 
proceedings  have  been  had  at  law  for  the  recovery  of  the  debt,  or 
any  part  of  it,  and  whether  any  part  of  it  has  been  paid.  If  any 
judgment  has  been  obtained  at  law,  no  proceedings  can  be  had,  unless 
return  is  made  that  the  execution  is  unsatisfied  in  whole  or  in  part, 
and  that  the  defendant  has  no  property  whereof  to  satisfy  the  exe- 
cution except  the  mortgaged  premises.^^^ 

All  sales  are  made  by  a  circuit  court  commissioner  of  the  county 
in  which  the  decree  was  rendered,  or  the  land  or  some  part  of  it  is 
situated,  or  by  some  other  person  authorized  by  the  order  of  the 
court.  The  sales  are  at  public  vendue  between  the  hour  of  nine 
o'clock  in  the  morning  and  the  setting  of  the  sun,  at  the  court- 
house, or  place  of  holding  the  circuit  court,  in  the  county  in  which 
the  estate  or  some  part  of  it  is  situated,  or  at  such  other  place  as 
the  co'urt  may  direct. ^^'^     Deeds  are  executed  by  the  commisioner,  or 

&  M.  Ins.  Co.  V.  Renz,  33  Mich.  298.  v.  Matthews.  123  Mich.  56,  81  N.  W. 

The   one   year   and    six   weelvS    that  918. 

must  elapse  before  the  sale  on  fore-  '-'  The  bringing  of  suit  at  law 
closure  may  be  computed  from  the  pending  an  equitable  suit  of  fore- 
date  of  taking  out  the  subpoena,  if  closure,  is  a  mere  irregularity  which 
it  is  taken  out  with  the  intention  in  will  not  be  enjoined  unless  rights 
good  faith  of  serving  it  as  soon  as  are  affected.  Steele  v.  Grave,  109 
possible,  and  there  is  no  laches  in  ob-  Mich.  647,  67  N.  W.  963. 
taining  service.  Culver  v.  Mc-  "'  A  bill  cannot  be  maintained 
Keown,  43  Mich.  322,  5  N.  W.  422.  which  shows  that  a  judgment  has 
The  decree  must  not  authorize  a  sale  been  recovered  on  one  of  the  notes, 
before  the  expiration  of  a  year  after  and  that  it  was  nearly  paid,  but  did 
the  filing  of  an  amended  bill.  Gray  not  show  that  an  execution  had 
v.  Federal  Bank,  83  Mich.  36.5,  47  N.  been  issued  and  returned  unsatisfied 
W.  221.  See  Fifth  Nat.  Bank  v.  in  whole  or  in  part,  and  did  not 
Pierce,  117  Mich.  376,  75  N.  W.  1058.  waive  a  decree  as  ;:o  that  note.  Den- 
A  statute  changing  time  to  six  nis  v.  Hemingway,  Walker's  Ch.  387. 
months  did  not  impair  obligation  of  ""  For  provisions  as  to  the  publi- 
existing  contracts.     State  Sav.  Bank  cation  of  notiees,  and  the  preserva- 


293  FORECLOSURE  AND  REDEMPTION.  [§  1342. 

other  person  making  the  sale,  specifying  the  names  of  the  parties 
to  the  suit,  the  date  of  the  mortgage,  when  and  where  recorded, 
with  a  description  of  the  premises  sold,  and  the  amount  bid  for  each 
parcel  of  land  sold,  and  shall  endorse  upon  each  deed  the  time  when 
the  same  will  become  operative  in  case  the  premises  are  not  redeemed. 
The  same  shall  be  copied  at  length  in  case  the  premises  or  any  parcel 
shall  be  redeemed;  the  register  shall  write  on  the  face  of  such  record 
the  word  "Redeemed."  Unless  the  premises  described  in  such  deed 
or  any  parcel  thereof  shall  be  redeemed  within  the  time  limited  for 
such  redemption  as  herein  provided,  such  deed  shall  thereupon,  as  to 
all  parcels  not  so  redeemed,  become  operative,  and  shall  vest  in  the 
grantee  therein  named,  his  heirs  or  assigns,  all  the  right,  title  and 
interest  which  the  mortgagor  had  at  the  time  of  the  execution  of  the 
mortgage,  or  at  any  time  thereafter. ^^" 

The  proceeds  of  a  sale  under  the  decree  are  applied  to  the  dis- 
charge of  the  debt  adjudged  by  the  court  to  be  due,  and  of  the 
costs  awarded ;  any  surplus  there  may  be  is  brought  into  court  for 
the  use  of  the  defendant,  or  of  the  person  entitled  to  it,  subject  to 
the  order  of  the  court.  If  this  remains  for  three  months  without 
being  applied  for,  the  court  may  direct  it  to  be  put  out  at  interest, 
under  the  direction  of  the  court,  for  the  benefit  of  the  defendant. 
Where  a  portion  of  the  mortgage  debt  is  not  due  at  the  time  of  the 
filing  of  the  bill  it  is  dismissed  upon  the  defendant's  bringing  into 
court,  at  any  time  before  the  decree  of  sale,  the  principal  and  in- 
terest due,  with  costs.^^^  If  he  bring  this  in  after  a  decree  of  sale  has 
been  entered,  the  proceedings  are  stayed ;  but  the  court  enters  a 
decree  of  foreclosure  and  sale,  to  be  enforced  by  a  further  order  of 
court  upon  a  subsequent  default.^^^ 

The  court  may  direct  a  reference  to  a  master,  to  .ascertain  and 
report  the  situation  of  the  premises,  or  may  determine  the  same 
on  oral  or  other  testimony;  and  if  it  appear  that  they  can  be  sold 
in  parcels  without  injury  the  decree  directs  so  much  of  the  prem- 
ises to  be  sold  as  will  be  sufficient  to  pay  the  amount  then  due  on 
the  mortgage,  M'ith  costs;  and  such  decree  remains  as  security  for 
any  subsequent  default.     If  there  be  any  default  subsequent  to  the 

tion  of  evidence  of  service,  see  An-        "^  The   proceedings   for   a   further 
notated    Stats.    1882,    §§    7497,    7498;  decree  are  essentially  a  new  suit  in 
New  York  Bap.  Union  v.  Atwell,  95  all    respects    except   form;    and    no- 
Mich.  239,  54  N.  W.  760.  tice    must   be   given   to   all    persons 
As  to  what  is  a  sufficient  affidavit  whose  interests  will   be  affected  in 
under  these  provisions,  see  Brown  v.  the  same  manner  as  in  the  original 
Philips,  40  Mich.  264.  suit.    No  decree  can  be  entered  with- 
130  pu^j    Acts  1899,  No.   200.  out  proof,  as  in  other  cases.     Brown 
"'  Brown  v.  Thompson,  29  Mich.  72.  v.  Thompson,  29  Mich.  72. 


§    1343.]  STATUTORY    PROVISIONS    RELATING    TO.  294 

decree,  the  court  may,  upon  the  petition  of  the  complainant,  by  fur- 
ther order  direct  a  sale  of  so  much  of  the  premises  as  will  be  suffi- 
cient to  satisfy  the  amount  due,  with  the  costs  of  the  petition;  and 
such  proceedings  may  be  had  as  often  as  a  default  may  happen.  If 
it  appear  that  a  sale  of  the  whole  of  the  premises  will  be  more 
beneficial  to  the  parties,  the  decree  in  the  first  instance  is  entered 
f.OT  the  sale  of  the  whole.  Upon  a  sale  of  the  whole,  the  proceeds 
are  applied  as  well  to  the  portion  of  the  debt  due  as  towards  that 
not  due,  with  a  rebate  of  legal  interest  in  case  the  residue  do  not 
bear  interest;  or  the  court  may  direct  the  balance  of  the  proceeds 
of  such  sale,  after  the  payment  of  the  portion  due,  to  be  put  out  at  in- 
terest for  the  benefit  of  the  complainant,  to  be  paid  him  as  the  in- 
stalments may  become  due,  and  the  surplus  for  the  benefit  of  the 
defendant,  to  be  paid  on  the  order  of  the  court. 

§  1343.  Minnesota. ^^^ — Actions  for  the  foreclosure  of  mortgages 
are  governed  by  the  rules  and  provisions  of  statute  applicable  to 
civil  actions.  Service  by  publication  for  six  weeks,  as  in  the  case 
of  a  sale  under  power,  may  be  made  upon  all  parties  to  the  action 
against  whom  no  personal  judgment  is  sought,  and  such  judgment 
may  be  taken  at  the  expiration  of  twenty  days  after  the  completion  of 
publication.^^*  Such  judgment  is  entered  for  the  amount  due  with 
costs,  and  directs  the  sheriff  to  proceed  to  sell  the  same  as  on  exe- 
cution and .  make  report  to  the  court.  The  mortgagee  or  any  one 
claiming  under  him  may  fairly  and  in  good  faith  purchase  at  the  sale. 
Upon  the  coming  in  of  the  report  the  court  may  confirm  the  sale, 
and  the  clerk  shall  then  enter  satisfaction  of  the  judgment  to  the 
extent  of  the  sum  bid,  less  expenses  and  costs,  and  execution  may 
issue  for  the  balance. 

Any  surpluife  is  subject  to  the  order  of  the  court  for  the  benefit  of 
the  person  entitled  to  it.  When  the  action  of  foreclosure  is  for  an 
instalment  due,  it  may  be  dismissed  on  payment  before  judgment 
of  the  amount  due ;  or,  after  judgment,  proceedings  may  be  stayed,  to 
be  enforced  by  further  order  upon  subsequent  default. 

The  mortgagee,  or  any  one  claiming  under  him,  may  fairly  and  in 
good  faith  bid  off  the  premises  at  said  sale;  and  in  such  case  the 
statement  of  such  fact  in  the  report  of  sale  shall  have  the  same 
effect  as  a  receipt  for  money  paid  upon  a  sale  for  cash. 

"=G.   S.   1891,   §§   5380-5397;    G.   S.  "» As  to  service  of  notice  at  the 

1894,  §§  6057-6073.     The  action  is  a  usual   abode  of  owner  by  copy,  see 

personal  action,  and  not  a  proceed-  Groff  v.  National  Bank,  50  Minn.  234, 

ing  in  rem.    Whalley  v.  Eldridge,  24  52  N.  W.  934. 
Minn.    358;    Bardwell    v.    Collins,    44 
Minn.  97,  46  N.  W.  315. 


295  FORECLOSUUE  AND  REDEMPTION.  [§  1344. 

Whenever  possession  of  lands,  foreclosed  as  aforesaid,  is  wrong- 
fully withheld  after  final  decree,  the  court  may  compel  delivery  of 
possession  to  the  party  entitled  thereto  by  order  directing  the  sheriff 
to  effect  such  delivery. 

A  strict  foreclosure  may  be  decreed  in  cases  where  such  remedy 
is  just  or  appropriate;  but  in  such  case  no  final  decree  can  be  ren- 
dered until  the  lapse  of  one  year  after  the  judgment  determining 
the  amount  due  on  the  mortgage.^^^ 

Redemption  may  be  made  as  in  case  of  sales  under  a  power,  that 
is,  for  one  year.^^"  After  the  expiration  of  the  time  allowed  for  re- 
demption, a  final  decree  is  entered  that  the  title  is  in  the  purchaser 
free  of  all  redemption,  and  this  decree  being  recorded  passes  the 
title  to  the  property  as  against  the  parties. 

§  1344.  Mississippi. — Foreclosure  is  under  the  jurisdiction  of 
courts  of  equity.  The  court  may  compute  the  amount  due  on  the 
mortgage,^^^  or  reference  Tuay  be  made  to  the  clerk  of  court,  or  to  a 
master,  to  compute  it  and  report.  The  bill  may  be  maintained  for 
an  instalment  of  the  mortgage  debt  before  the  balance  of  it  becomes 
due;  but  the  whole  debt  may  be  included  in  the  decree  if  it  becomes 
due  before  the  final  hearing. ^^^  Upon  the  confirmation  of  the  report 
of  sale  under  a  decree  to  satisfy  a  mortgage  ot  deed  of  trust,  if  there 
be  a  balance  due  to  the  complainant,  the  court  upon  motion  should 
give  a  decree  against  the  defendant  for  any  balance  for  which  he 
is  personally  liable,  upon  which  decree  execution  may  issue.^^®  All 
lands  comprising  a  single  tract,  and  wholly  described  by  the  sub- 
division  of   the   governmental   surveys,   sold   under   mortgages   and 

""G.  S.  1891,  §  5385;  G.  S.  1894,  §  lard  v.   Finnegan,   42   Minn.   476,  44 

6073;   Wilder  v.   Haughey,  21  Minn.  N.  W.  985.    And  see  same  case  hold- 

101,   per  Berry,   J.:    "The  cases   are  ing  that  the  purchaser,  at  the  mort- 

very    rare    in    which    a    strict   fore-  gage  sale,  alone  could  raise  the  ques- 

closure  should  be  adjudged."  tion  whether  a  tender  by  the  mort- 

^''  See  §  1743  for  provisions  respect-  gagor    discharged    the   lien  of     the 

ing    certificate    of    sale    and    mode  judgment,    so    as    to    terminate    his 

of  redemption.     A  creditor,  after  re-  right  to  redeem. 

deeming    sufficient    property    of    his  "' Beville  v.  Mcintosh, 41  Miss.  516. 

debtor  to  satisfy  his  judgment,  can-  '=^  Magruder  v.  Eggleston,  41  Miss, 

not    make   a   further   valid   redemp-  284. 

tion.     Scripter  v.  Bartleson,  43  Fed.  ^="'  Annot.  Code  1892,  §  592.    Motion 

259.  for  such  judgment  need  not  be  made 

If  the  land  is  sold  in  one  parcel,  at  the  term  of  court  when  the  sale 

a  purchaser  or  mortgagee  of  a  part  is  confirmed,  but  at  any  time  before 

of  it  may  redeem  the  whole,  and  is  the  execution  of  the  decree  is  barred 

thereby  subrogated  to  the  rights  of  by    limitation.      Weir    v.    Field,    67 

the     purchaser    at    the     foreclosure  Miss.  292,  7  So.  355. 

sale.      O'Brien    v.    Krenz,    36    Minn.  On    the    death    of   the    mortgagor, 

136,  30  N.  W.  458.  such  personal  decree  for  the  balance 

As  to  redemption  by  a  creditor  of  may    be    had    against    his    personal 

the  mortgagor  who  had  conveyed  the  representative.      Weir    v.    Field,    67 

mortgaged  land  to  another,  see  Wil-  Miss.  292,  7  So.  355. 


1345.] 


STATUTORY    PROVISIONS    RELATING    TO. 


29G 


deeds  of  trust  hereafter  executed,  shall  be  sold  in  the  manner  pro- 
vided by  the  Constitution  for  the  sale  of  lands  in  pursuance  of  a 
decree  of  court  or  under  execution;  that  is,  the  lands  shall  be  first 
offered  in  subdivisions  not  exceeding  one  hundred  and  sixty  acres, 
or  one  quarter  section,  and  then  offered  as  an  entirety,  and  the 
price  bid  for  the  latter  shall  control  only  when  it  shall  exceed  the 
aggregate  of  the  bids  for  the  same  in  subdivisions;  but  the  chancery 
court  may  decree  otherwise  if  deemed  advisable. ^*'^ 
There  is  no  redemption  after  sale. 

§  1345.  Missouri.^" — Foreclosure  is  by  petition  in  the  circuit 
court  against  the  mortgagor  and  the  actual  tenants  or  occupiers  of  the 
real  estate,  setting  forth  the  substance  of  the  mortgage  deed,  and 
praying  that  judgment  may  be  rendered  for  the  debt  or  damages 
and  that  the  equity  of  redemption  may  be  foreclosed,  and  the  prop- 


»»Annot.  Code  1892,  §  2443. 

"^R.  S.  1889,  §8  7078-7097;  1  R.  S. 
1899.  §§  4342-4353.  For  sales  under 
powers,  see  §   1745. 

This  is  a  statutory  proceeding,  and 
is  governed  by  the  rules  of  pro- 
ceedings at  law  and  not  by  those  in 
equity.  Thayer  v.  Campbell,  9  Mo. 
280.  These  statutory  provisions  are 
very  similar  to  those  of  other  States 
which  are  there  enforced  in  equity. 
The  courts  have  sometimes  found  it 
a  matter  of  uncertainty  whether  a 
foreclosure  suit  in  a  particular  in- 
stance is  under  the  statute,  or  under 
the  jurisdiction  of  a  court  of  equity, 
it  being  the  general  opinion  that, 
notwithstanding  the  statutory  rem- 
edy, a  party  may  pursue  his  rights 
in  a  court  of  chancery.  Although  a 
petition  was  addressed  to  the  judge 
"in  chancery  sitting,"  and  contained 
language  peculiar  to  bills  in  equity, 
yet,  the  mode  of  proceeding  having 
been  that  prescribed  by  the  statute, 
it  was  regarded  as  a  statutory  pro- 
ceeding. The  chief  distinction  be- 
tween the  two  modes  is  this,  that  in 
equity  there  can  be  no  judgment  for 
a  deficiency,  while  this  is  provided 
for  by  the  statute.  Riley  v.  Mc.Cord, 
24  Mo.  265;  Fithian  v.  Monks,  43  Mo. 
502. 

The  statute  does  not  do  away  with 
the  chancery  jurisdiction  of  the 
United  States  Circuit  Court  of  a 
proceeding  to  foreclose  a  mortgage 
in  Missouri,  the  statute  providing 
ing  for  foreclosure  in  a  court  of  law 
not   doing  away   with   the   right   to 


proceed  in  equity.  Keith  &  P.  Coal 
Co.  V.  Bingham,  97  Mo.  196,  10  S.  W. 
32. 

A  judgment  for  the  residue  of  the 
debt,  not  satisfied  by  the  mortgage 
can  be  rendered  only  against  the 
'mortgagor  or  his  personal  repre- 
sentative, and  cannot  be  rendered 
against  a  purchaser  who  has  as- 
sumed the  payment  of  the  mortgage 
as  a  part  of  the  cosideration  of 
purchase.  This  proceeding  being 
purely  statutory  cannot  be  extended 
beyond  the  express  provisions  of 
the  statute.  Fithian  v.  Monks,  43 
Mo.  502. 

In  some  cases  a  foreclosure  may 
be  had  in  equity  when  no  remedy  can 
be  had  under  the  statute,  as  in  case 
of  a  deed  made  by  mistake  to  the 
grantor  himself,  to  be  void  upon 
the  payment  of  a  debt  by  him;  it 
cannot  be  treated  as  a  mortgage  in  a 
court  of  law,  but  in  equity  may  be 
reformed  and  foreclosed  upon  the 
same  bill.  Rackliffe  v.  Seal,  36  Mo. 
317.  And  so,  also,  on  a  bill  in  equity 
to  redeem,  the  decree  may  be  that 
on  failure  to  redeem  within  the  time 
limited  the  property  shall  be  sold, 
this  being  in  such  case  a  foreclosure 
in  equity.  Davis  v.  Holmes,  55  Mo. 
349. 

The  more  common  form  of  security 
in  this  State  is  a  trust  deed  or  a 
power  of  sale  mortgage.  These  may 
be  foreclosed  under  the  statute,  as 
well  as  under  the  powers  in  these 
instruments. 


297  FORECLOSURE    AND    REDEMPTION.  [§    1345. 

erty  sold  to  satisfy  the  amount  due.  The  petition  may  be  filed  in 
any  county  where  any  part  of  the  mortgaged  premises  is  situated. ^^^ 
In  case  of  the  death  of  the  mortgagee  or  his  assignee,  or  of  the  mort- 
gagor, either  before  or  after  the  action  is  brought,  the  personal 
representatives  of  the  deceased  must  be  made  a  party  to  the  suit;^'*^ 
and  when  the  personal  representative  of  the  mortgagor  is  made  a 
party  to  the  suit,  and  the  property  is  insufficient  to  satisfy  the  debt 
and  costs,  as  to  the  residue  the  judgment  has  the  effect  of  a  judg- 
ment against  the  executor  or  administrator  as  such.^**  Any  person 
claiming  an  interest  in  the  mortgaged  property  may,  on  motion,  he 
made  defendant  in  such  proceedings.^*^  When  the  mortgagor  is 
not  summoned,  but  notified  by  publication,  and  has  not  appeared, 
the  judgment  against  him  is  for  the  debt  and  damages,  or  damages 
found  to  be  due,  and  costs,  to  be  levied  of  the  mortgaged  property 
described  as  in  the  mortgage.  When  he  has  been  duly  summoned, 
or  appears  in  the  suit,  the  judgment  further  provides  that  if  the 
mortgaged  property  be  not  sufficient  to  satisfy  the  debt  and  damages, 
or  damages  and  costs,  then  the  residue  shall  be  levied  off  other  goods, 
chattels,  lands,  and  tenements  of  the  mortgagor. 

The  execution  is  a  special  fieri  facias,  and  is  served  and  returned 
as  executions  in  ordinary  civil  suits. ^■*''  The  purchaser  at  a  fore- 
closure sale  takes  a  title  against  the  parties  to  the  suit,  but  he  cannot 
set  it  up  against  the  subsisting  equities  of  those  who  are  not  parties. 

If  redemption  be  made  by  payment  to  the  officer  befoxe  sale,  the 
officer  makes  a  certificate,  which  is  acknowledged  and  recorded  in  the 
office  where  the  mortgage  is  recorded,  and  has  the  same  effect  as 
satisfaction  entered  on  the  margin.  There  is  no  redemption  after 
such  sale,  though  there  is  after  a  sale  under  a  power  of  sale  mort- 
gage or  trust  deed.^*'^ 

"-  Objection  that  the  suit  is  not  One  of  several  mortgagees  may  pro- 
brought  in  the  county  where  the  ceed  to  foreclose  without  making 
premises  are  situated,  though  in  the  the  other  mortgagees  parties  to  the 
proper  court,  must  be  taken  before  petition.  He  has  no  right  to  join 
plea,  and  will  be  waived  by  plead-  them,  but  they  may  come  in  volun- 
ing  to  the  merits.  Choteau  v.  Allen,  tarily.  Thayer  v.  Campbell,  9  Mo. 
70  Mo.  290.  280. 

"'  See  Tierney  v.  Spira,  97  Mo.  98,  ""  A    sale    is    valid    under    a    writ 

10  S.  W.  433.  which  commands  the  sheriff  to  sell 

"*  Perkins  v.   Woods,   27   Mo.   547.  the   mortgaged    premises,    and    have 

His  heirs  are  not  necessary  parties,  the    proceeds    before    the    court    to 

"^  They  are  allowed  to  become  par-  satisfy  the  judgment.    Lord  v.  John- 
ties  so  that  they  may  protect  their  son,  102  Mo.  680,  15  S.  W.  73. 
own   interests,   not   the   interests  of  "' §  1745;  1  R.  S.  1899,  §  4365. 
others.     Wall    v.    Nay,    30    Mo.    494. 


§§    1346,    1347.]    STATUTORY   PROVISIONS    RELATING   TO.  398 

§  1346.  Montana."* — ^An  action  for  the  foreclosure  of  a  mortgage 
of  real  propert,y  must  be  tried  in  the  county  in  which  the  subject  erf 
the  action  or  some  part  of  it  lies;  unless  the  property  is  situated 
partly  in  one  county  and  partly  in  another,  in  which  case  the  plain- 
tiff may  select  either  county.  There  is  but  one  action  for  the  re- 
covery of  any  debt,  or  the  enforcement  of  any  rights  secured  by 
mortgage  upon  real  estate.  In  actions  for  the  foreclosure  of  mort- 
gages the  court  has  the  power  by  its  judgment  to  direct  a  sale  of 
the  incumbered  property,  or  as  much  as  may  be  necessary,  and  the 
application  of  the  proceeds  of  the  sale  to  the  payment  of  the  costs 
of  the  court,  and  expenses  of  the  sale,  and  the  amount  due  the 
plaintiff;  and  if  it  appear  from  the  sheriff's  return  that  the  pro- 
ceeds are  insufficient,  and  a  balance  still  remains  due,  judgment  is 
docketed  for  such  balance  against  the  defendant  personally  liable 
for  the  debt,  and  thus  becomes  a  lien  on  the  real  estate  of  such 
judgment  debtor.  No  person  whose  title  does  not  appear  on  record 
need  be  made  a  party  to  the  suit.  If  there  be  a  surplus,  it  is 
paid  to  the  person  entitled  to  it,  and  in  the  mean  time  it  is  to  be 
deposited  in  court.  If  the  debt  be  not  all  due,  sufficient  of  the 
property  is  sold  to  satisfy  the  amount  due,  interest,  and  costs,  and 
the  court  may  on  motion  order  a  further  sale.  But  if  the  prop- 
erty cannot  be  sold  in  portions  without  injury,  the  whole  may  be 
sold,  and  the  entire  debt  with  interest  and  costs  paid,  there  being 
a  proper  rebate  of  interest  when  the  part  not  due  does  not  bear 
interest'. 

§  1347.  Nebraska.^*'' — All  petitions  for  the  foreclosure  or  satisfac- 
tion of  mortgages  shall  be  filed  in  the  district  court  in  chancery 
where  the  mortgaged  premises  are  situated.     The  court  shall  have 

•**  Codes  &  Stats.  1895;   Code  Civ.  ir  upheld  by  construing  it  m  connec- 

Pro.    §§    1290-1292.      Redemption    in  ■ion   with   a  general   statute  of  the 

one    year.      Code    Civ.    Pro.    1895,    §  state  which  provides,  that  "whenever 

1235.     The  holder  of  a  note  secured  a  statute  shall  be  repealed,  such  re- 

by    a    second    mortgage    is    not   re-  peal  shall  in  no  manner  affect  pend- 

quired      to      foreclose      after      the  ing    actions     founded     thereon,    nor 

property  has  been  sold  under  a  fore-  causes  of  action  not  in  suit  that  ac- 

closure  of  the  first  mortgage  and  the  crued  prior  to  such  repeal  except  as 

period    of    redemption    has    expired,  may  be  provided  in  such  repealing 

but  he  may  then  sue  upon  the  note,  statute."     Comp.  St.  1901,  c.  88.     So 

Brophy  v.  Downey,  26  Mont.  252,  67  construed,  the  repealing  statute  does 

Pac.  312.    See  California  Decisions,  §  r.ot  impair  the  remedy  existing  im- 

1324.  der  the  statute  previously  existing  by 

""Consol.  Stats.  1903,  §§  7354-7370.  which   a  judgment  for  a  deficiency 

As  to  aflBdavit  for  service  by  publi-  may   be   entered    in    the    forecosiire 

cation,  see  Fulton  v.  Levy,  21  Neb.  suit.    Burrows  v.  Vanderbergh  (Neb. 

478.  32  N.  W.   307.  1903),  57  Cent.  L.  J.  92.    See  Newark 

The  statute  of  1897  repealing  pro-  Sav.   Inst.   v.   Forman,  33   N.  .7.  Eq. 

vision  for  judgment  for  a  deficiency  436,  cited  in  §  1350. 


299  FORECLOSURE    AND    REDEMPTION,  [§    1347. 

power  to  decree  a  sale  of  the  mortgaged  premises,  or  such  part 
thereof  as  may  be  sutficient  to  discharge  the  amount  due  on  the 
mortgage  and  the  cost  of  suit. 

While  such  petition  is  pending,  and  after  a  decree  rendered  there- 
on, no  proceedings  whatever  shall  be  had  at  law  for  the  recovery 
of  the  debt  secured  by  the  mortgage,  or  any  part  thereof.  Upon  filing 
a  petition  for  the  foreclosure  or  satisfaction  of  a  mortgage,  the  com- 
plainant shall  state  therein  whether  any  proceedings  have  been  had 
at  law  for  the  recovery  of  the  debt  secured  thereby,  or  any  part  there- 
of, and  whether  such  debt,  or  any  part  thereof,  has  been  collected  and 
paid.^®°  If  it  appear  that  any  judgment  has  been  obtained  in  a  suit 
at  law  for  the  money  demanded  by  such  petition,  or  any  part  thereof, 
m>  proceedings  shall  be  had  in  such  case,  unless,  to  an  execution 
against  the  property  of  the  defendant  in  such  judgment,  the  sheriff 
or  other  proper  officer  shall  have  returned  that  the  execution  is  unsat- 
isfied in  whole  or  in  part,  and  that  the  defendant  has  no  property 
whereof  to  satisfy  such  execution  except  the  mortgaged  premises.^^^ 

All  sales  of  mortgaged  premises  under  a  decree  in  chancery  shall 
be  made  by  a  sheriff,  or  some  other  person  authorized  by  the  court 
in  the  county  where  the  premises  or  some  part  of  them  are  situated ; 
and  in  all  cases  where  the  sheriff  shall  make  such  sale  he  shall  act 
in  his  official  capacity,  and  he  shall  be  liable  on  his  official  bond  for 
all  his  acts  therein.  Deeds  shall  thereupon  be  executed  by  such 
sheriff,  which  shall  vest  in  the  purchaser  the  same  estate  that  would 
have  vested  in  the  mortgagee  if  the  equity  of  redemption  had  been 
foreclosed,  and  no  other  or  greater;  and  such  deeds  shall  be  as  valid 
as  if  executed  by  the  mortgagor  and  the  mortgagee,  and  shall  be  an 
entire  bar  against  each  of  them,  and  all  parties  to  the  suit  in  which 
the  decree  for  such  sale  was  made,  and  against  their  heirs  respec- 
tively, and  all  persons  claiming  under  such  heirs. 

The  proceeds  shall  be  applied  to  the  discharge  of  the  debt  ad- 
judged to  be  due,  and  of  the  costs;  and  if  there  be  any  surplus  it 
shall  be  brouglit  into  court  for  the  use  of  the  defendant  or  of  the 
person  entitled  thereto,  subject  to  the  order  of  the  court. 

""This    provision   applies   only   to  534;  Jones  v.  Burtis,  57  Neb.  604,  78 

formal  mortgages,  and  not  to  mort-  N  W.  261;  Kirby  v.  Shrader,  58  Neb. 

gages    or    liens    arising    out    of    the  316,  78  N.  W.  616.   As  to  proof  of  alle- 

equities  between  the  parties.  Dimick  gallon  to  this  effect,  see  Wool  worth 

v.  Grand  Island  Banking  Co.  37  Nob.  v.  Sater,  63  Neb.  418,  88  N.  W.  682; 

394,  55  N.  W.  1066.  Insurance    Co.    v.    Parker,    64    Neb. 

"'^  The  petition  must  show  whether  411;  Miller  v.  Nicodemus,  58  Neb. 
there  has  been  a  suit  at  law,  and  352.  78  N.  W.  618;  Simmons  Hard- 
whether  any  part  of  the  debt  has  ware  Co.  v.  Brokaw,  7  Neb.  405.  As 
been  collected.  Durland  v.  Durland,  to  publication  of  notice  of  sale,  see 
62  Neb.  813,  87  N.  W.  1048:  Plum-  Drew  v.  Kirkham,  8  Neb.  477;  Par- 
mer V.  Park,  62  Neb.  665,  87  N.  W.  rat  v.  Neligh,  7  Neb.  456. 


§    1347.]  STATUTORY    PROVISIONS    RELATING    TO.  300 

Whenever  a  petition   shall   be  filed   for   the   satisfaction   or   fore- 
closure of  any  mortgage,  upon  which  there  shall  be  duo  any  interest 
on  any  portion  or  instalment  of  the  principal,  and  there  shall  be 
other  portions  or  instalments  to  become  due  subsequently,  the  peti- 
tion shall  be  dismissed  upon  the  defendant  bringing  into  court,  at 
any  time  before  the  decree  of  sale,  the  principal  and  interest  due, 
with  costs.     If,  after  a  decree  for  sale  entered  against  a  defendant 
in  such  case,  he  shall  bring  into  court  the  principal  and  interest, 
with  costs,  the  proceedings  in  the  suit  shall  be  stayed ;  but  the  court 
shall  enter  a  decree  of  foreclosure  and  sale,  to  be  enforced  by  a 
further  order  of  the  court  upon  a  subsequent  default  in  the  pay- 
ment of  any  portion  or  instalment  of  the  principal,  or  any  interest 
thereafter  to  become  due.     If  the  defendant  shall  not  bring  into 
court  the  amount  due,  with  costs,  or  if  for  any  other  cause  a  decree 
shall  pass  for  the  complainant,  the  court  may  direct  a  reference  to 
a  sheriff  to   ascertain   and   report  the   situation   of  the  mortgaged 
premises,  or  may  determine  the  same  on   oral  or  other  testimony; 
and  if  it  shall  appear  that  the  same  can  be  sold  in  parcels,  without 
injury  to  the  parties,  the  decree  shall  direct  so  much  of  the  mort- 
gaged premises  to  be  sold  as  will  be  sufficient  to  pay  the  amount 
then  due  on  such  mortgage,  with  costs,  and  such  decree  shall  remain 
a  security  for  any  subsequent  default.     If  there  shall  be  any  default 
subsequent  to  such  decree  in  the  payment  of  any  portion  or  instal- 
ment of  the  principal,  or  any  interest  due  upon  such  mortgage,  the 
court  may,  upon  the  petition  of  the  complainant,  by  a  further  order 
founded  upon  such  first  decree,  direct  a  sale  of  so  much  of  the  mort- 
gaged premises  to  be  made,  under  such  decree,  as  will  be  sufficient 
to  satisfy  the  amount  so  due,  with  the  costs,  and  the  same  proceed- 
ings may  be  had  as  often  as  a  default  shall  happen."-    If,  in  any  of 
the  foregoing  cases,  it  shall  appear  to  the  court  that  the  mortgaged 
premises  are  so  situated  that  a  sale  of  the  whole  will  be  most  bene- 
ficial to  the  parties,  the  decree  shall,  in  the  first  instance,  be  entered 
for  the  sale  of  the  whole  premises  accordingly.     In  such  case  the 
proceeds  of  such  sale  shall  be  applied  as  well  to  the  interest,  por- 
tion,  or  instalment  of  the  principal   due   as  towards  the  whole  or 
residue  ,of  the  sum  secured  by  such  mortgage  and  not  due  and  pay- 
able at  the  time  of  such  sale ;  and  if  such  residue  do  not  bear  inter- 
est, then  the  court  may  direct  the  same  to  be  paid,  with  a  rebate  of 

^"  This  provision  has  no  applica-  Ir.  was  not  intended  to  authorize  thrt 

tion  in  an  action  for  the  foreclosure  court    to    relieve    a    party    from    a 

of    a    mortgage,     when     the     whole  forfeiture.    Beisel  v.  Artman,  10  Neb. 

amount  of  the  debt  secured  is  dup.  181,  4  N.  W.  1011. 


301  FORECLOSURE  AND  REDEMPTION.  [§  1348. 

the  legal  interest  for  the  time  during  ^\•hich  such  residue  shall  not 
be  due  and  payable;  or  the  court  may  direct  the  balance  of  the 
proceeds  of  such  sale,  after  paying  the  sum  due,  with  costs,  to  be 
put  out  at  interest  for  the  benefit  of  the  complainant,  to  be  paid  to 
him  as  the  instalments  or  portions  of  the  principal  or  interest  may 
become  due,  and  the  surplus  for  the  benefit  of  the  defendant,  his 
representatives  or  assigns,  to  be  paid  to  them  on  the  order  of  the 
court. 

The  order  of  sale  on  all  decrees  for  the  sale  of  mortgaged  prem- 
ises shall  be  stayed  for  the  period  of  nine  months  from  and  after 
the  rendition  of  such  decree  whenever  the  defendant  shall,  within 
twenty  days  after  the  rendition  of  such  decree,  file  with  the  clerk 
of  the  court  a  written  request  for  the  same:  provided  -that,  if  the 
defendant  make  no  such  request  within  said  twenty  days,  the  order 
of  sale  may  issue  immediately  after  the  expiration  thereof. 

§  1348.  Nevada. ^^^ — Only  one  action  can  be  had  for  the  recov- 
ery of  the  debt  or  enforcement  of  the  mortgage.^^*  In  such  action 
judgment  is  rendered  for  the  amount  found  due,  and  for  a  sale  of 
the  property,  and  application  of  the  proceeds  to  payment  of  the 
debt;  execution  may  issue  for  any  balance  there  may  appear  to  be 
due  by  the  sheriff's  return.  Any  surplus  the  court  may  cause  to 
be  paid  to  the  persons  entitled  to  it,  and  in  the  mean  time  may  di- 
rect it  to  be  deposited  in  court.  If  the  debt  be  not  all  due,  only  so 
much  of  the  property  as  is  necessary  to  satisfy  the  amount  due  shall 
be  sold;  but  if  it  cannot  be  sold  in  portions  without  injury,  the 
whole  may  be  ordered  to  be  sold  in  the  first  instance  and  the  entire 
debt  paid,  with  a  proper  rebate  of  interest. 

A  certificate  of  the  sale  is  made  by  the  sheriff,  and  after  the 
time  allowed  for  redemption  has  expired  a  deed  is  executed.  The 
debtor  or  his  successor  in  interest  may  redeem  within  six  months 
on  paying  the  amount  of  the  bid,  in  the  money  or  currency  speci- 
fied in  the  judgment,  with  eighteen  per  cent,  thereon  in  addition, 
with  any  amount  paid  for  taxes;  and  also,  if  the  purchaser  be  a 
creditor  having  a  lien  prior  to  that  of  a  redemptioner  other  than 
the  judgment  under  which  the  purchase  was  made,  the  amount 
of  such  lien,  with  interest.  There  may  be  successive  redemptions 
by  judgment  or  mortgage  creditors  within  sixty  days  after  the  last 
redemption. ^^^ 

'•'G.  S.  1885,  §§  3270-3272.     Comp.  power.       Bryant    v.     Carson     River 

Laws  1900,  §  3343.     When  suit  may  L'lmbering  Co.   3  Nev.   313,   93  Am 

be  brought.  Laws  1885,  ch.  95.  Dec.  403. 

'=*  It  would  seem  that  this  provision  •"  G.   S.   1885,   §§   3253-3258,  Comp. 

would   not   prevent   a  sale  under  a  Laws  1900,  §§  3326-3328. 


§§    13-i9,    1350.]    STATUTORY    PROVISIONS    RELATING    TO.  302 

The  statute  in  this  State  entirely  changes  the  common  law  rule 
that  the  mortgagee  may  pursue  all  his  remedies  simultaneo'usly  by 
action  upon  the  debt,  by  bill  to  foreclose,  and  by  ejectment.  Here 
ejectment  is  wholly  forbidden.  No  action  of  debt  can  be  resorted 
to  unless  the  mortgage  lien  be  abandoned.  The  remedy  against  the 
property  is  confined  to  foreclosure  and  sale.^^^  A  judgment  for  the 
debt  cannot  be  enforced  until  the  remedy  against  the  property  is 
exhausted.  The  plaintiff  may,  if  he  choose,  take  simply  a  decree 
in  equity,  without  a  common  law  judgment,  and  then,  if  the  property 
falls  short  of  paying  the  entire  debt,  he  may  afterwards  have  exe- 
cution for  the  balance.  If  a  common  law  judgment  be  taken  in  the 
first  instance,  it  constitutes  no  lien  upon  other  property  until  a 
deficiency  is  duly  ascertained  and  'docketed.^"  Equity  has  jurisdic- 
tion of  a  bill  to  foreclose,  although  the  debt  has  been  presented  and 
allowed  against  the  estate  of  the  deceased  mortgagor.^^^ 

§  1349.  New  Hampshire. — Foreclosure  may  be  had  by  bill  in 
equity  when  the  complicated  relations  of  the  parties  render  pro- 
ceedings at  law  inadequate.^^*  The  modes  of  foreclosure  in  com- 
mon use  are,  by  entry  under  process  of  law;  by  peaceable  entry 
and  publication  of  notice  of  the  same;  or  by  advertisement  when 
the  mortgagee  is  already  in  possession.  In  either  case,  actual  peace- 
able possession  continued  for  one  year  from  the  time  of  entry,  or 
from  the  day  specified  in  the  notice  in  the  latter  mode,  forever  bars 
the  right  of  redemption.^*''*  Foreclosure  may  also  l>e  made  by  a  de- 
cree for  sale  under  a  power  of  sale  or  under  such  power  without  a 
decree.^^^ 

§  1350.  New  Jersey. — Foreclosure  is  under  the  general  jurisdic- 
tion of  the  courts  of  chancery ;  but  where  all  the  premises  are  situate 
in  the  same  county,  the  circuit  court  of  the  county  has  the  same 
jurisdiction  and  power  as  the  court  of  chancery. ^"^  The  court  may 
decree  a  sale  of  the  mortgaged  premises,  or  of  such  part  of  them  as 
shall  be  sufficient  to  discharge  the  debt  and  costs;  which  sale  shall 
be  made  either  by  one  of  tlie  masters  of  the  court,  or  by  the  sheriff 
of  the  county  where  the  premises  are  situated  by  virtue  of  a  writ  of 

"•  Hyman  v.  Kelly,  1  Nev.  179.  "'  See  §  1749. 

'"  Weil  V.  Howard,  4  Nev.  384.  "'  Rev.  1877,  p.  705,  2  G.   S.   1895, 

"« Corbett  v.  Rice,  2  Nev.  330.  2104.     In  an  action  of  ejectment  for 

"» Aken  v.  Gale,  37  N.  H.  501,  510.  the    recovery    of    mortgaged    lands, 

^""P.  S.  1891,  eh.  138,  §  14.     See  §§  and  in  actions  upon  the  bond,  a  ten- 

1241-1243.     The  time  for  redemption  der  of  the  sum  due  with  costs  is  a 

will    not   be    extended    to   enable   a  satisfaction    of    the    mortgage,    and 

party  to  ascertain  whether  it  is  for  the    mortgagee    may    thereupon    be 

his  "interest    to    exercise    it.      Bast-  compelled  to  reconvey.     R.   S.   1877, 

man  v.  Thayer,  60  N.  H.  405.  pp.  701,  702;   2-G.  S.  1895,  p.  2102. 


303  FORECLOSURE   AND   REDEMPTION.  [§    1350. 

fieri  facias.  The  officer  making  the  sale  executes  the  proper  deed. 
An  absent  defendant  may  at  any  time  before  the  sale  cause  his  ap- 
pearance ito  be  entered,  and  upon  the  payment  of  costs  the  proceed- 
ings may  be  stayed,  and  may  afterwards  go  on  as  if  his  appearance 
had  been  duly  entered  in  the  beginning.  When  a  decree  is  had  for 
the  non-payment  of  an  instalment  of  interest  or  principal  before  the 
whole  mortgage  debt  is  due,  and  it  shall  appear  to  the  court  that  a 
part  of  the  mortgaged  premises  cannot  be  sold  to  satisfy  the  amount 
without  material  injury  to  the  remaining  part,  and  that  it  is  just 
and  reasonable  that  the  whole  should  be  sold  together,  the  court 
may  decree  a  sale  of  the  whole,  and  apply  the  proceeds  of  the  sale,  or 
ao  much  as  may  be  necessary,  as  well  to  the  payment  of  the  amount 
then  due  as  to  the  payment  of  the  whole  or  residue  of  the  debt, 
making  a  proper  rebate  of  interest  upon  the  part  of  the  debt  not 
then  due  and  payable.  When  the  defendant  has  entered  an  appear- 
ance but  has  filed  no  answer,  execution  for  sale  is  not  issued  until 
the  expiration  of  such  time  as  may  be  fixed  by  the  rules  of  the 
court,  not  less  than  twO',  nor  more  than  four,  months. ^^^  If  the 
mortgagor  or  any  of  those  holding  under  him  has  absconded,  or  is 
unknown  to  the  holder  of  the  mortgage,  service  may  be  made  by 
publication."* 

"^Rev.  1877,  pp.  116-118,  §§  71-77;  by  paying  the  full  amount  for  whicli 

1  G.  S.  1895,  pp.  385-387.  the  decree  was  rendered,  with  inter- 

'"  Laws  1873,  p.  161;  R.  S.  1877,  p.  est  and  costs;    provided  that  a  suit 

704;  2  G.  S.  1895,  p.  2104.  for  redemption  is  brought  within  six 

By  a  recent  statute,  Laws  1880,  eh.  months  after  the  entry  of  such  judg- 

170,  amended  in  Laws  1881,  ch.  147,  ment  for  the  balance  of  the  debt.    2 

Supp.    1886,   pp.    489,   490,   it  is   pro-  G.  S.  1895,  p.  2112. 

vided  that  in  all  proceedings  to  fore-  Confirmation.    The  sheriff  or  other 

close  mortgages  no  decree  shall  be  officer  who  may  be  directed  to  sell 

rendered  for  any  balance  of  money  any  mortgaged  premises  shall,  after 

which  may  be  due  complainant  over  making  such  sale,   report  the  same 

and  above  proceeds  of  the  sale,  and  within    five    days    thereafter    to    the 

no  execution  shall  issue  for  the  col-  court  out  of  which  an  execution  or 

lection  of  such  balance.    2  G.  S.  1895,  order  to  sell   is  issued,  stating  the 

p.  2111.  name  of  the  purchaser  or  purchasers 

Suit   for   deficiency.      In   all   cases  and  the  price  obtained,  and,  if  the 

where   a   bond   and   mortgage   have  said  court  or  a  judge  thereof  shall 

been    or    may    hereafter    be    given  approve  of  such  sale,  they  shall  con- 

for  the  same   debt,   all   proceedings  firm   the  same  as  valid,  and  shall, 

to   collect   said   debt   shall   be,  first,  by    rule    of    court    allowed    in    open 

to    foreclose    the    mortgage,    and    if  court,   or   by  a  judge   at   chambers, 

there   is   a  deficiency,   then   to   pro-  direct  the  said  sheriff  or  other  officer 

ceed  on  the  bond;  and  that  all  suits  to    execute    a    good    and    sufficient 

on    the    bond    shall    be    commenced  conveyance  in  law  to  the  purchaser; 

within  six  months  from  the  date  of  provided  that  no  sale  shall  be  con- 

the  sale  of  the  mortgaged  premises,  firmed,    or    further    proceedings    be 

Such  recovery  on  the  bond  opens  the  had,  until  the  court  or  such  judge 

foreclosure  and  sale,  and  the  person  is    satisfied    by    evidence    that    the 

against  whom  the  judgment  has  been  property  has  been  sold  at  the  high- 

recovered  may  redeem  the  property  est  and  best  price  the  same  would 


§  1350.] 


STATUTORY    PROVISIONS    RELATING   TO. 


30-i 


When  a  foreclosure  is  sought  for  an  insitalment  only  of  the  debt, 
the  remainder  not  being  due,  the  court  will  not  direct  the  whole 
premises  to  be  sold,  if  they  can  be  divided;  and  if  a  decree  has 
been  entered  for  the  sale  of  the  whole  premises  when  they  are 
manifestly  divisible,  the  court  may  in  its  discretion  regulate  the 
execution  of  the  decree.^'^^ 


then  bring  in  cash,  and  such  evi- 
dence may  be  in  the  form  of  aflfi- 
davits. 

This  act  applies  to  mortgages 
given  before  the  date  of  its  passage; 
and  it  is  not  unconstitutional  as 
taking  away  a  remedy  for  enforc- 
ing a  contract  which  existed  when 
the  contract  was  made,  because  a 
more  efficacious  remedy  of  the  same 
sort  remains  at  law.  Newark  Sav. 
Inst.  V.  Forman,  33  N.  J.  Eq.  436; 
Naar  v.  Union  &  Essex  Land  Co.  34 
N.  J.  Eq.  111.  See  to  the  contrary, 
Burrows  v.  Vanderbergh  (Neb. 
1903),  57  Cent.  L.  J.  72. 

The  purchaser  at  a  foreclosure 
sale,  under  a  mortgage  made  before 
the  enactment  of  this  statute,  is  un- 
affected by  the  provisions  for  re- 
demption, although  at  the  fore- 
closure sale  enough  was  received  to 
pay  the  prior  mortgage  in  full,  and  a 
small  sum  upon  a  second  mortgage 
which  was  made  after  the  statute 
took  effect.  Champion  v.  Hinkle,  45 
N.  J.  Eq.  162,  16  Atl.  701. 

The  terms  of  the  statute  are  not 
waived  by  giving,  with  the  bond,  a 
warrant  to  confess  judgment,  and  a 
judgment  entered  upon  such  bond 
before  the  foreclosure  of  the  accom- 
panying mortgage  is  irregular.  Hell- 
yer  v.  Baldwin,  53  N.  J.  L.  141,  20 
Atl.  1080. 

Grantees  who  have  assumed  the 
payment  of  a  mortgage  are  still 
liable  to  the  mortgagee  if  a  de- 
ficiency remain  after  foreclosure, 
and  their  liability  may  be  enforced 
by  an  independent  suit  in  equity. 
Allen  V.  Allen,  34  N.  J.  Eq.  493; 
Chancellor  v.  Traphagen,  41  N.  J. 
Eq.  369,  7  Atl.  505. 

The  object  of  this  provision  is  to 
prevent  a  sacrifice  of  the  property, 
so  far  as  it  may  be  done,  by  requir- 
ing proof  that  the  property  brought 
the  best  price  then  obtainable.  It 
was  not  intended  that  the  court 
should  set  aside  sales  until  an  ade- 
quate price  should  be  obtained  for 
the  property.  Delaware,  Lacka- 
wanna &  Western  R.  Co.  v.  Scran- 


ton,  34  N.  J.  Eq.  429.  The  owner  of 
an  equity  of  redemption  whose 
property  has  been  assigned  for  the 
benefit  of  his  creditors  has  such  an 
interest  that  he  may  apply  under 
this  act  for  a  resale.  Delaware, 
Lackawanna  &  Western  R.  Co.  v. 
Scranton,  34  N.  J.  Eq.  429. 

One  claiming  an  interest  in  the 
premises,  who  has  been  deprived  of 
an  opportunity  to  protect  that  inter- 
est through  the  neglect  of  his  coun- 
sel, may  apply  for  a  resale.  Mut. 
Benefit  L.  Ins.  Co.  v.  Gould,  34  N.  J. 
Eq.   417. 

Prior  to  the  statute  of  1880,  the 
chancellor  might  decree  the  pay- 
ment of  any  excess  of  the  mortgage 
debt  above  the  proceeds  of  sale, 
by  any  of  the  parties  to  the  suit 
who  may  be  liable  for  it  either  at 
law  or  in  equity.  Rev.  1877,  p.  118, 
§  76.  The  practice  in  such  cases 
was  to  issue  an  order  after  sale,  re- 
citing the  proceedings  under  the 
execution,  and  the  existence  and 
amount  of  the  deficiency  as  ascer- 
tained by  the  statement  of  the  officer 
by  whom  the  decree  of  sale  was 
executed,  and  to  award  an  execu- 
tion to  make  the  amount  with 
interest  and  costs  of  the  order  and 
execution.  Mut.  Life  Ins.  Co.  v. 
Southard,  25  N.  J.  Eq.  337. 

In  a  suit  to  foreclose  a  mortgage, 
all  persons  claiming  an  interest  in 
the  property,  under  any  mortgage,  or 
lien  not  recorded  at  the  time  of  fil- 
ing the  bill,  are  bound  by  the  pro- 
ceedings. Rev.  118,  §  78;  McCrea  v. 
Newman,  46  N.  J.  Eq.  473,  19  Atl. 
198. 

A  suit  for  a  deficiency  cannot  be 
maintained  in  Pennsylvania  against 
a  resident  of  that  State  more  than 
six  months  after  the  foreclosure  of 
the  land  situate  in  New  Jersey.  The 
act  of  1881  being  an  incident  of  the 
contract,  the  lex  loci  contractus 
must  govern.  Sea  Grove  B.  &  L. 
Asso.  V.  Stockton,  148  Pa.  146,  23  Atl. 
1063. 

"'  Am.  Life  &  Fire  Ins.  &  Trust 
Co.  V.  Ryerson,  6  N.  J.  Eq.  9. 


305  FORECLOSURE  AND  UEDE:\rPTiox.  [§§  1350a,   1351 

When  no  one  is  necessarily  irterested  in  the  mortgaged  premises 
other  than  the  mortgagor  and  mortgageo,  and  the  premises  are  sub- 
ject to  one  mortgage  only,  foreclosure  may  be  had  by  scire  facias  in 
the  supreme  court  or  court  of  common  pleas  of  the  county  where 
the  lands  lie.^""  Under  this  process,  after  judgment,  the  premises  are 
sold  in  the  same  manner  as  under  other  executions  for  the  sale  of 
real  estate,  and  conveyed  to  the  purchaser.^^^  If  there  is  any  sur- 
plus after  paying  the  mortgage  debt,  it  is  paid  into  court  by  the 
sheriff  or  other  officer  making  the  sale;  and  the  court  orders  it  to 
be  applied  in  satisfaction  of  any  judgment  or  other  lien  upon  the 
property,  if  there  be  any,  but  otherwise  to  be  paid  to  the  debtor. 

There  is  no  redemption  after  sale. 

§  1350a.  New  Mexico."® — There  is  but  one  form  of  action  which 
is  denominated  a  civil  action.  No  real  property  shall  be  sold  upon 
foreclosure  of  any  mortgage,  mortgage  deed,  trust  deed,  or  any 
other  written  instrument  which  may  operate  as  a  mortgage,  under 
or  by  any  order,  judgment,  or  decree  of  any  court  in  this  Territory, 
until  ninety  days  after  the  date  of  the  order,  judgment,  or  decree, 
within  which  time  the  mortgagor,  or  any  one  for  him,  may  pay  off 
the  decree  and  discharge  the  mortgage  and  avoid  the  sale.  And  all 
real  property  which  may  be  hereafter  sold  under  any  mortgage, 
mortgage  deed,  trust  deed,  or  any  other  written  instrument  which 
may  operate  as  a  mortgage,  by  virtue  of  a  power  of  sale  contained 
in  the  said  mortgage,  mortgage  deed,  trust  deed,  or  other  written 
instrument,  or  annexed  to  or  accompanying  the  same,  and  which 
may  not  be  sold  under  any  order,  judgment,  or  decree  of  any  court, 
may  be  redeemed  by  the  mortgagor  or  his  assignee,  or  any  other 
parties  interested  in  the  said  real  estate,  by  paying  the  purchaser 
the  amount  paid,  with  interest  at  the  rate  of  twelve  per  centum  per 
annum,  at  any  time  within  one  year  after  the  date  of  such  sale. 

§  1351.  New  York."" — In  an  action  to  foreclose  a  mortgage  upon 
real  property,  if  the  plaintiff  becomes  entitled  to  final  judgment,  it 
must  direct  the  sale  of  the  property  mortgaged,  or  of  ?uch  part 
thereof  as  is  sufficient  to  discharge  the  mortgage  debt,  the  expenses 
of  the  sale,  and  the  costs  of  the  aotion.^^*' 

i'"  Rev.  1877,  p.  703;  2  G.  S.  1895,  p.  ""Bliss's  Code  of  Civil   Procedure 

2103.  1890,  1902,  §§  1626-1637. 

1"  As  to  advertising  and  adjourn-  ''"  Upon  final  judgment  the  plain- 
ing the  sale,  see  Hewitt  v.  Montclair  tiff,  in  addition  to  the  other  costs  al- 
Ry.  Co.  25  N.  J.  Eq.  392.  lowed,    is   entitled    to   the   following 

'•'^  Laws  1889,  ch.  51.     Comp.  Laws  percentage    upon     the    amount    due 

1897,  §§  2685,  3938.  upon  the  mortgage:  Upon  a  aunr  vot 


§    1351.]  STATUTORY    PROVISIONS    RELATING    TO.  306 

Any  person  who  is  liable  to  the  plaintiff  for  the  payment  of  the 
debt  secured  by  the  mortgage  may  be  made  a  defendant  in  the 
action;  and  if  he  has  appeared,  or  has  been  personally  served  with 
the  summons,  the  final  judgment  may  award  payment  by  him  of 
the  residue  of  the  debt  remaining  unsatisfied  after  a  sale  of  the 
mortgaged  property  and  the  application  of  the  proceeds  pursuant  to 
the  directions  contained  therein. ^'^^ 

Wliile  an  action  to  foreclose  a  mortgage  upon  real  property  is 
pending,  or  after  final  judgment  for  the  plaintiff  therein,  no  other 
action  shall  be  commenced  or  maintained  to  recover  any  part  of  the 
mortgage  debt  without  leave  of  the  court  in  which  the  former  action 
was  brought. ^^^  The  complaint  in  an  action  to  foreclose  a  mortgage 
upon  real  property  must  state  whether  any  other  action  has  been 
brought  to  recover  any  part  of  the  mortgage  debt,  and  if  so  whether 
any  part  thereof  has  been  collected. 

Where  final  judgment  for  the  plaintiff  has  been  rendered  in  an 
action  to  recover  any  part  of  the  mortgage  debt,  an  action  shall  not 
be  commenced  or  maintained  to  foreclose  the  mortgage,  unless  an 
execution  against  the  property  of  the  defendant  has  been  issued  upon 
the  judgment  to  the  sheriff  of  the  county  where  he  resides,  if  he 
resides  within  the  State,  or,  if  he  resides  without  the  State,  to  the 

exceeding    $200,    ten    per    centum;  "^  A  contingent  decree  for  the  pay- 

upon  an  additional  sum  not  exceed-  ment  of  any  deficiency  may  be  made 

ing  $400,  five  per  centum;    upon  an  before  sale.     McCarthy  v.  Graham,  8 

additional  sum  not  exceeding  $1,000,  Paige,  480. 

two  per  centum.     If  the  action  be  The  master's  deed  passes  the  title 

settled   before  judgment,   the   plain-  from'  the  time  of  its  delivery.     Ful- 

tiff  is  entitled,  upon  the  amount  re-  ler  v.  Van  Geesen,  4  Hill,  171. 

ceived  in  settlement,  to  one-half  the  ""  A  suit  at  law  need  not  be  actu- 

above   rates.     When   a   part   of   the  ally    discontinued    before    filing   the 

mortgage    debt    is    not    due,    if    the  bill,   but   upon    the   filing  of   it   the 

final  judgment  directs  a  sale  of  the  suit    is    suspended.      Williamson    v. 

whole  property,  the  percentages  are  Champlin,  8  Paige,  70. 

computed  upon  the  whole  sum  un-  This  provision  does  not  apply  to 

paid    upon    the    mortgage.      If    the  an  action  on  a  deficiency  judgment, 

judgment   directs    a   sale   of   a   part  as  that  becomes  a  new  obligation  on 

only,  the  percentages  are  computed  being  docketed,  and  is  conclusive  on 

upon  the  sum  actually  due,  and  upon  defendant;  and  it  is  immaterial 'that 

a  sale  of  the  remainder  the  percent-  plaintiff    in    foreclosure     purchased 

ages      are      computed      upon      that  the  property  at  the  sale,  and  made  a 

amount;    but   the   aggregate   of  the  profit  thereon.    Schultz  v.  Mead,  8  N. 

percentages  cannot  exceed  the  sum  Y.  Supp.  663. 

which   would   have  been   allowed    if  The  granting  of  such  permission 

the  entire  sum  secured  had  been  due  is  not  a  matter  of  course.     The  ap- 

when  final  judgment  was  rendered,  plication  must  be  upon  cause  shown; 

The    court    may    also   in    its    dis-  and  its  favorable  consideration  is  to 

cretion   allow  a  sum  not  exceeding  be  determined  according  to  principles 

two  and  one-half  per  centum  upon  of  equity.     Equitable  L.  Ins.  Co.  v. 

the  sum  due  upon  the  mortgage,  and  Stevens,    63    N.    Y.    341;    Scofield    v. 

not  exceeding  in  the  aggregate  $200.  Doscher,   72   N.   Y.   491.     While   the 

Bliss's  Code  of  Civil  Procedure  1890,  court  may  have  the  power  to  grant 

§§  3252,  3253.  such    leave   to    sue    nunc   pro    tunc 


307 


FORECLOSURE    AND   KEDEMPTIOX. 


[§   13ol. 


sheriff  of  the  county  wlierc  the  judgment  roll  is  filed,  and  has  been 
returned  wholly  or  partly  unsatisfied.^^-' 

The  plaintiff  must,  at  least  twenty  days  before  a  final  judgment 
directing  a  sale  is  rendered,  file,  in  the  clerk's  office  of  each  county 
where  the  mortgaged  property  is  situated,  a  notice  of  the  pendency 
of  the  action,  which  must  specify,  in  addition  to  other  particulars 
required,  the  date  of  the  mortgage,  the  parties  thereto,  and  the 
time  and  place  of  recording  it.^^* 

A  conveyance  upon  a  sale  made  pursuant  to  a  final  judgment,  in 
an  action  to  foreclose  a  mortgage  upon  real  property,  vests  in  the 
purchaser  the  same  estate  only  that  would  have  vested  in  the  mort- 
gagee if  the  equity  of  redemption  had  been  foreclosed.^^^     Such  a 


after  commencement  of  the  suit, 
by  an  ex  parte  application,  the  prac- 
tice is  not  in  the  orderly  administra- 
tion of  justice,  and  should  not  be  en- 
couraged. The  defendant  should 
have  an  opportunity  to  be  heard  in 
the  first  instance.  Walton  v.  Grand 
Belt  Copper  Co.  11  N.  Y.  Supp.  110, 
following  United  States  Ins.  Co.  v. 
Poillon,  6  N.  Y.  Supp.  370. 

^"'  This  prohibition  is  not  limited 
to  a  suit  against  the  mortgagor,  but 
applies  to  a  suit  against  a  surety,  or 
one  who  has  assumed  to  pay  the 
mortgage.  Pattison  v.  Powers,  4 
Paige,  549.  And  to  a  suit  upon  a 
guaranty  of  the  mortgage.  McKer- 
nan  v.  Robinson,  84  N.  Y.  105.  But  it 
does  not  apply  to  a  suit  upon  a  guar- 
anty of  the  mortgage  debt.  Schaaf 
V.  O'Brien,  8  Daly,  181.  In  case  of  a 
guaranty  of  collection,  it  is  implied 
that  the  guarantor  is  not  liable  un- 
til the  remedy  upon  the  security  has 
been  exhausted.  Baxter  v.  Smack, 
17  How.  Pr.  183,  184. 

If  the  plaintiff  untruly  aver  that 
no  proceedings  have  been  had,  the 
defendant  may  plead  a  judgment  at 
law  without  averring  that  no  execu- 
tion has  been  issued  on  it.  North 
River  Bank  v.  Rogers,  8  Paige,  648. 
See,  also,  as  to  the  effect  of  a  judg- 
ment, Grosvenor  v.  Day,  Clarke,  109. 

The  mere  commencement  of  pro- 
ceedings at  law,  if  no  judgment  has 
been  recovered,  will  not  p  "event  the 
filing  of  a  bill  to  foreclose.  But  the 
suit  cannot  be  prosecuted  without 
the  permission  of  the  court.  This 
may  be  given  in  some  cases,  as.  for 
instance,  where  the  suit  is  against  a 
third  person  liable  for  the  debt,  but 
who  is  not  a  party  to  the  bill  of  fore- 


closure, and  might  not  be  liable  to  a 
decree  for  the  deficiency  if  he  were  a 
party,  and  where  the  premises  are 
not  sufficient  to  pay  the  debt.  The 
court  will  permit  the  suit  at  law  to 
proceed  so  far  as  to  test  the  validity 
of  a  defence  set  up,  but  will  not  al- 
low an  execution  to  be  taken  out  on 
the  judgment  without  further  order 
of  court.  Suydam  v.  Bartle,  JJ 
Paige,  294.  See,  also,  Thomas  v. 
Brown,  9  Paige,  370;  Engle  v.  Un- 
derbill, 3  Edw.  249. 

If  an  action  has  been  commenced 
without  previous  authority,  the 
court  may  by  subsequent  order  made 
nunc  pro  tunc  grant  permission. 
McKernan  v.  Robinson,  84  N.  Y.  105. 

^'*  A  decree  without  proof  of  such 
notice,  though  irregular,  is  not  void. 
Potter  V.  Rowland,  8  N.  Y.  488;  Cur- 
tis V.  Hitchcock,  10  Paige,  399;  White 
V.  Coulter,  1  Hun,  357. 

Under  Code  of  Civ.  Pro.  1890,  § 
1331,  providing  for  the  giving  of  a 
bond  upon  taking  an  appeal  from  a 
judgment  directing  a  sale  in  order 
to  stay  execution,  an  undertaking 
against  waste  and  for  the  value  of 
use  and  occupation  operates  as  a 
stay  of  proceedings  without  a  cove- 
nant to  pay  a  deficiency.  The  bond 
may  be  in  either  form,  that  is,  to 
pay  for  use  and  occupation,  or  to 
pay  the  deficiency.  Grow  v.  Gar- 
lock,  29  Hun,  598;  Werner  v.  Tuch, 
52  Hun,  269,  119  N.  Y.  632,  23  N.  E. 
573,  5  N.  Y.  Supp.  219. 

"'When  the  sale  is  made  by  a 
master,  no  report  or  confirmation 
is  necessary  before  making  the  deed. 
Monell  V.  Lawrence,  12  Johns.  521. 

If  the  sale  be  made  by  a  referee 
appointed  for  the  purpose,  his  duties 


8    1351.]  STATUTORY    PROVISIONS    RELATING    TO.  308 

conveyance  is  as  valid  as  if  it  were  executed  by  the  mortgagor  and 
mortgagee,  and  is  an  entire  bar  against  each  of  them,  and  against 
each  party  to  the  action  who  was  duly  summoned,  and  every  person 
claiming  from,  through,  or  under  a  party  by  title  accruing  after 
the  filing  of  the  notice  of  the  pendency  of  the  action,  as  above  pre- 
scribed. 

If  there  is  any  surplus  of  the  proceeds  of  the  sale  after  paying 
the  expenses  of  the  sale,  and  satisfying  the  mortgage  debt  and  the 
costs  of  the  action,  it  must  be  paid  into  court  for  the  use  of  the 
person  or  persons  entitled  thereto.^^''  If  any  part  of  the  surplus 
remains  in  court  for  the  period  of  three  months,  the  court  must,  if 
no  application  has  been  made  therefor,  and  may  if  an  application 
therefor  is  pending,  direct  it  to  be  invested  at  interest  for  the  bene- 
fit of  the  person  or  persons  entitled  thereto,  to  be  paid  upon  the 
direction  of  the  court.  Where  an  action  is  brought  to  foreclose 
a  mortgage  upon  real  property,  upon  which  a  portion  of  the  princi- 
pal or  interest  is  due,  and  another  portion  of  either  is  to  become 
due,  the  complaint  must  be  dismissed,  without  costs  against  the 
plaintiff,  upon  the  defendant  paying  into  court,  at  any  time  before 
a  final  judgment  directing  a  sale  is  rendered,  the  sum  due,  and 
the  plaintiff's  costs.  In  such  case,  if,  after  a  final  judgment  direct- 
ing a  sale  is  rendered,  but  before  the  sale  is  made,  the  defendant 
pays  into  court  the  amount  due  for  principal  and  interest  and  the 
costs  of  the  action,  together  with  the  expenses  of  the  proceedings 
to  sell,  if  any,  all  proceedings  upon  the  judgment  must  be  stayed; 
but  upon  a  subsequent  default  in  the  payment  of  principal  or  interest, 
the  court  may  make  an  order  directing  the  enforcement  of  the  judg- 
ment for  the  purpose  of  collecting  the  sum  then  due.^" 

Where  the  mortgage  debt  is  not  all  due,  and  the  mortgaged  prop- 
erty is  so  circumstanced  that  it  can  be  sold  in  parcels  without  in- 
jury to  the  interests  of  the  parties,^'^  the  final  judgment  must  di- 
rect that  no  more  of  the  property  be  sold,  in  the  first  place,  than  is 
sufficient  to  satisfy  the  sum  then  due,  with  the  costs  of  the  action 
and  expenses  of  the  sale;^"  and  that,  upon  a  subsequent  default  in 

are  ministerial  in  their  nature,  and  made  without  reference.  Ontario 
he  must  follow  the  terms  of  sale,  Bank  v.  Strong,  2  Paige,  301. 
and  is  personally  liable  if  he  disre-  If  the  master  has  reported  that 
eards  them  Day  v.  Bergen,  53  N.  Y.  the  premises  cannot  be  sold  m  par- 
cels, on  another  instalment  be- 
Bostwick  V    Pulver,  3  How.  Pr.     coming    due    a    second    reference    is 

not  necessary.     Knapp  v    Burnham, 

■  See    also,  Brinkerhoff  v.  Thall-    11  Paige,  330. 

himer     2    Johns.    Ch.    486;    Ellis    v.        '^»  The  master  is  not  bound  to  sell 

Craig '  7  Johns    7  in  parcels  unless  the  decree  so  di- 

>'«  An    order   of   sale   will   not   be    rects.    Woodhull  v.  Osborne,  3  Edw. 


404. 


69 


309 


FORECLOSURE    AND    REDEMPTION. 


[§    1351. 


the  payment  of  principal  or  interest,  tlie  plaintill:  may  apply  for  an 
order  directing  the  sale  of  the  residue,  or  of  so  much  thereof  as  is 
necessary  to  satisfy  the  amount  then  due,  with  the  costs  of  the  ap- 
plication and  the  expenses  of  the  sale.  The  plaintiff  may  apply 
for  and  obtain  such  an  order  as  often  as  a  default  happens.^*"  If  in 
such  case  it  appears  that  the  mortgaged  property  is  so  circum- 
stanced that  a  sale  of  the  whole  will  be  most  beneficial  to  the  par- 
ties, the  final  judgment  must  direct  that  the  whole  property  be 
sold;^'"^  that  the  proceeds  of  the  sale,  after  deducting  the  costs  of 
the  action  and  the  expenses  of  the  sale,  be  either  applied  to  the 
satisfaction  of  the  whole  sum  secured  by  the  mortgage,  with  such  a 
rebate  of  interest  as  justice  requires,  or  be  first  applied  to  the  pay- 
ment of  the  sum  due,  and  the  balance,  or  so  much  thereof  as  is 
necessary,  be  invested  at  interest  for  the  benefit  of  the  plaintiff,  to 
be  paid  to  him  from  time  to  time  as  any  part  of  the  principal  or 
interest  becomes  due.^^^ 


614;  Lansing  v.  Capron,  1  Johns.  Ch. 
617. 

'*'°  If  the  mortgage  be  conditioned 
for  the  support  of  the  mortgagee 
during  life,  no  decree  for  subsequent 
breeches  can  be  made  without  sup- 
plementary proceedings.  Ferguson 
V.  Ferguson,  2  N.  Y.  360. 

So  where  interest  only  is  due. 
Brinckerhoff  v.  Thallhimer,  2  Johns. 
Ch.  486;  Lyman  v.  Sale,  2  Johns. 
Ch.  487;  Campbell  v.  Macomb,  4 
Johns.  Ch.  534;  Delabigarre  v.  Bush, 
2  Johns.  490;  Brevoort  v.  Jackson,  1 
Edw.  447. 

'*'  A  sale  of  the  whole  may  be  de- 
creed when  the  mortgage  is  inade- 
quate security  and  the  mortgagor  is 
irresponsible,  although  the  whole 
debt  be  not  due,  unless  the  mort- 
gagor will  pay  the  amount  due,  or 
give  security  for  the  residue.  Suf- 
fern  v.  Johnson,  1  Paige,  450,  19  Am. 
Dec.  440.  The  court  may  order  a 
sale  of  the  whole  premises,  with  a 
view,  not  to  the  satisfaction  of  the 
mortgage,  but  to  the  better  protec- 
tion of  the  susbequent  parties  in  in- 
terest. Livingston  v.  Mildrum,  19 
N.  Y.  440,  443;  Snyder  v.  Stafford,  11 
Paige,  71;  Deforest  v.  Farley,  4  Hun, 
640. 

So  when  there  is  a  second  mort- 
gage on  the  same  premises,  which  is 
due,  upon  the  foreclosure  of  the  first 
mortgage,  although  a  part  only  of 
that  is  due,  the  court  will  direct  a 
sale   of  the   whole   premises,   or   so 


much  as  will  satisfy  the  whole  of 
both  mortgages,  unless  the  defend- 
ant pay  the  amount  due  with  costs 
before  sale.  Hall  v.  Bamber,  10 
Paige,  296.  Although  the  premises 
consist  of  two  or  more  parcels,  if 
they  have  previously  been  held, 
used,  and  conveyed  together  as  one 
farm,  a  sale  of  the  whole  in  one 
parcel  is  good.  Anderson  v.  Austin, 
34  Barb.  319.  And  see  Wolcott  v. 
Schenck,  23  How.  Pr.  385;  Wood- 
hull  V.  Osborne,  2  Edw.  614. 

'*-  The  judgment  may  direct  the 
delivery  of  the  possession  of  the 
property  to  the  person  entitled 
thereto.  If  a  party,  or  his  repre- 
sentative or  successor,  who  is  bound 
by  the  judgment,  withholds  posses- 
sion from  the  person  thus  declared 
to  be  entitled  thereto,  the  court,  be- 
sides punishing  the  disobedience  as 
a  contempt,  may  in  its  discretion,  by 
order,  require  the  sheriff  to  put 
that  person  in  possession.  Such  an 
order  must  be  executed  as  if  it  was 
an  execution  for  the  delivery  of  the 
possession  of  the  property.  Code  of 
Civil  Procedure  1880  and  1902,  § 
1675. 

The  officer  making  the  sale  must, 
out  of  the  proceeds,  unless  the  judg- 
mentotherwise  directs,  pay  all  taxes, 
assessments,  and  water  rates,  which 
are  liens  upon  the  property  sold,  and 
redeem  the  property  sold  from  any 
sales  for  unpaid  taxes,  assessments, 
or  water  rates  which  have  not  ap- 


1352.] 


STATUTORY    PROVISIONS    RELATING    TO. 


!10 


§  1352.  North  Carolina. — Mortgages  are  foreclosed  by  action  in 
the  nature  of  a  bill  in  equity.^^^  The  suit  must  be  brought  in  the 
county  in  which  the  premises  or  some  part  of  them  are  situated.^^'* 
If  any  party  having  an  interest  in  the  mortgaged  premises  or  a 
lien  upon  them  is  unknown  to  the  plaintiff,  and  his  residence  can- 
not with  reasonable  diligence  be  ascertained,  upon  affidavit  of  such 
fact  the  court  may  grant  an  order  that  the  notice  be  served  by  pub- 
lishing the  same  for  six  weeks,  once  in  each  week  successively,  in  a 
newspaper  printed  in  the  county  where  the  premises  lie,  if  there 
be  any;  otherwise  in  some  newspaper  printed  in  Raleigh,  and  in 
one  printed  in  the  county  where  the  premises  lie.^®^  There  is  no 
redemption  after  sale.  Judgment  may  be  rendered  against  any  one 
personally  liable   for  the  mortgage  debt  for  a  deficiency  after  the 


parently  become  absolute.  The  sums 
necessary  to  make  those  payments 
and  redemptions  are  deemed  ex- 
penses of  the  sale,  within  the  mean- 
ing of  that  expression,  as  used  in 
any  provision  of  articles  second, 
third,  or  fourth  of  this  title.  Code 
of  Civil  Procedure  1880  and  1902,  § 
1676. 

The  sale  must  be  at  public  auction 
to  the  highest  bidder.  Notice  of 
sale  must  be  given  as  follows:  1. 
A  written  or  printed  notice  thereof 
must  be  conspicuously  fastened  up, 
at  least  forty-two  days  before  the 
sale,  in  three  public  places  in  the 
town  or  city  where  the  sale*  is  to 
take  place,  and  also  in  three  public 
places  in  the  town  or  city  where  the 
property  is  situated,  if  the  sale  is  to 
take  place  in  another  town  or  city. 
2.  A  copy  of  the  notice  must  be 
published,  at  least  once  in  each  of 
the  six  weeks  immediately  preced- 
ing the  sale,  in  a  newspaper  pub- 
lished in  the  county,  if  there  is  one; 
or  ,  if  there  is  none,  in  the  newspa- 
per printed  at  Albany  in  which  legal 
notices  are  required  to  be  published. 

In  case  the  property  is  situated 
wholly  or  partly  in  a  city  in  which  a 
daily,  semi-weekly  or  tri-weekly 
newspaper  is  published,  notice  must 
be  given  by  publishing  in  such  pa- 
per notice  of  the  sale  at  least  twice 
in  each  week  for  the  three  successive 
weeks,  or  in  a  weekly  paper  pub- 
lished in  a  city,  once  in  each  of  the 
six  weeks  immediately  preceding  the 
sale  in  one,  or  in  the  city  or  in  the 
counties  of  New  York  and  Kings  in 
two  of  such  papers.  Notice  of  a 
postponement   of   the   sale   must  be 


published  in  the  paper  or  papers 
wherein  the  notice  of  sale  was  pub- 
lished. The  terms  of  the  sale  must 
be  made  known  at  the  time  of  sale; 
and  if  the  property,  or  any  part 
thereof,  is  to  be  sold  subject  to  a 
right  of  dower,  charge,  or  lien,  that 
fact  must  be  declared  at  the  time  of 
sale.  If  the  property  consists  of 
two  or  more  distinct  buildings, 
farms,  or  lots,  they  must  be  sold 
separately;  except  that  where  two 
or  more  buildings  are  situated  on 
the  same  city  lot,  they  may  be  sold 
together.  Code  of  Civil  Procedure 
1880  and  1902,  S  1678;  Code  of  Civil 
Procedure  1878  and  1902,  §  1434. 

A  foreclosure  sale  of  two  buildings 
is  not  invalidated  because  they  have 
been  sold  together.  The  word 
"must"  in  this  provision  is  directory 
merely.  Wallace  v.  Ferly,  6  How. 
Pr.  225. 

^^''  All  distinction  between  actions 
at  law  and  suits  in  equity  is 
abolished.  Constitution,  §  1,  art.  14; 
Battle's  Revisal  (1873),  137. 

^**Code  1883,  8  221.  The  superior 
Court  has  jurisdiction  of  the  ac- 
tion although  the  debt  secured  be 
less  than  two  hundred  dollars.  The 
action  is  not  founded  on  the  con- 
tract merely,  but  on  the  equity 
growing  out  of  the  relation  of  mort- 
gagor and  mortgagee.  The  enforce- 
ment of  such  an  equity  does  not 
fall  within  the  jurisdiction  of  a  jus- 
tice, because  the  sum  secured  on  the 
contract  would  be  cognizable  before 
him.  Murphy  v.  McNeill,  82  N.  C. 
221. 

'"^  Code  of  Civ.  Pro.  1892,  §  221. 


311  FORECLOSURE   AND    REDEMPTION.  [§    1352a, 

sale,  though  this  could  not  be  done  under  the  former  equity  prac- 
tice.i«° 

§  1352a.  North  Dakota^"  and  South  Dakota.^^s — Foreclosure  is  by 
an  equitable  suit  in  accordance  with  the  Code.  The  action  must  be 
brought  in  the  district  court  of  the  county  where  the  premises  or 
some  part  of  them  are  situated;  judgment  may  be  rendered  for  the 
amount  of  the  debt  against  the  mortgagor,  and  a  decree  may  be 
made  for  the  sale  of  the  premises,  or  of  such  part  as  may  be  suffi- 
cient to  pay  the  amount  of  the  judgment.  The  court  may  order  and 
compel  the  delivery  of  the  possession  of  the  •  premises  to  the  pur- 
chaser after  the  expiration  of  one  year  from  the  sale,  and  may  di- 
rect an  execution  to  issue  for  the  balance  remaining  unsatisfied.  While 
this  action  is  pending,  no  proceedings  at  law  can  be  had  for  the 
recovery  of  the  debt  or  any  part  of  it  unless  authorized  by  the 
court.  If  any  person  other  than  the  mortgagor  is  liable  for  the 
debt,  a  judgment  for  the  balance  remaining  unsatisfied  after  the 
sale  may  be  entered  against  him  as  well  as  the  mortgagor,  and  may 
be  enforced  by  execution  or  other  process.  The  complainant  must 
state  in  his  complaint  whether  any  proceedings  have  been  had  at  law 
or  otherwise  for  the  recovery  of  the  debt;  and  if  any  execution 
has  been  issued  for  any  part  of  the  debt,  the  proceedings  cannot 
go  on  unless  the  execution  be  returned  unsatisfied  in  whole  or  in 
part;  and  that  the  defendant  has  no  property  whereon  to  satisfy  it, 
except  the  mortgaged  premises. 

Sales  under  a  decree  of  foreclosure  are  made  by  a  referee,  sheriff, 
or  deputy  sheriff  of  the  county,  or  other  person  appointed  by  the 
court,  in  the  county  or  subdivision  of  it  where  the  premises  or  some 
part  of  them  are  situated."^     The  officer  making  the  sale  must  give 

18"  Fleming  v.  Sitton,  1  Dev.  &  Bat.  the    proceeds    of   the   sale    are   suf- 

Eq.  621.  ficlent,  such  officer  shall  take  up  all 

^"  North    Dakota:     R.    Codes    1895,  notes,     bonds,     mortgages,  or  other 

Code  Civ.  Pro.  SS  5865-5882.  evidences  of  the  debt  and  security, 

i»"  South   Dakota:     R.   Codes,   Code  and   cancel   the  same   by   plain   and 

Civ.    Pro.    §§    655-674.      Redemption  legible      notation      upon     the     face 

after    sale.      See    Nichols    v.    Ting-  thereof,    giving    date    and    amounts 

stad,  10  N.  D.  172,  86  N.  W.  694;  Mc-  so  paid;   and  when  the  proceeds  are 

Donald   v.   Beatty,   10  N.   D.   511,  88  insufficient,  he  shall  make  a  like  in- 

N.  W.  281.  dorsement    thereon    of    the    amount 

'*"  South     Dakota:      On     all     fore-  paid,   and  shall   also  take  from  the 

closure  sales  conducted  by  the  sher-  judgment  or  mortgage  creditor,  his 

iff  or  his  deputy,  it  is  the  duty  of  agent  or  attorney,  a  receipt  for  the 

such  officer  to  apply  the  proceeds  of  amount  so  paid  and  applied;   all  of 

such   sale,  first,   to  the  payment  of  which    receipts    and    cancelled    evi- 

the  expenses  of  such  sale,  for  which  dences  of  debt  or  security  shall  be 

he    shall    take    receipts;    second,    in  by  said  officer  kept  and  preserved  in 

payment  of  the  costs  on  account  of  his    office    until    called    for    by    the 

which  the  sale  was  made;  and  when  debtor.      If,    however,    the    original 


§    1353.]  STATUTORY    PROVISIONS    RELATING   TO.  312 

to  the  purchaser  a  certificate  in  writing,  setting  forth  a  description 
of  the  property  sold,  the  price  bid  for  each  parcel,  and  the  whole 
price  paid;  and  if  the  premises  are  not  redeemed  within  one  year 
from  the  time  of  sale,  he  executes  a  deed  to  the  purchaser.^^°  Re- 
demption within  that  time  may  be  made  by  paying  the  purchaser 
the  sum  for  which  the  premises  were  sold,  with  interest  at  the  rate 
of  twelve  per  cent,  per  annvim.  The  proceeds  of  the  sale  are  ap- 
plied to  the  payment  of  the  debt,  and  any  surplus  there  may  be  is 
brought  into  court  for  the  use  of  the  persons  entitled  to  it. 

When  the  action  is  brought  for  an  instalment  of  the  debt  or  of 
the  interest,  and  other' instalments  are  not  then  due,  the  bill  is  dis- 
missed upon  payment,  at  any  time  before  the  decree  of  sale,  of  the 
principal  and  interest  due,  with  costs.  If,  after  a  decree  of  sale, 
the  money  is  brought  into  court,  the  proceedings  are  stayed  until  a 
further  default,  in  case  of  which  the  court  may  enforce  the  collec- 
tion of  such  subsequent  instalment.  The  court  may  direct  a  refer- 
ence to  a  master  to  ascertain  whether  the  premises  shall  be  sold  in 
parcels  or  together,  and  may  direct  the  sale  to  be  made  accordingly. 
If  it  appears  that  a  sale  of  the  whole  together  will  be  most  bene- 
ficial to  the  parties,  the  decree  may  be  in  the  first  instance  entered 
for  the  sale  of  the  whole.  In  that  case  the  proceeds  are  applied  to 
the  payment  as  well  of  the  part  of  the  debt  already  due  as  that 
which  is  not  then  due;  and  if  the  residue  which  is  not  then  pay- 
able does  not  bear  interest,  a  proper  rebate  of  interest  is  made.^"^ 

§  1353.  Ohio.^^^ — An  action  for  the  sale  of  real  property  under  a 
mortgage  must  be  brought  in  the  county  in  which  the  property  lies, 

evidences  of  sale  and  security  have  pay  all  taxes  and  all  interest  then 

been  deposited  in  court,  no  cancel-  due,  and  interest  for  one  year  in  ad- 

lation  shall  be  required,  but  receipts  vance,  the  time  of  redemption  shall 

shall  be  taken  as  in  case  of  partial  be   extended   one   year.     Laws   1893, 

payments.      Laws   1893,   ch.    118;    R.  ch.   140.     R.   Codes,   1903,   Code  Civ. 

Codes  1903,  Code  Civ.  Pro.  §  664.  Pro.  §  646. 

All  real  property  sold  upon  fore-  ^^°  A  certificate  by  a  deputy  in  his 

closure    of    mortgage    by    advertise-  name  as  deputy  sheriff,   while   per- 

ment,    order,    judgment,    or    decree  haps  irregular  in  not  using  the  name 

of  court,   may  be  redeemed   at  any  of  his  principal,  is  not  void.     Hodg- 

time  within  one  year  after  such  sale,  don  v.   Davis,   6  Dak.   21,   50  N.  W. 

in  like  manner  and  to  the  same  ef-  478. 

feet  as  provided  for  redemption   of  "^  Redemption    may    be    made    as 

real    property    sold    upon   execution,  provided   in   case   of  foreclosure  by 

by,  1,  The  mortgagor  or  his  succes-  advertisement.     S  1728. 

sor  in  interest  in  the  whole  or  any  ^■'=  R.    S.    1892    and    1900,    §§    5021, 

part   af   the   property;    2,    A   subse-  5022,  5316,  5317.     The  distinction  be- 

quent  judgment  or  mortgage  creditor  tween   actions   at   law   and   suits   in 

has  the  rights  of  a  redemptioner.  equity  was  abolished  in  1853,  but  the 

If,   at  the  expiration   of  one  year  mode  of  proceeding  is  in  accordance 

from  the  date  of  sale,  the  mortgagor  with  general  equity  principles.     The 

or    his    successor    in    interest    shall  former     statute     remedy     by     scire 


313  FORECLOSURE    AND    REDEMPTION.  [§    1353a. 

except  that,  when  the  property  is  situate  in  more  than  one  county, 
the  action  may  be  brouglit  in  either.  When  a  mortgage  is  fore- 
closed, a  sale  of  the  premises  shall  be  ordered;  and  when  the  prem- 
ises to  be  sold  are  in  one  or  more  tracts,  the  court  may  direct  the 
officer  who  makes  the  sale  to  subdivide,  appraise,  and  sell  the  same 
in  parcels,  or  to  sell  any  one  of  the  tracts  as  a  whole.  When  the 
mortgaged  property  is  situate  in  more  than  one  county,  the  court 
may  order  the  sheriff  or  master  of  each  to  make  sale  of  the  property 
in  his  county,  or  may  direct  one  officer  to  sell  the  whole;  the  court 
may  direct  that  the  property,  when  it  consists  of  a  single  tract,  be 
sold  as  one  tract,  or  in  separate  parcels,  and  shall  direct  whether 
appraisers  shall  be  selected  for  each  county,  or  one  set  for  all;  and 
shall  also  direct  whether  publication  of  the  sale  shall  be  made  in  all 
the  counties  or  in  one  county  only. 

The  plaintiff  may  also  ask  in  his  petition  for  a  judgment  for 
the  money  claimed  to  be  due;  and  such  proceedings  shall  be  had 
and  judgment  rendered  as  in  other  civil  actions  for  the  recovery 
of  money  only.^**^ 

A  receiver  may  be  appointed  when  it  appears  that  the  mortgaged 
property  is  in  danger  of  being  lost,  removed,  or  materially  injured, 
or  that  the  condition  of  the  mortgage  has  not  been  performed,  and 
the  property  is  probably  insufficient  to  discharge  the  mortgage  debt."* 

There  is  no  redemption  after  sale. 

§  1353a.  Oklahoma  Territory."^ — Actions  for  a  sale  of  real  prop- 
erty under  a  mortgage  must  be  brought  in  the  county  in  which  the 
property  is  situated,  except  in  case  the  land  is  situated  in  two  or 
more  counties,  the  action  may  be  brought  in  any  county  in  which 
any  part  of  it  is  situated.  In  actions  to  enforce  a  mortgage,  deed 
of  trust,  or  other  lien  or  charge,  a  personal  judgment  or  judg- 
ments shall  be  rendered  for  the  amount  or  amounts  due,  as  well  to 
the  plaintiff  as  other  parties  to  the  action  having  liens  upon  the 
mortgaged  premises  by  mortgage  or  otherwise,  with  interest  thereon, 
and  for  the  sale  of  the  property  charged  and  the  application  of  the 
proceeds,  or  such  application  may  be  reserved  for  the  further  order 

facias   did   not   preclude   foreclosure  Ohio,  427;  Myers  v.  Hewitt,  16  Ohio, 

by  bill  in  equity.    Anon.  1  Ohio,  235.  449,    456.      There   may   be   judgment 

The    system    of    procedure    by    scire  against  all  the  makers  of  the  note, 

facias  was  adopted  by  the  territorial  although   the   mortgage   is   executed 

government  in  1795  from  the  Statutes  by   only  a   part   of   them.      King  v. 

of     Pennsylvania.       Biggerstaff     v.  Safford,  19  Ohio  St.  587. 

Loveland,  8  Ohio,  45.  ""  R.  S.  19n0.  §  5587. 

"'See  Keller  v.  Wenzell,  23  Ohio  "^  Stats.   1893,   §§   3920,  4144,  4290; 

St.  579;  Wood  v.  Stanberry,  21  Ohio  2  R.  S.  1903,  §§  4246,  4247,  4588,  4441. 
St.    142;    Hamilton    v.    Jefferson,    13 


§    1354,]  STATUTORY    PROVISIONS   RELATING    TO,  314 

of  the  court;  and  the  court  shall  tax  the  costs,  attorney's  fees,  and 
expenses  which  may  accrue  in  the  action,  and  apportion  the  same 
among  the  parties  according  to  their  respective  interests,  to  be  col- 
lected on  the  order  of  sale  or  sales  issued  thereon.  When  the  same 
mortgage  embraces  separate  tracts  of  land  situated  in  two  or  more 
counties,  the  sheriff  of  each  county  shall  make  sale  of  the  lands 
situated  in  the  county  of  which  he  is  sheriff.  No  real  estate  shall 
be  sold  for  the  payment  of  any  money,  or  the  performance  of  any 
contract  or  agreement  in  writing,  in  security  for  which  it  may  have 
been  pledged  or  assigned,  except  in  pursuance  of  a  judgment  of  a 
court  of  competent  jurisdiction  ordering  such  sale,  A  receiver  may 
be  appointed  in  an  action  by  a  mortgagee  for  the  foreclosure  of  his 
mortgage  and  sale  of  the  mortgaged  property,  where  it  appears  that 
the  mortgaged  property  is  in  danger  of  being  lost,  removed,  or 
materially  injured,  or  that  thB  condition  of  the  mortgage  has  not 
been  performed,  and  that  the  property  is  probably  insufficient  to 
discharge  the  mortgage  debt. 

§  1354.  Oregon. ^^^ — Mortgages  are  foreclosed  in  an  action  of  an 
equitable  nature  and  the  property  adjudged  to  be  sold.^*^  If  a  prom- 
issory note  or  other  personal  obligation  for  the  payment  of  the  debt 
has  been  given,  the  court  also  decrees  a  recovery  of  the  amount  of  such 
debt.  Any  person  having  a  lien  subsequent  to  the  plaintiff  upon  the 
same  property,  and  any  person  who  has  given  a  promissory  note  or 
other  personal  obligation  for  the  payment  of  the  debt,  must  be  made 
a  defendant  in  the  suit;^^^  and  any  person  having  a  prior  lien  may 
be  made  defendant  at  the  option  of  the  plaintiff.  Any  defendant 
having  a  lien  may  have  a  decree  in  the  same  manner  as  if  he  were 
plaintiff.  When  a  decree  is  given  foreclosing  two  or  more  liens 
upon  the  same  property  or  any  portion  thereof  in  favor  of  different 
persons  not  united  in  interest,  such  decree  must  determine  and  spe- 
cify the  order  of  time,  according  to  their  priority,  in  which  the 
debts  secured  by  such  liens  shall  be  satisfied  out  of  the  proceeds  of 
the  sale  of  the  property. 

The  decree  may  be  enforced  by  execution  as  an  ordinary  decree 

^»«  Hill's  Annot.  Laws  1892,  §§  414-  garded.      Thompson    v   Marshall,    21 

422;    Annot.    Codes   and   Stats.   1902,  Oreg.  171,  27  Pac.  957. 

§§  423-434.  The   jurisdiction   of  such   suits   is 

"'  The  method  of  foreclosing  pre-  vested    in    the    circuit    courts.      But 

scribed  by  this  section  is  exclusive  these    courts    have    no    jurisdiction 

and   imperative,   and  an  attempt  to  after    the    death    of   the    mortgagor, 

prescribe  a  different  method  in  the  Verdier   v.    Eigne,   16    Oreg.    208,    19 

mortgage  or  writing  creating  a  lien  Pac.  64. 

upon   real   property   must  be   disre-  '''*  Lauriat   v.    Stratton,   6   Sawyer, 

339. 


315  FORECLOSURE   AND   REDEMPTION.  [§    1354. 

for  the  recovery  of  money,  except  that,  when  a  decree  of  foreclosure 
and  sale  is  given,  an  execution  may  issue  thereon  against  the  prop- 
erty adjudged  to  be  sold.^"''  If  the  decree  is  in  favor  of  the  plaintiff 
only,  the  execution  may  issue  as  in  ordinary  cases;  but  if  it  be  in 
favor  of  different  persons,  not  united  in  interest,  it  shall  issue  upon 
the  joint  request  of  such  persons,  or  upon  the  order  of  the  court  or 
judge  thereof,  on  the  motion  of  either  of  them.  When  the  decree 
is  also  against  the  defendants  or  any  one  of  them  in  person,  and  the 
proceeds  of  the  sale  of  the  property  upon  which  the  lien  is  fore- 
closed is  not  sufficient  to  satisfy  the  decree,  as  to  the  sum  remain- 
ing unsatisfied  the  decree  may  be  enforced  by  execution  as  in  ordi- 
nary cases.  When  in  such  case  the  decree  is  in  favor  of  different 
persons  not  united  in  interest,  it  shall  be  deemed  a  separate  decree 
as  to  such  persons,  and  may  be  enforced  accordingly. 

During  the  pendency  of  an  action  of  law  for  the  recovery  of  a 
debt  secured  by  any  lien,  a  suit  cannot  be  maintained  for  the  fore- 
closure of  such  lien,  nor  thereafter,  unless  judgment  be  given  in 
such  action  that  the  plaintiff  recover  such  debt  or  some  part  thereof, 
and  an  execution  thereon  against  the  property  of  the  defendant  in 
tlie  judgment  is  returned  unsatisfied  in  whole  or  in  part.  When  a 
suit  is  commenced  to  foreclose  a  lien  by  which  a  debt  is  secured, 
which  debt  is  payable  in  instalments  either  of  interest  or  principal, 
and  any  of  such  instalments  is  not  then  due,  the  court  shall  decree 
a  foreclosure  of  the  lien,  and  may  also  decree  a  sale  of  the  property 
for  the  satisfaction  of  the  whole  of  such  debt,  or  so  much  thereof 
as  may  be  necessary  to  satisfy  the  instalment  then  due,  with  costs 
of  suit;  and  in  the  latter  case  the  decree  of  foreclosure  as  to  the 
remainder  of  the  property  may  be  enforced  by  an  order  of  sale  in 
whole  or  in  part,  whenever  default  shall  be  made  in  the  payment 
of  the  instalments  not  then  due.  If,  before  a  decree  is  given,  the 
amount  then  due,  with  the  costs  of  suit,  is  brought  into  court  and 
paid  to  the  clerk,  the  suit  shall  be  dismissed;  and  if  the  same  be 
done  after  decree  and  before  sale,  the  effect  of  the  decree  as  to 
the  amount  then  due  and  paid  shall  be  terminated,  and  the  execu- 
tion, if  any  have  issued,  be  recalled  by  the  clerk.  When  an  instal- 
ment not  due  is  adjudged  to  be  paid,  the  court  shall  determine  and 
specify  in  the  decree  what  sum  shall  be  received  in  satisfaction 
thereof,  which  sum  may  be  equal  to  such  instalment  or  otherwise, 
according  to  the  present  value  thereof. 

^'^  The    sheriff    need    not    make    a  or  together,  in  his  discretion.    Bank 

levy  before  proceeding  to  sell.     He  of  British  Columbia  v.  Page,  7  Oreg. 

May     sell     premises     consisting     of  454. 
several   town  lots  either  separately 


§    1355.]  STATUTORY    PROVISIONS    RELATING    TO.  ,  316 

Eedemption  may  be  had  from  a  foreclosure  sale,  in  like  manner 
as  upon  an  execution  sale,  within  sixt}'  days  after  the  date  of  the 
order  confirming  the  sale.^°° 

§  1355.  Pennsylvania. — In  the  case  of  mortgages  given  by  cor- 
porations the  Supreme  Court  of  the  Commonwealth  may  exercise 
all  the  power  and  jurisdiction  of  a  court  of  chancery.-"^  There  has 
never  been  any  distinct  chancery  tribunal  in  this  State,  and  the 
chancery  powers  conferred  previous  to  the  above  statute  never  em- 
braced the  subject  of  mortgages;  therefore  there  was  no  jurisdic- 
tion to  decree  a  foreclosure  or  sale  under  a  mortgage;  but  as  the 
court  had  jurisdiction  of  trusts,  it  could  in  behalf  of  a  cestui  que  trust 
compel  trustees  under  a  mortgage  with  a  power  of  sale  to  execute 
the  power  according  to  its  terms.  The  court  declined,  however,  to 
do  more  than  to  control  or  direct  the  execution  of  a  power  of  sale 
already  conferred,  and  would  riot  itself  exercise  the  power.-"^  The 
above  provision  was  accordingly  enacted  in  order  that  there  might 
be  a  remedy  more  adequate  for  the  administration  of  the  large 
mortgages  which  corporations  are  in  the  habit  of  making  than 
was  furnished  by  the  writ  of  scii-e  facias  by  which  mortgages  are 
generally  foreclosed. 

The  mode  of  foreclosing  mortgages  in  other  cases  is  by  scire 
facias.  When  default  has  been  made  on  a  mortgage,  the  holder  of 
the  mortgage,  at  any  time  after  the  expiration  of  twelve  months^"* 
next  ensuing  the  last  day  when  the  mortgage  money  ought  to  be 
paid,  or  other  condition  performed,  may  sue  forth  a  writ  of  scire 
facias"^^^  from  the  court  of  common  pleas  for  the  county  or  city 

""">  Hill's     Annot.    Laws     1892,     §§  gage   itself,    and    not   in   the   bond 

299-307,  418;  1  Codes  and  Stats.  1902,  Kennedy    v.    Ross.    25    Pa.    St.    256 

§  247.  Ruling    v.    Drexell,    7    Watts,    126 

For  provision  for  entry  of  satisfac-  Walker   v.    Tracy,      1     Phila.      225 

tion  of  a  mortgage  of  record  when  Whitecar  "v.    Worrell,    1    Phila.    44 

foreclosed,  see  Laws  1893,  p.  81.  Black  v.  Galway,  24  Pa.  St.  18. 

="1  Brightly's    Purdon's    Dig.    1872,        -**  The   mortgagee   cannot   proceed 

593;  act  of  April  11,  1862.    This  pro-  by  scire  facias  to  recover  successive 

vision  is  constitutional  as  applied  to  instalments  of  a  mortgage  debt.  This 

mortgages  made  before  the  act  was  remedy  puts  an  end  to  the  security, 

passed.      McCurdy's    Appeal.    65    Pa.  and    disposes    of    the    whole    estate. 

St.    290;    McElrath    v.    Pittsburg    &  Fickes  v.  Ersick.  2  Rawle,  166;  Ewart 

Steubenville  R.  Co.  55  Pa.  St.  189.  v.    Irwin,    1    Phila.    78.      But    if    the 

="-  Bradley  v.  Chester  Valley  R.  Co.  mortgage  provides  that  on  a  failure 

36  Pa.  St.  141;  Ashhurst  v.  Montour  to  pay  any  instalment  for  a  certain 

Iron  Co.  35  Pa.  St.  30.  period  the  whole  debt  should  become 

^"^  Brightly's    Purdon's    Dig.    1883,  due  and  collectible,  scire  facias  may 

pp.  596-599.     This  limitation  may  be  issue  forthwith  upon  the  default  for 

waived     in     the     mortgage     subse-  the  whole  debt.  Hosie  v.  Gray,  71  Pa. 

quently,  but  the  waiver  must  be  ex-  St.    198.      The   provisions   of   a   stay 

plicit,  and  by  the  party  authorized  law  may  be  waived  in  the  mortgage 

to  make  it;  and  must  be  in  the  mort-  by  express  provision.    Drexel  v.  Mil- 


317  FORECLOSURE   AND    REDE^HPTIOK.  [§    1355. 

where  the  lands  lie,  directed  to  the  proper  officer,  requiring  him  to 
make  known  to  the  mortgagor,  or  his  heirs,  executors,  or  adminis- 
trators, that  he  show  cause  why  the  mortgaged  premises  should  not 
be  seized  and  taken  on  execution  for  payment  of  the  mortgage 
money,  with  interest.  If  the  defendant  appears,  he  may  plead  sat- 
isfaction of  part  or  all  of  the  mortgage  money,  or  make  any  other 
lawful  plea,  in  avoidance  of  the  deed  or  debt;  but  if  he  do  not  ap- 
pear on  the  day  the  writ  is  made  returnable,  if  damages  only  are 
recoverable,  an  inquest  is  to  be  forthwith  charged  to  inquire  thereof, 
and  judgment  is  entered  that  the  plaintiff  have  execution  by  levari 
facias^  by  virtue  of  which  the  premises  are  taken  in  execution  and 
exposed  to  sale  and  conveyed  to  the  buyer,  and  the  money  rendered 
to  the  mortgage  creditor;  but,  for  want  of  buyers,  to  be  delivered 
to  the  creditor,  in  the  same  manner  as  land  taken  upon  execution 
for  other  debts.  When  the  lands  are  sold  or  delivered  they  are 
held  discharged  of  all  equity  of  redemption,  and  all  incumbrances 
made  or  suffered  by  the  mortgagor,  his  heirs  or  assigns;  but  before 
sale  is  made,  notice  must  be  given  in  writing  of  the  time  and  place 
of  sale  in  the  same  manner  as  is  directed  concerning  sales  upon  exe- 
cution.^*'^ Any  surplus  realized  above  the  debt  and  costs  must  be 
returned  by  the  officer  to  the  defendant.  On  a  reversal  of  the 
judgment  under  which  a  sale  has  been  made,  the  purchaser  is  pro- 
tected in  his  title,  unless  the  process  was  void.^°*^  When  an  action  is 
brought  on  a  mortgage,  a  memorandum  of  the  names  of  the  parties 
and  date  of  the  action  is  furnished  to  the  recorder  and  entered  upon 
the  record  of  the  mortgage.  An  assignee  of  the  mortgage  may  sue 
in  his  own  name,  or  in  the  name  of  the  mortgagee  for  the  use  of  the 

ler,   49   Pa.   St.   246.     Upon   any   de-  join  in  the  mortgage.    Scott  v.  Cros- 

fault  ejectment  may  be  maintained  dale,  2  Dall.  127.     The  sale  must  be 

for  possession  of  the  land.    Smith  v.  by  the  sheriff  of  the  county  where 

Shuler,    12    S.    &   R.    240;    Fickes   v.  the  land  lies.     He  can  make  the  sale 

Ersick,2  Rawle,  166;  Martin  v.  Jack-  outside  of  it.     Menges  v.   Oyster,  4 

son,  27  Pa.  St.  504.     But  this  proc-  W.  &.  S.  20,  39  Am.  Dec.  56.     As  to 

ess    only    gives    possession,    which  distribution  of  surplus,  see  Selden's 

may  be  maintained  until  the  debt  is  Appeal,  74  Pa.  St.  323. 

paid.    Colwell  v.  Hamilton,  10  Watts,  The  mortgagor  should  not  be  made 

413,  417.  a  party  if  he  no  longer  has  any  in- 

A  scire  facias  does  not  lie  upon  an  terest  in  the  property.     Broomell  v. 

unsealed  equitable  mortgage.     Spen-  Anderson  (Pa.),  8  Atl.  764. 

cer  v.   Haynes,   12   Phila.    (Pa.)    452.  As  to  sale  under  a  mortgage  given 

-'"  This    is    a    proceeding    in    rem.  by  a  life  tenant,  see  Dalesman's  App. 

The  effect  of  the  sale  is  to  extinguish  127  Pa.  St.  348,  17  Atl.  1086,  1100. 

the  equity  of  redemption,  and  trans-  =""  See  Caldwell  v.  Walters,  18  Pa. 

fer  the  estate  as  fully  as  it  existed  St.  79,  84,  54  Am.  Dec.  592;  Evans  v. 

in   the   mortgagor  before  the  mort-  Meylert,   19   Pa.    St.   402;    Wilson   v. 

gage.      Hartman   v.    Ogborn,    54   Pa.  McCullough,  19  Pa.  St.  77;   Burd  v. 

St.  120,  93  Am.  Dec.  679.    The  wife's  Dansdale,  2  Binn.  80. 
dower  is  barred  though  she  did  not 


1355.] 


STATUTORY   PROVISIONS    RELATING    TO. 


318 


assignee;  or  the  record  may  be  amended  after  suit  has  been  com- 
menced, and  the  proper  persons  made  parties.  Mortgages  of  leasehold 
estates  are  foreclosed  in  the  same  manner.  ^"'^ 

If  the  mortgagee  has  released  a  portion  of  the  premises,  the  de- 
fendant in  scire  facias  may  plead  that  the  balance  claimed  is  greater 
than  in  a  just  proportion  should  be  levied  on  the  premises  described 
in  the  writ.-°^  In  general  as  to  the  defences  that  may  be  taken, 
although  the  action  be  one  at  law,  equitable  defences  are  not  neces- 
sarily excluded.'"''  Any  defence  may  be  set  up  in  this  action  that 
may  be  set  up  against  the  mortgage  debt;  as  that  there  was  no 
consideration,  or  that  this  was  void  or  illegal,-^"  or  that  the  considera- 
tion has  failed,  as  in  the  case  of  a  purchase-money  mortgage,  when 
the  mortgagor  has  been  ejected  by  reason  of  a  paramount  title  in 
another.^^^  But  a  purchaser  of  several  lots  of  land,  having  secured 
the  unpaid  purchase-money  by  a  mortgage  upon  one  of  the  tracts 
of  which  he  has  taken  a  separate  deed,  cannot  set  up  as  a  defence  to 
the  mortgage  a  failure  of  the  title  of  the  lots  not  included  in  the 
mortgage.^^^ 

This  is  a  local  action  and  must  issue  in  the  county  where  the 
land  lies.^^^  It  is  regarded  chiefly  as  a  proceeding  in  rem  to  fore- 


=""  Before  this  statute,  after  an  as- 
signment duly  executed  and  re- 
corded, no  suit  could  be  maintained 
in  the  name  of  the  assignor  for  the 
use  of  those  having  the  equitable 
interest  in  the  mortgage.  Pryor  v. 
Wood,  31  Pa.  St.  U-Z.  If  the  assign- 
ment was  not  formal  and  legal,  the 
suit  could  be  maintained  by  the  as- 
signor. Partridge  v.  Partridge,  38 
Pa.  St.  78;  Moore  v.  Harrisburg 
Bank,  8  Watts,  138,  151. 

Upon  petition  of  the  mortgagor  or 
owner  of  the  property,  the  court 
may  direct  scire  facias  to  issue.  If 
the  holder  of  the  mortgage  neglects 
for  sixty  days  to  issue  the  writ,  the 
owner  may  pay  into  court  the 
amount  admitted  by  him  to  be  due, 
and  the  court  may  thereupon  direct 
satisfaction  to  be  entered.  Brightly's 
Purdon's  Dig.  Supp.  2189.  A  creditor 
is  not  an  "owner"  for  this  purpose. 
Guarantee  Deposit  Co.  v.  Powell, 
150  Pa.  St.  16,  24  Atl.  345. 

-"^  Brightly's  Purdon's  Dig.  1883,  p. 
480. 

^''^Ewart  V.  Irwin,  1  Phila.  78.  7 
Leg.  Int.  134. 

^"'Ra.guet  v.  Roll,  7  Ohio,  77.  In 
this  case  the  defence  was  that  the 
consideration   was   in   part   for   the 


forbearance  of  a  criminal  prosecu- 
tion. 

This  defence  must  be  made  before 
the  court,  and  not  before  the  auditor 
appointed  to  make  distribution. 
Thompson's  App.  126  Pa.  St.  434,  17 
Atl.  663. 

•''■  Morris  v.  Buckley,  11  S.  &  R. 
168.  Otherwise  in  Illinois:  McFad- 
den  V.  Fortier,  20  111.  509;  Wacker  v. 
Straub,  88  Pa.  St    32. 

='-  Fisk  V.  Duncan,  83  Pa.  St.  196. 

213  Tryon  v.  Munson,  77  Pa.  St.  250. 
When  the  real  estate  bound  by  a 
mortgage  is  situate  in  two  or  more 
counties,  it  is  lawful  for  the  mort- 
gagee or  his  assignee  to  issue  his 
writ  of  scire  facias  to  enforce  the 
collection  of  said  mortgage  in  the 
courts  of  either  of  the  said  coun- 
ties where  the  mortgage  may  be 
recorded,  and  proceed  to  obtain 
judgment  thereon;  provided,  that  the 
sale  made  under  a  writ  of  levari 
facias,  issued  on  the  judgment  in  the 
county  where  the  judgment  shall 
have  been  obtained,  shall  be  suf- 
ficient to  vest  in  the  purchaser  the 
entire  estate  of  the  mortgagor  in 
the  premises  bound  by  the  mort- 
gage, as  well  in  the  county  where 
scire  facias  may  have  been  issued 


319  FORECLOSURE   AND    KEDEMPTIOX.  [§    1356. 

close  the  mortgage  and  convert  the  security  into  money.  It  is  a 
proceeding  in  personam  only  so  far  as  notice  to  the  parties  is  pre- 
scribed by  the  act.-^*  The  action  is  applicable  to  all  mortgages, 
whether  recorded  or  not.  It  is  founded  on  the  instrument  itself, 
and  not  upon  the  record  of  it.  The  proper  plea  in  denial  of  the 
instrument  is  non  est  factum  and  not  nul  tiel  record.  But  on  the 
trial  an  exemplification  of  the  record  may  be  used  as  evidence  of 
the  instrument  itself.^^^  jSTo  one  except  the  mortgagor,  or  upon 
his  death  his  personal  representatives,  is  a  necessary  party  to  the 
action.  A  purchaser  from  the  mortgagor  or  other  terre-tenant  need 
not  be  made  a  party  to  the  suit;  though  it  is  the  general  practice 
to  give  such  purchaser  or  tenant  notice  of  it,  and  to  permit  him  to 
make  any  equitable  or  legal  defence  to  which  he  may  be  entitled,"^** 
in  which  case  he  should  be  required  to  give  a  stipulation  for  costs; 
otherwise,  the  judgment  being  exclusively  in  rem,  he  is  not  per- 
sonally responsible  for  them.  The  writ  takes  the  place  of  a  declara- 
tion, and  should  show  on  its  face  an  immediate  cause  of  action.^" 
The  judgment  cuts  off  all  rights  and  interests  under  the  mortgage 
which  are  not  paramount  to  it,  although  the  parties  holding  rights 
subsequent  to  the  mortgage  are  not  made  parties  to  the  action,  and 
have  no  notice  of  it.-^^  The  sale  under  the  judgment  does  not  af- 
fect prior  rights  and  liens,  but  is  subject  to  them.^^^  The  judg- 
ment, moreover,  extinguishes  the  debt.^^'* 

§  1356.     Ehode   Island. — There   is   jurisdiction   in   equity   of   the 
foreclosure  of  mortgages.    The  bill  should  be  brought  in  the  supreme 

as  in  the  other  counties  where  the  county  lines  or  otherwise,  as  may- 
mortgage  may  have  been  recorded;  best  suit  the  interest  of  parties  hav- 
and  provided,  further,  that  be-  ing  liens  upon  the  land  in  the  dif- 
fore  sale  be  made  under  the  ferent  counties.  Purdon's  Ann.  Dig. 
writ      of      levari      facias,      an      ex-  p.  2111,  §§  6,  8. 

emplification    of    the    record   of  the  "^  Hartman  v.   Ogborn,   54  Pa.   St. 

judgment     shall     be      taken     from  120,  93  Am.  Dec.  679;  Wilson  v.  Mc- 

the  county  where  the  same  was  ob-  Cullough,    19   Pa.    St.    77;    Brown   v. 

tained,  and  entered  in  the  courts  of  Scott,  51  Pa.  St.  357. 

the  other  counties  where  said  mort-  "'  McLaughlin    v.    Ihmsen,    85    Pa. 

gage  may  have  been  recorded;    and  St.  364;  Tryon  v.  Munson,  77  Pa.  St. 

advertisement  of   the   sale   shall   be  250;    Lancaster  v.   Smith,  67  Pa.   St. 

made  by  the  sheriff,  in  at  least  one  427;    Roberts  v.   Halstead,  9  Pa.   St. 

newspaper  published  in  each  of  the  32,     49     Am.     Dec.     541;     Frear     v. 

other    counties,    in    addition    to    the  Drinker,  8  Pa.  St.  520. 

advertisement    as    now    directed    by  ='"  Mevey's    Appeal,    4    Pa.    St.    80; 

law  in  the  county  in  which  the  sale  Hinds   v.    Allen,   34    Conn.    185. 

is   to   be   made.      The   court   of   the  =''  Swift     v.     Allegheny     Building 

county  in  which  the  judgment  may  Asso.  82  Pa.  St.  142. 

be  obtained  upon  any  such  mortgage  ='"  Dennison  v.   Allen.  4  Ohio.  495. 

as    aforesaid    may    make   any    order  ='"  Wertz's  Appeal,  65  Pa.  St.  306; 

which  may  appear  to  them  just  and  Helfrlch  v.  Weaver,  61  Pa.  St.  385. 

equitable,   directing  the  lands  to  be  ■-"  Reedy  v.  Burgert,  1  Ohio,  157. 
sold   in   parcels,   as   divided   by   the 


§§  1357,  1358.]  STATUTORY  PROVISIONS  RELATING  TO.  320 

court  for  the  county  in  which  the  premises  are  situated.    It  is  heard 
and  determined  according  to  the  principles  of  equity.^^^ 

The  statutory  remedies  are  entry  and  possession/^^  and  actions 
at  law  of  ejectment,  or  of  trespass  and  ejectment,  for  obtaining 
possession. ^^^  Eedemption  may  be  made  within  three  years  after 
possession  is  acquired  in  either  way. 

§  1357.  South  Carolina.^^* — Mortgages  are  foreclosed  by  ordi- 
nary suit  of  complaint  and  summons  in  the  nature  of  a  proceeding 
in  equity.  The  action  must  be  brought  in  the  county  where  the 
premises  or  some  part  thereof  are  situated.  The  court  has  power 
to  adjudge  and  decree  the  payment  by  the  mortgagor  of  any  residue 
of  the  mortgage  debt  that  may  remain  unsatisfied  after  a  sale  of 
the  mortgaged  premises,  in  cases  in  which  he  is  personally  liable 
for  the  debt  secured;  and  if  the  debt  be  secured  by  the  covenant 
or  obligation  of  any  other  person,  the  plaintiff  may  make  him  a  party 
to  the  action,  and  the  court  may  adjudge  payment  of  the  residue 
remaining  unsatisfied  after  a  sale  against  such  other  person,  and 
may  enforce  such  judgment  as  in  other  cases. 

There  is  no  redemption  after  sale. 

§  1357a.     South  Dakota. — See  §  1352a. 

§  1358.  Tennessee.^-^ — Foreclosure  is  by  bill  in  chancery  and  sale 
under  decree.  The  oificer  whose  duty  it  is  to  make  the  sale  must, 
in  the  absence  of  any  special  provision  in  the  decree,  publish  the 
sale  at  least  three  different  times  in  some  newspaper  published  in 
the  county  where  it  is  to  be  made,  the  first  of  which  publications 
shall  be  at  least  twenty  days  previous  to  the  sale.  The  publication 
is  dispensed  with  when  the  owner  of  the  property  so  directs,  or  when 
no  newspaper  is  published  in  the  county,  in  which  cases  notice  is 
posted  for  thirty  days  in  at  least  five  of  the  most  public  places  in 
the  county,  one  of  which  must  be  the  court-house  door,  and  another 
the  most  public  place  in  the  civil  district  where  the  land  lies.  The 
advertisement  or  notice  must  give  the  names  of  the  plaintiff  and 
defendant,  or  parties  interested,  and  describe  the  land  in  brief  terms, 

"ip.   S.   1882,  ch.  176,  §   14;    G.  L.  "-See  §  1245. 

1896,  ch.  207,  §  15.    This  statute  pro-  "'  See   §    1279. 

vides    that    any    person    entitled    to  -•Code  of  Civ.   Pro.   1882,   §§   144, 

foreclose  the  equity  of  redemption  in  156,  188.     Code  of  Civ.  Pro.  1902,  §§ 

any  mortgaged  estate,  whether  real  144,  188. 

or    personal,    may    prefer    a    bill    to  -^  Code    1884,    §§    2969-2979.     Code 

foreclose  the  same,  which  bill  may  1896,  §§  3838-3848.     As  to  powers  of 

be  heard,  tried  and  determined  ac-  sale  mortgages,  see  §  1758. 
cording   to   the   usages   in   chancery 
and  the  principles  of  equity. 


321  FORECLOSURE    AXD   REDEMPTION.  [§    1359. 

and  mention  the  time  and  place  of  sale.  A  sale  without  such  notice 
is  not  on  that  account  void  or  voidable;  but  the  officer  failing  to 
comply  with  these  provisions  is  guilty  of  a  misdemeanor,  and  pun- 
ishable accordingly,  and  is  moreover  liable  to  the  party  injured  for 
damages.  At  any  time  before  ten  in  the  forenoon  on  the  day  of 
sale,  the  owner  of  the  property  may  deliver  to  the  officer  making 
the  sale  a  plan  or  division  of  the  lands,  subscribed  by  him  and  bear- 
ing date  subsequent  to  the  advertisement,  according  to  which  so 
much  of  the  land  as  may  be  necessary  to  satisfy  the  debt  and  costs, 
and  no  more,  shall  be  sold.  If  no  such  plan  is  furnished,  the  land 
may  be  sold  without  division.  The  sale  must  be  made  between  the 
hours  of  ten  iji  the  forenoon  and  four  in  the  afternoon  of  the  day 
appointed.^^® 

The  real  estate  sold  may  be  redeemed  at  any  time  within  two 
years,  unless  upon  application  of  the  complainant  the  court  order  it 
to  be  sold  on  a  credit  of  not  less  than  six  months,  nor  more  than  two 
j^ears,  and  that,  upon  confirmation  by  the  court,  no  right  of  redemp- 
tion shall  exist  in  the  debtor  or  his  creditor,  but  that  the  title  of  the 
purchaser  shall  be  absolute.  This  right  of  redemption  does  not  ex- 
tend to  sales  made  under  a  deed  of  trust  or  mortgage  by  virtue  of  a 
power. ^^^  Eedemption  is  made  by  paying  the  purchaser  the  amount 
paid  by  him,  with  interest  at  the  rate  of  six  per  cent,  per  annum, 
together  with  all  other  lawful  charges.  If  the  purchaser  is  a  creditor 
by  judgment,  decree,  or  acknowledged  by  deed,  and  within  twenty 
days  after  the  sale  makes  an  advance  on  his  bid  and  credits  his  debt, 
he  may  hold  the  property  subject  to  redemption  at  the  price  bid  and 
such  advance.  Any  creditor  may  redeem  in  the  same  manner  by 
advancing  at  least  ten  per  cent,  on  the  sum  bid,  or  crediting  that 
amount  on  the  debt  owing  to  him.^-® 

§  1359.  Texas. — Foreclosure  is  by  suit  in  which  judgment  is  ren- 
dered and  a  sale  oTdered.-^^  The  ordinary  proceeding  for  foreclosure 
is  by  petition  in  the  clerk's  office  of  the  district  court  of  the  county 
where  such  land  or  a  part  of  it  is  situated,  stating  the  case  and  the 

--"  Upon  any  foreclosure  of  a  mort-  Tenn.  460.  Before  this  provision  a 
gage  or  of  a  deed  of  trust,  the  court  waiver  of  redemption  was  not  bind- 
may  order  that  the  property  be  sold  ing.  Cherry  v.  Bowen,  4  Sneed,  415. 
on  a  credit  of  not  less  than  six  -« Code  1884,  §§  2947-2951.  Code, 
months  nor  more  than  two  years;  1896,  §S  3811-3815. 
that  there  shall  be  no  right  of  re-  --*  Power  of  sale  mortgages  are  in 
demption,  but  the  purchaser's  title  use,  but  the  plaintiff  may  also  fore- 
shall  be  absolute;  and  that  the  sur-  close  under  the  statute.  The  power 
plus  be  paid  to  the  debtor.  Com-  of  sale  is  only  a  cummulative  rem- 
piled   Stats.   1871,   §   4489.  edy.     Morrison  v.  Bean,  15  Tex.  267, 

"'  See  Chadbourn  v.  Henderson,  58  269. 


§    1359.]  STATUTORY    PROVISIONS    RELATING   TO.  322 

amount  of  the  demand,  and  describing  the  property  mortgaged. 
Whereupon  the  mortgagor  is  summoned  to  appear  at  the  next  term 
of  the  court,  to  show  cause  why  judgment  should  not  be  rendered 
for  the  sum  due  on  the  mortgage,  with  interest  and  costs.  Judg- 
ment is  rendered  and  execution  issued  as  in  other  cases.^''"'  The  judg- 
ment against  other  persons  than  executors,  administrators,  or  guard- 
ians is  that  the  plaintiff  recover  his  debt,  damages,  and  costs,  and 
that  an  order  of  sale  issue  to  the  sheriff  or  any  constable  of  the 
county  directing  him  to  sell  as  under  execution,  and,  if  the  proceeds 
be  insufficient  to  pay  the  judgment  and  costs,  further  execution  may 
issue  for  the  balance.^  ^^ 

When  any  order  foreclosing  a  lien  is  made,  such  order  shall 
have  all  the  force  and  effect  of  a  writ  of  possession,  as  between 
the  parties  to  such  suit  of  foreclosure  and  any  person  claiming 
under  the  defendant  to  such  suit  by  any  right  acquired  pending 
such  suit,  and  the  court  shall  so  direct  in  the  judgment  providing 
for  the  issuance  of  such  order;  and  the  sheriff  or  other  officer  exe- 
cuting such  order  of  sale  shall  proceed  by  virtue  of  said  order  to 
place  the  purchaser  of  the  property  sold  under  the  same  in  possession 
thereof  within  thirty  days  after  the  day  of  sale.^^^' 

The  court  may  by  injunction  restrain  the  party  in  possession  from 
doing  any  act  to  the  injury  of  the  property  during  the  foreclosure  of 
a  mortgage,  or  after  a  sale  before  a  conveyance.^^^' 

After  the  death  of  the  mortgagor  proceedings  to  enforce  the 
mortgage  debt  must  be  taken  in  the  probate  court. ^^^  Instead  of 
ordering  a  sale  the  court  may  order  payment  to  be  made  out  of  the 
general  assets  if  this  be  beneficial  to  the  estate.     Any  creditor  of  a 

=?»  R.  S.  1889,  art.  1198,  §  11.     See,  der  for  the  sale  of  the  property  upon 

as     to    jurisdiction,     Cavanaugh     v.  which  he  has  such  mortgage  or  other 

Peterson,  47  Tex.  197.  lien,  or  so  much  of  said  property  as 

=^1 R    S.    1889   and   1895,   art.   1340,  may    be    required    to    satisfy    such 

1341  claim,  by  making  has  application  in 

See,  as  to  the  decree  of  sale,  Goss  writing,    and    having   such    executor 

V  Pilgrim    28  Tex.  263,  267;  Bishop  or  administrator  cited  to  appear  and 

V  Jones  28  Tex.  294,  321.  As  to  answer  the  same.  The  same  notice 
form  of  'decree,  see  Kenney  v.  Me-  shall  be  given  of  said  application  as 
Cleod    9  Tex    78    80  is   required   to   obtain   an   order   for 

='^Laws  1885,  ch.  8;  R.  S.  1889,  art.  the  sale  of  such  property.  Cannon 
1340  a-  R  S.  1895,  arts.  1340,  1341.  v.  McDaniel,  46  Tex.  303.  In  such 
^-'^  Comp  Laws  1888,  §  3474.  case  the  probate  court  must  order 
"*  Any  creditor  of  a  deceased  per-  the  sale,  even  if  the  mortgage  con- 
son  holding  a  claim  secured  by  tains  a  power.  This  is  revoked  by 
mortgage  or  other  lien,  which  claim  the  mortgagee's  death.  Fortson  v. 
has  been  allowed  and  approved  or  Caldwell,  17  Tex.  627:  Boggess  v. 
established  by  suit,  may  obtain  at  Lilly.  18  Jex.  200;  Buchanan  v. 
a  regular  term  of  the  court,  from  Monroe.  22  Tex.  537,  542:  Webb  v. 
the  county  court  of  the  county  Mallard,  27  Tex^  80,  83;  Gid^ings  v. 
where  the  letters  testamentary  or  of  Crosby,  24  Tex.  295,  299.  See  §  1792. 
administration  were  granted,  an  or- 


323  FORECLOSURE    AND   REDEMPTION.  [§    13G0. 

deceased  person  holding  a  claim  secured  by  mortgage  or  other  lien, 
which  claim  had  been  allowed  and  approved  or  established  by  suit, 
may  obtain  at  a  regular  term  of  the  court,  from  tiie  county  court 
of  the  county  where  the  letters  testamentary  or  of  administration 
were  granted,  an  order  for  the  sale  of  the  property  upon  which  he 
has  such  mortgage  or  other  lien,  or  so  much  of  said  property  as  may 
be  required  to  satisfy  such  claim,  by  making  his  application  in 
writing  and  having  such  executor  or  administrator  cited  to  appear 
and  answer  the  same.  And  in  case  the  mortgage  or  other  lien 
shall  be  upon  real  property  the  same  notice  shall  be  given  of  said 
application  as  is  required  to  obtain  an  order  for  the  sale  of  such 
property.^^^  If  one  joint  mortgagor  or  owner  of  the  equity  be  dead, 
the  mortgagee  must  pursue  his  remedy  against  the  representatives 
of  the  deceased  in  the  probate  court,  so  far  as  his  interest  is  con- 
cerned, and  the  interest  of  the  other  mortgagor,  who  is  living,  must 
be  foreclosed  in  the  ordinary  way  in  the  district  court.^^" 
Kedemption  may  be  had  until  the  sale,  but  not  afterwards. 

§  1360.  TJtah  Territory.^^^ — There  is  but  one  action  for  the  re- 
covery of  any  debt,  or  the  enforcement  of  any  right  secured  by 
mortgage.  In  such  action  judgment  is  rendered  for  the  amount 
found  due  the  plaintiff,  and  a  decree  is  entered  for  the  sale  of  the 
property  and  the  application  of  the  proceeds  to  the  payment  of  the 
expenses  of  sale,  the  costs  of  suit,  and  the  amount  due  the  plaintiff. 
A  judgment  is  entered  for  any  deficiency  there  may  be  against  the 
mortgagor  and  others  liable  for  the  debt.^^^  Any  surplus  proceeds  of 
sale  must  be  paid  to  the  person  entitled  to  it,  and  in  the  mean  time 
deposited  in  court.  When  the  debt  is  not  all  due,  the  sale  must 
cease  as  soon  as  sufficient  property  has  been  sold  to  satisfy  the 
amount  due;  and  as  often  as  more  becomes  due  for  principal  or 
interest,  the  court  may  on  motion  order  a  further  sale.  But  if  ths 
property  cannot  be  sold  in  portions  without  injury  to  the  parties, 
the  whole  may  be  ordered  to  be  sold  in  the  first  instance,  and  the 
entire  debt  and  costs  paid,  with  a  proper  rebate  of  interest  when 
necessary. 

"^  Sayles's  Civ.  Stats.  1889,  §  2067;  dorser  of  a  note  secured  by  mortgage 

R.  S.  1895,  art.  2121.  may   be  joined    in   a   proceeding   to 

-^''  Martin  v.  Harrison,  2  Tex.  456,  foreclose  the  mortgage,  and  it  is  not 

458;    Buchanan   v.   Monroe,   22   Tex.  necessary  to  state  a  separate  cause 

537;  Wiley  v.  Pinson,  23  Tex.  486.  of    action    against    each.     Smith    v. 

*•  Compiled    Laws    1888,    §§    3460-  McEvoy,  8  Utah,  58,  29  Pac.  1030. 
3462.     R.  S.  1898,  §§  3498-3305.     Un-        "^  An   execution   cannot   issue    for 

der  §   3220,   Comp.   Laws  1888,  pro-  any  deficiency  until   a  judgment  is 

viding  that  several  causes  of  action  entered  therefor  after  the  return  of 

arising    out    of    the    same    contract  the  officer.     Russell  v.  Hank,  9  Utah, 

may  be  united,  the  maker  and  in-  309,  34  Pac.  245. 


§    13C1.]  STATUTORY    PROVISIONS    RELATING    TO.  324 

Property  sold  under  foreclosure  is  subject  to  redemption  as  in  case 
of  sales  under  execution. 

§  1361.  Vermont.^^" — Foreclosure  may  be  had  in  equity  under 
general  chancery  jurisdiction,  or  a  petition  in  equity  for  foreclosure 
may  be  made  with  the  same  effect  as  by  bill.^*° 

Whenever  a  decree  shall  have  been  made  by  the  court  to  foreclose 
the  right  in  equity  of  redeeming  mortgaged  premises,  if  the  premises 
are  not  redeemed  agreeably  to  the  decree,  the  clerk  of  the  court  of 
chancery  may  issue  a  writ  of  possession  to  put  the  complainant  in 
possession  of  the  premises,  which  is  executed  in  the  same  manner,  and 
with  the  same  effect,  as  similar  writs  issued  by  a  court  of  law,  after 
judgment  in  an  action  of  ejectment. 

When  the  time  of  redemption  has  expired,  the  decree  in  chancery 
or  a  copy  of  it  must  be  recorded  in  the  town  clerk's  office  where  the 
land  is  situated,  within  thirty  days  after  the  expiration  of  the  time 
of  redemption.  The  foreclosure  is  not  effectual  against  subsequent 
purchasers,  mortgagees,  or  attaching  creditors,  unless  the  decree  is 
so  recorded,  or  afterwards  left  for  record,  before  they  acquire  any 
rights. 

Foreclosure  may  also  be  made  by  action  of  ejectmenV*^  in  which 
the  court  ascertains  the  sum  equitably  due  to  the  plaintiff  on  the 
mortgage  or  deed  with  defeasance,  and  orders  that  if  the  defendant 
or  his  representatives  shall  pay  or  cause  to  be  paid  the  amount  then 
due  the  plaintiff,  with  legal  interest,  to  the  clerk  of  the  court,  by  a 
time  limited  by  the  court,  not  exceeding  one  year  from  the  rendition 
of  the  judgment,  then  such  judgment  shall  be  vacated.  If  the  debt 
is  payable  by  instalments,  a  part  of  which  is  not  due  at  the  time  the 
judgment  is  rendered,  the  court  may  order  and  decree  a  redemption 
at  any  future  period,  by  instalments  or  otherwise,  as  to  the  court 

-^^  R.   L.   1880,    §§    760-762,   767-779.  nically  a   mortgage  by   deed,   to  be 

This  is  a  strict'  foreclosure.  void  upon  condition,  or  having  a  de- 

"°  Ross    V.    Shurtleff,    55    Vt.    177.  feasance  under  seal.   Miller  v.  Hamb- 

The  form  of  the  petition  and  decree  let,  11  Vt.  499.     The  action  may  be 

are  given  R.  L.  1880,  §  760.  maintained   although  the  statute  of 

On  bill  or  petition  to  foreclose,  any  limitations  has  run  against  the  debt, 

subsequent    attaching    creditor    may  Reed  v.  Shepley,  6  Vt.  602.     The  note 

be  made  defendant.  secured   by   the   mortgage   must   be 

A  petition  for  foreclosure  does  not  produced;  and  a  variance  between 
require  the  fulness  and  particularity  the  note  produced  and  that  describ- 
required  by  a  bill.  A  general  and  ed  in  the  mortgage  cannot  be  ex- 
comprehensive  statement  of  ultimate  plained  by  parol  as  a  mistake, 
facts  constituting  the  ground  of  Edgell  v.  Stanford,  3  Vt.  202.  But 
right  and  liability  is  sufficient,  it  need  not  be  produced  when  the 
Sprague  v.  Rockwell,  51  Vt.  401.  mortgagor  has  released  the  equity  in 

="R.    L.    1880,    §8    1253-1258.     This  satisfaction    of    the    note.     Marshall 

mode    of    foreclosure    is    applicable  v.  Wood,  5  Vt.  250. 
only  where  the  conveyance  is  tech- 


325  FORECLOSURE  AND  REDEMPTION.   [§§  1362,  1363, 

appears  just  and  equitable,  not  more  than  one  year  after  the  last 
instalment  becomes  due."^  If  the  defendant  pays  within  the  time 
limited  by  the  court  the  sums  so  ordered  to  be  paid,  the  clerk  de- 
livers to  him  a  certificate  of  payment,  which,  when  recorded  in  the 
proper  registry  of  deeds,  defeats  the  mortgage.-*^  If  the  defendant 
does  not  pay  as  ordered  by  the  time  limited,  the  plaintiff  has  his 
writ  of  possession  for  the  premises  recovered,  and  for  his  damages 
and  costs,  and  holds  the  premises  discharged  from  all  right  and 
equity  of  redemption. 

§  1362.  Virginia. — Foreclosure  is  under  the  general  jurisdiction 
of  courts  of  equity.  Mortgages,  however,  are  now  seldom  or  never 
used  in  this  State,  deeds  of  trust  being  substituted  in  their  place.^** 
There  are  no  provisions  of  statute  relating  specifically  to  the  fore- 
closure O'f  mortgages.  There  are  special  provisions  relating  to  deeds 
of  trust,'*^  and  courts  of  equity  may  be  invoked  in  any  case  to 
supervise  the  execution  of  them.^*''  There  are  general  provisions 
relating  to  judicial  sales  which  would  be  applicable  to  a  foreclosure 
sale  under  decree  of  court,  and  to  sales  under  trust  deeds  when 
made  under  direction  of  court.  These  authorize  the  court  to  direct 
the  sale  to  be  made  for  cash,  or  on  such  credit  and  terms  as  it  may 
deem  best;  and  it  may  appoint  a  commissioner  to  make  the  sale, 
who  must  give  bonds  before  receiving  any  money  under  the  decree. 
When  no  special  commissioner  is  appointed,  the  sheriff  or  sergeant 
may  act.^*^ 

§  1363.  Washington.^*^ — When  default  is  made  in  the  perform- 
ance O'f  any  condition  contained  in  a  mortgage,  the  mortgagee   or 

"-  It  is  held  that  if  the  mortgage  crops  as  his.    Wolcott  v.  Hamilton, 

embraces  several  parcels  which  have  61  Vt.  79,  17  Atl.  39. 

subsequently  been  transferred  to  dif-  ="  Pitzer  v.  Burns,  7  W.  Va.  63,  74. 

ferent   persons,   the   mortgage   must  "°  See  chapter  xxxix. 

be    apportioned    upon    the    land    ac-  ="  Michie  v.  Jeffries,  21  Graft.  334. 

cording    to     their    value,     and     the  "'  All    sales    for    the    payment    of 

owner  of  each  given  a  time  to  re-  debts  contracted  or  liabilities  incur- 

deem  his  portion,  and  upon  failure  red  prior  to  April  10,  1865,  must  be 

to  do  so  he  is  foreclosed.     If  neither  upon  a  credit  of  not  less  than  three 

of  such  owners  redeem,  that  is  the  or  more  than  six  equal  instalments 

end  of  it.     If  one  redeems  his  por-  annually  from  the  day  of  sale,  ex- 

tion,  and  the  others  do  not,  then  the  cept  that  the  costs  of  the  suit  and 

one  redeeming  must  also  redeem  the  sale  must  be  paid  in  cash.    The  com- 

portions  of  the  others,  or  forfeit  the  missioner  cannot  sell  for  less  than 

whole  estate,  and  if  he  does  so  re-  three-fourths  of  the  assessed  value, 

deem    he    takes    the    whole    estate.  Code    1873,    p.    1123.     The    commis- 

Gates  v.  Adams,  24  Vt.  70.  sioner  or  officer  is  allowed  for  serv- 

"'The    result   of   a   failure   to   so  ices   5°/    on  the  first  $300,   and  2% 

record  the  decree  is  that  the  mort-  on  all  above  that, 

gagor,  when  allowed  to  occupy  the  "^  G.   S.   1891,   Code  of  Proced.   §§ 

premises,   must  be   regarded,   as   to  625-635.     2   Annot  Codes  and  Stats, 

his  creditors,  as  a  mortgagor  in  pos-  1897,  §§  5885-5896. 
session,  and  they  may  levy  on  the 


§    1363.]  STATUTORY    PROVISIONS    RELATING   TO.  326 

his  assigns  may  proceed,  in  the  Superior  Court  of  the  county  where 
the  land  or  some  part  thereof  lies,  to  foreclose  the  equity  of  redemp- 
tion. When  there  is  no  express  agreement  in  the  mortgage,  nor  any 
separate  instrument  given  for  the  payment  of  the  sum  secured  there 
by,  the  remedy  is  confined  to  the  property  mortgaged.  In  rendering 
judgment  of  foreclosure  the  court  orders  the  mortgaged  premises,  or 
so  much  thereof  as  may  be  necessary,  to  be  sold  to  satisfy  the  mort- 
gage and  cost  of  the  action.  The  payment  of  the  mortgage  debt, 
with  interest  and  costs,  at  any  time  before  sale,  satisfies  the  judg- 
ment. When  there  is  an  express  agreement  for  the  payment  of  the 
sum  of  money  secured  contained  in  the  mortgage  or  any  separate 
instrument,  the  court  directs  in  the  order  of  sale  that  the  balance 
due  on  the  mortgage,  with  costs  remaining  unsatisfied  after  the  sale, 
shall  be  satisfied  from  any  property  of  the  mortgage  debtor.^*^ 

The  decree  may  be  enforced  by  execution,  as  an  ordinary  decree 
for  the  payment  of  money.  The  sheriff  thereupon  proceeds  to  sell 
the  mortgaged  premises,  or  so  much  thereof  as  may  be  necessary  to 
satisfy  the  judgment,  interest,  and  costs,  as  upon  execution;  and  if 
any  part  of  the  judgment,  interest,  and  costs  remain  unsatisfied, 
the  sheriff  forthwith  proceeds  to  levy  the  residue  upon  the  property 
of  the  defendant. 

The  plaintiff  cannot  proceed  to  foreclose  his  mortgage  while  he 
is  prosecuting  any  other  action  for  the  same  debt  or  matter  which 
is  secured  by  the  mortgage,  or  while  he  is  seeking  to  obtain  exe- 
cution of  any  judgment  in  such  otlier  action ;  nor  can  he  prosecute 
any  other  action  for  the  same  matter  while  he  is  foreclosing  his 
mortgage  or  prosecuting  a  judgment  of  foreclosure. 

Whenever  a  complaint  is  filed  for  the  foreclosure  of  a  mortgage 
upon  which  there  shall  be  due  any  interest  or  instalment  of  the 
principal,  and  there  are  other  instalments  not  due,  if  the  defend- 
ant pay  into  court  the  principal  and  interest  due,  with  costs,  at 
any  time  before  the  final  judgment,  proceedings  thereon  shall  be 
stayed,  subject  to  be  enforced  upon  a  subsequent  default  in  the 
payment  of  any  instalment  of  the  principal  or  interest  thereafter 
l)ecoming  due.  In  the  final  judgment,  the  court  directs  at  what 
time  and  upon  what  default  any  subsequent  execution  shall  issue. 
In  such  cases,  after  final  judgment,  the  court  ascertains  whether 
the  property  can  be  sold  in  parcels;  and  if  it  can  be  done  without 

"»By  Laws  of  1897,  p.  98,  §  1.     In  or  assignee  shall  be  limited  to  the 

all   proceedings   for   the   foreclosure  property  included  in  the  mortgage, 

of  mortgages  hereafter  executed,  or  Of  course  this  Act  only  operates  on 

on    judgments    rendered    upon    the  mortgages  executed  after  the  date  of 

debt  thereby  secured,  the  mortgagee  this  Act,  June  9,  1897. 


327  rORECLOSURE*AND   REDEMPTION.       [§§    1364,    1365. 

injury  to  the  interests  of  the  parties,  the  court  directs  so  much  only 
of  the  premises  to  be  sold  as  may  be  sufficient  to  pay  the  amount 
then  due  on  the  mortgage,  with  costs,  and  the  judgment  remains 
and  may  be  enforced  upon  any  subsequent  default,  unless  the 
amount  due  shall  be  paid  before  execution  of  the  judgment  is  per- 
fected. 

If  the  mortgaged  premises  cannot  be  sold  in  parcels,  the  court 
orders  the  whole  to  be  sold,  and  the  proceeds  of  the  sale  applied 
first  to  the  payment  of  the  principal  due,  interest,  and  costs,  and 
then  to  the  residue  secured  by  the  mortgage  and  not  due;  and 
if  the  residue  do  not  bear  interest,  a  deduction  is  made  therefrom 
by  discounting  the  legal  interest;  and  in  all  cases  when  the  pro- 
ceeds of  the  sale  are  more  than  sufficient  to  pay  the  amount  due 
and  costs,  the  surplus  is  paid  to  the  mortgage  debtor,  his  heirs  and 
assigns. 

The  debtor  or  his  successor  in  interest  may  redeem  any  real 
estate  sold  under  foreclosure  at  any  time  within  one  year  from  the 
date  of  the  sale,  by  paying  the  amount  of  purchase-money  with 
interest  at  the  rate  of  one  per  centum  per  month  thereon  from 
the  date  of  sale.^^° 

§  1364.  West  Virg-inia. — The  foreclosure  of  mortgages  in  this 
State,  the  same  as  in  Virginia,  is  by  bill  in  chancery,  and,  as  is  the 
case  in  that  State,  deeds  of  trust  have  been  generally  substituted 
for  mortgages.'^^  There  are  no  statutory  provisions  in  regard  to  en- 
forcing the  latter;  though  there  are  such  in  regard  to  sales  under 
deeds  of  trust,-^-  which  may  be  made  in  accordance  with  the  pro- 
visions of  the  deed  and  the  statute  without  the  intervention  of  the 
court,  or  may  be  supervised  by  it  in  equity.  All  judicial  sales  may 
be  for  cash,  or  on  such  credit  and  terms  as  the  court  may  deem 
best;  and  it  may  appoint  a  special  commissioner  to  make  such  sale. 
If  no  commissioner  is  appointed  for  the  purpose,  the  sheriff  or  ser- 
geant executes  the  decree. ^°^ 

§  1365.  Wisconsin.-^* — In  actions  for  the  foreclosure  of  mort- 
gages upon  real  estate,  if  the  plaintiff  recover,  the  court  shall  ren- 

""  G.  S.   1891,  Code  Proced.   §  512.  Only  one  case  relating  to  mortgages 
2  Codes  Stats.   1897,   8  5295.     If  the  is  found  in  the  reports  of  this  State, 
mortgagor   does   not  redeem  within  and   the   mortgage  in   that  instance 
the   time  allowed,   he  cannot  after-  was  made  in  New  York. 
wards   recover  them  from   the  pur-  -'-  See  chapter  xxxix. 
chaser,  or  his  grantee,  on  the  ground  "•'' Code  1891,  ch.  132. 
that  no  valid   deed   was   ever  made  -'^'  The  terms  of  the  statute  must 
by  the  sheriff.     Stevens  v.  Ferry,  48  be  followed  with  reasonable  strict- 
Fed.  7.  ness.    Spengler  v.  Hahn,  95  Wis.  472, 

"'"  Pitzer  V.  Burns,  7  W.  Va.  63,  74.  70  N.  W.  3154,  3162.     2  Annot.  Stats. 


§    1365.]  STATUTORY    PROVISIONS    RELATING   TO.  338 

der  judgment  of  foreclosure  and  sale  of  the  mortgaged  premises. 
The  proceeds  of  every  sale  made  under  such  judgment  are  applied 
to  the  discharge  of  the  debt  adjudged  to  be  due,  and  the  costs 
awarded ;  and  if  there  be  any  surplus,  it  is  brought  into  court  for  the 
use  of  the  defendant,  or  of  any  person  who  may  be  entitled  thereto, 
subject  to  the  order  of  the  court.  If  such  surplus,  or  any  part 
thereof,  remain  in  court  for  the  term  of  three  months  without  being 
applied  for,  the  court  directs  the  same  to  be  put  out  at  interest  for 
the  benefit  of  the  defendant,  his  representatives  or  assigns,  to  be 
paid  to  them  by  the  order  of  such  court. 

In  all  such  actions,  the  plaintiff  may,  in  his  complaint,  unite 
with  his  claim  for  a  foreclosure  and  sale  a  demand  for  judgment 
for  any  deficiency  which  may  remain  due  to  the  plaintiff,  after  sale 
of  the  mortgaged  premises,  against  every  party  who  may  be  per- 
sonally liable  for  the  debt  secured  by  the  mortgage,  whether  the 
mortgagor  or  other  persons,  if  upon  the  same  contract  which  the 
mortgage  is  given  to  secure;  and  judgment  of  foreclosure  and  sale, 
and  also  for  any  such  deficiency  remaining  after  applying  the  pro- 
ceeds of  sale  to  the  amount  adjudged  to  be  due  for  principal,  in- 
terest, and  costs,  may  in  such  case  be  rendered.  Such  judgment 
for  deficiency  is  ordered  in  the  original  judgment,  and  separately 
rendered  against  the  party  liable,  on  or  after  the  coming  in  and 
confirmation  of  the  report  of  sale,  and  is  docketed  and  enforced  as 
in  other  cases.  ^^^ 

Whenever  there  is  due  any  interest,  or  any  instalment  of  the 
principal,  and  there  be  other  portions  or  instalments  to  become 
due  subsequently,  the  action  is  dismissed  upon  the  defendant's  bring- 
ing into  court,  at  any  time  before  judgment,  the  principal  and 
interest  due,  with  the  costs.  If  after  judgment  is  entered  the  de- 
fendant brings  into  court  the  principal  and  interest  due,  with  the 
costs,  proceedings  on  the  judgment  are  stayed;  but  the  court  may 
enforce  the  judgment  by  a  further  order  upon  a  subsequent  de- 
fault in  the  payment  of  any  instalment  of  the  principal  or  of  inter- 
est. The  court,  before  rendering  judgment,  directs  a  reference  to 
some  proper  person,  to  ascertain  and  report  the  situation  of  the 
mortgaged  premises,  and  whether  they  can  be  sold  in  parcels  with- 

1889,    ch    135,    §§    3154-3169.      R.    S.  mortgage  and  one  to  recover  on  the 

1898,  ch.  135,  §§  3154-3169.  mortgagor's  personal   liability,  both 

-^^  The   judgment   for   a   deficiency  growing  out  of  the  same  transaction 

cannot  be   rendered  with   the  judg-  may  be  joined  under  the  statute  pro- 

ment  of  foreclosure.     Welp  v.  Gun-  vided  the  mortgagor  is  the  only  de- 

ther,  48  Wis.  543,  4  N.  W.  647.  fendant.  Endress  v.  Shrove,  110  Wis. 

A    cause    of    action    to    enforce    a  133,  85  N.  W.  653. 


329  FORECLOSURE   AXD   REDEMPTION".  [§    1365. 

out  injury  to  the  interests  of  the  parties  ;-■'"'  and  if  it  appear  that 
they  can  be  so  sold,  the  judgment  directs  a  sale  in  parcels,  specify- 
ing them,  or  so  much  thereof  as  will  be  sufficient  to  pay  the  amount 
then  due;  and  such  judgment  remains  as  security  for  any  subse- 
quent default.  If  there  be  any  default  subsequent  to  such  judg- 
ment, the  court  may,  upon  petition  of  the  plaintiff,  by  a  fur- 
ther order,  founded  upon  such  first  judgment,  direct  a  sale  of  so 
much  of  the  mortgaged  premises  to  be  made  under  the  said  judg- 
ment as  will  be  sufficient  to  satisfy  the  amount  so  due,  with  the 
costs  of  such  petition  and  the  subsequent  proceedings  thereon;  and 
the  same  proceedings  are  had  as  often  as  a  default  happens.^^'^  If  it 
appear  to  the  court  that  the  mortgaged  premises  are  so  situated 
that  they  cannot  be  sold  in  parcels  without  injury  to  the  interests 
of  the  parties,  or  that  the  sale  of  the  whole  will  be  most  beneficial  to 
them,  the  court  may  adjudge  the  sale  of  the  whole  accordingly, 
in  which  case  the  proceeds  of  sale,  after  deducting  the  costs  of  the 
action  and  of  sale,  are  applied  to  the  payment  of  the  sums  then 
due  and  also  to  become  due  thereafter;  deducting  from  all  sums 
not  due,  which  do  not  bear  interest,  interest  from  the  time  of  pay- 
ment to  the  time  when  the  same  are  payable;  or  the  court  may 
direct  the  balance  of  -the  proceeds  of  sale,  after  paying  the  sum 
then  due,  with  such  costs,  to  be  placed  at  interest  for  the  benefit  of 
the  plaintiff,  to  be  paid  to  him  as  such  subsequent  instalments  be- 
come due,  with  the  interest  thereon. 

The  judgment  fixes  the  amount  of  the  mortgage  debt  then  due, 
and  also  the  amount  of  each  instalment  thereafter  to  grow  due, 
and  the  several  times  when  they  will  become  so  due,  and  adjudges 
that  the  mortgaged  premises  be  sold  for  the  payment  of  the  amount 
adjudged  to  be  then  due,  and  of  all  instalments  which  shall  there- 
after grow  due  before  the  sale,  or  so  much  thereof  as  may  be  suffi- 
cient to  pay  such  amount,  including  costs  of  sale;  but  no  such  sale 
shall  be  made  until  the  expiration  of  one  year  from  the  date  of 
such  judgment  or  order  of  sale;^^^  and  when  judgment  is  for  instal- 
ments due  and  to  grow  due,  and  payment  shall  be  made  within  the 
year  of  the  instalments  found  due  at  the   date  of  the  judgment, 

""  It  is  a  material  error  to  omit  but   does   not  give  the  year's  right 

a  judical  determination  of  this  mat-  of  redemption  allowed  by  that  law 

ter.     Hiles  v.  Brooks,  105  Wis.  256,  after  sale,  does  not  impair  the  obli- 

81  N.  W.  422.  gation  of  contracts  when  applied  to 

-'•  Supp.   to   R.   S.   1883,   §   3159,  p.  mortgages    given    before    its    enact- 

682.  ment,  since  the  time  for  redemption 

'^"  Laws  Wis.   1877,  ch.  143,  which  is  the  same  in  either  case,  and  the 

postpones    foreclosure    sales,  for    a  remedy    not    materially    changed, 

year    after   judgment,    and    provides  Northwestern    Mut.    L.    Ins.    Co.    v. 

for  the  repeal  of  Laws  1859,  ch.  195,  'Neeves,  46  Wis.  147,  49  N.  W.  832. 


§    13G5.]  STATUTORY    PROVISIONS    RELATING    TO.  330 

with  interest  and  costs,  no  sale  shall  be  made  upon  any  instalment 
growing  due  after  the  date  of  the  judgment,  until  the  expiration 
of  one  year  after  the  same  shall  become  due  f^^  but  in  all  cases  the 
parties  may,  by  stipulation  in  writing,  to  be  filed  with  the  clerk, 
consent  to  an  earlier  sale.  These  provisions  do  not  apply  to  judg- 
ments of  foreclosure  and  sale  of  mortgages  given  by  any  railroad 
corporation;  but  such  sales  may  be  made  immediately  after  the 
rendition  of  the  judgment. ^'^^ 

The  sheriff  or  referee  who  makes  sale  of  mortgaged  premises 
under  a  judgment  therefor  shall  give  notice  of  the  time  and  place 
of  sale,  in  the  manner  provided  by  law  for  the  sale  of  real  estate 
upon  execution,  or  in  such  other  manner  as  the  court  shall  in  the 
judgment  direct.^**^  He  shall,  within  ten  days  thereafter,  file  with 
the  clerk  of  the  court  a  report  of  the  sale,  and  immediately  after  the 
sale  shall  pay  to  the  parties  entitled  thereto,  or  their  attorneys,  the 
proceeds  of  the  sale,  after  deducting  the  costs  thereof,  unless  other- 
wise ordered  by  court. 

Upon  any  such  sale  being  made,  the  sheriff  or  referee  making 
the  same,  on  compliance  with  its  terms,  shall  make,  execute,  and 
deliver  to  the  purchaser  a  deed  of  the  premises  sold,  setting  forth 
each  parcel  of  land  sold  to  him,  and  the  sum  paid  therefor,  which 
deed,  upon  the  confirmation  of  such  sale,  vests  in  the  purchaser  all 
the  right,  title,  and  interest  of  the  mortgagor,  his  heirs,  personal 
representatives,  and  assigns,  in  and  to  the  premises  sold,  and  is  a 
bar  to  all  claim,  right,  or  equity  of  redemption  therein,  of  and' 
against  the  parties  to  such  action,  their  heirs  and  personal  representa- 
tives, and  also  against  all  persons  claiming  under  them  subsequent 
to  the  filing  O'f  the  notice  of  the  pendency  of  the  action  in  which 
such  judgment  was  rendered;  and  the  purchaser  is  let  into  the  pos- 
session of  the  premises  so  sold,  on  production  of  such  deed,  or  a  duly 

=*'*  The  judgment  referred  to  is  the  ch.    135,    §§    3135-3137.      The    mort- 

formal    entry    by    the    clerk    of    the  gagor  has  the  paramount  and  abso- 

court,  completed  bq  as  to  show  the  lute  right  to  redeem;   and  upon  his 

total    amount    which    must   be    paid  doing  so  a  deposit  previously  made 

in   order  to  redeem,  including  the  by  the  holder  of  a  subsequent  lien, 

costs  taxed.     Andrews  v.  Welch,  47  for    the   purpose   of   redeeming,    be- 

Wis.  132,  2  N.  W.  98.  comes  of  no  effect.     Wylie  v.  Welch, 

'•"'"For  provision  in  case  any  part  51  Wis.  351,  8  N.  W.  207. 
of  the  premises  is  a  homestead,  see  ="  The  notice  of  sale  must  be  pub- 
,2  Annot.  Stats.  1889,  ch.  135,  §  3163.  lished  for  six  full  weeks  after  the 
For  provision  as  to  interest  on  expiration  of  one  year  from  the  date 
judgment  and  instalments,  see  2  of  the  judgment.  Kopmeier  v.  O'Neil, 
Annot.  Stats.  1889,  ch.  135,  §  3164.  47  Wis.  593,  3  N.  W.  365;  North- 
As  to  redemption  of  the  whole  or  western  Mut.  Life  Ins.  Co.  v.  Neeves, 
part  before  sale,  see  2  Annot.  Stats.  46  Wis.  147,  49  N.  W.  832. 


331  FORECLOSURE   AND    KEDE.MPTION.  [§    13GG. 

certified  copy,  and  tlie  court  may,  if  necessary,  issue  a  writ  of  as- 
sistance to  deliver  such  possession.^**- 

There  is  no  redemption  after  foreclosure  by  action,  though  there 
is  a  right  of  redemption  for  one  year  after  a  foreclosure  by  adver- 
tisement.-**^ 

§  1366.  WyGming.-"* — In  an  action  to  foreclose  a  mortgage  given 
to  secure  the  payment  of  money,  or  to  enforce  a  specific  lien  for 
mo'uey,  the  plaintiff  may  also  ask  in  his  petition  a  judgment  for  the 
money  claimed  to  be  due.  A  sale  of  the  premises  shall  be  ordered; 
and  when  the  premises  to  Be  sold  are  in  one  or  more  tracts,  the 
court  may  direct  the  officer  who  makes  the  sale  to  subdivide,  ap- 
praise, and  sell  the  same  in  parcels,  or  to  sell  any  one  of  the  tracts 
as  a  whole.  When  the  mortgaged  property  is  situate  in  more  than 
one  county,  the  court  may  order  the  sheriff  or  master  of  each  to 
make  sale  of  the  property  in  his  county,  or  may  direct  one  officer 
to  sell  the  whole.  The  court  may  direct  that  the  property,  when  it 
consists  of  a  single  tract,  be  sold  as  one  tract,  or  in  separate  parcels, 
and  shall  direct  whether  appraisers  shall  be  selected  for  each  county, 
or  one  set  for  all;  and  shall  also  direct  whether  publication  of  the 
sale  shall  be  made  in  all  the  counties  or  in  one  county  only. 

-^-  This  provision  defines  the  rights  see  2  Annot.  Stats.  1889,  §  3187.     See 

of  the  purchaser  after  confirmation  McBride  v.  Wright,  75  Wis.  306,  43 

of   sale.    Welp   v.    Gunther,    8   Wis.  N.  W.  955. 

543;  Wcehler  v.  Endter,  46  Wis.  301,  ^"^  R.  S.   1889,   §   3533. 

1  N.  W.  329;  50  N.  W.  1099.  ="  R.   S.   1887,   §§   2410,  2663,  2664; 

As  to  filing  notice  of  lis  pendens,  R.  S.  1899,  §§  3495,  3757,  3758. 


CHAPTER  XXXI. 

THE  PARTIES  TO  AN  EQUITABLE  SUIT   FOR  FORECLOSURE. 

I.  Of  parties  plaintiff,  1368-1393.         |  II.  Of  parties  defendant,  1394-1442. 

§  1367.  General  principles. — In  determining  who  are  the  proper 
and  necessary  parties  to  a  bill  to  foreclose  a  mortgage,  two  funda- 
mental principles  in  all  proceedings  in  equity  must  be  kept  in  view: 
first,  that  no  one  shall  be  adjudged  as  to  his  rights  except  he  is 
befoTC  the  court;  and  second,  that  the  rights  of  all  persons  interested 
in  the  object  of  the  suit  shall  he  provided  for  in  the  determination  of 
it.  It  is  the  constant  aim  of  a  court  of  equity  to  do  complete  justice, 
by  deciding  upon  and  settling  the  rights  of  all  persons  interested  in 
the  subject  of  the  suit,  to  make  the  performance  of  the  order  of  the 
court  perfectly  safe  to  those  who  are  compelled  to  obey  it,  and 
to  prevent  further  litigation.^  It  is  a  maxim,  as  stated  by  Lord 
Talbot,  that  "a  court  of  equity  in  all  cases  delights  to  do  complete 
justice,  and  not  by  halves."-  Therefore  it  is  generally  essential 
that  all  persons  materially  interested  in  the  subject-^matter  of  the 
suit  shall  be  made  parties  to  it,  either  as  plaintiffs  or  defendants.^ 
Tliis  is,  however,  a  general  statement,  and  as  a  practical  rule  is  sub- 
ject to  many  limitations.  Those  who  are  indirectly  or  consequently 
interested  in  the  mortgage  debt  or  in  the  mortgaged  premises  are 
not  necessarily  included  among  the  proper  parties  to  the  suit.  The 
interest  in  the  object  of  the  suit  must  be  apparent  upon  the  record. 
When  it  is  said  that  a  person  materially  interested  should  be  made 
a  party  to  the  suit,  the  materiality  of  the  interest  is  relative  to  the 
case,  and  to  the  prayer  of  the  bill.     For  instance,  a  mortgagee  may 

'  Lord  Redesdale's  Pleadings,  164.      Wm.    Cxrant,   in   Wilkins   v.    Fry,   1 
=  Knight  V    Knight,   3  P.   W.    331,    Mer.    244,   262.   per   Lord    Redesdale, 

333  PI.  164;  per  Lord  Langdale,  in  Rich- 

3  Per  Lord  Eldon,  in  Cockburn  v.     ardson  v.  Hastings,  7  Beav.  323,  326. 

Thompson,  16  Ves.  321,  325;  per  Sir 

332 


333       PARTIES  TO  AX  EQUITABLE  SUIT  FOR  FORECLOSURE.  [§  1367. 

pray  for  a  foreclosure  against  the  mortgagor  and  not  against  a  sub- 
sequent incumbrancer,  in  wMch  case  such  incumbrancer  is  not  ma- 
terially interested  in  the  object  of  the  suit.  Then,  as  we  shall  pres- 
ently notice  more  fully,  the  interests  which  persons  have  in  the 
debt  and  in  the  equity  of  redemption  may  be  represented  by  others, 
as  by  executors  and  administrators,  and  by  trustees.  Moreover,  the 
suit  may  be  brouglit  or  defended  by  persons  iaterested  on  be- 
half of  themselves  and  of  otli-ers,  as  where  the  number  is  too  large 
to  make  it  practicable  to  bring  all  of  them  before  the  court.  In 
several  other  ways  the  general  rule  founded  upon  interest  is  modi- 
fied in  the  practical  application  of  it;  and  these  exceptions  will  ap- 
pear under  the  particular  applications  of  the  rule  to  the  parties  inter- 
ested in  the  mortgage  debt  and  property  to  be  made  in  this  chapter. 

Of  course,  when  neither  party  to  a  mortgage  has  assigned  his  in- 
terest, or  done  anything  to  affect  it  in  any  way  down  to  the  time 
of  the  bringing  of  the  suit  to  foreclose  it,  the  mortgagor  and  mort- 
gagee remain  the.  only  parties  to  be  brought  before  the  court.  But 
this  simple  state  of  facts  may  be  changed  to  one  of  great  complica- 
tion by  events  subsequent  to  tlie  mortgage;  and  the  changes  which 
thus  take  place  give  rise  to  a  great  many  questions  as  to  the  proper 
and  necessary  parties  to  a  suit  for  foreclosure. 

These  general  principles  of  equity  respecting  the  parties  to  suits 
have  been  embodied  in  the  codes  adopted  in  several  of  the  States, 
and  extended  to  all  actions,  whether  such  as  were  formerly  suits  in 
equity  or  distinctively  suits  at  law.  These  codes  provide  that  all 
persons  having  an  interest  in  the  subject  of  the  action,  or  in  obtain- 
ing the  relief  demanded,  may  be  joined  as  plaintiifs.*  "Of  the 
parties  to  the  action,  those  who  are  united  in  interest  must  be  joined 
as  plaintiffs  or  defendants ;  but  if  the  consent  of  any  one  who  should 
have  been  joined  as  plaintiff  cannot  be  obtained,  he  may  be  made  a 
defendant,  the  reason  thereof  being  stated  in  the  complaint.  When 
tTie  question  is  one  of  a  common  or  general  interest  of  many  persons, 
or  when  the  parties  are  very  numeroois,  and  it  may  be  impracticable 
to  bring  them  all  before  the  court,  one  or  more  may  sue  or  defend  for 
the  benefit  of  the  whole. '^^ 

'Pomeroy's  Remedies,  §  116.  Ohio:     R.  S.  1880,  §§  5007,  5008. 

For  a  statement  of  the  provisions  Indiana:     R.  S.  1888,  §  269. 

in  several  States  abolishing-  all  dis-  Iowa:     R.  Code  1880,  §§  2548,  2549. 

tinction   between    suits    at   law    and  Wisconsin:      Annot.   Stats.   1889,   § 

in  equity,  see  chapter  xxx;  and  also  2604. 

see   Pomeroy's    Remedies,    §§    28-30,  Kansas:     G.  S.  1889,  §§  4114,  4115; 

44.  Code  of  Civ.  Pro.  §§  37,  38. 

=  New  York:     Code  of  Civ.  Proced.  Nebraska:      Comp.   Stats.   1885,   p. 

§  448.  633,  §§  42,  43. 


S    1368.]  OF    PARTIES    PLAINTIFF.      '  334 

In  the  same  States  it  is  provided  that  an  executor,  administrator, 
trustee  of  an  express  trust,  a  person  with  whom  or  in  whose  name  a 
contract  is  made  for  the  benefit  of  another,  or  a  person  expressly 
authorized  by  statute,  may  bring  an  action  without  joining  with  him 
the  person  for  whose  benefit  it  is  prosecuted."  It  is  further  provided 
that  when  a  complete  determination  of  the  controversy  between  the 
parties  before  the  court  cannot  be  had  without  the  presence  of  other 
parties,  the  court  must  cause  them  to  be  brought  in.  A  person 
having  an  interest  in  the  subject  of  the  suit,  and  not  a  party  to  it, 
may  be  made  a  party  on  his  own  application.'^  These  codes  also  con- 
tain a  few  other  provisions  relative  to  parties,  generally  recognizing 
equitable  rules  already  established,  but  which  it  is  not  essential  to  no- 
tice in  this  connection. 

A  bill  in  equity  to  foreclose  a  mortgage  of  real  property  is  a 
local  action  and  must  be  brought  in  the  jurisdiction  in  which  the 
property  is  situated.® 

PART  I. 

OF    PARTIES    PLAINTIFF. 

Who  are  the  Proper  Parties. 

§  1368.     All   those  who   are   interested   in   the   mortgage   debt 

should  according  to  the  general  principle  already  stated,  join  in  the 
suit  to  enforce  the  security.  If  the  mortgagee  is  the  only  party 
in  interest,  he  is  of  course  the  only  plaintiff.  If  several  persons  and 
even  numerous  persons  are  made  mortgagees,  or  are  entitled  to  the 
mortgage  money,  all  of  tliem  must  be  parties  to  the  suit,®  though 
there  are  many  cases  in  which  some  of  the  persons  so  interested 
may  properly  be  made  defendants.  The  codes  of  several  States,  as 
already  noticed,  embody  this  equitable  principle,  extending  it  to  all 

Missouri:     R.  S.  1889,  §  1994,  with-  "  Tucker  v.  Lake,  67  N.  H.  193,  29 

out  last  clause.  Atl.  406.                                    „   „    .„o 

Nevada:     G.  S.  1885,  §  3036.  '  Palmer  v.  Carlisl-e,  1  S.  &  S.  423, 

Oregon:      1    Annot.    Laws    1887,    §  425.     Sir  John  Leach  said:      "There 

385    but  limited  to  equitable  actions,  can    be    no    foreclosure    or    redemp- 

c'alifornia:     Codes  and  Stats.  1885,  tion   unless    the   parties   entitled    to 

Code  of  Civ  Pro.  §  382.  the  whole  mortgage  money  are  be- 

Kentucky:     Civil  Code  1889,  §§  24,  fore    the    court."    Carpenter    v.    O'- 

25  Dougherty,  2  T.  &  C.  427.  67  Barb. 

North  Carolina:     Code  1S83,  §  185.  397,  affirmed  58  N.   Y.  681;    Pine  v. 

South  Carolina:     G.  S.  Code  of  Civ.  Shannon,  30  N.  J.  Eq.  501;  Pogue  v. 

Pro    §  140  Clark,     25     111.     351;      Johnson     v. 

"Pomeroy's  Remedies,  §  115.  Brown,   31    N.    H.    405;    Mangels   v. 

'Pomeroy's  Remedies,  §  119.  Brewing  Co.  53  Fed.  513. 


335  WHO   ARE    rROPEK    I'ARTIES.  [§    1369. 

actions,  including  such  as  were  formerly  distinctively  actions  at  law. 
Not  only  joint  mortgagees,  hut  also  persons  having  an  united  interest 
in  the  debt  secured,  even  if  their  interests  be  several,  may  join  as 
plaintiffs.^" 

§  1369.  Joinder  of  plaintiff. — It  is  not  very  material,  however,  in 
an  equity  suit,  whether  more  than  one  of  the  persons  interested  in 
prosecuting  it  is  nominally  made  a  plaintiff.  It  is  generally  sufficient 
that  the  persons  to  be  bound  by  the  decree  shall  be  bronight  before 
the  cooirt  in  some  oapacity.^^  WTien  a  person  having  an  interest  in 
the  security  is  made  a  defendant  in  the  action,  the  bill  ought  to 
ehow  his  refusal  to  join  as  a  plaintiff;  but  thds  omission  is  not 
material  unless  such  defendant  objects  by  demurrer.^^  If  several 
persons  have  rights  and  interests  in  the  same  demand  and  security, 
even  if  these  are  not  strictly  joint,  and  are  entitled  to  the  same 
relief,  they  should  naturally  join  as  plaintiffs  in  seeking  it.  But  if 
one  of  the  persons  so  interested  institutes  the  suit,  and  makes  the 
others  having  like  interests  defendants,  the  requirements  of  equity 
are  generally  satisfied.  If  several  persons  have  claims  alike  in  be- 
ing antagonistic  to  the  defendant,  but  several  and  distinct  in  their 
nature,  because  they  have  arisen  out  of  different  events  and  circum- 
stances, although  they  may  join  as  co-plaintiffs  in  seeking  the  same 
relief,  in  actual  practice  one  person,  perhaps  by  reason  of  his  greater 
interest  or  more  urgent  occasion  for  relief,  institutes  the  suit  with- 
out asking  the  co-operation  of  the  others,  making  them  defendants. 
And  finally,  as  no  one  can  be  made  a  plaintiff  against  his  will,  this 
practical  restriction  in  many  cases  determines  the  question  whether 
a  person  shall  be  made  a  plaintiff  or  defendant. 

There  are,  however,  some  decisions  at  variance  with  these  gener- 
ally established  doctrines  in  equity.  Thus,  it  was  held  in  one  case 
that  where  a  mortgage  was  given  to  secure  two  or  more  notes  which 
were  transferred  to  different  persons,  the  holders  could  not  join  in 
an  action  to  foreclose  it,  although  a  pro  rata  interest  in  the  security 
was  assigned,  "because,  the  indebtedness  having  been  severed,  the  de- 

^"  Story's  Eq.  PI.  5  201;  Pomeroy's  per  Sir  William  Grant:     "In  equity 

Remedies,  §§  116,  117,  183;   Lowe  v.  it   is   sufficient   that   all    parties    in- 

Morgan,  1  Bro.  C.  C.  368;  Stansfleld  terested   in  the   subject  of   the   suit 

V.  Hobson,  16  Beav.  189;   Palmer  v.  should   be   before   the   court,    either 

Carlisle,  1  S.  &  S.  423,  425;  Noyes  v.  in  the  shape  of  plaintiffs  or  defend- 

Sawyer,  3  Vt.  160;   Pogue  v.  Clark,  ants."     See  also  Hansen  \.  Wagner, 

25    111.    351;     Shirkey    v.    Hanna,    3  133  Cal.   69,  65  Pac.   142. 
Blackf.  403,  26  Am.  Dec.  426;  Stucker        '=  Hancock   v.    Hancock.    22    N.    Y. 

v.  Stucker,  3  J.  J.  Marsh.  801;  Wood-  568;  Carpenter  v.  O'Dougherty,  58  N. 

ward  v.  Wood,  19  Ala.  213.  Y.  681. 

"Wilkins  v.  Fry,  1  Mer.  244,  262, 


§    1370.]  OF    PARTIES    PLAINTIFF.  336 

mands  were  distinct  and  separate.  The  rights  of  all  parties  were, 
however,  protected  and  determined  in  one  action  in  which  the  holder 
of  one  notp  was  made  plaintiff,  and  the  holders  of  the  others  defend- 
ants, who  answered  in  the  form  of  cross-bills,  and  had  their  rights 
fixed  by  the  decree.^^ 

It  is  not  material  that  the  interests  of  the  several  plaintiffs  should 
be  coextensive,  or  that  they  should  have  originated  at  the  same  time. 
Neither  is  the  extenjt  of  the  interest  material,  if  there  be  any  inter- 
est at  all;  nor  whether  it  be  absolute  or  conditional." 

§  1370.  Real  party  in  interest.' — MoreovBr,  the  codes  of  all  these 
States  provide  that  "every  action  must  be  prosecuted  in  the  name  of 
the  real  party  in  interest,"^^  thus  recognizing  another  established 
principle  of  equity  and  extending  it  to  all  actions.  The  application 
of  this  rule  to  the  question,  Who  can  prosecute  a  suit  to  foreclose 
a  mortgage?  is  of  special  service  in  answering  it  in  the  case  of  an 
assignment  of  the  mortgage,  whether  this  be  a  legal  or  equitable 
assignment.  If  the  assignee  be  the  legal  owner  of  both  the  mort- 
gage and  the  mortgage  debt,  he  must  of  course  bring  the  action.  If 
he  is  the  equitable  assignee  only,  he  is  still  the  proper  plaintiff,  and 
generally  the  only  plaintiff  necessary,  though  by  statute  in  a  few  of 
the  States  the  assignor  retaining  the  legal  title  should  be  joined 
either  as  a  plaintiff  or  defendant.  A  mortgage  to  one  as  cashier  of 
a  bank  to  secure  a  loan  made  by  the  bank  may  be  enforced  by  a  suit 
in  the  name  of  the  bank,  without  assignment  or  indorsement.  The 
cashier  cannot  maintain  such  suit  alone.  The  bank  is  a  necessary 
party,  and  must  join  with  the  cashier  if  he  is  made  a  party  to  the 
suit.^^  A  note  and  mortgage  given  to  secure  an  indebtedness  to  a 
co-unty,  made  in  terms  to  the  supervisors  of  such  county  or  their 
successors  in  oifice,  may  be  declared  upon  as  obliga.tions  to  the  county, 
and  the  suit  may  be  brought  in  the  name  of  the  board  of  super- 
visors.^'^ 

A  subsequent  mortgagee  or  a  subsequent  judgment  creditor  of  the 
mortgagor  having  a  lien  upon  the  equity  of  redemption  may  redeem 
the  mortgage  and  then  foreclose  it;  but  without  having  redeemed 
he  cannot  maintain  a  bill  in  equity  to  have  the  mortgage  foreclosed, 
and  the  proceeds  of  sale  applied,  after  payment  of  the  prior  mortgage 

"Rankin  v.  Major,  9  Iowa,  297.  "  Pomeroy's  Remedies,  §  199. 
To  like  effect  see  Thayer  v.  Camp-  "  Pomeroy's  Remedies,  §  124. 
bell,  9  Mo.  280.    But  the  court  say        "Moore  v.   Pope,  97   Ala.   462,   11 

that  the  proceeding  to  foreclose  is  So.  840.  ,„  „r- 

one  at  law,  and  is  not  governed  by        "  Oconto  County  v.  Hall,  42  Wis. 

the  rules  in  equity.  59. 


337  WHO  ARE  PROPER  PARTIES.     [§§  1371,  1372. 

debt,  to  the  satisfaction  of    his  subsequent  mortgage  or    his    judg- 
ment.^^ 

The  beneficiary  in  a  trust  deed  may  maintain  the  action  in  his 
own  name,^"  but  the  trustee,  if  he  does  not  join,  should  be  made  a 
party  defendant.^" 

^  1371.  The  plaintiff  must  have  some  interest. — After  an  abso- 
lute assignment  the  suit  cannot  be  prosecuted  in  the  mortgagee's 
name  for  the  use  of  the  assignee. ^^  The  plaintiff  must  have  either 
the  legal  or  equitable  interest.  If  he  has  not  both  these  interests, 
he  must  make  the  holder  of  the  other  interest  a  party  with  himself; 
if  not  plaintiff,  then  as  defendant.  The  plaintiff  must,  however, 
have  some  interest  either  as  mortgagee  or  assignee.^^  If  he  has  only 
a  partial  interest,  the  remedy  given  is  limited  to  the  extent  of  that 
interest.  Therefore,  where  the  holder  of  two  mortgage  notes  assigned 
one  of  them,  and  afterwards  brought  suit  to  foreclose  the  other,  he 
was  not  allowed  to  take  judgment  for  the  amount  of  the  assigned 
note  as  well  as  for  that  of  the  note  retained  by  him,  although  he 
was  liable  upon  the  other  note  as  indorser.^^ 

A  purchaser  at  a  foreclosure  sale  who  has  subsequently  discovered 
that  there  was  a  junior  mortgage  upon  the  property,  the  holder  of 
which  was  not  made  a  party  to  the  foreclosure  suit,  may  take  an 
assignment  of  the  foreclosed  mortgage  and  maintain  a  second  fore- 
closure suit  to  cut  off  such  junior  mortgagee.^* 

A  junior  mortgagee  may,  of  course,  maintain  a  bill  to  foreclose 
his  own  mortgage,  but  he  cannot  maintain  a  bill  to  enforce  both  the 
senior  mortgage  and  his  own.  His  remedy  is  first  to  redeem  from 
the  senior  mortgage  and  then  to  enforce  his  own  mortgage,  and  his 
lien  for  reimbursement  of  the  redemption  money.-^ 

§  1372.  It  is  apparent,  therefore,  that  a  formal  legal  assignment 
is  not  requisite  in  equity  to  enable  the  assignee  to  enforce  the  mort- 
gage in  his  own  name.  If  he  is  the  real  party  in  interest,  the  form 
by  which  he  acquires  this  interest  is  quite  immaterial.  A  verbal 
assignment,  even,  of  the  bond  and  mortgage,  gives  the  assignee  an 

'"  Kelly  V.  Longshore,  78  Ala.  203.  -'  Barraque  v.  Manuel,  7  Ark.  516. 

Minis  V.  Cobbs,  110  Ala.  577,  18  So.  "  Bolles  v.  Carll,  12  Minn.  113. 

309;  Bingham  v.  Vandegrift,  93  Ala.  =' Haynes    v.    Seachrest,    13    Iowa, 

283;    9   So.   280;    Ware  v.   Hamilton,  455. 

Brown   Shoe   Co.   92   Ala.   145,   9   So.  ■'  Franklyn  v.   Hayward,   61   How. 

136.  Pr.  43. 

'^  Hutchison  v.  Myers,  52  Kan.  290,  -'  Threefoot    v.    Hillman,    130    Ala. 

34    Pac.    742.  244,  30  So.  513. 

"  §  1397. 


§§    1373-1375.]  OF   PARTIES   PLAINTIFF.  338 

equitable  claim  to  them,  and  enables  him  to  bring  an  action  upon 
them  in  his  own  name.^" 

§  1373.  If  the  mortgage  has  been  in  legal  form  assigned  abso- 
lutely and  the  mortgagee  retains  no  further  interest  in  it,  he  is 
not  a  proper  party  to  the  suit.^'^  "It  is  enough  to  make  that  man 
a  party  who  has  contracted  to  stand  in  the  place  of  the  original 
mortgagee  and  of  all  assignees.^^ 

§  1374.  A  mortgagee  who  has  assigned  his  mortgage  as  col- 
lateral security  for  his  own  debt,  but  still  has  a  pledgor's  interest 
in  the  mortgage,  should  be  made  a  party  to  a  suit  by  the  assignee 
to  foreclose  it,  although  the  assignment  be  in  terms  absolute,  and 
recites  the  payment  of  a  full  consideration  for  it;^^  otherwise  the 
effect  of  the  foreclosure  as  between  the  pledgor  and  pledgee  is 
simply  to  substitute  the  land  for  the  mortgage,  and  the  pledgee"  will 
hold  it  subject  to  redemption  by  the  pledgor,  although  the  fore- 
closure may  be  effectual  to  cut  off  the  equity  of  redemption  of  the 
mortgagor  and  all  persons  claiming  under  him  except  the  mort- 
gagee.^** If,  however,  it  appears  from  the  assignment  that  it  was  the 
intention  of  the  assignor  to  give  the  assignee  the  right  to  foreclose, 
or  to  receive  the  moneys  in  his  own  name,  it  is  unnecessary  to  make 
the  assignor  a  party,  although  he  retains  an  interest  in  the  mortgage. 
It  was  so  held  where  the  assignment  wias  absolute  in  form,  except 
that  it  stated  that  the  money,  when  collected,  was  to  be  applied  in 
liquidation  of  the  debts  for  which  the  complainant  stood  security  for 
the  assignor.^^  It  is  proper,  however,  to  join  both  the  assignor  and 
assignee  as  plaintiffs  in  the  action.^^ 

§  1375.     One  who  holds  the  mortgage  as  a  collateral  security 

for  a  smaller  debt  due  him  from  the  assignor  must  make  the  latter  a 
party  to  the  suit  to  enforce  it,  inasmuch  as  he  is  interested  to  the 

=«  Green   v.    Marble,   37    Iowa,   95;  Saenger  v.  Nightingale,  48  Fed.  708. 
Andrews  v.  McDaniel,  68  N.  C.  385.        -'  Chambers  v.  Goldwin,  9  Ves.  254, 

This  last  was  an  unindorsed  note.  264. 

"Wallier    v.    Smalwood,    2    Amb.        ='' Hobart  v.  Abbot,  2  P.  Wms.  643; 

676;   Gaskell  v.  Durdin,  2  Ball  &  B.  Gage   v.    Stafford,    1   Ves.    Sen.    544; 

167-    Miller  v.   Henderson,   10   N.   J.  Johnson  v.  Hart,  3  Johns,  Ch.  322; 

Eq'320-   Parker  v.  Stevens,  3  N.  J.  Whitney  v.  M'Kinney,  7  Johns.  Ch. 

Eq    56-  McGuffey  v.  Finlev,  20  Ohio,  144;  Kittle  v.  Van  Dyck,  1  Sandf.  Ch. 

474-  Christie  v.  Herrick,  1  Barb.  Ch.  76  Cerf  v.  Ashley,  68  Cal.  419. 
254-  Whitney  v.  M'Kinney,  7  Johns.        ^"Matter  of  Gilbert,  104  N.  Y.  200, 

Ch.  144;   Garrett  v.  Puckett,  15  Ind.  10  N.  E.   148.  .  ,     .   „     v,    r^v, 

485;    Walker  v.    Bank   of   Mobile,   6        ="  Christie  v.  Herrick,  1  Barb.  Ch. 

Ala.    452;    Newman   v.    Chapman,    2  254.  .^  xt   v   ooi 

Rand.  93,  14  Am.  Dec.  760;  Prout  v.        ''  Hoyt  v.  Martense,  16  N.  Y.  231. 
Hoge,     57     Ala.     28.     See,    however, 


339  WHO  ARE   rROPER   PARTIES.  [§    1375a. 

amount  of  the  surplus  above  his  debt.^^  This  is  in  accordance  with 
the  general  rule  that  all  who  are  interested  in  the  mortgage  debt 
must  be  made  parties  to  the  foreclosure  suit.  And  if  in  any  way 
the  assignment  of  the  mortgage  be  not  absolute,  and  the  mortgagee 
retains  an  interest  in  the  security,  he  is  a  necessary  party.^**  Even 
if  the  assignment  is  absolute  in  its  terms  and  expresses  the  payment 
of  a  full  consideration,  the  mortgagee  should  still  be  made  a  party 
if  the  assignee  is  accoimtable  to  him  for  any  part  of  the  proceeds  of 
it.=^^  The  fact  that  he  is  liable  to  account  does  not,  however,  impair 
the  right  of  the  assignee  to  enforce  collection  of  the  mortgage.^^  This 
only  affects  the  amount  for  which  he  may  have  a  decree.  He 
is  the  proper  party  to  institute  the  proceedings,  having  the  legal  and 
apparent  title.^^  If  in  such  case  the  assignee  refuses  to  foreclose,  or 
makes  no  objection  to  a  foreclosure  by  the  assignor,  and  the  col- 
lateral character  of  the  assignment  appears  on  the  face  of  it,  the  as- 
signor may  foreclose  in  his  own  name;^^  and  it  would  seem  that 
his  interest  might  be  established  by  evidence  aside  from  anything 
upon  the  face  of  the  assignment,  so  that  he  might  enforce  the  mort- 
gage upon  the  neglect  or  refusal  of  the  assignee  to  do  so,  on  the 
same  principle  by  which  it  is  held  that  a  verbal  assignment  of  a 
bond  and  mortgage  entitles  the  assignee  to  sue  in  his  own  name.^^ 
In  such  case  the  assignee  may  be  made  a  party  defendant,  and 
neither  the  mortgagor  nor  any  person  other  than  the  assignee  him- 
self can  object.*" 

But  if  on  the  face  the  pleadings  no  necessity  appears  for  mak- 
ing the  assignor  a  party,  and  it  does  not  appear  that  he  has  any 
interest,  an  objection  raised  at  the  hearing,  that  he  is  not  a  party, 
will  not  prevail.*^ 

§  1375a.  If  a  mortgage  has  been  assigned,  the  assignee  should 
maintain  the  suit  to  foreclose  the  mortgage;  and  even  if  the  as- 
signment is  made  pending  a  foreclosure  suit  by  the  mortgagee,  the 
assignee  may  generally  be  substituted  as  plaintiff.  If  such  assignee 
is  not  made  a  party,  the  bill  must  be  dismissed.*^     If  a  oounter- 

"  Woodruff  v.  Depute,  13  N.  J.  Eq.  Sinking     Fund     Commissioners     v. 

168    176;  Cerf  v.  Ashley,  68  Cal.  419,  Northern  Bank  of  Kentucky,  1  Mete. 

9    Pac.    658.  174.     Consolidated     Nat.     Bank     v. 

^*  Miller  v.  Henderson,  10  N.  J.  Eq.  Hayes,  112  Cal.  75,  44  Pac.  469. 

320.  '"See  §   1377. 

^'^  Kittle  V.  Van  Dyck,  1  Sandf.  Ch.  *<>  Simson  v.  Satterlee,  6  Hun,  305. 

76.  "  Stevens  v.   Reeves,  33  N.  J.  Eq. 

=«  Overall  v.  Ellis,  32  Mo.  322.  427;  Woodruff  v.  Depue,  14  N.  J.  Eq. 

"  McKinney  v.  Miller,  19  Mich.  142;  167. 

Norton  v.  Warner,  3  Edw.  Ch.  106.  "Johnson  v.  Clarke  (N.  J.  Eq.),  28 

^^  Simson  v.  Satterlee,  6  Hun,  305;  Atl.  558;  Wilson  v.  Spring,  64  111.  14. 
Norton  v.  Warner,  3  Edw.  Ch.  106; 


§§    1376,    1377.]  OF    PARTIES    PLAINTIFF.  3-40 

claim  has  been  filed  against  the  mortgagee,  this  may  be  applied  as 
against  such  assignee.*^ 

If  a  mortgage  of  indemnity  has  been  assigned  after  the  mort- 
gagee's claim  under  the  mortgage  has  become  fixed,  the  assignee 
should  maintain  the  suit  to  foreclose  the  mortgage.** 

The  plaintilf  in  a  process  of  garnishment  against  a  mortgagor 
and  his  mortgagee,  after  obtaining  judgment,  is  in  legal  effect  an 
assignee  of  the  mortgage  and  mortgage  debt,'  and  may  maintain 
an  action  to  foreclose  the  mortgage,*^ 

A  trustee,  though  appointed  by  a  court  in  another  State,  who  holds 
by  assignment  the  legal  title  to  a  mortgage  and  the  notes  secured  there- 
by, may  maintain  an  action  to  foreclose  such  mortgage,  and  any 
averments  in  his  complaint  as  to  his  official  appointment  may  be 
treated  as  surplusage.*® 

§  1376.  The  assignee  of  a  mortgage,  without  the  bond  or  note  se- 
cured by  it,  has  no»  interest  in  it  as  against  a  subsequent  assignee 
of  both,  and  cannot  foreclose  it.*^  The  debt  is  the  principal  thing, 
and  the  mortgage  only  the  incident.  The  assignment  of  the  mort- 
gage by  delivery  merely  does  not  carry  with  it  the  bond  or  note, 
and  is  not  conclusive  evidence  of  an  intention  to  pass  it;  although 
generally  the  mortgage  passes  by  a  transfer  of  the  bond  or  note  so 
as  to  make  an  equitable  transfer  of  the  mortgage. 

§  1377.  Assignee  of  mortgage  note. — En  most  of  the  States 
the  doctrine  prevails  that  the  mortgage  debt  is  the  essential  fact, 
and  the  mortgage  itself  a  mere  incident  of  it;  and,  as  a  conse- 
quence, that  a  transfer  of  the  note  or  other  evidence  of  the  debt 
carries  with  it  the  security  without  a  special  assignment  of  it.  In 
those  States,  therefore,  a  suit  to  foreclose  the  mortgage  may  be 
brought  by  the  assignee  without  making  the  mortgagee  who  as- 
signed it  a  party.*^  Under  statutes  which  require  suits  to  be  brought 
in  the  name  of  the  real  party  in  interest,  a  foreclosure  suit  should 
be  brought  in  the  name  of  the  equitable  owner  of  the  note  se- 
cured, although  he  be  not  the  payee  or  indorsee.*®     The  holder  of 

«Schlichter   v.   Brooklyn   Sawmill  342;   Merritt  v.  Bartholick,  47  Barb. 

Co.  35  Hun,  399.  253. 

"Bendey  v.   Townsend,   109  U.    S.        *' Swett    v.     Stark,    31    Fed.    858; 

665,  3  Sup.  Ct.  482.  Gower  v.  Howe,  20  Ind.  396;  Garrett 

^^Alsdorf    V.    Reed,    45    Ohio    St.  v.    Puckett,    15    Ind.    485;    Austin   v. 

653,  17  N.  E.  73.  Burbank,   2    Day,   476,    11   Am.    Dec. 

"Iowa   &   California   Land   Co.   v.  119;   Briggs  v.  Hannowald,  35  Mich. 

Hoag    132  Cal.  627,  64  Pac.  1073.  474;   Michigan  State  Bank  v.  Trow- 

«  Cooper  V.  Newland,  17  Abb.  Pr.  bridge,  92  Mich.  217,  52  N.  W.  632. 

"Irish  V.  Sharp,  89  111.  261. 


•J41  WHO  ARE  rilOPER  PARTIES.         [§§   1377a,   1378. 

the  mortgage  without  the  debt  has  no  interest  in  it.  The  equitable 
assignee  may,  however,  join  the  assignor  with  him  in  the  suit,^**  or 
make  him  a  defendant.^^  Even  where  the  assignment  of  the  note 
is  not  a  legal  assignment  of  the  mortgage,  the  assignee  of  the 
note  acquires  an  equitable  interest  which  a  court  of  equity  will 
protect,  though  all  parties,  including  the  mortgagee,  whether  hav- 
ing equitable  or  legal  interests,  must  be  parties  to  the  suit.^^  Under 
the  practice  in  some  States,  the  assignee  of  the  note  in  such  case 
m'ay  sue  in  the  name  of  the  mortgagee,  even  against  his  consent,  on 
giving  him  proper  indemnity  against  costs.'^^  If  the  mortgage  debt 
be  assigned  by  parol  merely,  the  legal  title  remaining  in  the  mort- 
gagee, he  is  a  necessary  party  to  a  bill  filed  by  such  equitable  as- 
signee.^* 

§  1377a.     The  assignee  in  bankruptcy  of  the  holder  of  a  mortgage 

should  enforce  the  mortgage,  if  it  is  for  the  benefit  of  the 
bankrupt's  estate  that  he  should  do  so.  But  if  he  abandons  the 
right,  or  declines  to  prosecute  a  suit  already  pending  in  favor  of 
the  bankrupt,  as  he  may  properly  do  when,  for  instance,  the  mort- 
gage note  has  been  pledged  by  the  bankrupt  and  he  does  not  con- 
sider it  worth  while  to  redeem  from  the  pledge,  the  bankrupt  may 
maintain  the  suit.  The  right  of  property  in  such  case  remains  in, 
or  is  restored  to,  the  bankrupt,  for  he  has  the  right  against  every 
one  but  the  assignee.^^ 

A  receiver  of  the  property  of  a  corporation,  partnership,  or  indi- 
vidual, appointed  by  order  of  court  with  power  to  collect  debts  and 
for  that  purpose  to  institute  suits,  in  foreclosing  a  mortgage  should 
join  with  him  as  complainant  the  mortgagee  in  whom  the  legal  title 
is  vested  ;^^  unless  the  appointment  be  made  under  a  statute  which 
vests  the  title  to  the  property  in  the  receiver." 

§  1378.     The   holder    of    one    of     several    notes    secured   by  the 

same  mortgage  may  proceed  in  the  first  instance  to  foreclose  by 
suit  in  equity  without  suing  at  law;  but  all  the  other  mortgagees 
or  holders  of  notes  secured  by  it  must  be  brought  before  the  court 

^"Holdrige  v.  Sweet,  23  Ind.  118.  "Denby  v.  Mellgrew,  58  Ala.  147; 

'■'Burton  v.  Baxter,  7  Blackf.  297;  Langley  v.  Andrews,  132  Ala.  147, 
Stone  V.  Locke.  46  Me.  445.  31  So.  469. 

"Moore    v.     Ware,    38    Me.     496;         ^=  Towle  v.  Rowe,  58  N.  H.  394. 
Stone   v.    Locke,    46    Me.    445;    Bibb.        ^"Corner    v.    Bray,    83    Ala.    217,    3 
v.    Hawley,    59    Ala.    403;    Prout    v.    So.  554;  Harland  v.  Bankers'  &  Mer- 
Hoge,   57   Ala.   28;    Hopson  v.   ^tna    chants'  Tel.  Co.  32  Fed.  305. 
Axle  &  Spring  Co.  50  Conn.  597.  "  Miller  v.  Mackenzie,  29  N.  J.  Eq. 

"Calhoun  v.   Tullass.   35  Ga.  119;     29L 
English  v.  Register,  7  Ga.  387. 


§§    1379,    1380.]  OF    PARTIES    PLAINTIFF.  342 

as  defendants  before  a  decree  is  made.^^  There  are  as  many  causes 
of  action  as  there  are  separate  notes  in  the  hands  of  different  per- 
sons. Tt\^o  holders  of  notes  cannot  join  as  plaintiffs  to  enforce 
the  mortgage.  There  is  no  community  of  interest  between  such 
holders,  but  rather  an  antagonism.  Only  one  such  holder  can  be 
plaintiff,  and  he  must  make  the  other  holders  defendants,  so  that 
the  amounts  and  priorities  of  their  several  liens  may  be  deter- 
mined.^^ The  plaintiff's  allegation,  that  another  note  secured  by 
the  mortgage  may  be  presumed  from  lapse  of  time  and  other  cir- 
cumstances to  have  been  paid,  is  insufficient  to  excuse  his  not 
making  the  assignee  of  it  a  party  to  the  suit.*^°  If  the  other  mort- 
gagees make  default,  they  lose  their  interest  in  the  property  mort- 
gaged by  failure  to  redeem  from  a  sale  umier  such  foreclosure, 
where  this  is  allowed,  and  cannot  thereafter  foreclose  their  interest 
in  such  mortgage.''^ 

The  holder  of  one  of  several  notes  secured  by  a  mortgage  may  in- 
tervene in  a  foreclosure  suit  brought  by  another.^^ 

The  holder  of  overdue  coupon  interest  notes,  secured  by  mort- 
gage, may  in  like  manner  maintain  an  action  to  foreclose  the  mort- 
gage, although  the  principal  debt  is  not  yet  mature  and  is  held  by 
another  person  f^  but  the  principal  debtor  should  be  made  a  party.^* 

§  1379.  A  partner  who  holds  a  mortgage  as  security  for  a  debt 
due  the  partnership  should  join  the  other  partners  with  him  as 
plaintiffs  in  an  action  to  foreclose  it.^^ 

Where  a  mortgage  is  made  to  a  partnership  in  the  firm  name, 
the  mortgagees  are  sufficiently  identified  by  making  the  individual 
partners  plaintiffs  in  the  proceedings,  and  alleging  that  they  consti- 
tute the  firm  named."® 

§  1380.     A  surety  or  guarantor  of  a  debt  secured  by  mortgage  on 

=' §    1479;    Goodall    v.    Mopley,    45  "^Cooper  v.  Mohler,  104  Iowa,  301, 

Ind.   855;    Stanley  v.   Beatty,  4   Ind.  73  N.  W.  828. 

134;    Merritt  v.   Wells,   18  Ind.   171;  "'Cleveland  v.  Booth,  43  Minn.  16, 

Rankin  v.  Major,  9  Iowa,  297;  Myers  44  N.  W.  670. 

v.    Wright,    33    111.    284;     Pogue    v.  "*  First  Nat.   Bank  v  Lambert,   63 

Clark,   25   111.    351 ;    Wilson   v.    Hay-  Minn.  263,  65  N.  W.  451. 

ward,  2  Fla.  27;  Wiley  v.  Pinson,  23  "' Noyes  v.  Sawyer,  3  Vt.  160;    De 

Tex.    486;     Hartwell    v.    Blocker,    6  Greiff  v.   Wilson,   30  N.   J    Eq.   435, 

Ala.   581;    Johnson  v.   Brown,  31  N.  citing    text    with    approval.     But    in 

H.    405;    Pettibone    v.    Edwards,    15  Michigan   it   is   held   that   it   is   im- 

Wis.  95;    Jenkins  v.  Smith,  4  Mete,  material    whether    a    partner    who 

380;  Utz  V.  Utz,  34  La.  Ann.  752.  holds  a  mortgage"  as  trustee  for  the 

**  Swenson    v.    Molina   Plough    Co.  partnership  joins  his  partners  or  not. 

14  Kans.  387.  Shelden  v.  Bennett,  44  Mich.  634. 

'°  Bell  V.  Shrock,  2  B.  Men.  29.  ''"  Bernstein   v.    Hobelman,   70   Md. 

"O'Brien  v.  Moffitt,  133  Ind.   660,  29,    16   Atl.   374. 
33  N.  E.  616. 


343  WHO   ARE    PROPER    PARTIES,  [§    13S1. 

lands  of  the  principal  on  paying  the  debt  is  subrogated  in  equity  to  the 
rights  of  the  mortgagee,  and  may  foreclose  in  his  own  name  without  an 
assigimient  of  the  mortgage  and  bond."^  A  guarantor  of  interest 
coupons  which  he  has  taken  up  should  make  the  holder  of  the  prin- 
cipal obligation  a  party.''^  In  like  manner  a  purchaser  who  has 
assumed  the  payment  of  a  mortgage  on  land  which  he  has  subse- 
quently sold  to  another,  who  in  turn  has  assumed  the  mortgage 
but  has  failed  to  pay  it,  may  upon  being  obliged  to  pay  it  fore- 
close it  in  his  own  name  without  having  an  assignment  of  it.*'* 
And  a  person  interested  in  the  land  subject  to  the  mortgage,  though 
not  personally  bound  to  pay  it,  upon  doing  so  for  his  own  pro- 
tection has  the  same  right. '^*'  It  is  even  held  that  without  paying 
the  debt  a  surety  may  file  a  bill  to  foreclose  the  mortgage,  making  the 
mortgagee  a  party,  and  asking  for  judgment  against  the  persons 
primarily  liable.''^ 

§  1381.  Joint  mortgagees. — Where  one  of  two  joint  mortgagees 
has  become  the  owner  of  the  equity  of  redemption,  the  other  can 
maintain  against  him  a  bill  for  foreclosure  to  the  extent  of  his  in- 
terest.'^- In  like  manner  a  note  and  mortgage  given  by  thirteen 
persons  to  three  of  their  number  may  be  foreclosed  for  ten  thir- 
teenths of  the  debt,  by  a  suit  in  which  the  three  join  as  plaintiffs 
against  the  others  as  defendants.'^^  A  mortgagee  of  an  undivided 
interest  may  foreclose  that  interest  although  he  is  the  owner  of  the 
other  undivided  part  of  the  land,'^*  or  although  a  suit  for  partition  is 
pending.''^  A  mortgagee  is  not  prevented  from  foreclosing  by  rea- 
son of  being  one  of  the  trustees  who  hold  the  equity  of  redemption; 
he  may  bring  the  action .  against  his  co-trustees," *'  or  one  of  several 
executors  holding  the  estate;  he  may  as  mortgagee  foreclose  his 
mortgage  upon  it  against  his  co-executors.'^^ 

If  one  joint  mortgagee  owning  one  half  of  the  security  surren- 
ders his  share  of  the  notes  to  the  mortgagor  and  takes  a  quitclaim 

"  Ellsworth  V.  Lockwood,  42  N.  Y.        ■'  Marsh  v.  Pike,  1  Sandf.  Ch.  210, 

89;   Halsey  v.  Reed,  9  Paige,  446.  10  Paige,   595;    M'Lean  v.  Lafayette 

"'^  Bacon  v.  O'Keefe,  13  Wash.  655,  Bank,  3  McLean,  587. 
16  Pac.  226.  '-  Sandford    v.    Bulkley.    30    Conn. 

"'New  York:     McLean  v.  Towle,  3  344. 
Sandf.    Ch.    117;    Tice    v.    Annin,    2        "McDowell  v.  Jacobs,  10  Cal.  387. 
Johns.  Ch.   125;    Cherry  v.  Monro,  2        '*  Baker  v.  Shephard,  30  Ga.  706. 
Barb.  Ch.  618;  Ferris  v.  Crawford,  2        '=  Gleises  v.  Maignan,  3  La.  530,  23 

Den.  595;  Johnson  v.  Zink,  52  Barb.  Am.  Dec.  466. 

396;  Brewer  v.  Staples,  3  Sandf.  Ch.        '"Baton  v.   Murray,  6  Paige,  474. 
579.     California:     Waldrip  v.  Black,        "McGregor  v.  McGregor,  35  N.  Y. 

16  Pac.  Rep.  226.  218;  Lawrence  v.  Lawrence,  3  Barb. 

"Ellsworth  V.  Lockwood,  42  N.  Y.  Ch.    71. 
89;   Averill  v    Taylor,  8  N.  Y.  44. 


§§    1382,    1383.]  OF    PARTIES    PLAINTIFF.  344. 

deed  of  an  undivided  half  of  the  mortgaged  land,  he  is  not  a  proper 
party  to  foreclosure  proceedings  subsequently  instituted  by  the  other; 
for  such  mortgagee  then  has  a  mortgage  upon  an  undivided  half 
of  the  land,  and  he  can  foreclose  it  by  a  decree  against  the  mort- 
gagor.'^ 

§  1382.  When  a  mortgage  secures  an  indebtedness  due  to  the 
mortgagees  jointly,  their  interest  in  the  estate  so  far  partakes  of 
the  nature  of  the  debt  that  the  doctrine  of  survivorship  applies,  and 
the  suit  to  foreclose  may  be  brought  in  the  name  of  the  survivor, 
without  making  the  heir  or  personal  representatives  of  the  deceased 
mortgagee  a  party. ^^  If  there  are  conflicting  claims  as  to  the  mort- 
gage money,  the  executor  of  the  deceased  mortgagee  should  be 
made  a  defendant.^"  The  survivor  of  joint  assignees  of  a  mort- 
gage of  course  has  the  same  right  to  foreclose,  without  joining  the 
personal  representatives  of  the  deceased  assignee,  that  the  survivor 
of  joint  mortgagees  has.^^ 

If  the  money  equitably  belongs  to  the  mortgagees  severally,  the 
representatives  of  the  deceased  mortgagee  should  be  joined  with 
the  survivor.*^ 

If  the  mortgagees  have  no  joint  or  common  interest  in  the  deht 
secured  by  the  mortgage,  this  fact  should  be  alleged  in  the  bill,  and 
the  decree  be  for  the  payment  of  the  sums  due  to  each  severally.*^ 

§  1383.  It  is  a  general  rule  that  a  nominal  trustee  cannot 
bring  the  suit  in  his  own  name  alone,  but  must  joint  with  him  the 
names  of  those  persons  who  have  the  beneficial  interest.®*  The 
trustee  in  a  deed  of  trust  is  a  necessary  party, ^^  and  he  should  join 
with  himself  the  holder  of  the  debt  secured..*®     Very  generally,  how- 

"Sowles   V.    Buck,   62   Vt.   203,   20  «^  Higgs   v.    Hanson,    13   Nev.   356; 

Atl.   146.  .^^.tna  L.   Ins.   Co.   v.   Finch,  84  Ind. 

'» Williams  v.   Hilton,  35  Me.   547,  301. 

58  Am.  Dec.  729;   Blake  v.  Sanborn,  '*  Davis  v.  Hemingway,  29  Vt.  438; 

8  Gray,  154;   Martin  v.  McReynolds,  Stillwell    v.    M'Neely,    2    N.    J.    Eq. 

6   Mich.    70;    Lannay   v.   Wilson,    30  305;    Freeman   v.    Scofield,   16   N.    J. 

Md.  536;  Milroy  v.  Stockwell,  1  Ind.  Eq.  28;  Woodruff  v.  Depue,  14  N.  J. 

35;    Erwin  v.  Ferguson,  5  Ala.  158;  Eq.   168,   176;    Large  v.    Van    Doren, 

McAllister    v.    Plant,    54    Miss.    106;  14    N.    J.    Eq.    208;    Jewell    v.    West 

Alabama  &  G.  Manufacturing  Co.  v.  Orange,    36   N.    J.    Eq.    403;    Willink 

Robinson,  56  Fed.  690,  6  C.  C.  A.  79,  v.    Morris    Caaal    &    Banking   Co.    4 

13    U.    S.    App.    359;     Robinson    v.  N.  J.  Eq.  377;  Sidney  Stephens  Imp. 

Alabama  &  G.  Manuf.  Co.  48  Fed.  12  Co.   v.    South   Ogden   L.    Building  & 

^  Freeman  v.  Scofield,  16  N.  J.  Eq.  Imp.  Co.  20  Utah  267,  58  Pac.  843. 

28.  ^^  Harlow   v.    Mister,    64   Miss.   25 

"  Martin   v.    McReynolds,   6   Mich.  Gardner    v.     Brown,     21     Wall.    36 

70.  Chandler  v.  O'Neil.  62  111.  App.  418 

'=Vickers  v.  Cowell,  1  Beav.  529.  Hill  v.  Boyland,  40  Miss.  618;  Shelby 

"Vickers  v.   Cowell,  1  Beav.   529;  v.  Burtis,  18  Tex.  644. 

Eliason    v.    Sidle,    61    Minn.    285,   63  »« Boyd    v.    Jones,     41    Ark.    314; 

N.  W.  730;  §  1435.  Tucker  v.  Silver,  9  Iowa,  261. 


345  WHO  ARE  PROPER  PARTIES.  [§  1383. 

ever,  the  trustee  in  a  deed  of  trust  is  the  only  necessary  party 
plaintiff.^^  But  where,  on  account  of  the  number  of  the  persons 
interested,  great  inconvenience  and  expense  would  be  incurred  in 
joining  them  in  the  bill,  the  court  will  in  its  discretion  dispense 
with  a  strict  adherence  to  this  rule.^^  Accordingly  where  a  mortgage 
was  made  to  a  banker  as  "the  agent  and  trustee  of  the  several  sub- 
scribers to  the  loan,"  which  was  of  large  amount,  it  was  held  that 
the  mortgagee  might  file  the  bill  in  his  own  name  alone.*®  And 
where  a  bill  is  brought  by  the  trustees  of  a  mortgage  by  a  railroad 
company  to  foreclose  the  mortgage,  the  holders  of  the  bonds  secured 
are  not  necessary  or  proper  parties  complainant,  though  there  may 
be  circumstances  which  would  authorize  the  court  to  admit  any  of 
them  as  defendants  on  their  own  application.®"  In  such  suit  the 
beneficiaries,  though  not  named  as  parties  to  the  record,  are  privy, 
and  are  estopped  by  the  decree  in  the  absence  of  fraud.®^  If  there 
are  several  mortgage  trustees,  they  should  join  in  a  suit  to  fore- 
close; but  circumstances  may  render  a  suit  by  one  or  more  without 
the  others  proper.  Thus  one  of  three  trustees  in  a  trust  deed  is 
entitled  to  sue  alone  for  foreclosure  when  he  avers  that  one  of 
the  others  is  dead,  and  that  the  remaining  one  claimed  to  be  interested 
in  the  property,  and  "is  interested  adversely  to  your  orator  as  trustee 
of  said  bondholders."®^  Where  a  mortgage  is  made  or  assigned  to  the 
cashier  of  a  bank,  not  as  an  individual,  but  as  an  officer  of  the  bank, 
he  is  not  a  necessary  party  in  an  action  by  the  bank  to  foreclose  the 
mortgage;  for  the  mortgage  shows  that  it  is  a  contract  with  the 
bank.®^ 

If,  however,  the  only  object  of  the  foreclosure  suit  is  to  reduce 
the  property  into  possession,  it  is  not  necessary  to  make  the  cestui 
que  trust  a  party  to  it.®* 

"Hays  v.   Dorsey,  5  Md.   99.  Co.  53  Fed.   850;    Anderson  v.   Rail- 

^^Bardstown    &    Louisville   R.    Co.  road    Co.    2    Woods,    628;    Carter    v. 

V.    Metcalfe,    4    Mete.    199;    Swift   v.  New  Orleans,  19  Fed.  659;   Farmers' 

Stebbins,     4     Stew.     &     Port.     447;  Loan   &   T.    Co.   v.   Lake   St.    El.    R. 

Wright  V.  Bundy,  11  Ind.  398;   Land  Co.    173    111.    439,   51   N.    E.    55.     See 

Co.   V.   Peck,  112   111.   408;    Lambert-  Jones  on  Corp.  Bonds  and  Mortgages, 

ville  Nat.  Bank  v.  Bag  &  Paper  Co.  §§  392-397. 

(N.  J.)  15  Atl.  388;  Union  Trust  Co.  "'  Glide  v.   Dwyer,   83   Cal.   477,  23 

v.    Broshears    (Ky.)    39    S.    W.    44;  Pac.  706;  Robbins  v.  Chicago,  4  Wall. 

Campbell  v.  Texas  &  N.  O.  R.  Co.  1  657;  Castle  v.  Noyes,  14  N.  Y.  329. 

Woods,  368.  "-Robinson   v.    Ala.    &    G.    Manuf. 

*«  Willink  V.  Morris  Canal  &  Bank-  Co.  48  Fed.  12. 

ing  Co.  4  N.  J.  Eq.  377.  "^  Garton    v.    Bank,    34   Mich.    279; 

""Williamson  v.  N.  J.  Southern  R.  Michigan  State  Bank  v.  Trowbridge, 

Co.    25    N.    J.    Ch.    13;    McElrath    v.  92  Mich.  217,  52  N.  W.  632. 

Pittsburg  &   Steubenville  R.   Co.   68  "*  Still  v.  Ketchum.  Harr.    (Mich.) 

Pa.    St.    37;    American    Tube   Co.    v.  Ch.  423;  Cortelyou  v.  Jones,  132  Cal. 

Kentucky  Gas.  Co.  51  Fed.  826;   Fi-  131,  64  Pac.  119. 
delity   Trust  Co.   v.   Mobile   St.   Ry. 


§§  1383a,  1384.]  of  parties  plaintiff.  346 

In  a  suit  by  a  receiver  appointed  to  collect  a  mortgage  and  bond 
and  distribute  it  among  certain  persons  named,  the  receiver  should 
join  these  beneficiaries  as  parties  complainant.^^ 

A  trustee  in  a  trust  deed  sufficiently  indicates  his  representative 
character  by  using  the  word  "trustee"  though  the  word  "as"  does 
not  precede  it.®° 

§  1383a.  A  foreign  receiver  or  trustee  may  maintain  an  action 
to  foreclose  a  mortgage.  This  is  by  reason  of  the  doctrine  of  comity. 
In  a  recent  California  case  the  Court  say:  "The  early  rule  denied 
to  such  officers  any  standing  in  a  foreign  court,  but  the  courts  of 
late,  influenced  by  a  spirit  of  comity,  have  inclined  to  much  more 
liberal  views,  and  it  may  fairly  be  said  that  the  prevailing  doctrine 
permits  the  maintenance  of  such  actions  by  foreign  receivers  and 
like  officers,  where  the  rights  of  domestic  creditors  are  not  inter- 
fered with."®^ 

§  1384.  If  a  cestui  que  trust,  or  other  holder  of  the  mortgage 
debt,  brings  a  bill  to  foreclose,  the  trustee  is  an  indispensable  party, 
because  it  is  more  particularly  the  legal  estate  that  is  affected  by  the 
decree  of  foreclosure  and  sale,  and  in  case  of  redemption  thje  trustee 
is  the  one  to  release  the  property.     The  trustee   and   the  benefl- 

»' Tyson    v.    Applegate,    40    N.    J.  Co.    91  Wis.    174,   64   N.   W.   751,   51 

Eq.  305,  reversing  39  N.  J.  Eq.  365.  Am.  St.  Rep.  881. 

An  exception  to  this  rule  has  been  In  the  California  case  above  cited 

made    where    the     receiver    is   ap-  the  suit  was  by  a  trustee  appointed 

pointed  under  a  statute  which  vests  by  a  court  of  the  State  of  Iowa  and 

the    title    to    the    property    in    him.  the  court  was  reluctant  to  apply  the 

Miller   v.    Mackenzie,    29    N.    J.    Eq.  principle  of  comity  by  reason  of  the 

291.     In  Colorado  by  force  of  §  5,  of  fact  that  the  Supreme  Court  of  Iowa 

the  Civ.  Code,  a  trustee  may  main-  had   refused   to   recognize   the   prin- 

tain  a  foreclosure  suit  without  join-  ciple  and  denied  to  a  foreign  trus- 

Ing  the  beneficiary.     Hardy  v.  Swi-  tee  the  right  to  maintain  an  action 

gart,  25  Colo.  136,  53  Pac.  380.  in   its   courts.     Ayres   v.    Siebel,    82 

^"Kinsella    v.    Cahn,    185    111.    208,  Iowa,   347,   47   N.   W.    989,    modified, 

56  N.  E.  1119.  however,     in     Hale     v.     Harris,    112 

"  Iowa  &  California  Land  Co.  v.  Iowa,  372,  83  N.  W.  Rep.  1046.  "But, 
Hoag,  132  Cal.  627,  64  Pac.  1073;  apart  from  that,  we  think  that  the 
Toronto  General  Trust  Co.  v.  Chi-  rule  permitting  the  maintenance  of 
cago  B.  &  Q.  R.  Co.  123  N.  such  actions  in  our  courts,  where 
Y.  37,  25  N.  E.  198;  Comstock  the  rights  of  domestic  creditors  are 
V.  Frederickson,  51  Minn.  350,  not  interfered  with,  is  both  just  and 
53  N.  W.  713;  Boulware  v.  Davis^  reasonable,  and  should  be  enforced 
90  Ala.  207,  8  So.  84;  Winans  v.  without  distinction,  and  therefore, 
Gibbs  &  Starrett  Mfg.  Co.  48  Kan.  regardless  of  the  rule  which  may 
777,  30  Pac.  163;  Hurd  v.  Elizabeth,  prevail  in  Iowa,  and  of  the  fact  that 
41  N.  J.  L.  1;  Wilson  v.  Keels,  54  the  trustee  in  this  case  is  a  trustee 
S.  C.  545,  32  S.  E.  702,  71  Am.  St.  under  the  laws  of  Iowa,  as  we  are 
Rep.  816;  Gilman  v.  Ketcham,  84  not  hampered  by  the  principle  of 
Wis.  60,  54  N.  W.  395,  36  Am.  St.  stare  decisis,  and  as  the  rights  of  do- 
Rep.  899;  Sands  v.  Greeley,  88  Fed.  mestic  creditors  are  not  involved,  we 
Rep.  130;   Parker  v.  Stoughton  Mill  hold   that  he   may,   as  a  matter  of 

comity,  maintain  this  action." 


347  WHO  ARE  PHOPEK  PARTIES.  [§§   1385,   1386. 

clary  should  unite  as  plaintiffs.''^  Primarily  the  right  of  action  is 
in  the  trustee,  but  his  right  is  not  exclusive  unless  made  so  by  the 
terms  of  the  deed.®" 

§  1385.  A  holder  of  bonds  secured  by  a  mortgage  may  file  a 
bill    to  foreclose  in  behalf    of   himself    and  the  other  bondholders, 

whose  rights  the  court  will  protect,  though  they  be  not  made  par- 
ties and  do  not  appear,^''"  especially  if  the  mortgage  trustee  refuses 
to  bring  the  action,^"^  or  has  acquired  an  adverse  interest.^"^  This  is 
in  accordance  with  the  equitable  principles  already  stated,  and 
adopted  in  the  several  codes,  that  one  or  more  of  many  persons 
having  a  common  interest,  or  of  persons  so  numerous  as  to  render 
it  impracticable  to  bring  them  all  before  the  court,  may  sue  in  be- 
half of  the  whole. 

A  bondholder  may  also  intervene  in  a  foreclosure  suit  brought 
by  the  trustee  of  the  mortgage  or  deed  of  trust,  for  the  protection 
of  his  interests,  when  it  is  shown  that  the  trustee  is  not  acting 
in  good  faith,  and  that  the  litigation  is  being  conducted  upon  a  false 
and  fraudulent  basis,  prejudicial  to  the  bondholder's  interests."^ 

If  in  such  case  a  master  be  appointed  with  instructions  to  report 
the  names  of  the  lien-holders,  and  the  amount  due  each,  those  who 
appear  before  the  master  and  prove  their  claims  are  as  much  bound 
by  a  judgment  or  order  affecting  the  subject-matter  of  the  suit  as 
if  they  had  been  formally  made  parties."* 

If  such  other  bondholders  intervene,  they  are  considered  parties 
plaintiff  in  determining  the  jurisdiction  of  the  court  as  affected  by 
citizenship.^*'^ 

§  1386.  Trustee  for  creditors. —  Another  exception  to  the  gen- 
eral rule  is  made  in  the  case  of  a  trustee  of  a  fund  for  the  benefit 

»^  Story  Eq.  PI.  §§  201,  209;  Wood  Tex.  290,  34  S.  W.  729;  Fidelity  Trust 

V.  Williams,  4  Madd.  186;  Hichens  v.  &  Saf.   Vault  Co.  v.  Mobile  St.   Ry. 

Kelly,  2  Sm.  &  G.  264;  Martin  v.  Mc-  Co.  53  Fed.  850;   Gasquet  v.  Fidelity 

Reynolds,  6  Mich.   70;    Hambrick  v.  Trust  &  Saf.  Vault  Co.  57  Fed.  80.  6 

Russell,  86  Ala.  199,  5  So.  298.  C.  C.  A.  253,  13  U.  S.  App.  564. 

'*»  American    Tube    &    Iron    Co.    v.  ^'^  Davies  v.  N.  Y.   Concert  Co.  41 

Kentucky  So.  Oil  &  Gas.  Co.  51  Fed.  Hun,  492. 

826.  ^"^Webb    v.    Vt.    Cent.    R.    Co.    20 

'"^See  Jones  on   Corporate  Bonds  Blatchf.    218;    Henry   v.    Travellers' 

and    Mortgages,    §    388.      Mason    v.  Ins.  Co.  16  Colo.  179,  26  Pac.  318. 

York  &  Cumberland  R.   Co.   52   Me.  ^^  Henry  v.  Travellers'  Ins.  Co.  16 

82;  Coe  v.  Beckwith,  10  Abb.  Pr.  296;  Colo.  179,  26  Pac.  318;  Grain  v.  Ald- 

Reid  V.  Evergreens,  21  How.  Pr.  319.  rich,  38  Cal.  514;  Galveston  Railroad 

See    Blair    v.    Shelby   Co.    Agr.    Soc.  Co.  v.  Cowdry,  11  Wall.  459. 

28  Ind.  175;  Bardstown  &  Louisville  '"*  Carpenter  v.  Canal  Co.  35  Ohio 

R.   Co.   V.   Metcalfe,  4  Mete.   199,  81  St.  307. 

Am.    Dec.     541;     Lambertville     Nat.  '"^Mangels  v.  Donau  Brewing  Co, 

Bank  v.  Bag  &  Paper  Co.   (N.  J.)  15  53  Fed.  513. 
Atl.    388;    Hammond    v.    Tarver,    89 


R    1387.]  OF    PARTIES    PLAINTIFF.  348 

of  creditors,  who  may  generally  sue  without  bringing  the  creditors 
before  the  court."®  In  many  cases  it  would  be  impossible  to  make  all 
the  creditors  parties,  as  where  they  are  not  designated  except  as  a 
person's  creditors. 

§  1387.  Upon  the  death  of  the  mortgagee,"'  or  of  a  mortgage 
trustee,  the  right  of  action  upon  the  mortgage  securities  is  in  his 
executor  or  administrator,  and  not  in  the  heirs  of  the  mortgagee."* 
His  heirs  can  maintain  the  action  only  in  case  there  has  been  no 
administration  axid  there  are  no  debts.""  The  land  is  regarded  as 
merely  a  security  for  the  money,  and  not  as  real  estate  absolutely 
vested  in  the  mortgagee,  and  which  upon  his  death  goes  to  his  heir, 
although  this  was  the  view  formerly  taken.^"  The  entry  of  the 
mortgagee  after  forfeiture  does  not  make  the  mortgaged  property 
his  real  estate.  Until  foreclosure  is  complete  the  land  belongs  to 
the  mortgagor.  Neither  does  the  absence  of  any  personal  obliga- 
tion by  bond,  note,  or  covenant  for  the  debt  affect  the  right  of  the 
personal  representative  to  collect  the  money  due  by  the  mortgage. 
The  heir  of  the  mortgagee  holds  the  legal  title  in  trust  for  the  per- 
sonal representative. 

Of  course  the  mortgagee  may,  by  his  will,  settlement,  or  otherwise, 
provide  that  the  mortgage  security  shall  go  to  his  heir  as  devisee; 
and  then  the  right  of  the  heir  to  sue  rests  upon  the  authority  so 
given.  One  to  whom  a  specific  mortgage  is  bequeathed  for  life  may 
maintain  a  bill  to  foreclose  it,  although  there  be  a  further  bequest 
over  to  another  of  the  remainder  after  the  death  of  the  first  taker.^^^ 
Such  immediate  legatee  is  entitled  to  the  possession  of  the  securities, 
and  as  well  to  the  possession  of  the  proceeds  of  the  same  upon 
collection.     It  is   necessary  that   such   holder   of   securities   should 

1""  Morley  v.  Morley,  25  Beav.  253;  '"*  Lambertville  Nat.  Bank  v.  Bag 

Knight    v.    Pocock,    24    Beav.    436;  &    Paper    Co.    (N.    J.)    15    Atl.    388; 

Thomas  v.   Dunning,   5  De  G.   &  S.  Griffin   v.    Lovell,    42   Miss.    402;    De 

618;  Christie  v.  Herrick,  1  Barb.  Ch.  Peyster  v.  Ferrers,  11  Paige,  13.     In 

254;    Moulton   v.    Haskell,   50   Minn.  Alabama    the   heirs    as    well    as   the 

367,'  52  N.  W.  960.  personal    representatives   are   neces- 

"^  Woodruff  v.  Mutschler,  34  N.  J.  sary    parties.      Wells    v.    American 

Eq.  33,  and  reporter's  note;  Citizens'  Mortg.  Co.  109  Ala.  430,  20  So.  Rep. 

Nat.  Bank  v.  Dayton,  116  111.  257,  4  136. 

N.  E.  492.  "*»Brunson  v.  Henry,  140  Ind.  455, 

It  is  provided  by  statute  in  several  39  N.  E.  256. 

states    that    upon    the    death    of    a  "«  St.  John  v.  Grabham  (11  Car.  1), 

holder  of  a  mortgage  without  having  cited  in  Smith  v.  Smoult,  1  Ch.  Cas. 

foreclosed  the  equity  of  redemption,  88;  Noy  v.  Ellis,  2  Ch.  Cas.  220. 

the   mortgage  is  personal  assets  in  '"  Proctor   v.    Robinson,    35   Mich, 

the   hands   of   his    executor   or    ad-  284.    See  Sargent  v.  Baldwin,  60  Vt. 

ministrator;   as  in  Maine,  Maryland,  17,  13  Atl.  854. 
Michigan,   Ohio,   Vermont   and   Wis- 
consin. 


3-i9"  WHO    ARE    I'ROPEU    I'AKTJES.  [§    1388. 

have  the  authority  to  convert  them  into  money  in  order  to  obtain 
the  income  and  protect  the  property  from  loss.^^^ 

A  mortgage  cannot  be  foreclosed  in  the  name  of  the  mortgagee 
after  his  decease,  by  direction  of  a  devisee  or  legatee;  but  the  lat- 
ter may  have  a  new  foreclosure  in  his  own  name.^^^ 

If,  upon  final  settlement  of  the  estate,  a  mortgage  be  transferred 
to  a  guardian  of  certain  minor  heirs  of  the  deceased  mortgagee,  an 
action  upon  it  may  be  maintained  by  such  guardian.^" 

Upon  the  final  settlement  of  the  mortgagee's  estate,  if  the  admin- 
istrator hands  over  to  the  heirs  certain  mortgages  which,  being 
deemed  of  little  value,  had  never  been  included  in  the  administra- 
tor's account,  or  in  the  order  of  distribution,  the  heirs  may,  as  the 
equitable  owners,  enforce  them  in  their  own  name.^^^ 

§  1388.  The  personal  representative  of  the  mortgagee  upon  the 
death  of  the  latter  is  the  proper  party  to  bring  an  action  to  fore- 
close the  mortgage,  this  being  personal  assets.  The  administrator 
need  not  join  the  heirs  with  him  in  the  proceeding.^^*^  The  heirs 
cannot  maintain  the  bill;  nor  can  the  devisee  or  legatee.^^^  For- 
merly it  was  held  that  the  heirs  should  be  joined,  because,  if  the 
mortgagor  should  redeem,  there  would  be  no  one  before  the  court 
by  whom  an  effectual  conveyance  of  the  legal  estate  could  be  made.^^* 
But  in  this  country  the  heir  has  been  held  a  necessary  party  in  only 
two  or  three  States.^^'^  All  the  administrators  or  executors  who  have 
qualified  should  join  in  the  suit,^-°  and  proper  proof  of  appointment 
should  be  made.^^^  It  is  no  defence  to  a  suit  by  executors  to  foreclose 
a  mortgage  that  their  testator  made  a  later  will  than  that  under 
which  they  are  acting,  which  has  not  been  offered  or  admitted  to 
probate. ^^^ 

"'  Sutphen  v.  Ellis,  35  Mich.  446.  "°  Mclver    v.    Cherry,     8     Humph. 

'''White  V.  Secor,  58  Iowa,  533,  12  713;    Atchison   v.   Surguine,   1  Yerg. 

N.  W.  586.  400;    Etheridge  v.  Vernoy,  71  N.   C. 

"*  Walter  v.  Wala,  10  Neb.  123,  4  184,  187. 

N.  E.  938.  ''"1  Daniel  Ch.  Pr.  p.  226;   Davies 

"^  Stanley  v.  Mather,  31  Fed.  860.  v.  Williams,  1  Sim.  5. 

'"Dayton  V.  Dayton,  7  Bradw.  136;  '=' Ralphs    v.    Hensler,   97   Cal.    96, 

Plummer  v.  Doughty,  78  Me.  341.  32  Pac.  243. 

"■  Kinna  v.  Smith,  3  N.  J.  Eq.  14;  '"Moss  v.  Lane,  50  N.  J.  Eq,  295, 

Woodruff  v.  Mutschler,  34  N.  J.  Eq.  23  Atl.   481.     Until  the  later  will  is 

33;    Buck    v.    Fischer,    2    Colo.    182;  proven,  and  letters  testamentary  is- 

Roath  V.   Smith,  5  Conn.   133;    Rat-  sued     upon     It,    the   power    of    the 

liff  V.  Davis,  38  Miss.  107;  Grattan  v.  executor  under  the  letters  testamen- 

Wiggins,  23  Cal.  16.     For  an  excep-  tary  actually  issued,  to  take  and  col- 

tional  case,  see  Wright  v.  Robinson,  lect    the    assets,    remains    undimin- 

94  Ala.  479,  10  So.  319.  ished.     Annin  v.  Vandoren,  14  N.  J. 

'"Powell     Mortg.     970;     Wood    v.  Eq.    135,   146;    Quidort   v.    Pergeaux, 

Williams,  4  Madd.  185;  Worthington  18    N.    J.    Eq.    472.    476;    Waters    v. 

V.  Lee,  2  Bland  Ch.  678.  Stickney,  12  Allen  1,  15. 


§    1389.]  OF   PARTIES    PLAINTIFF.  350 

When,  however,  the  heir  of  the  mortgagee  is  in  possession  of  the 
premises,  the  personal  representative  should  make  him  a  party, 
either  plaintiff  or  defendant.^^^  When  the  administrator  has  ac- 
quired title  through  foreclosure,  he  can  bring  ejectment  for  the 
land.^^* 

In  case  no  administration  has  been  taken  upon  the  mortgagee's 
estate,  there  being  no  debts  of  the  estate,  his  heir  may  maintain  an 
action  to  foreclose  the  mortgage. ^-^ 

§  1389.  A  foreign  executor  or  administrator  must  generally 
receive  appointment  from  the  proper  court  in  the  State  where  the 
mortgaged  land  is  situate,  before  he  will  be  allowed  to  prosecute  a 
suit  to  foreclose  the  mortgage.^^"  The  legal  objection  to  allowing 
a  foreign  executor  or  administrator  to  pFOsecute  such  suit  is  that 
better  protection  is  afforded  to  creditors  of  the  deceased,  resident  in 
the  State  where  the  property  is  situated,  by  requiring  an  appoint- 
ment under  the  laws  of  that  State,  and  thereby  making  the  rep- 
resentative of  the  deceased  liable  to  account  in  that  State  for  the 
assets  there  collected  by  him;  so  that  creditors  and  others  in  such 
State  are  not  obliged  to  go  to  a  foreign  jurisdiction  to  prosecute 
their  claims. ^^^ 

Another  practical  advantage  of  the  requirement  is,  that  by  such 
appointment  in  the  State  where  the  property  is  situated  evidence 
of  the  authority  of  the  personal  representative  to  act  in  place  of 
the  deceased  mortgagee,  and  to  make  discharge  of  the  mortgage, 
is  to  be  found  in  that  State;  and  this  alone  is  sufficient  ground  for 
requiring  such  appointment  in  every  case,  even  when  voluntary 
payment  of  the  mortgage  is  to  be  made;  or  when  an  assignee,  resi- 
dent in  the  State,  claims  payment  l)y  virtue  of  an  assignment  to 
him  by  a  foreign  executor  or  administrator;  for  although  such  as- 
signee can  prosecute  an  action  to  foreclose  the  mortgage,^^^  the  record 
title  to  the  estate  made  through  such  foreclosure  is  objectionable, 
inasmuch  as  there  is  no  evidence  in  the  State  of  the  authority  by 
which  the  foreign  executor  or  administrator  made  the  assignment.^'** 

'-'Huggins    v.    Hall,    10    Ala.    283;  Anthony  v.  Anthony,  161  Mass.  343, 

Osborne  v.  Tunis,  25  N.  J.  L.  633.  37  N.  E.  386.    See  §  797. 

"*  Kunzie  v.  Wixom,  39  Mich.  384.  ""  Peterson  v.    Chemical   Bank,   32 

'"  Pool  V.  Davis,  135  Ind.  323,  34  N.  N.  Y.  21  43,  29  How.  Pr.  240,  88  Am. 

E.  1130.  Dec.  298. 

^^^  Trecothick  v.  Austin,  4  Mason,  "'  Peterson  v.   Chemical  Bank,  32 

16,  33;   Williams  v.  Storrs,  6  Johns.  N.  Y.  21,  43,  29  How.  Pr.  340,  88  Am. 

Ch.  353,  10  Am.  Dec.  340;   Brown  v.  Dec.  298.     And  see  Smith  v.  Webb. 

Brown,   1  Barb.   Ch.   189;    Porter  v.  1  Barb.  230,  that  a  legatee  under  a 

Trail,  30  N.  J.  Eq.  106.     See  Wood-  will   proved   in   another   State   may 

ruff  V.   Mutschler,   34   N.   J.   Eq.   33,  sue. 

note;    Dial   v.    Gary,   24   S.    C.    572;  "^  See  §  797. 


351  WHO  ARE  rnoPER  parties.         [§§  1390,  1391. 

Objection  that  the  foreign  executor  or  administrator  has  no 
standing  in  court  to  enforce  the  mortgage  must  bo  made  by  demur- 
rer or  answer,  or  it  will  be  deemed  to  have  been  waived. ^^° 

In  a  State  where  a  foreign  executor  is  by  statute  allowed  to  sue 
like  any  other  non-resident,^^^  the  right  of  such  executor  to  main- 
tain an  action  on  securities  in  his  hands  is  sufficiently  shown  by 
the  production  of  letters  testamentary  issued  by  the  court  of  an- 
other State  having  general  jurisdiction  of  the  settlement  of  estates, 
although  the  testator  was  a  resident  of  still  another  State,  where 
he  died,  and  the  recitals  of  the  letters  only  show  that  he  had  prop- 
erty in  the  State,  but  not  in  the  county,  where  the  letters  were 
issued.^^^ 

§  1390.  Mortgage  to  executor  or  guardian. —  A.  mortgage  made 
to  A.  B.,  "acting  executor  of  the  estate  of  T.  T.,  deceased,"  is  ijrima 
facie  the  private  property  of  A.  B.,  and  upon  his  decease  a  bill  to  fore- 
close it  should  be  brought  by  his  personal  representative;  but  if 
it  be  alleged  in  the  bill  and  shown  that  the  mortgage  is  part  of 
the  assets  of  the  estate  of  T.  T.,  an  administrator  with  the  will 
annexed  of  his  estate  may  foreclose  it.^^^  The  personal  representa- 
tives of  A.  B.  should  be  made  parties  to  the  suit,  because  prima 
facie  the  security  vests  in  them.^^* 

A  bill  to  foreclose  a  trust  deed  or  mortgage  made  to  secure  the 
payment  of  a  note  endorsed  to  the  complainant,  as  guardian,  and 
not  to  his  ward,  may  be  filed  by  the  complainant  in  his  own  name 
without  stating  for  whom  or  in  what  character  he  sues.  The  word 
"guardian"  is  simply  descriptive  of  the  person  and  not  material. ^^^ 

§  1391.  When  one  person  holds  two  mortgages  upon  the  same 
premises,  he  is  not  allowed  to  bring  separate  foreclosure  suits.^^"  If 
they  are  of  different  dates  and  secure  different  debts,  when  the 
decree  is  for  sale  of  the  property  it  should  direct  the  payment  of 
the  first  mortgage  out  of  the  proceeds  of  sale,  and  that  the  residue 
be  paid  into  court  for  the  benefit  of  subsequent  incumbrancers.^^^  In 

""  McBride   v.    Farmers'    Bank   of  "=  Beach  v.  Peabody,  188  111.  75,  58 

Salem,  26  N.  Y.  450,  457;   Zabriskie  N.   E.   679;    Wolf  v.   Beaird,   123   III. 

V    Smith,  13  N.  Y.  322,  64  Am.  Dec.  585,  15  N.  E.  161;  Laycock  v.  Oleson, 

551.  60  111.  30;  Newhall  v.  Turney,  14  111. 

i^^As  in  Nebraska:  Comp.  St.  1885,  338;  Baker  v.  Ormsby,  5  111.  325. 

p.  324,  ch.  24.  '^'  Roosevelt  v.  Ellithorp,  10  Paige, 

^"Cheney  v.  Stone,  29  Fed.  885.  415;    Newman  v.  Ogden,  6  Ch.   Dec. 

"^Peck  v.  Mallams,  10  N.  Y.  509;  (N.    Y.)    40;    Kellogg  v.    Babcock,   1 

People  v.   Keyser,  28   N.   Y.   226,   84  Ch.  Dec.  (N.  Y.)  47;  Fitzhugh  v.  Mc- 

Am.  Dee.  338;   Renaud  v.  Conselyea,  Pherson,  3  Gill,  408.     And  see  Pierce 

4  Abb.   Pr.  280,  affirmed  5  Abb.  Pr.  v.  Balkam,  2  Cush.  (Mass.)  374. 

346.  "'  Kellogg  v.  Babcock,  1  Ch.  Dec. 

"*Peck  v.  Mallams,  10  N.  Y.  50».  (N.  Y.)  47. 


§§    1393,    1393.]  OF    PARTIES    PLAINTIFF.  352 

case  of  a  strict  foreclosure,  one  decree  is  made  embracing  both  mort- 
gage debts,  instead  of  two  decrees  each  limiting  a  time  of  redemption 
for  each  mortgage.^^®  The  holder  of  the  two  mortgages  may 
foreclose  them  in  one  suit,  although  they  were  given  by  different 
persons,  if  made  to  secure  the  same  debt.^^**  Where  there  are  sev- 
eral simultaneous  mortgages  of  the  same  property,  though  they  se- 
cure different  debts,  one  not  entitled  to  a  preference  over  the  others 
cannot  be  foreclosed  alone.  The  complainant  should  ask  the  other 
mortgagees  to  join  with  him  in  foreclosing  all  the  mortgages,  and 
on  their  refusal  so  to  do  should  make  them  defendants.^*" 

§  1392.  A  mortg-age  executed  to  persons  in  an  official  ca- 
pacity may  be  foreclosed  by  their  successors  in  the  office  in  their 
own  names  as  equitable  assignees  of  the  security,  as  in  case  of  a 
mortgage  given  to  the  receivers  of  an  insolvent  corporation.  The 
successor  is  in  such  case  an  equitable  assignee,  and  though  he  could 
not  sue  in  his  own  name  at  law  he  may  do  so  in  equity.^*^ 

If  the  mortgagee  becomes  bankrupt,  his  assignee  may  foreclose 
the  mortgage  without  joining  him  as  a  party.  Though  there  be  a 
possibility  that  there  may  be  property  more  than  enough  to  pay 
the  creditors,  the  presumption  from  the  adjudication  is  that  there 
will  not  be;  and  therefore  he  is  not  regarded  as  having  any  in- 
terest sufficient  to  entitle  him  to  be  made  a  party.  And  such 
would  be  the  case  also  where  a  corpoTation  holding  a  mortgage 
has  been  declared  insolvent,  and  its  property  placed  in  the  hands  ox 
a  receiver.^*^ 

§  1393.     A  wife  owning  a  mortgage  as  her  separate   property 

"cannot  join  her  husband  as  a  co-plaintiff  to  foreclose  it.  Objec- 
tion, however,  to  the  joining  of  the  husband  should  be  taken  by 
demurrer,  and  cannot  be  insisted  upon  at  the  hearing.^*^  When  the 
note  and  mortgage  were  given  to  a  husband  and  wife  as  security  for 
money  loaned  by  the  wife,  upon  the  death  of  the  husband  the  wife 
was  held  to  be  the  proper  party  to  sue  in  her  own  name,  on  either 
of  two  grounds, — as  surviving  mortgagee,  or  because  the  mortgage 
concerned  her  separate  estate.^** 

In  a  suit  by  a  married  woman  to  foreclose  a  mortgage  payable 
to  her,  where  the  bonds  and  mortgage  are  in  possession  of  her  hus- 
band, who  is  living  apart  from  her  and  beyond  the  jurisdiction  of 

"'  Phelps  V.  Ellsworth,  3  Day,  397.        "^  Iglehart  v.  Bierce,  36  111.  133. 

""  McGowan    v.    Branch    Bank    at        "=  Iglehart  v.  Bierce,  36  111.  133. 
Mobile,  7  Ala.  823.  '"  Bartlett  v.  Boyd,  34  Vt.  256. 

""Potter   V.    Crandall,    Clarke    (N.         "*  Shockley    v.    Shockley,    20    Ind. 

Y.)  119.  108. 


353  WHO  ARE  NECESSARY  OR  PROPER.  [§  1394. 

the  court,  the  husband  should  be  made  a  party  to  the  suit;  but  if 
there  have  been  laches  and  delay  on  his  part,  he  should  not  be  al- 
lowed to  come  in  and  defend  except  upon  terms. ^*^ 

But  a  married  woman,  not  relieved  of  the  disabilities  of  cover- 
ture, cannot  sue  alone  to  foreclose  a  mortgage  given  to  her.^*" 


PART  II. 

OF  PARTIES  DEFENDANT. 

Who  are  the  Necessary  or  Proper  Parties. 

§  1394.  General  principles.—  In  respect  to  the  defendants  in 
foreclosure  suits,  they  are  either  necessary  or  proper  parties.^*^  A 
necessary  party  is  one  whose  presence  before  the  court  is  indis- 
pensable to  the  rendering  of  a  judgment  which  shall  have  any 
effect  upon  the  property;  without  whom  the  court  might  prop- 
srly  refuse  to  proceed,  because  its  decree  would  be  practically 
nugatory.  The  person  who  in  this  sense  is  a  necessary  party  de- 
fendant is  the  owner  of  the  equity  of  redemption;  but  the  owner- 
ship of  the  land  subject  to  the  mortgage  may  be  distributed  among 
several  pei-sons,  one  of  whom  is  no  more  necessary  to  the  render- 
ing of  an  effectual  judgment  than  another.  Moreover  the  equity 
of  redemption  may  have  been  conveyed  again  and  more  than  once  in 
mortgage,  and  the  person  who  holds  the  title  subject  to  the  mort- 
gages may  have  an  interest  which  is  in  fact  of  no  value,  while 
the  holders  of  the  subsequent  mortgages  have  valuable  interests; 
yet  according  to  the  cases  the  owner  of  the  unconditional  title  which 
is  of  no  value  is  a  necessary  party,  and  the  subsequent  mortgagees 
are  only  proper  parties.  It  is  not,  however,  the  value  of  the  in- 
terest held  by  any  one  which  in  any  way  determines  whether  he  is 
a  necessary  party  or  not;  for  although  the  interest  of  the  owner 
of  the  equity  may  be  valueless,  yet  a  decree  of  foreclosure  and 
sale  is  effectual  in  cutting  off  that  interest,  and  in  transfeiTing 
the  title  subject  to  the  rights  of  subsequent  incumbrancers,  if  they 
have  not  been  made  parties.     The  decree  is  at  any  rate  effectual 

"^  Ruckman   v.    Stephens,    11   Fed.  who    has    or   claims    an    interest   in 

793.  the     controversy     adverse     to     the 

"°  Byniim  v.  Frederick,  81  Ala.  489,  plaintiff,  or  who  is  a  necessary  party 

8  So.    198.  to  a  complete  determination  or  set- 

"'  The  codes  of  the  several  States  tlement    of    the    questions    involved 

before  mentioned  provide  that  "any  therein."     See  Pomeroy's  Remedies, 

person    may    be   made   a   defendant  §  271. 


g    1395.]  OF    PARTIES    DEFEXDAXT.  354 

in  stopping  the  further  transfer  or  incumbrance  of  the  title,  and 
this  is  doubtless  the  reason  why  the  owner  of  the  equity  of  redemp- 
tion is  regarded  as  a  necessary  party. 

In  one  sense  every  person  who  has  acquired  any  interest  in  the 
property  subsequent  to  the  mortgage  is  a  necessary  party  to  the 
suit  for  foreclosure,  whether  that  interest  be  by  way  of  a  mortgage 
or  judgment  lien,  an  inchoate  riglit  of  tenancy  in  dower  or  curtesy, 
or  an  unconditional  estate  in  fee ;  because,  in  order  to  make  the  fore- 
closure complete,  and  to  transfer  a  perfect  title  by  the  sale,  it  is 
necessary  that  the  holder  of  every  such  right  or  interest  should  be 
brought  before  the  court.  A  party  may  be  necessary  in  this  sense, 
although  this  term  has  generally  been  used  only  to  designate  the 
present  owner  of  the  property,  without  whom  the  general  ownership 
of  the  property  cannot  be  transferred  by  a  sale  under  the  decree. 
It  is  doubtless  for  this  reason  that  there  is  much  confusion  in 
the  cases  as  ,to  the  persons  who  are  necessary  parties  to  the  suit. 
As  a  practical  matter,  however,  the  distinction  between  necessary 
and  proper  parties  is  not  of  much  consequence;  for  the  suit,  though 
effectual  in  cutting  off  the  estate  or  interest  of  the  parties  to  it,  is 
generally  ineffectual  as  a  foreclosure,  unless  every  interest  subse- 
quent to  the  mortgage  is  cut  off  by  the  decree  and  sale  under  it; 
for  if  a  stranger  purchases,  he  may  decline  to  take  the  title  if  any 
lien  or  right  is  left  outstanding;  and  if  the  mortgagee  himself  buys 
he  only  subjects  himself  in  such  case  to  the  expenses  of  another  suit, 
to  get  rid  of  the  rights  that  others  still  have  in  the  property. 

To  obtain  a  judgment  for  any  deficiency  there  may  be  after  the 
sale,  the  debtor  and  any  other  person  who  may  have  assumed  the 
debt  are  necessary  parties;  but  as  the  primary  object  of  the  suit  is 
to  divest  the  title  of  the  holder  of  the  equity  of  redemption,  and 
of  others  interested  in  it,  and  to  transfer  this  by  sale  to  a  purchaser, 
the  fact  that  one  is  personally  liable  for  the  debt  makes  him  a  proper 
party,  but  not,  in  the  general  use  of  the  term,  a  necessary  one. 

^  1395.  When  a  party  in  interest,  other  than  the  owner  of 
the  equity  of  redemption,  is  not  made  a  party  to  the  bill,  the 
foreclosure  is  not  generally  for  this  reason  wholly  void.  It  is  effect- 
ual as  against  those  persons  interested  in  the  equity  who  are  made 
parties.  The  sale  vests  the  estate  in  the  purchaser,  subject  to  re- 
demption by  the  person  interested  in  it,  who  was  not  made  a  party 
to  the  proceedings.^*^     His  only  remedy,  however,  is  to  redeem.     He 

"'Story's  Eq.  Pleadings,  §  193.  216.  Illinois:  Kelgour  v.  Wood,  64 
Indiana:  Matcalm  v.  Smith,  6  Mc-  111.  345;  Ohling  v.  Luitjens,  32  111. 
Lean    416;   Martin  v.  Noble,  29  Ind.     23;  Cutter  v.  Jones,  52  ni.84;Hodgen 


355 


WHO    ARE    NECESSARY    OR    PROPER. 


[§    1395. 


cannot  maintain  ejectment  against  the  purchaser.  He  cannot  have 
the  sale  set  aside  by  intervening  by  petition  in  the  foreclosure  suit. 
His  only  right  is  the  right  of  redemption.^*'*  The  sale,  though  it  fails 
to  be  effectual  in  every  other  respect,  operates  as  an  assignment  of 
the  mortgage  and  all  the  mortgagee's  rights  to  the  purchaser,  who 
may  proceed  de  novo  to'  foreclose,  as  against  the  parties  having^^*' 
an  interest  who  have  been  omitted.  If  necessary  parties  have  been 
omitted,  so  that  the  foreclosure  is  void,  the  holder  of  the  mortgage 
may  generally  maintain  a  second  action  to  foreclose.^^^  If-  in  such 
case  the  prior  mortgagee  himself  purchases  at  the  sale,  he  becomes 
merely  a  mortgagee  in  possession. ^^^ 

There  are,  however,  some  cases  which  hold  that  where  a  junior 
mortgagee  has  not  been  made  a  party  to  a  suit  to  foreclose  a  prior 
mortgage,  and  the  prior  mortgagee  has  become  the  purchaser  at  the 
foreclosure  sale,  such  junior  mortgagee  may  maintain  a  suit  to  fore- 
close his  mortgage,  and  that  his  remedy  is  not  limited  to  an  action  to 
redeem.  The  utmost  effect  of  the  foreclosure  and  sale  was  to 
transfer  the  equity  of  redemption  from  the  mortgagor  to  the  plain- 
tiff in  the  foreclosure.  But  in  such  case  the  prior  mortgagee  in 
possession  is  entitled  to  have  a  sufficient  portion  of  the  proceeds  of 


v.  Glittery,  58  111.  431;  Robbins  v. 
Arnold,  11  111.  App.  434;  Strang  v. 
Allen,  44  111.  428;  Dunlap  v.  Wilson, 
32  111.  517;  Bradley  v.  Snyder,  14  111. 
263,  58  Am.  Dec.  564;  Richardson  v. 
Hadsall,  106  111.  476.  Mississippi: 
Georgia  Pacific  R.  Co.  v.  Walker,  61 
Miss.  481.  Ohio:  Frische  v.  Kramer, 
16  Ohio,  125,  47  Am.  Dec.  368. 
Texas:  Hall  v.  Hall,  11  Texas,  526; 
Webb  v.  Maxan,  11  Tex.  678,  686. 
Wisconsin:  Tallman  v.  Ely,  6  Wis. 
244;  Hodson  v.  Treat,  7  Wis.  263. 
Minnesota:  Banning  v.  Sabin,  45 
Minn.  431,  48  N.  W.  8;  Martin  v. 
Fridley,  23  Minn.  13.  Arkansas: 
Tiirman  v.  Bell,  54  Ark.  273,  15  S. 
W.  886.  Iowa:  Porter  v.  Kilgore,  32 
Iowa,  379;  Douglass  v.  Bishop,  27 
Iowa,  214;  Veach  v.  Schaup,  3  Iowa, 
194;  Spurgin  v.  Adamson,  62  Iowa, 
661,  18  N.  W.  293.  Missouri:  Valen- 
tine V.  Havener,  20  Mo.  133.  New 
Jersey:  Brnndred  v.  Walker,  12  N.  J. 
Eq.  140;  McCall  v.  Yard.  11  N.  J. 
Eq.  58,  9  N.  J.  Eq.  358.  North  Caro- 
lina: Vanhorn  v.  Duckworth,  7  Ired, 
Eq.  261.  California:  Haffley  v. 
Maier,  13  Cal.  13. 

""Wisconsin:  Person  v.  Merrick, 
5  Wis.  231;  Farwell  v.  Murphy,  2 
Wis.    533;    Green   v.    Dixon,    9    Wis. 


532.  Connecticut:  Goodman  v. 
White,  26  Conn.  317.  Maine: 
Thompson  v.  Chandler,  7  Me.  377. 
Illinois:  Bradley  v.  Snyder,  14  111. 
263,  58  Am.  Dec.  564.  New  York: 
Benedict  v.  Gilman,  4  Paige,  58; 
Peabody  v.  Roberts,  47  Barb.  91; 
Brainard  v.  Cooper,  10  N.  Y.  356. 
New  Jersey:  McCall  v.  Yard,  9  N. 
J.  Eq.  358.  Iowa:  Redfield  v.  Hart, 
12  Iowa,  355;  Knowles  v.  Rablin,  20 
Iowa,  101;  Heimstreet  v.  Winnie,  10 
Iowa,  430.  Kentucky:  Cooper  v. 
Martin,  1  Dana,  23.  North  Carolina: 
Isler  V.  Koonce,  83  N.  C.  55;  Hinson 
v.  Adrian,  86  N.  C.  61.  South  Caro- 
lina: Douthit  V.  Hipp,  23  S.  C.  205; 
Adger  v.  Pringle,  11  S.  C.  527,  545. 

''**  Peabody  v.  Roberts,  47  Barb.  91; 
Anson  v.  Anson,  20  Iowa,  55,  89  Am. 
Dec.  514;  Ten  Eyck  v.  Casad,  15 
Iowa,  524;  Byers  v.  Brannon  (Tex.), 
19  S.  W.  1091;  Foster  v.  Johnson,  44 
Minn.  290,  46  N.  W.  350;  Morey  v. 
Duluth,  69  Minn.  5,  71  N.  W.  694. 

''"'  Brackett  v.  Banegas,  116  Cal. 
274,  48  Pac.  90.  58  Am.  St.  164. 

'"Walsh  V.  Rutgers  F.  Ins.  Co.  13 
Abb.  Pr.  33;  Vanderkemp  v.  Shelton, 
11  Paige,  28;  Jordan  v.  Sayre,  24 
Fla.  1,  3  So.  329. 


§  139G.] 


OF    TARTIES    DEFENDANT. 


356 


the  sale  applied  to  the  payment  of  his  debt,  though  no  offer  to  re- 
deem the  premises  or  pay  the  first  mortgage  is  necessary.  This 
latter  point,  of  course,  proceeds  upon  the  theory  that,  as  to  the 
holder  of  the  second  mortgage,  the  first  mortgage  is  still  subsisting 
and  unforeclosed.^^^ 

It  is  in  many  cases  a  matter  of  much  expense  and  inconvenience 
to  join  as  parties  all  the  subsequent  incumbrancers,  but  it  is  much 
more  expensive  and  inconvenient  to  omit  any.  A  purchaser  will 
hardly  take  an  estate  which  may  be  redeemed,  and  thus  incur  the 
liability  of  a  suit  to  redeem,  and  of  being  called  upon  to  account. ^^* 
Of  course  it  is  the  right  of  the  plaintiff  to  bring  all  subsequent 
parties  in  interest  before  the  court,  but  as  the  law  now  stands  it  is 
not  his  absolute  duty  to  do  so;  or,  in  other  words,  the  court  will 
not  compel  the  plaintiff,  on  the  motion  of  any  other  party,  to  bring 
in  those  who  have  subsequent  liens,  however  desirable  it  may  be  to 
make  a  final  settlement  of  the  rights  of  all  persons  interested  in 
the  property.  If  for  any  reason  a  party  in  interest  is  not  made  a 
party,  his  interest  may  be  foreclosed  in  a  subsequent  action.^^^ 

8  1396.     All  parties  in  interest  should  be  joined,  inasmuch  as  it 


"^  Denton  v.  Ontario  Co.  Nat. 
Bank,  150  N.  Y.  126,  44  N.  E.  781, 
reversing  77  Hun,  83;  Bigelow  v. 
Davol,  16  N.  Y.  Supp.  646,  relying 
upon  Walsh  v.  Rutgers  F.  Ins.  Co. 
13  Abb.  Pr.  33,  citing  Miner  v.  Beek- 
man,  50  N.  Y.  337;  Brainard  v. 
Cooper,  10  N.  Y.  356,  and  distinguish- 
ing Salmon  v.  Gedney,  75  N.  Y.  479; 
Salmon  v.  Allen,  11  Hun,  29,  and 
Ross  V.  Boardman,  22  Hun,  527. 

^=*  In  the  earlier  cases  in  England 
the  distinction  between  parties  in- 
dispensable to  the  suit,  and  proper 
parties  to  it,  was  not  always  taken. 
In  Bishop  of  Winchester  v.  Beavor, 
3  Ves.  Jun.  314,  it  was  objected  by 
the  second  mortgagees,  v.ho  were 
parties  to  a  suit  for  the  foreclosure 
of  a  first  mortgage,  that  a  judgment 
creditor  was  not  joined.  At  first  the 
Master  of  the  Rolls,  afterwards  Lord 
Alvanley,  inclined  against  the  ob- 
jection, "stating  the  inconvenience 
that  would  arise  from  the  necessity 
of  making  all  the  judgment  creditors 
of  the  mortgagor  parties."  After 
argument  he  said:  "The  usual  and 
common  practice,  almost  without  ex- 
ception, is  to  make  all  incumbranc- 
ers parties.  If  I  lay  down  that  it  is 
absolutely  necessary.  I  arm  a  man 
with  a  shield  to  ward  off  a  fore- 
closure. But  the  question  is,  whether 


it  is  not  proper  in  this  case.  I  think 
it  would  be  too  much  to  refuse  it. 
Where  there  is  no  affectation  of  de- 
lay, that  I  can  see,  I  do  not  think 
the  general  point  so  clear  as  to  de- 
termine it  upon  this  case.  I  hope 
the  court  is  not  bound  to  insist  upon 
all  incumbrancers  being  parties;  but 
I  am  perfectly  satisfied  that  in  this 
case  it  is  by  much  the  least  evil  to 
order  the  cause  to  stand  over  till 
this  single  incumbrancer  is  made  a 
party."  Mr.  Calvert,  in  his  Treatise 
on  Parties, p.  196,  says:  "The  general 
practice  will  not  of  necessity  bind  a 
mortgagee  who  for  particular  rea- 
sons, such  as  costs  and  the  small 
value  of  the  security,  desires  to  ex- 
clude from  the  record  particular 
mortgagees.  There  is  no  rule  to  the 
effect  that  there  shall  be  only  one 
foreclosure  bill  of  the  same  estate, 
for  there  may,  according  to  the  ac- 
knowledged practice,  be  as  many 
foreclosures  as  there  are  mort- 
gagees, provided  the  suits  are  filed 
in  a  series  commencing  with  the  last 
mortgagee.  It  is  said  that  a  mort- 
gagor ought  not  to  be  liable  to  suc- 
cessive suits:  yet  he  will  be  if  the 
suits  were  instituted  in  that  series." 
155  Merriman  v.  Hyde,  9  Neb.  113, 
2  N.  W.  218. 


357 


WHO   ARE   NECESSARY   OR   PROPER. 


[§  139G. 


is  true  that  the  proper  object  of  a  bill  in  equity  to  foreclose  a  mort- 
gage is  to  cut  off  all  rights  subsequent  to  tiie  mortgage.^^**  The 
rights  of  any  one  so  interested  not  made  a  party  to  the  bill  are  not 
affected  by  the  decree  of  foreclosure  and  the  sale  under  it,  but  he 
may  redeem  as  before  the  sale/"  The  proceeding  is  not  in  rem  but 
in  personam.  A  party  in  interest,  whose  application  to  be  made  a 
party  has  been  granted  only  upon  conditions  which  the  court  had 
no  right  to  impose,  and  with  which  he  refuses  to  comply,  is  not 
bound  by  the  judgment.^^^ 

One   made   a   defendant  to  a   foreclosure   suit,   whose   connection 
with  the  mortgage  or  with  the  equity  of  redemption  is  not  shown 


'=»  Clark  V.  Reyburn,  8  Wall.  318; 
Caldwell  v.  Taggart,  4  Pet.  190.  New 
York:  Bloomer  v.  Sturges,  58  N.  Y. 
168;  Kay  v.  Whittaker,  44  N.  Y. 
565;  M'Gowan  v.  Yerks,  6  Johns.  Ch. 
450;  Ensworth  v.  Lambert,  4  Johns. 
Ch.  605;  Vanderkemp  v.  Shelton,  11 
Paige,  28;  Haines  v.  Beach,  3  Johns. 
Ch.  459.  Iowa:  Chase  v.  Abbott,  20 
Iowa,  154;  Wright  v.  Howell,  35 
Iowa,  288.  Indiana:  Gaines  v. 
Walker,  16  Ind.  361;  Proctor  v.  Ba- 
ker, 15  Ind.  178;  Martin  v.  Noble,  29 
Ind.  216;  Holmes  v.  Bybee,  34  Ind. 
262;  Hasselman  v.  McKernan,  50  Ind. 
441;  Coombs  v.  Carr,  55  Ind.  303; 
Wyman  v.  Russell,  4  Biss.  307; 
Watts  V.Julian,  122  Ind.  124,  23  N.  E. 
698,  O'Brien  v.  Moffit,  133  Ind.  660, 
33  N.  E.  616,  36  Am.  St.  566.  Kansas: 
Ferguson  v.  Tarbox,  3  Kan.  App. 
656,  44  Pac.  905;  Provident  Loan 
Trust  Co.  V.  Marks,  59  Kans.  230,  52 
Pac.  449.  Alabama:  Judson  v. 
Emanuel,  1  Ala.  598;  Hunt  v.  Acre, 
28  Ala.  580;  Boykin  v.  Rain,  28  Ala. 
332,  65  Am.  Dec.  349;  Duval  v.  Mc- 
Loskey,  1  Ala.  708;  Boiling  v.  Pace, 
99  Ala.  607,  12  So.  796.  Wisconsin: 
Armstrong  v.  Piatt,  2  Wis.  298;  Row- 
ley V.  Williams,  5  Wis.  151;  Moore  v. 
Cord,  14  Wis.  213;  Stark  v.  Brown, 
12  Wis.  572,  78  Am.  Dec.  762.  Con- 
necticut: Smith  v.  Chapman,  4  Conn. 
344;  Swift  v.  Edson,  5  Conn.  531; 
Goodman  v.  White,  26  Conn.  317,  322. 
South  Carolina:  Manufacturing  Co. 
V.  Price,  4  S.  C.  338.  New  Jersey: 
McCall  V.  Yard,  11  N.  J.  Eq.  58. 
California:  Hay  ward  v.  Stearns,  39 
Cal.  58;  Hefner  v.  Urton,  71  Cal.  479, 
12  Pac.  4.86.  Oregon:  Besser  v.  Haw- 
thorne, 3  Oreg.  129;  Sellwood  v. 
Gray,     11    Oreg.    534,    5    Pac.     196; 


Coughanour  v.  Hutchinson,  41  Oreg. 
419,  69  Pac.  68.  Florida:  Wilson  v. 
Russ,  17  Fla.  691.  Texas:  Ballard 
v.  Carter,  71  Tex.  161,  9  S.  W.  92. 

""  Cockes  V.  Sherman,  2  Freem. 
13  (1676).  Here  were  five  mortgages 
of  the  same  land.  The  fifth  mort- 
gagee bought  the  first  three  mort- 
gages, and  then  foreclosed  without 
making  the  fourth  mortgagee  a 
party.  Lord  Chancellor  Finch  held 
that  the  forth  mortgagee  had  an 
equity  of  redemption.  "The  fourth 
mortgagee  was  not  concluded  by  this 
decree,  being  never  made  a  party  to 
it;  and  although  there  be  a  great 
mischief  on  one  hand  that  a  mort- 
gagee, after  a  decree  against  the 
mortgagor  to  foreclose  him  of  his 
equity  of  redemption,  shall  never 
know  when  to  be  at  rest, — for  if 
there  be  any  other  incumbrances  he 
is  still  liable  to  an  account, — yet  the 
inconvenience  is  far  greater  on  the 
other  side;  for  if  a  mortgagee,  that 
is  a  stranger  to  this  decree,  should 
be  concluded,  he  would  be  absolutely 
without  remedy  and  lose  his  whole 
money,  when  perhaps  a  decree  may 
be  huddled  up  purposely  to  cheat 
him,  and  in  the  mean  time  he  (be- 
ing paid  his  interest)  may  be  lulled 
asleep,  and  think  nothing  of  it; 
whereas,  on  the  other  hand,  there  is 
no  prejudice  but  being  liable  to  the 
trouble  of  an  account;  and  if  so  be 
that  were  stated  bona  fide  between 
the  mortgagor  and  mortgagee  in  the 
suit  wherein  the  decree  was  ob- 
tained, that  shall  be  no  more 
ravelled  into,  but  so  long  shall  stand 
untouched." 

"'*  Coleman  v.  Hunt,  77  Wis.  263, 
45  N.  W.  1085. 


§    1397.]  OF    PARTIES    DEFEXDAXT.  358 

by  the  bill,  is  not  a  proper  party,  and  is  entitled,  so  far  as  he  is  con- 
cerned, to  have  the  bill  dismissed  with  costs.^^^ 

When  in  the  petition  it  is  alleged  that  a  party  defendant  has  or 
claims  an  interest  in  the  property,  but  that  such  interest  accrued 
subsequent  to  the  mortgage,  and  such  party  makes  default,  he  is 
bound  by  the  foreclosure  and  sale  of  the  property,  although  his  title 
was  in  fact  paramount  to  the  mortgage."" 

A  demurrer  by  such  party  defendant  raises  only  the  question 
whether  the  complaint  shows  a  valid  mortgage  between  the  parties."^ 

§  1397.  Trustees  and  beneficiaries. — The  trustee  in  a  deed  of 
trust  is  a  necessary  party  because  he  holds  the  legal  title."^ 

As  a  general  rule,  all  persons  beneficially  interested  in  the  equity 
of  redemption  should  be  made  parties  to  the  suit  as  well  as  the 
trustees  who  hold  the  legal  title.  They  have  an  interest  in  the  con- 
troversy adverse  to  the  plaintiff."^  This  was  the  English  rule  until 
it  was  enacted"*  that  the  trustees  may  represent  the  persons  bene- 
ficially interested,  so  that  the  latter  need  not  be  made  parties  to  the 
suit,  unless  the  court  in  its  discretion  orders  them  to  be  joined. 
Under  this  statute,  however,  it  seems  that  the  court  will  require  that 
the  cestuis  que  trust  be  made  parties  where  the  trustees  have  not 
complete  power  over  the  estate,  or  have  not  in  their  control  funds 
applicable  to  the  purpose  of  redemption."^  Under  this  general  rule 
persons  having  a  vested  remainder  in  fee  in  the  equity  of  redemp- 
tion should  be  made  parties  to  the  bill,  though  the  trustee  is  made 
a  defendant;  and  the  fact  that  the  trustee  executed  the  mortgage 
under  authority  of  the  court  does  not  excuse  omitting  them."^ 

i^»  Havens  v.   Jones,  45  Mich.  253,  Union  Bank  at  Massillon  v.  Bell,  14 

7  N.  W.  818;  Olvphant  v.  St.  L.  Ore  Ohio    St.    200;    Mavrich    v.    Grier,    3 

&  Steel  Co.  23  Fed.  465.  Nev.  52,  57,  93  Am.  Dec.  373;   Dela- 

ico  Provident  Loan  &  Trust  Co.  v.  plaine  v.  Lewis,  19  Wis.  476;  John- 
Marks,  59  Kans.  230,  52  Pac.  449;  son  v.  Robertson,  31  Md.  476,  491; 
Bradley  v.  Parkhurst,  20  Kans.  462;  Williamson  v.  Field,  2  Sandf.  Ch. 
Fisher  v.  Cowles,  41  Kan.  418,  21  533;  King  v.  McVickar,  3  Sandf.  Ch. 
Pac.  228;  Barton  v.  Anderson,  104  192;  Leggett  v.  Mut.  Life  Ins.  Co.  of 
Ind.  578,  4  N.  E.  420.  N.  Y.  64  Barb.  23;  Rawson  v.  Lamp- 

"1  Howard  v.  Iron  &  Land  Co.  62  man,  5  N.  Y.  456;  Nodine  v.  Green- 
Minn.  298.  64  N.  W.  896.  field,  7  Paige,  544,  34  Am.  Dec.  363; 

^•=  Gardner  v.  Brown,  21  Wall.  36;  Hamilton    v.    Jacobs,    4    Ohio    C.    C. 

Jordan  v.  Sayre,  29  Fla.  100,  10  So.  250. 

823.  '"  15  &  16  Vict.  ch.  86,  §  42. 

^"  Coles  V.  Forrest,  10  Beav.  552;  i''^  Goldsmid  v.  Stonehewer,  9  Hare, 

Calverley  v.  Phelp,  Madd.  &  G.  229;  App.    xxxviii;     Tuder    v.    Morris,    1 

Tylee    v.    Webb,    6    Beav.    552,    557;  Sm.  &  G.   503.     See,  also.  Young  v. 

Goldsmid    v.    Stonehewer,    9    Hare,  Ward,  10  Hare,  lix;  Siffken  v.  Da\as, 

App.    xxxviii.,   17   Jur.   199;    Newton  Kay,  xxi;  Cropper  v.  Mellersh,  1  Jur. 

v.  Egmont,  4  Sim.   574,  5  Sim.  130;  N.  S.  299. 

Piatt     V      Oliver      2     McLean,     267;  '^•'Williamson    v.    Field,    2    Sandf. 

Oliver  v.    Piatt,   3   How.   U.    S.    333;  Ch.  533. 
Lauriat  v.   Stratton,  6  Sawyer,  339; 


359  WHO   ARE   NECESSARY   OR    PROPER.  [§    1398. 

If  the  mortgage  and  notes  secured  were  executed  by  the  mortgag- 
or as  "trustee''  without  any  declaration  of  the  trust,  and  it  is  not 
alleged  that  he  was  acting  in  the  matter  as  a  trustee  for  any  one, 
tlte  word  '"trustee"  is  regarded  merely  as  a  descriptio  personae,  and 
no  cestui  que  trust  need  be  made  a  party.^®^ 

If  there  be  a  subsequent  trust  deed  of  the  property  in  the  nature 
of  a  mortgage,  so  that  it  becomes  necessary  to  make  the  holders  of 
such  trust  deed  parties  to  a  suit  for  the  foreclosure  of  a  prior  lien, 
both  the  trustee  and  the  cestui  que  trust  should  be  made  parties 
defendant.^*'^ 

A  mortgagee  having  no  notice  that  the  mortgaged  land  was  held 
by  the  mortgagor  under  a  parol  trust  may  foreclose  without  joining 
the  beneficiaries,  and  the  purchaser  will  obtain  good  title  though 
having  notice  of  such  fact.^'^'^ 

But  a  beneficiary,  while  a  proper  party,  is  not  ordinarily  a  nec- 
essary party.  ^^° 

§  1398.  When  beneficiaries  are  numerous.—  Although  as  a  gen- 
eral rule  a  nominal  trustee  cannot  be  made  a  defendant  alone  with- 
out joining  with  him  his  cestuis  que  trust,  this  rule  will  not  be  ad- 
hered to  when  great  inconvenience  or  expense  would  be  incurred 
by  making  them  parties.  In  a  case  where  the  trustee  represented 
two  hundred  and  fifty  owners  or  subscribers,  it  was  held  that  he 
sufficiently  represented  them  as  defendant  ;^^^  and  so  trustees  who 
represented  a  large  number  of  bondholders  under  a  second  mort- 
gage were  held  to  be  the  only  defendants  required  in  a  suit  to 
foreclose  a  prior  mortgage.^'-  This  exception  to  the  rule  applies 
also  where  the  mortgaged  property  is  held  in  trust  for  numerous 
creditors."^  The  plaintiff,  however,  should  state  distinctly  and  par- 
ticularly the  grounds  on  which  he  omits  to  make  the  creditors  or 
other  persons  interested  in  the  matter  in  controversy  parties  to  the 
suit.^^*     Even  a  selected  number  of  creditors  may  sufficiently  rep- 

1"  Moss  V.   Johnson,  36   S.   C.   551,  '"  Van  Vechten  v.  Terry,  2  Johns. 

15  S.  E.  709.    See  McDowall  v.  Reed,  Ch.  197.     Chancellor  Kent  said:    "It 

28  S.  C.  466,  468,  6  S.  E.  300.  would  be  intolerably  oppressive  and 

1"^  Illinois:  Clark  v.  Manning.  95  burdensome  to  compel  the  plaintiffs 
111.  580;  Gaytes  v.  Franklin  Sav.  to  brin?  in  all  the  cestuis  que  trust- 
Bank,  85  111.  256;  Scanlan  v.  Cobb,  ent.  The  delay  and  the  expense  in- 
85  111.  296;  Bayard  v.  McGraw,  1  cident  to  such  a  proceeding  would 
Bradw.  134;  Woolner  v.  Wilson,  5  be  a  reflection  on  the  justice  of  the 
Bradw.  439;    Shinn  v.   Shinn,  91  111.  court." 

482-    Walsh   v.    Truesdell,   1   Bradw.  •'=  N.  J.  Franklinite  Co.  v.  Ames,  12 

126.  N.   J.  Eq.  507. 

""  Cooper  v.  Loughlin,  75  Tex.  524,  '"  Willis   v.    Henderson,    5    111.    13. 

13  S.  W.  37.  And  see  Swift  v.   Stebbins,  4  Stew. 

""Harlem    Co-operative    B.    &    L.  &  Port.  447. 

Asso.  V.  Quinn,  57  Hun,  590,  10  N.  Y.  "*  Holland  v.  Baker,  3  Hare,  88. 
Supp.  859. 


§§    1399-1401.]  01'   IMRTIES    DEli'ENDANT.  360 

resent  the  whole  number;  but  in  such  case  the  trustees  should  be 
made  parties,  for  the  protection  of  the  interests  of  the  whole  body 
of  creditors.^'^^ 

§  1399.  Trustee. —  It  has  been  held  in  some  cases,  however,  that 
as  the  trustee  and  cestui  que  trust  really  represent  but  one  interest, 
and  the  trustee  is  the  holder  of  the  legal  interest,  he  alone  should 
be  made  a  party  to  the  suit,  as  he  would  be  the  party  entitled  to 
redeem.  This  is  especially  the  case  where  the  trust  is  for  the  benefit 
of  creditors. ^'"^ 

A  trustee  having  the  legal  title  is  at  any  rate  an  indispensable 
party.^^^ 

§  1400.  Equitable  interest. — A  person  having  an  equitable  in- 
terest in  the  mortgaged  premises  by  reason  of  having  advanced 
money  for  erecting  buildings  thereon,  and  who  by  agreement  with 
the  owner  entered  into  possession  of  the  premises  before  the  mak- 
ing of  the  mortgage,  and  continued  in  possession  down  to  the  time 
of  the  sale  of  them  under  foreclosure  suit,  should  be  made  a  party 
to  the  proceedings;  otherwise  his  rights  will  not  be  barred.  His 
continued  possession  is  constructive  notice  of  his  equitable  rights.^^^ 
A  person  having  only  a  remote  or  contingent  interest,  without  any 
estate  or  lien,  may  properly  be  made  a  party.^^^ 

§  1401.  Remainder-men. — When  there  are  estates  in  remainder 
or  reversion  after  a  life  estate  in  the  equity  of  redemption,  it  is 
generally  sufficient  to  bring  before  the  court  the  first  person  in 
being  who  has  a  vested  estate  of  inheritance,  together  with  those 
claiming  the  life  estate,  and  omitting  any  who  may  claim  a  rever- 
sion after  such  vested  estate.^»«     Those  having  merely  future  con- 

"=  Holland  v.  Baker,  3  Hare,  68.  out  justice  if  the  rule  requiring  all 
Wigram  V.  C,  in  this  case  said:  "I  persons  to  be  present  were  not  de- 
do  not  doubt  that  the  court  does  al-  parted  from,  it  must  be  relaxed 
low  a  selected  number  to  represent  a  rather  than  be  allowed  to  stand  as 
numerous  body  of  defendants  whose  an  obstruction  to  justice." 
interests  are  sought  to  be  adversely  ''"  Grant  v.  Duane,  9  Johns.  591, 
affected  in  a  suit.  Lord  Eldon  re-  612;  Willis  v.  Henderson,  5  111.  13; 
peatedly  said  it  might  be  done,  if  Paschal's  Dig.  of  Dec.  (Tex.),  §§ 
the  purposes  of  justice  required  it;  18531,18533.  ,  o^  *,  -inn 
and  Lord  Cottenham,  in  Attwood  v.  '■'  Hambrick  v.  Russell,  86  Ala.  199, 
Smith  (not  reported,  but  see  4  Myl.  5  So.  298.  xt  c  o.  t^ 
&  C.  635),  after  saving  that  the  right  "^  Noyes  v.  Hall,  97  U.  S.  oi\  ue 
course  was  to  bring  all  parties  be-  Ruyter  v.  St.  Peter's  Church,  2  Barb, 
fore  the  court,  observed,  that  courts  Ch.  655. 

of  justice  are  bound  to  have  regard  '"Johnson  v.  Britton,  23  Ind.  105; 

to  the  mode  in  which  the  affairs  of  Parrott  v.  Hughes,  10  Iowa,  459. 

mankind  are  conducted;    and  when,  '^°  Gore  v.   Stackpoole,   1  Dow,  is. 

in  consequence  of  the  mode  of  deal-  31 :    Reynoldson    v.    Perkins     AmbJ. 

Ing,  it  would  be  impossible  to  work  564;    Eagle  P.   Ins.  Co.   v.  Cammet, 


3G1  WHO    ARE   NECESSARY   OR   PROPER.  [§    1402. 

tingent  interests  are  not  necessary  parties,  if  the  person  who  has  the 
first  estate  of  inheritance  is  before  the  court.  If  the  estate  is  en- 
tailed, it  is  sufficient  to  make  the  first  tenant  in  tail  in  esse  a  party 
if  there  are  no  prior  estates.^**^  This  is  upon  the  principle  of  repre- 
sentation. "The  first  tenant  in  tail,"  says  Lord  Camden,  "is  suffi- 
cient; he  sustains  the  interests  of  everybody:  those  in  remainder 
are  considered  ciphers."^^^ 

But  it  is  not  enough  to  make  the  persons  holding  the  life  in- 
terest in  the  mortgaged  premises  parties  to  the  hill  without  joining 
any  one  having  a  remainder  in  fee;  as  in  case  the  mortgagor  makes 
a  devise  of  the  premises  to  trustees  in  trust  for  his  children  for  life, 
remainder  in  fee  to  his  grandchildren:  the  latter  must  be  made 
parties  in  order  to  cut  off  their  right  of  redemption.  The  trustees 
cannot  represent  the  whole  estate. ^*^ 

After  a  conveyance  of  lands  subject  to  mortgage  in  trust  for  the 
benefit  of  children,  both  those  in  being  and  those  to  be  born,  all  the 
children  in  esse  at  the  time  of  the  filing  of  a  bill  of  foreclosure  should 
be  made  parties.  A  decree  against  the  trustee  alone  does  not  take 
away  their  right  to  redeem.^®* 

§  1402.  The  mortgagor,  if  he  remains  the  owner  of  the  equity 
of  redemption,  is  a  necessary  party  to  a  foreclosure  .suit,  because 
without  his  presence  the  primary  object  of  the  suit,  a  decree  of 
foreclosure  or  sale,  cannot  be  ol^tained.^^^  Even  if  he  has  wholly 
parted  with  his  interest  in  the  premises  he  should  be  made  a  party 
to  the  bill,  if  a  judgment  is  sought  against  him  for  any  deficiency 
of  the  debt  that  may  remain  after  applying  to  it  the  proceeds  of 

2    Edw.    Ch.    127;    Cholmondeley    v.  Bro.  Ch.  276;  Palk  v.  Clinton,  12  Ves. 

Clinton,  2  Jac.  &  W.  133;    Chappell  48;    Caddick   v.    Cook,   32   Beav.    70; 

V.  Rees,  1  De  G.,  M.  &  G.  393;  Hop-  Richards  v.  Thompson,  43  Kans.  209, 

kins    V.    Hopkins,    1    Atk.    581,    590;  23  Pac.  106.     In  Kay  v.  Whittaker, 

Fishwick  v.  Lowe,  1  Cox,  411;   Ker-  44    N.    Y.    565,    572,    Hunt,    J.,    said, 

rick  V.  Safferey,  7  Sim.  317;   Nodine  obviously  with  reference  to  the  case 

V.    Greenfield,   7   P'aige,   544,   34   Am.  of   the    mortgagor's    still    remaining 

Dec.  363.  the  owner  of  the  equity:  "To  sustain 

"'Yates   V.    Hambly,    2    Atk.    237;  a  foreclosure  suit,  the  mortgagor  is 

Fishwick  v.  Lowe,  1  Cox,  411;  Lloyd  a  necessary  party,  and  g-enerally  the 

V.  Johnes,  9  Ves.  37;  Giffard  v.  Hort,  only  necessary  one.     Others  may  be 

1  Sch.  &  Lef.  386,  408;  Roscarrick  v.  joined  if  it  is  desired  to  cut  off  their 

Barton,    1    Ch.    €as.    217:     Piatt    v.  interests,    as    a   wife,    a    subsequent 

Sprigg,  2  Vern.   303;    Williamson  v.  purchaser,  or  subsequent  mortgagee. 

Field.  2  Sandf.  Ch.  533.  They  are  not  indispensable  parties. 

'*=  Reynoldson    v.    Perkins,    Ambl.  The   action   is   gooa   without   them; 

564.  and  the  only  effect  of  their  absence 

•^^  Leggett  V.  Mut.  Life  Ins.  Co.  64  is   that   their   interests   are   not   af- 

Barb.  23,  36.  fected  by  the  proceeding."  In  a  few 

1^  Clark  V.  Reyburn,  8  Wall  318.  cases  the  mortgagor  has  been  spoken 

"^  Story  Eq.  PI.  §  197;    Farmer  v.  of  as  a  proper  party  merely.    Semple 

Curtis,  2  Sim.  466;  Fell  v.  Brown,  2  v.  Lee,  13  Iowa,  304;  Sumner  v.  Cole- 


§    1403.]  OF    PARTIES    DEFENDANT.  3G3 

the  sale.^^*'  Therefore,  where  the  laws  provide  for  a  judgment  for 
such  deficiency,  he  is  always  a  proper  party,  though  not  a  necessary 
one,  after  he  has  conveyed  his  interest,  so  far  as  effecting  a  complete 
foreclosure  of  the  equity  of  redemption  is  concerned.  If  no  per- 
sonal judgment  is  sought  against  the  mortgagor,  or  none  can  be  had, 
he  sho'uld  not  be  made  a  party  to  the  bill  after  he  has  ceased  to 
have  any  interest  in  the  subject  of  the  mortgage. ^^^ 

§  1403.     If    the  mortgagor  retains  an  interest    in  the  property, 

such  that  he  may  ^gain  become  possessed  of  the  equity  of  redemp- 
tion, he  must  be  made  a  party;  as,  for  instance,  if  there  has  been  a 
voidable  or  irregular  sale  of  his  equity  under  a  subsequent  mort- 
gage.^** It  would  seem  that  until  he  has  actually  voided  the  sale  the 
purchaser  might  properly  be  regarded  as  the  necessary  party  to  the 
suit,  because  he  would  be  the  apparent  holder  of  the  equity  of  re- 
demption; and  that  the  mortgagor  would  be  a  j)roper  party  only 
by  reason  of  his  possible  right  to  redeem.  Although  a  mortgagor 
has  entered  into  a  binding  contract  to  convey  the  property,  he  is 
not  a  necessary  part}^  until  he  actually  makes  the  conveyance. 
The  person  contracting  to  purchase  is,  however,  a  proper  party; 
and  the  court  may  even  order  him  to  be  brought  in  before  entering 
a  decree.^*'' 

In  some  cases  it  has  been  held  that  the  circumstance  that  the 
mortgagor  has  conveyed  the  premises  by  a  warranty  deed  gives  him 
a  sufficient  interest  in  a  suit  to  foreclose  the  mortgage  to  authorize 
his  being  made  a  party  defendant. ^'"*     But  these  decisions  are  not 

man,  20  Ind.  486.    But  it  is  conceived  service  is  made  by  publication,  it  is 

tliat    this    is    an    inaccuracy    in    the  generally    provided    either    that    an 

use  of  terms.  entry  of  judgment  shall  be  deferred, 

'"' Delaplaine  v.  Lewis,  19  Wis.  476;  or  that  judgment  may  be  opened  if 

Bigelow  v.  Bush,  6  Paige,  343;  Shaw  the     defendant     appears     within     a 

V.  Hoadley,  8  Blackf.  165;  Van  Nest  limited  time.     See  Brown  v.  Conger, 

V.  Latson,  19  Barb.  604;   Heyman  v.  10  Neb.  236,  4.  N.  W.  1009. 

Lowell,   23    Cal.    106;    Michigan    Ins.  '^^  Brown    v.    Stead,    5    Sim.    535; 

Co.   V.   Brown,  11   Mich.  265:  Worth-  Swift  v.  Edson,  5  Conn.  531;  Broome 

ington  V.  Lee,  2  Bland,  678;  Moore  v.  v.    Beers,    6    Conn.    198;    Wilkins   v. 

Starks,    1    Ohio    St.    369;     Cord    v.  Wilkins,  4  Port.  245;   Inge  v.  Board- 

Hirsch,  17  Wis.  403;   Semple  v.  Lee,  man,  2  Ala.  331;    Stevens  v.   Camp- 

13    Iowa,    304;    Johnson    v.    Monell,  bell,  21  Ind.  471;  Burkham  v.  Beaver, 

13   Iowa,   300;    Murray  v.   Catlett,   4  17    Ind.    367;    Jones    v.    Lapham,    15 

Greene    (Iowa),     108;     Williams     v.  Kans.    540;    Ashmore   v.    McDonnell, 

Meeker,  29  Iowa,  292,  294;  Huston  v.  39  Kans.  669,  16  Pac.  687. 

Stringham,  21  Iowa,  36;    Chester  v.  '^' Merritt    v.    Phenix,    48    Ala.    87. 

King,  2  N.  J.  Eq.   405;    Vreeland  v.  And  see,  also,  Huston  v.  Stringham, 

Loubat,  2  N.  J.  Eq.  104.  21  Iowa,  36. 

If  the  mortgagor  be  not  a  resident  ''■'' Crooke  v.  O'Higgins,  14  How.Pr. 

of  the  State,  service  must  be  had  in  154. 

the  manner  provided  by  statute  for  '^^  Gifford    v.    Workman,    15    Iowa, 

service  upon  absent  defendants,  or,  34;    Huston  v.   Stringham,  21   Iowa, 

in   the   absence   of   such   statute,   in  36. 
the  manner  ordered  by  court.    When 


363  WHO    ARE   NECESSARY    OR   PROPER.  [§    l-i04. 

generally  sustained.  The  mortgagor,  however,  is  presumed  to  re- 
tain his  interest  in  the  property,  and  to  be  a  necessary  party,  unless 
the  bill  discloses  a  state  of  facts  which  render  it  unnecessary  to 
make  him  a  party.^^^ 

The  grantor  in  an  absolute  deed,  intended  as  a  mortgage,  is  not 
a  necessary  party  when  the  defeasance  is  executed  to  another,  to 
secure  whose  debt  the  deed  was  made.  He  is  a  proper  party, 
though  gncrally  he  may  be  omitted.  If  the  complainant,  however, 
has  any  doubt  of  the  validity  of  the  conveyance,  he  may  very  prop- 
erly join  him,  to  set  the  doubt  at  rest.^''' 

§  1404.  The  mortgagor,  after  he  has  conveyed  the  whole  of 
the  premises  mortgaged,  is  not  a  necessary  party  to  the  suit;  nor 
indeed,  is  he  a  proper  party,  unless  a  personal  judgment  for  any 
deficiency  there  may  be,  after  applying  the  property  to  the  debt,  is 
sought  against  him.^"^  The  decree  is  conclusive  upon  the  title 
without  him.^^*  He  is,  however,  so  far  a  proper  party  in  case  a  per- 
sonal judgment  against  him  is  sought,  that  this  judgment  is  con- 
clusive against  him  in  any  future  litigation  between  the  same  par- 
ties, and  he  may  take  an  appeal  from  it.^^'''  If  he  is  not  made  a 
party,  and  no  one  under  him  has  become  personally  liable  for  the 
debt,  the  decree,  after  finding  the  amount  of  the  debt,  can  merely 
direct  a  sale  of  the  premises  in  satisfaction  of  the  de?bt.^''*'  And  such 
would  be  the  case,  also,  when  the  debt  is  barred  by  the  statute  of 
limitations,  although  he  is  made  a  party.^**^ 

"iRunkel  v.  Markell,  26  Md.  390.  Jones  v.  Smith,  55  Tex.  383;  Patter- 

"=Weed  v.   Stevenson,  Clarke   (N.  son  v.  Allen,   50  Tex.  23;    Heard  v. 

y.),  166.  McKinney,  1  Posey,  Unrep.  Cas.  83; 

^"•^  Miller    v.    Thompson,    34    Mich.  Henderson  v.  New  England  Loan  & 

10;  Hibernia  Savings  &  Loan  Soc.  v.  Trust  Co.  6  Kans.  App.  219,  283.  51 

Herbert,    53    Cal.    375;     Osborne    v.  Pac.   61;    Gutzeit  v.  Pennie,   98  Cal. 

Crump,  57  Miss.  622;  Johnson  v.  Fos-  327,  33  Pac.  199. 

ter,  68  Iowa,  HO,  26  N.  W.  39;  John-  '"*  Soule  v.  Albee,  31  Vt.  142;  Drury 

son  V.  Monell,  13  Iowa,  300;   Watts  v.   Clark,  16  How.  Pr.  424;    Daly  v. 

v.  Creighton,  85  Iowa,  154,  52  N.  W.  Burchell,    13    Abb.    Pr.    N.    S.    2G4; 

12;    Root    V.    Wright,   21    Hun,   344;  Stevens    v.    Campbell,    21    Ind.    471; 

Bennett  v.   Mattingly,   110   Ind.   197,  Johnson    v.    Monell,    13    Iowa,    300; 

10  N.   E.   299;    Petry  v.   Ambrosher,  Belloc  v.  Rogers,  9  Cal.  123;   Goode- 

100  Ind.  510;  Davis  v.  Hardy,  76  Ind.  now  v.  Ewer.  16  Cal.  461;   Schadt  v. 

272;  Watts  v.  Julian,  122  Ind.  124,  23  Heppe,    45    Cal.    437;    Hibernia   Soc. 

N.    E.    698;    Curtis    v.    Gooding,    99  v.    Herbert,   53   Cal.   375;    Gutzeit  v. 

Ind.  45;  West  v.  Miller,  125  Ind.  70,  Pennie,    98    Cal.    327,    33    Pac.    199; 

25  N.  E.  143;  Miner  v.  Smith,  53  Vt.  Swift  v.   Edson,  5  Conn.  531;    Dela- 

551;     Soule    v.    Albee,    31    Vt.    142;  plaine  v.   Lev/is,  19  Wis.  476;    Cord 

Kinsley  v.   Scott,   58  Vt.  470,  5  Atl.  v.  Hirsch,  17  Wis.  403. 

390;  Townsend  Sav.  Bank  v.  Epping,  "=  Andrews  v.  Stelle,  22  N.  J.  Eq. 

3  Woods,  390;  Hammons  v.  Bigelow,  478. 

115  Ind.  363,  17  N.  E.  192;  Boutwell  ""Jones  v.  Lapham,  15  Kans.  540. 

v.  Steiner,  84  Ala.  307,  4  So.   184,  5  '"Mich.  Ins.  Co.  v.  Brown,  11  Mich. 

Am.  St.  Rep.  375;  Puckett  v.  Reed,  3  265.      See,    also,    Rhodes    v.    Evans, 

Tex.    Cir.    App.    350,    22    S.    W.    515;  Clarke  (N.  Y.),  168. 


§§    1405,    1406.]  OF    PARTIES    DEFENDANT.  364 

A  mortgagor  who  has  conveyed  the  mortgaged  land  by  a  deed  of 
general  warranty  may  be  made  a  party  and  is  entitled  to  intervene 
for  the  purpose  pleading  usury  or  setting  up  some  other  defence.^**^ 

§  1405.  If  the  mortg^agor  has  conveyed  away  only  a  portion 
of  the  premises,  and  remains  owner  of  the  residue,  he  may  still  be 
regarded  as  a  necessary  party,  and  the  purchaser  of  the  part  only 
a  proper  one,  because  a  decree  against  the  mortgagor  alone  would 
have  something  to  act  upon,  and  a  decree  against  the  purchaser  of 
a  portion  of  the  property  is  not  indispensable,  though  the  portion 
sold  to  him  would  remain  unaffected  if  he  was  not  made  a  party.^^® 
To  bind  him  he  must  be  made  a  party.-"'' 

A  sale  of  the  mortgagor's  interest  upon  execution  does  away  with 
the  necessity  of  making  him  a  party  as  effectually  as  a  voluntary 
sale  would. 

A  partition  of  the  estate  subsequent  to  the  mortgage  affects  the 
mortgagee  so  far  only  that  he  must  see  that  all  persons  who  become 
interested  in  the  property  by  the  partition  shall  be  made  parties  to 
the  proceedings  to  foreclose. 

§  1406.  The  owner  of  the  equity  of  redemption  by  purchase 
from  the  mortgagor  is,  of  course,  an  essential  party  to  a  bill  to  bar 
the  equity  by  foreclosure.-"^  Such  owner  is  in  fact  the  only  neces- 

"*  Pitman  v.  Ireland,  64  Neb.  675.  Huggins,    19    Ala.    200;    Tutwiler   v. 

"^Douglass  V.  Bishop,  27  I-owa,  214,  Dunlap,  71  Ala.  12G;Capehart  v.  Mc- 

21G;  Mims  v.  Mims,  35  Ala.  23;  Hull  Gahey,  132  Ala.  334.    Illinois:    Alsup 

V.    Lyon,   27    Mo.    570;    Crenshaw   v.  v.  Stewart,  194  111.  595,  62  N.  B.  795; 

Thackston,  14  S.  C.  437.  Ohling  v.  Luitjens,  32  111.  23.     Kan- 

2W  Woodward    v.    Brown,    119    Cal.  sas:     Lenox  v.   Reed,   12   Kans.   223. 

283,  51  Pac.  2,  63  Am.  St.  Rep.  108.  Ohio:     Childs  v.  Chil-ds,  10  Ohio  St. 

=»'  England:     Peto     v.     Hammond,  339,     75     Am.     Dec.     512.       Texas: 

29   Beav.    91;    Maule   v.    Beaufort,   1  Schmeltz  v.  Garey,  49  Tex.  49;  Brad- 

Russ.     349.       New     York:      Reed    v.  ford  v.  Knowles  86  Tex.  505,  25  S.  W. 

Marble,  10  Paige,  499;    Hall  v.  Nel-  1117.    Nebraska:    Merriman  v.  Hyde, 

son,    14    How.    Pr.    32;    St.    John    v.  9  Neb.   113,  2   N.  W.  218.     Indiana: 

Bumpstead,  17  Barb.   100;   William-  Travellers'  Ins.  Co.  v.  Patten,  98  Ind. 

son  v.    Field,  2  San-df.  Ch.  533;  Wat-  209;    Retry   v.    Ambrosher,    100   Ind. 

son  v.  Spence,  20  Wend.  260;  Hall  v.  510;  Daugherty  v.  Deardorf,  107  Ind. 

Nelson,    23     Barb.    8-8.      California:  527,    8    N.    E.    296;  Watts  v.  Julian, 

Bludworth    v.    Lake,    33    Cal.    265;  122   Ind.   124,  23   N.   E.   698;    Fowler 

Skinner  v.  Buck,  29  Cal.  253;   Boggs  v.  Lilly,  122  Ind.  2^7,  23  N.  E.  767; 

V.  Hargrave,  16  Cal.  559,  76  Am.  Dec.  Curtis     v.     Gooding,     99     Ind.     45; 

561;  De  Leon  v.  Higuera,  15  Cal.  483;  Armstrong      v.      Hufty,      156      Ind. 

Luning  v.  Brady,  10  Cal.  265.     Wis-  606.     55     N.     E.     443,     60     N.     E. 

consin:  Cord  v.  Hirsch,  17  Wis.  403;  1080;    Browning  v.    Smith,    139    Ind. 

Moore  v.   Cord,   14  Wis.   213;    Stark  280,  37  N.  E.  540.    Florida:  Matheson 

v.  Brown,  12  Wis.  572,  78  Am.  Dec.  v.  Thompson,  20  Fla.  790:  Jordan  v. 

762;    Hodson  v.    Treat,   7  Wis.   263;  Sayre,  24  Fla.   1,  3  So.   329;    10   So. 

State  Bank  v.  Abbott,  20  Wis.   570.  823. 

Minnesota:    Nichols    v.     Randall,    5  Contrary  to  the  entire  list  of  au- 

Minn.  304,  308;   Wolf  v.  Banning,  3  thorities  and   to  sound  principle,  it 

Minn.   202,  204.     Alabama:     Hall  v.  was  held  in  Sumner  v.  Coleman,  20 


365  WHO   ARE   NECESSARY    OR    PROPER.  [§    140G. 

sary  party  defendant.^"^  Equally  with  the  mortgagor  he  is  unaf- 
fected by  any  foreclosure  proceeding  to  which  he  is  not  made  a 
party,-**^  and,  moreover,  the  decree  is  generally  regarded  as  void.^"* 
It  does  not  matter  that  the  decree  taken  against  him,  as  upon  a  de- 
fault, falsely  recites  that  he  "was  duly  served  with  notice  and 
brought  into  court/'^°^  If  he  has  assumed  the  payment  of  the  mort- 
gage, there  is  a  double  reason  for  making  him  a  party.^"^  If  he  has 
assumed  only  a  portion  of  the  mortgage  debt,  he  is  liable  to  a  per- 
sonal judgment  for  only  that  portion.^°^ 

One  who'  is  the  owner  of  the  record  title  is  a  necessary  party 
to  the  suit,  though  he  disclaims  any  beneficial  ownership.-"^ 

If  the  purchaser  from  the  mortgagor  has  failed  to  place  nis  title 
upon  record,  and  consequently  he  is  not  made  a  party  to  proceed- 
ings to  foreclose  the  mortgage,  the  mortgagor  being  made  a  party 
defendant,  the  foTCclosure  sale  is  not  for  this  reason  void.'"''  The 
legal  title  passed  by  the  sale,  but  the  owner  of  the  equity  not  made 
a  party  is  entitled  to  redeem.^^** 

The  purchaser  at  a  foreclosure  sale  under  a  junior  mortgage  is 
not,  prior  to  the  time  when  he  becomes  entitled  to  a  deed,  such  a 
necessary  party  to  a  suit  by  senior  mortgagee  as  to  make  the  de- 
cree void.^^^ 

An  indorser  of  the  mortgage  note  may  be  made  a  party  for  the  pur- 
pose of  enforcing  his  liability,  but  except  for  this  purpose  he  is  not 
a  necessary  party.^^^ 

A  purchaser  of  the  mortgaged  property  at  a  tax  sale  is  a  proper 
party  to  a  foreclosure  suit,  so  long  as  he  has  not  acquired  a  title 
superior  to  the  moTtgage,  by  notice  -to  the  mortgagee  to  redeem, 
as  provided  by  statute  in  some  States.^^^  If  such  purchaser  of  a  tax 
title  is  not  made  a  party  to  proceedings  to   foreclose  a  mortgage 

Ind.  486;   and  in  Semple  v.  Lee,  13  statement  of  the  doctrine  as  to  par- 
Iowa,    304;    Cline   v.    Inlow,   14   Ind.  ties. 

419,  that  the  owner,  though  a  proper,  '*"  Logan  v.  Smith,  70  Ind.  597. 

is  not  a  nece&sary,  party  defendant.  -•"*  Watts  v.  Julian,  122  Ind.  124,  23 

""  Carpenter  v.  Ingalls,  3  S.  D.  49,  N.  E.  698. 

51  N.  W.  948.  '"'■'  Shippen    v.    Kimball,    47    Kans. 

^o^*  Barrett   v.    Blackmar,   47    Iowa,  173,  27  Pac.  913;    Murdock  v.  Leon- 

565.  ard,  15  Wash.  142,  45  Pac.  751. 

2°M§   1394,   1402;   Watts  v.  Julian,  ='»  Alsup   v.    Stewart,    194    111.    595, 

122  Ind.  124,  23  N.  E.  698.  62  N.  E.  795. 

-"''  Frazier    v.    Miles,    10    Neb.    109,  ="  Stanbrough  v.  Daniels,  77  Iowa, 

4  N.  W.  930.  561,  42  N.  W.  443. 

^o"  Mudge  V.  Hull,  56  Kans.  314,  43  -'"-  Morgan     v.     South     Milwaukee 

Pac.  242;  Curry  v.  Janicke,  48  Kans.  Lake  View  Co.  97  Wis.  275,  72  N.  W. 

168,  29  Pac.  319;  Kimball  v.  Conner,  872. 

3  Kans.  414;  Bishop  v.  Douglass,  25  ='=  Ruyter  v.  Wickes,  4  N.  Y.  Supp. 

Wis.    696;    Green    v.    Dixon,    9   Wis.  743,  22  N.  Y.  St.  200. 
532.    See  this  last  case  for  a  general 


§§    1407,    140S.]  OF    PARTIES    DEFENDANT.  366 

made  previous  to  the  levy  of  the  taxes  for  which  the  sale  was  made,  he 
is  not  affected  by  a  decree  foreclosing  the  mortgage,  or  by  a  sale 
and  conveyance  thereunder.-" 

§  1407.  If  the  purchaser  from  the  mortgagor  has  assumed  the 
payment  of  the  mortgage  debt,  and  thereby  made  himself  per- 
sonally responsible  to  the  holder  of  the  mortgage,  there  is  less  occa- 
sion to  make  the  mortgagor  a  party ;  but  to  obtain  a  decree  for  a  de- 
ficiency against  the  purchaser  or  against  the  mortgagor  it  is  essen- 
tial that  he  should  be  made  a  party  to  the  suit.'^^  As  between  him 
and  the  purchaser,  the  land  itself  and  the  purchaser  are  primarily 
responsible,  and  the  mortgagor  is  a  surety  only.  But  if  the  mort- 
gagee does  not  care  to  ohtain  a  personal  judgment  against  him,  there 
is  no  occasion  to  make  him  a  party  to  the  proceedings."'^  In  other 
words,  he  is  not  a  necessary  party  though  a  proper  one.-^^  There  is, 
howover,  no  real  distinction,  as  regards  the  propriety  of  making  the 
mortgagor  a  party,  between  the  case  in  which  he  has  simply  con- 
veyed the  land  incumbered  by  the  mortgage  and. that  where  the 
purchaser  has  assumed  the  payment  of  the  mortgage  debt.  The 
mortgagor  is  just  as  much  bound  to  the  holder  of  the  mortgage 
in  one  case  as  in  the  other;  and  whether  he  remains  the  principal 
debtor,  or  by  a  sale  of  the  property  another  assumes  his  place  as 
debtor  and  he  becomes  only  a  surety,  he  continues  to  the  same  ex- 
tent liable  to  a  personal  judgment  for  a  deficiency. 

§  1408.  Intermediate  purchasers  who  have  conveyed  their  in- 
terest in  the  property  should  not  be  made  parties  to  the  bill,  unless 
they  have  assumed  the  payment  of  the  mortgage,  and  thus  become 
personally  liable  for  the  debt,  when  they  may  be  made  parties  for  the 
purpose  of  obtaining  a  personal  judgment  against  them.-^^     If  they 

-''  Chard  v.  Holt,  136  N.  Y.  90,  32  N.  Delaplaine    v.    Lewis,    19    Wis.    476, 

E.  740.  Cole,    J.,    said:     "According    to    the 

"'  Rouse  v.  Bartholomew,  51  Kans.  weight  of  modern  authority,  the  rule 

425,  32  Pac.  1088;  Washington  L.  Ins.  seems  to  be  settled  that  the   mort- 

Co.'  V.  Marshall.  56  Minn.  250,  57  N.  gagor   who     has     absolutely     parted 

W.  658;   McRae  v.  Sullivan,  56  Minn,  with  the  equity  of  redemption  is  not 

266,  57  N.  W.  659;   Field  v.  Thistle,  a    necessary,    though    he    is    a   very 

58  N.  J.  Bq.  339,  43  Atl.  1072.  proper,    defendant    in    an    action    to 

""Dalv  V.  Burchell,  13  Abb.  Pr.  N.  foreclose  the  mortgage." 
S.  264,  268;  Paton  v.  Murray,  6  Paige,        In  some  cases  he  has  been  declared 

474-    Van   Nest  v.   Latson,   19   Barb,  not  only  a  proper  but   a  necessary 

604-  Shaw  v.  Hoadley,  8  Blackf.  165;  party.     Mudge  v.  Hull,  56  Kans.  314, 

Burkham    v.    Beaver,    17    Ind.    367;  43  Pac.  242. 

Keller  v    Ashford    133  U.  S.  610,  10        ^'Tomeroy's  Remedies  and  Reme- 

Sup     Ct    494;    Steele   v.    Grove,    109  dial  Rights,  8  337;  Hall  v.  Yoell.  45 

Mich   647   67  N   W   963.  Cal.    584;    Lockwood    v.    Benedict,    3 

^i^ilcArthur  v    Franklin,  15  Ohio  Edw.  472;  Finch  v.  Magill,  37  Kans. 

St    485     509,    16    Ohio    St.    193.      In  761,  15  Pac.   907;    Ingham  v.  Weed, 


367  WHO    ARE    NECESSARY    OR    PROPER.  [§    1409. 

have  not  made  themselves  responsiljle  for  the  mortgage  debt  by 
assuming  it,  having  no  longer  any  interest  in  the  land,  they  cannot 
properly  be  joined  as  defendants.^ ^'^ 

Formerly  it  was  everywhere  held  that  a  mesne  purchaser  who  had 
assumed  the  mortgage  debt,  and  subsequently  conveyed  the  premises 
to  another  on  like  terms,  was  not  liable  to  the  holder  of  the  mort- 
gage, by  reason  of  his  assuming  it,  because  there  was  no  privity  of 
contract  between  them;  that  he  was  liable  only  to  his  grantor,  and 
therefore  that  in  a  suit  to  foreclose  he  could  not  Ije  made  a  party 
and  adjudged  liable  to  pay  any  deficiency.-^**  But  now  in  several 
States  the  rule  is  that  one  who  has  assumed  the  debt  is  in  equity 
directly  liable  for  it  to  the  holder  of  the  mortgage.^^^ 

§  1409.  Tenants  in  common  and  joint  tenants  of  the  equity  of 
redemption  must  all  be  joined.  The  mortgagee  is  entitled  to  re- 
ceive the  whole  of  his  money  together,  if  compelled  to  go  into 
court  at  all.  Therefore,  in  case  the  mortgage  was  made  by  tenants 
in  common,  he  is  entitled  to  a  foreclosure  of  the  whole  estate,  and 
cannot  be  compelled  to  receive  the  share  of  the  debt  due  from  one 
of  them  and  foreclose  against  the  other  for  his  share.---  Such  would 
also  be  the  case  when  two  estates  have  been  mortgaged  together, 
and  the  equities  have  subsequently  passed  into  different  hands.  Neither 
would  he  be  allowed  to  foreclose  against  the  owner  of  one  estate, 
without  making  the  owner  of  the  other  a  party  also,^^^  unless  there 
were  special  equities  in  favor  of  the  estate  exempted.  A  federal 
court  cannot  entertain  jurisdiction  to  foreclose  a  mortgage  given 
by  an  executor  under  a  power  in  a  will  on  land  devised  to  the 
testator's  children,  some  of  whom  are  non-residents,  and  are  neither 
made  parties  to  the  bill  nor  appear  to  answer.  The  mortgage  can- 
not be  foreclosed  without  affecting  the  interest  of  the  devisees  not 
present,  inasmuch  as  the  devisees  are  joint  tenants,  and  a  decree  of 
foreclosure  or  sale  would  necessarily  affect  the  interest  of  the  non- 
resident devisees.  The  mortgage  could  not  be  foreclosed  as  to  the 
interest  of  those  devisees  only  who  are  made  parties  to  the  bill, 
since  the  entire  lien  would  in  that  case  be  cast  upon  their  shares."* 

— Cal.— ,  48  Pac.  318;  Johnes  v.  Out-  33  Mich.  354,  and  cases  cited;  §§  755- 

water,  55  N.  J.  Bq.  398,  36  Atl.  483;  761. 

Armstrong   v.    Hufty,    156    Ind.    606,  --  Frost  v.  Frost,  3  Sandf.  Cti.  188. 

53  N.  E.  443.  "'  Cholmondeley  v.  Clinton,  2  Jac. 

=i«  Scarry  v.   Eldridge,   63   Ind.   44,  &  W.  134;   Palk  v.  Clinton,  12  Ves. 

7  Cent.  L.  J.  418.  48.  59. 

""  Lockwood   V.   Benedict,   3   Edw.  =-*  Detweiler    v.    Holderbaum,      42 

472.  Fed.   337;    R.   S.   of  the  U.   S.   §   737 

==iBurr  V.  Beers,  24  N.  Y.  178,  80  and   Equity   Rule  47   do  not   aid    in 

Am.  Dec.  327;  Crawford  v.  Edwards,  such  case. 


SS    1410,    1111.1  OF    PARTIES    DEFENDANT.  368 

If  the  mortgaged  estate  has  subsequently  been  divided  and  sold 
in  distinct  lots,  all  the  purchasers  must  be  made  parties  to  make  an 
effectual  foreclosure  of  the  whole  estate."^  If  the  mortgage  to  be 
foreclosed  covers  two  distinct  estates,  one  of  which  is  subsequently 
incumbered  by  a  second  mortgage,  and  the  other  is  sold  to  a  third 
person,  both  the  second  mortgagee  and  the  purchaser,  as  well  as  the 
original  mortgagor  who  retains  the  equity  of  one  of  the  estates,  must 
be  made  parties  to  the  bill;  for  the  mortgage  cannot  be  foreclosed 
upon  one  estate  alone,  unless  there  be  special  equities,  if  the  owner 
of  it  objects.  The  purchaser  of  a  part  can  redeem  only  by  paying 
the  whole  debt."^ 

§  1410.  Objection  that  the  owner  of  the  equity  is  not  made  a 
party  to  the  bill'  may  be  taken  by  the  mortgagor  in  his  answer."" 
But  objection  that  the  mortgagor  is  not  made  a  party  defendant  can- 
not be  made  by  a  purchaser  of  the  premises  who  is  a  party  to  the 
suit.^^^  An  objection  to  the  non-joinder  of  a  defendant  must  be 
taken  by  demurrer  or  answer,  or  will  be  deemed  to  have  been 
waived.^^^  After  a  foreclosure  sale  the  mortgagor  cannot  object  to 
a  confirmation  of  it  on  the  ground  that  he  was  not  made  a  party, 
and  that  in  consequence  the  equity  of  redemption  was  not  extin- 
guished, and  the  premises  brought  much  less  than  they  would  other- 
wise have  brought.'^" 

When  it  appears  that  the  mortgaged  property  is  part  of  a  dece- 
dent's estate  l)elonging  to  several  persons  who  are  undetermined  or 
whose  interests  are  undetermined,  the  foreclosure  suit  is  not  barred, 
but  the  court  may  suspend  judgment  until  the  undetermined  interests 
are  settled.-^^ 

§  1411.  Purchaser  pendente  lite. — As  a  general  rule,  where  the 
equity  of  redemption  has  been  assigned  or  attached  after  the  com- 
mencement of  proceedings  in  equity  to  foreclose,  the  purchaser  or 
attaching  creditor  need  not  be  brought  before  the  court ;  because 
he  is  regarded  as  having  notice  of  the  plaintiff's  rights  and  his  pro- 
ceedings to  enforce  them,  and  can  claim  against  him  only  such  title 
and  rights  as  the  owner  of  the  equity  had  at  the  time  of  the  pur- 
chase or  attachment.-^^     In  this  respect  an  assignee  in  bankrtiptcy 

"=  Peto  v.  Hammond,  29  Beav.  91.  "'  See  Davis  v.  Converse,  35  Vt.  503. 

See  Ireson  v.  Denn,  2  Cox.  425.  ""  Cord  v.  Hirsch,  17  Wis.  403,  408. 

--'''  Douglass  V.  Bishop,  27  Iowa,  214.  ="  Wall  v.  McMillan,  44  S.  C.  402, 

="Peto  V.  Hammond.  29  Beav.  91;  22  S.  E.  424. 

Dnirv    V.    Clark.    16    How.    Pr.    424;  ='=  Garth    v.    Ward,    2    Atk.     174; 

Hall  V.  Nelson,  14  How.  Pr.  ?.2.  MptcnFe  v.   Pnlvertoft,  2  Ves.  &  B. 

"MVilliams    v.    Meeker,    29    Iowa,  200.   20!^:    Gaskell  v.  Durdin,  2  Ball 

292,  294.  &  B.  187,  169;   Lloyd  v.  Passingham, 


369 


WHO   ARE   NECESSARY    OR   PROPER. 


[§   1411. 


appointed  pending  a  foreclosure  suit  stands  in  the  same  position  as 
any  other  grantee  of  the  equity  of  redemption,  and  is  barred  by  a 
decree  against  the  mortgagor.*  Provision  is  made  in  many  States 
for  the  filing  of  a  notice  of  the  pendency  of  the  suit  in  the  registry 
or  with  the  clerk  of  the  court  in  the  county  where  the  mortgage  is 
recorded  ;-^^  and  where  the  recording  of  such  notice  is  required,  third 
persons  are  not  affected  with  notice  unless  the  record  is  made  as 
required.-^*  But  in  the  absence  of  such  statutory  provisions,  the  pro- 
ceedings in  court  being  of  public  record,  parties  are  regarded  as 
having  constructive  notice  of  the  proceedings,  and  take  subject  to 
them.^^^  As  a  practical  matter,  if  a  mortgagor  could,  after  the  com- 
mencement of  the  suit,  create  new  parties  at  his  pleasure,  by 
making  new  incumbrances  upon  the  property,  whose  presence  in 
court  would  be  necessary  to  the  foreclosure  of  their  rights,  there 
might  be  nO'  end  to  the  suit.^^®    The  doctrine  of  lis  pendens  does  not 


16  Ves.  59,  66;  Parkes  v.  White,  11 
Ves.  209,  236;  Stout  v.  Lye,  103  U.  S. 
521;  McPherson  v.  Housel,  13  N.  J. 
Eq.  299;  Watt  v.  Watt,  2  Barb.  Ch. 
371;  Jackson  v.  Lose,  4  Sandf.  Ch. 
381;  Zeiter  v.  Bowman,  6  Barb.  133; 
Griswold  v.  Miller,  15  Barb.  520; 
Cleveland  v.  Boerum,  23  Barb.  201, 
27  Barb.  252,  3  Abb.  Pr.  294;  Lyon  v. 
Sanford,  5  Conn.  545,  548;  Paston  v. 
Eubank,  3  J.  J.  Marsh.  42;  Hull  v. 
Lyon,  27  Mo.  570;  Ostrom  v.  Mc- 
Cann,  21  How.  Pr.  431;  Stevenson  v. 
Edwar-ds,  98  Mo.  622,  12  S.  W.  255; 
Stokes  v.  Maxwell,  59  Ga.  78;  Wise 
v.  Griffith,  78  Cal.  152,  20  Pac.  675; 
Johnson  v.  Valido  Marble  Co.  64  Vt. 
337,  25  Atl.  441,  445;  Kopper  v.  Dyer, 
59  Vt.  477,  489,  9  Atl.  4;  Grau  v.  Ben- 
nett, 96  111.  513;  Smith  v.  Worster,  59 
Kans.  640,  54  Pac.  676;  Utley  v.  Fee, 
33  Kans.  683,  689,  7  Pac.  555. 

*Eyster  v.  Gaff,  91  U.  S.  521; 
Stout  V.  Lye,  103  U.  S.  66;  Malone  v. 
Marriott,  64  Ala.  486;  Pratt  v.  Pratt, 
96  111.  184;  Elizabethport  Cordage 
Co.  V.  Whitlock,  37  Fla.  190,  224,  20 
So.  255. 

='' South  Carolina:  R.  S.  S.  C.  1873, 
p.  600.  Virginia:  Code  1873,  p.  1166. 
West  Virginia:  Code  1870,  pp.  667, 
668.  Connecticut:  Acts  1879,  p.  389. 
New  York:  Code  of  Civil  Procedure 
(1880),  §§  1670,  1671.  Under  the  New 
York  Code  of  Civil  procedure,  §§ 
1670,  1671,  a  notice  of  lis  pendens 
may  be  filed  with  the  complainant, 
before  the  service  of  the  summons, 
but,  in  that  case,  personal  service  of 


the  summons  must  be  made  upon  the 
defendant,  within  sixty  days  after 
the  filing  or  in  case  of  an  absent  de- 
fendant, publication  of  the  sum- 
mons must  be  commenced,  or  ser- 
vice thereof  pursuant  to  an  order 
must  be  made  without  the  State 
within  the  same  time.  A  notice  of 
lis  pendens  so  filed,  is  made  con- 
structing notice  from  the  time  of 
such  filing  to  any  purchaser  or  in- 
cumbrance of  the  property.  Cali- 
fornia: Abadie  v.  Lobero,  36  Cal. 
390. 

"'Thompson  v.  Smith,  96  Mich. 
258,  55  N.  W.  886.  This  notice  is 
unnecesary  as  to  all  parties  in  in- 
terest before  the  court.  Totten  v. 
Stuyvesant,  3  Edw.  500.  It  does  not 
affect  those  having  paramount  rights. 
Curtis  V.  Hitchcock,  10  Paige,  399. 

If,  after  notice  has  been  duly  re- 
corded and  one  or  more  of  the  de- 
fendants served  with  summons  in 
the  suit,  a  judgment  be  docketed 
against  the  owner  of  the  equity  of 
redemption,  the  judgment  creditor  is 
bound  by  the  judgment  in  the  fore- 
closure suit,  although  at  the  time  of 
the  entry  of  his  judgment  the  owner 
had  not  been  served  with  summons 
in  the  foreclosure  suit.  Fuller  v. 
Scribner,  76  N.  Y.  190. 

"=>  Smith  v.  Davis  (N.  J.  Eq.),  19 
Atl.  541. 

='^  Garth  v.  Ward,  2  Atk.  174; 
Bishop  of  Winchester  v.  Paine,  11 
Ves,  194,  197;  Brooks  v.  Vt.  Cent.  R. 
Co.  14  Blatchf.  463,  471. 


8    1411.]  OF    PARTIES    DEFENDANT.  370 

rest  upon  the  presumption  of  notice,  but  upon  reasons  of  public 
policy,  and  applies  where  there  is  no  possibility  that  there  was 
actual  notice  of  the  pendency  of  the  suit.-" 

The  lis  pendens  commences  upon  the  serving  of  the  subpoena,  if 
the  bill  has  been  actually  filed.-^*  The  pendency  of  the  suit  create.'? 
the  notice.  When  the  cause  is  ended  by  a  final  decree,  there  is  no 
longer  any  Us  pendens  by  which  parties  can  be  further  affected  with 
notice.-^^  Under  a  statute  providing  for  the  filing  of  a  lis  pendens, 
creditors  obtaining  judgments  afterwards,  even  before  service  of 
the  summons  and  complaint  upon  the  owner  of  the  equity  of  re- 
demption, are  cut  off  without  being  made  parties.^***  If,  pending  the 
bill,  the  mortgagor's  interest  in  the  land  is  sold  on  execution,  the 
plaintiff  is  not  bound  to  amend  his  complaint  so  as  to  make  the  pur- 
chaser a  party.^*^ 

It  is  not  within  the  power  of  the  mortgagor,  pending  a  foreclosure 
suit,  by  contract  with  a  mechanic  and  without  the  consent  of  the 
mortgagee,  to  create  an  incumbrance  upon  the  property  which  could 
in  ajiy  wise  affect  the  rights  of  the  mortgagee  as  they  might  be 
declared  by  the  final  decree.^^^ 

Purchasers  and  creditors  attaching,  pendente  lite,  have  no  right  to 
come  in  by  petition  and  make  defence  in  the  suit.^"  They  can  only 
make  themselves  parties  to  the  suit  by  filing  a  bill  to  protect  their 
rights.^** 

A  statute  providing  that  a  person  whose  conveyance  or  incum- 
brance is  recorded  after  the  filing  of  notice  of  pendency  of  such  an 
action  shall  be  bound  by  all  the  proceedings  thereafter  taken  in  it, 
to  the  same  extent  as  if  he  was  a  party,  does  not  apply  to  a  pur- 
chaser or  incumbrancer  in  possession  at  the  time  of  filing  of  such 
notice,  for  such  possession  is  notice,  as  complete  as  the  recording  of 
the  instrument  itself  would  be,  to  all  persons  dealing  with  or  pro- 
ceeding against  the  property.-*^ 

=>"  Newman   v.    Chapman,   2   Rand.  "'Bennett     v.     Calhoun     Loan     & 

93,  14  Am.  Dec.  766.  Building  Asso.  9  Rich.  Eq.  163. 

^'' Anon.  1  Vern.  318.  "=  Hards   v.    Conn.    Mut.    Life   Ins. 

239Worsley  v.  Scarborough,  3  Atk.  Co.  8  Biss.  234,  8  Ins.  L.  J.  9,  6  Re- 

392;  Self  v.  Madox,  1  Vern.  4.59.  porter,  420. 

2*"  Fuller  V.  Scribner,  16  Hun,  130,  ='^  Davis  v.  Conn.  Mut.  Life  Ins.  Co. 

affirmed    76    N.    Y.    190.      And    see  84  111.  508. 

Weeks  v.   Tomes,  16   Hun,   349.     So  ="  People's      Bank      v.      Hamilton 

also   is   the    wife   of  the   mortgagor  Manuf.  Co.  10  Paige,  481;  Loomis  v. 

bound   by   such   notice   and   a   judg-  Stuyvesant,  10  Paige,  490. 

ment    of    foreclosure    as    against    a  -'"  Walsh  v.  Schoen,  13  N.  Y.  Supp. 

declaration    of    homestead    filed    by  71;   Phelan  v.  Brady,  119  N.  Y.  587, 

her  pending  the  suit.     McNamara  v.  23  N.  B.  1109. 
Oakland  Build.   &  L.  Asso.  132  Cal. 
247.  64  Pac.  277. 


371  WHO   AUE    NECESSARY    OK    PROPER.       [§§    1413-1414. 

§  1412.  If  the  deed  to  the  purchaser  of  the  equity  has  not  been 
recorded  at  the  time  of  the  bringing  of  tlie  bill,  lie  is  nevertheless 
a  necessary  party  if  the  plaintifE  has  in  any  way  either  actual  or 
constructive  notice  of  it;"*''  but  if  the  purchaser  has  not  recorded 
his  deed,  and  the  plaintifE  has  no  notice  of  it,  the  foreclosure  is 
binding  upon  the  purchaser  equally  as  if  he  were  made  a  party.^*^ 
If  the  deed  be  recorded  before  the  service  of  summons  upon  the 
mortgagor,  the  grantees  are  necessary  parties,  although  notice  of 
the  pendency  of  the  action  had  been  filed  before  the  recording  of 
the  deed.^*^  Such  notice  becomes  operative  only  upon  the  service 
of  the  summons.  If  the  mortgage  was  not  recorded  at  a  time  of  a 
subsequent  sale  of  the  equity  of  redemption,  a  purchaser  without 
notice  is  not  a  necessary  party,  nor  even  a  proper  one,  because  his 
rights  are  paramount  and  cannot  be  affected  by  the  suit.'*" 

§1413.  A  mere  occupant  of  the  land  without  title  should  not 
be  made  a  party  to  the  bill,-^''  unless  by  statute  this  be  required. ^^^ 
If,  however,  he  has  any  rights,  these  are  not  prejudiced  by  the 
decree  ;'^^  and  for  this  reason,  and  that  the  title  may  be  quieted,  an 
occupant  or  a  tenant  in  possession,  although  he  has  no  legal  interest 
in  the  premises,  has  sometimes  been  regarded  as  a  proper  party  to 
the  bill.^^^  A  lessee  for  a  term  of  years  of  the  mortgagor,  having  a 
right  to  redeem,  should  be  made  a  party  to  a  suit  to  foreclose.-^*  But 
occupation  is  notice  of  any  rights  the  occupant  has  in  the  property. 
If,  therefore,  he  has  a  valid  contract  of  purchase,  a  foreclosure  with- 
out making  him  a  party  will  operate  merely  as  an  assignment  of 
the  mortgage. "'"^^ 

§  1414.  Mortg^ag-or's  heirs. — If  the  mortgagor  has  died  seised  of 
the  mortgaged  estate,  bis  heirs  at  law  or  devisees  are  indispensable 

="Drury  V.  Clark,  16  How.  Pr.  424;  ="  Cline    v.     Inlow,    14    Ind.    419; 

Kursheedt   v.    Union    Sav.    Inst.    118  Mims  v.  Mims,  1  Humph.  425. 

N.    Y.    358,    23    N.    E.    473;    Ehle    v.  ='"  Suiter  v.  Turner,  10  Iowa,  517. 

Brown,  31  Wis.  405;  Pettibone  V.  Ed-  ="  Buckner    v.    Sessions,    27    Ark. 

wards,   15   Wis.   95.     See  Hodson  v.  219;  Fletcher  v.  Hutchinson,  25  Ark. 

Treat,  7  Wis.  263;  Green  v.  Dixon,  9  30. 

Wis.  532.  "^Suiter  v.  Turner,  10  Iowa,  517; 

"■  Leonard  v.  N.  Y.  Bay  Co.  28  N.  Ballard  v.  Carter,  71  Tex.  161,  9  S. 

J.  Eq.  192;  Kipp  v.  Brandt,  49  How.  W.  92. 

Pr.    358;    Woods   v.    Love,    27    Mich.  ==^  Ruyter  v.  Reid,   121   N.   Y.   498, 

308;    Aldrich    v.    Stephens,    49    Cal.  24  N.  E.  791,  25  N.  E.  377;  Comings 

676;    Houghton   v.    Mariner,    7   Wis.  v.  Smith,  6  N.  Y.  82;  Lewis  v.  Smith, 

244;    Davenport    v.    Turpin,   41    Cal.  9    N.    Y.    502;    Merchants'    Bank    v. 

100;  Boice  v.  Mich.  Mut.  L.  Ins.  Co.  Thomson,    55    N.    Y.    7;     Cruger    v. 

114  Ind.  480,  15  N.  W.  825.  Daniel,  McMull.  Eq.  157,  196. 

="  Farmers'   Loan   &   Trust   Co.   v.  -•'*  Lockhart  v.  Ward.  45  Tex.  227; 

Dickson,  17  How.  Pr.  477.     See  note  Averill  v.  Taylor,  8  N.  Y.  44. 

1,  §  1411.  -"Martin   v.    Morris,   62   Wis.   418. 

22  N.  W.  525. 


1414.] 


OF   PARTIES   DEFENDANT, 


372 


parties.  It  is  not  enough  to  make  his  executor  or  administrator  a 
party  to  it.^^®  The  personal  representative  has  no  title  to  the  land, 
and  is  not  a  necessary  party/^'^  unless  a  personal  judgment  is  sought, 
though  in  some  States  he  has  a  temporary  right  of  possession  and 


""  Story  Eq.  PI.  §§  194,  196;  Farmer 
V.  Curtis,  2  Sim.  4G6;  Fell  v.  Brown, 
2  Bro.  Ch.  276;  Palk  v.  Clinton,  12 
Ves.  48,  58;  Buncombe  v.  Hansley,  3 
P.  Wms.  333  n.;  Bradshaw  v.  Out- 
ram,  13  Ves.  234. 

Illinois:  Bissell  v.  Marine  Co.  of 
Chicago,  55  111.  165;  Ohling  v.  Luit- 
jens,  32  111.  23;  Lane  v.  Erskine,  13 
111.  501;  Harvey  v.  Thornton,  14  111. 
217. 

Kansas:  Britton  v.  Hunt,  9  Kans. 
228;  Craven  v.  Bradley,  51  Kans.  336, 
32  Pac.  1112. 

Ohio:  Moore  v.  Starks,  1  Ohio  St. 
369. 

Virginia:  Graham  v.  Carter,  2 
Hen.  &  M.  6;  Mayo  v.  Tomkies,  6 
Munf.  520. 

Tennessee:  Mclver  v.  Cherry,  8 
Humph.  713. 

Wisconsin:  Stark  v.  Brown,  12 
Wis.  572,  78  Am.  Dec.  762;  Zaegel  v. 
Kuster,  51  Wis.  31,  7  N.  W.  781. 

North  Carolina:  Averett  v.  Ward, 
Busbee  Eq.  192;  Isler  v.  Koonce,  83 
N.  C.  55;  Eraser  v.  Bean,  96  N.  C. 
327,  2   S.   E.   159. 

Maryland:  Worthington  v.  Lee,  2 
Bland,  678. 

Indiana:  Muir  v.  Gibson,  8  Ind. 
187;  McKay  v.  Wakefield,  63  Ind. 
27;  Daugherty  v.  Deardorf,  107  Ind. 
527. 

Iowa:  Detweiler  v.  Holderbaum, 
42  Fed.  337;  Shields  v.  Keys,  24 
Iowa,  298. 

Minnesota:  Hill  v.  Townley,  45 
Minn.  167,  47  N.  W.  653;  Noon  v. 
Finnegan,  29  Minn.  418,  13  N.  W. 
197. 

Missouri:  Miles  v.  Smith,  22  Mo. 
502;  Bollinger  v.  Chouteau,  20  Mo. 
89. 

Arkansas:  'Kiernan  v.  Blackwell, 
27  Ark.  235;  Simms  v.  Richardson, 
32  Ark.  297;  Pillow  v.  Sentelle,  39 
Ark.   61. 

Alabama:  Both  heirs  and  person- 
al representatives.  Hunt  v.  Acre,  28 
Ala.  580;  Erwin  v.  Ferguson,  5  Ala. 
158;  Jones  v.  Richardson,  85  Ala. 
463,  5  So.  194;  Wells  v.  American 
Mortg.  Co.  109  Ala.  430,  20  So.  136-. 
The  administrator  is  a  proper  party. 


Hunter  v.  Shelby  Iron  Co. — Ala. — 18 
So.  106. 

Kentucky:  Shiveley  v.  Jones,  6  B. 
Mon.   274. 

Michigan:  Abbott  v.  Godfrey,  1 
Mich.  178. 

Mississippi:  Byrne  v.  Taylor,  46 
Miss.   95. 

South  Carolina:  Bryce  v.  Bowers, 
11  Rich.  Eq.  41;  Trapier  v.  Waldo, 
16  S.  C.  276;  Butler  v.  Williams,  27 
S.  C.  221,  3  S.  E.  211;  Johnson  v. 
Johnson,  27  S.  C.  309,  3  S.  E.  606. 
New  York:  Wood  v.  Moorehouse, 
1  Lans.  405. 

Oregon:  Renshaw  v.  Taylor,  7 
Oreg.  315. 

A  statute  forbidding  an  action  to 
be  brought  against  an  executor  or 
administrator,  within  one  year  from 
the  date  of  his  appointment,  does 
not  apply  to  a  bill  for  foreclosure 
against  the  heir  of  a  deceased  mort- 
gagor. ■  Slaughter  v.  Foust,  4  Blaclil. 
379. 

In  Florida  the  heir  is  not  a  neces- 
sary party,  but  the  administrator  is. 
Merrittv.  Baffin,  24  Fla.  320,  4  So.  806. 
Ballard  v.  Kennedy,  34  Fla.  483,  16 
So.  327. 

In  Georgia  the  personal  represen- 
tative of  the  mortgagor  is  a  neces- 
sary party.  Magruder  v.  Oftutt,  Bud- 
ley  (Ga.),  227;  Bixon  v.  Cuyler,  27 
Ga.   248. 

In  New  Jersey  the  administration, 
though  not  a  necessary  party  is  a 
proper  party.  United  Security  L. 
Ins.  &  T.  Co.  V.  Ott,— N.  J.— 26  Atl. 
923. 

In  South  Carolina,  under  the  form- 
er equity  practice,  it  was  said  that 
the  personal  representative  should 
be  joined.  Mitchell  v.  Bogan,  11 
Rich.   686,   711. 

In  Missouri,  since  the  Code  of  1845, 
the  personal  representative  of  the 
mortgagor  is  a  necessary  party; 
Miles  V.  Smith,  22  Mo.  502;  Perkins 
V.  Woods,  27  Mo.  547;  and  the  only 
necessary  party;  Hall  v.  Klepzig,  99 
Mo.   83,   12   S.  W.   372. 

"'  Harlem  Co-operative  B.  &  L. 
Asso.  V.  Freeburn,  54  N.  J.  Eq.  37, 
33  Atl.  514;  Roberts  v.  Tunnell,  165 
111.  631,  46  N.  E.  713. 


373  WHO   ARE   NECESSARY   OR   PROPER.  [§    1414. 

becomes  a  necessary  party.-'"'^  The  personal  claim  for  the  mortgage 
debt  or  deficiency  must  be  presented  for  allowance  in  the  course  of 
administration  in   the  probate   court.'^^ 

A  judgment  obtained  in  a  foreclosure  suit  against  the  mortgagor 
commenced  after  his  death,  without  making  his  heirs  parties  to  it, 
is  void  as  against  such  heirs.^^*^ 

Upon  the  death  of  the  mortgagor  pending  a  foreclosure  suit,  his 
heirs  should  be  summoned  in,  and  the  suit  prosecuted  against  them.^^^ 

The  heirs  of  a  mortgagor  who  has  sold  the  mortgaged  premises 
in  his  lifetime  have  no  interest  in  the  land,  and  therefore  should 
not  be  made  parties  to  the  bill,  unless  the  validity  of  the  convey- 
ance is  controverted.^*'^  The  heirs  of  a  deceased  mortgagor  are  not 
necessary  parties  in  case  the  mortgagor  has  in  his  lifetime  assigned 
all  his  property  for  the  benefit  of  his  creditors.^''^  If  the  complain- 
ant seeks  for  a  personal  judgment  or  for  an  account,  the  personal 
representative  should  be  joined  with  the  heirs;-"*  but  if  no  such 
judgment  be  sought,  the  personal  representative  should  not  be 
joined.-*'^  Of  course  such  suit  cannot  be  maintained  until  the  ex- 
piration of  the  year  after  the  issuing  of  letters  of  administration, 
during  which  time  the  administrator  is  exempt  from  suit.-*'''  If  the 
debt  is  barred,  or  for  any  reason  is  not  payable  out  of  the  personal 
assets,  the  occasion  for  joining  the  personal  representative  no  longer 
exists. 

=^8  Kelsey  v.  Welch,  8  S.  D.  255,  -"^  Butler  v.  Williams,  27  S.  C.  221, 
66  N.  W.  390;  Simon  v.  Sabb,  56  S.  3  S.  E.  211.  In  California,  however, 
G.  38,  33  S.  E.  799.  the  heirs  of  the  mortgagor  are  not 

-"  Hill  V.  Townley,  45  Minn.  167,  necessary  parties.  Bayly  v.  Muehe, 
47  N.  W.  653;  Commercial  Bank  v.  65  Cal.  345,  3  Pac.  Rep.  467,  4  Pac. 
Slater,  21  Minn.  174;  Fern  v.  Leuth-  486;  Finger  v.  McCaughey,  119  Cal. 
old,  39  Minn.  212,  39  N.  W.  399.  59,  51  Pac.  13. 

='="  Richards  v.  Thompson,  43  Kans.  ="*  Daniel  v.  Skipwith,  2  Bro.  C.  C. 
209,  23  Pac.  106;  Craven  v.  Bradley,  155;  Bradshaw  v.  Outram,  13  Ves. 
51  kans.  336,  32  Pac.  1112.  234;  Brwin  v.  Ferguson,  5  Ala.  158; 

-^^  Hibernia  Sav.  Soc.  v.  Wacken-  Jones  v.  Richardson,  85  Ala.  463, 
reuder,  99  Cal.  503,  34  Pac.  219.  5  So.  191;  Leonard  v.  Morris,  9  Paige, 
Kager  v.  Vickery,  61  Kan.  342,  59  90;  Bigelow  v.  Bush,  6  Paige,  345; 
Pac.  628.  But  in  California  the  Code  Huston  v.  Stringham,  21  Iowa,  36; 
Civ.  Pro.  §§  1500,  1502  provides  for  Darlington  v.  Bffey,  13  Iowa,  177; 
presenting  of  claims  against  a  de-  Drayton  v.  Marshall,  Rice  (S.  C.) 
cedent's  estate,  but  permits  a  fore-  Eq.  373,  33  Am.  Dec.  84;  Inge  v. 
closure  on  it  without  such  presen-  Boardman,  2  Ala.  331;  Belloc  v. 
tation  provided  recourse  against  Rogers,  9  Cal.  123;  Harwood  v. 
other  property  is  expressly  waived.  Marye,  8  Cal.  580;  Carr  v.  Caldwell, 
Supplemental  proceedings  against  10  Cal.  380,  70  Am.  Dec.  740;  Butler 
the  heirs  after  the  death  of  the  mort-  v.  Williams,  27  S.  C.  221,  3  S.  E. 
gagor  pending  suit  against  him  are  211;  Hodgdon  v.  Heidman,  66  Iowa, 
not  a  new  action  as  regards  the  sta-  645,  24  N.  W.  257. 
tute  of  limitations.  ="=  Hibernia  Savings  and  Loan  Soc. 

^''^  Medley    v.    Elliott,    62    111.    532;     v.   Herbert,  53  Cal.  373,  7  Reporter, 
Douglas  V.  Souther,  52  111.  154;  Wilk-    458. 
ins  V.  Wilkins,  4  Port,  245.  ^"^  Lovering  v.  King,  97  Ind.  130. 


§§  1415,  1416.]       OF  PARTIES  DEFENDANT.  374 

The  heirs  of  the  mortgagor  or  other  person  who  has  died  seised 
of  the  estate  covered  by  the  mortgage  are  necessary  parties,  just 
as  the  deceased  mortgagor  or  owner  would  have  been  if  the  action 
had  been  brought  in  his  lifetime,  being  indispensable  to  the  render- 
ing of  any  judgment  of  foreclosure,  or  for  the  sale  of  the  property. 
The  court  of  its  own  motion,  even  if  no  one  who  is  a  party  to  the 
suit  makes  objection  that  they  are  not  joined,  will  order  them  to  be 
brought  in  as  defendants.-*'^  If  the  heirs  are  beyond  the  jurisdic- 
tion of  the  court  the  cause  cannot  be  proceeded  with.^'^^  Under  a 
statute  by  which  the  personal  representative  of  a  deceased  person 
succeeds  to  the  lands  as  well  as  the  personal  property,  for  the  pur- 
pose of  administration  the  executor  or  administrator  becomes  the 
necessary  party  in  the  foreclosure  of  a  mortgage,  in  place  of  the 
heir.-''^ 

The  possibility  that  the  mortgage  debt  may  have  been  paid  in 
whole  or  in  part  is  no  occasion  for  joining  the  personal  representa- 
tive. The  heir  can  take  advantage  of  such  payment,  if  any  there 
be,  and  must  establish  the  fact  himself  by  proofs.  Yet,  under  the 
statutes  of  several  of  the  States,  it  is  held  that  the  personal  rep- 
resentative is  a  proper  party  at  least,  and  should  be  admitted  as 
such  upon  his  motion  ;^'^°  that  he  has  the  same  right  to  be  made  a 
party  that  the  mortgagor  had;^^^  and  especially  when  the  mortgagee 
seeks  to  charge  the  personal  estate  of  the  deceased,  of  which  the 
administrator  is  the  representative,  on  account  of  the  inadequacy  of 
the  security.^^- 

A  guardian  of  minor  heirs  need  not  be  joined  as  a  defendant. ^^* 

§  1415.  Heir  of  purchaser.  The  same  rules  as  to  making  the  heirs 
of  the  mortgagor  parties  to  the  foreclosure  suit  apply  as  well  to 
the  heirs  of  a  purchaser,  or  of  a  judgment  creditor,-'*  but  of  course 
no  personal  judgment  can  be  had  against  such  heirs.^^^ 

§  1416.  Heirs  of  partner. — If  one  of  two  or  more  joint  mort- 
gagors, who  are  partners,  dies  pending  a  suit  for  foreclosure,  it  is  not 

="  Story's  Eq.   PI.    §    196;    Muir  v.  405;  Building  Asso.  v.  Vendervere,  11 

Gibson,    8   Ind.    187.  N.    J.    Eq.    382,    383;    Dorsheimer    v. 

-"^Fell  v.  Brown,  2  Bro.  C.  C.  276;  Rorback,  23  N.  J.  Eq.  46,  25  N.  J.  Eq. 

Farmer  v.   Curtis,  2  Sim.  466.  516,  519;  Andrev/s  v.  Stelle,  22  N.  J. 

=•">  Harwood  v.  Marye,  8  Cal.  580.  Eq.  478. 

=■"  Miles  V.  Smith,  22  Mo.  502;  Darl-  -"'Huston  v.   Stringham,  21   Iowa, 

ington  V.   Effy,   13  Iowa,  177;    Hunt  36. 

V.  Acre,  28  Ala.  580;  Dixon  v.  Cuyler,  ="=  Darlington  v.  Effey,  13  Iowa,  177; 
27    Ga.    248;    Mitchell    v.    Began,    11  United  Security  L.  Ins.  Co.  v.  Van- 
Rich.  L.  686;  Martin  v.  O'Bannon,  35  degrift,  51  N.  J.  Eq.  400,  26  Atl.  985. 
Ark.  62;  United  Security  L.  Ins.  Co.  ="  Alexander  v.  Frary,  9  Ind.  481. 
V.   Vandegrift.   51   N.   J.   Eq.    400,   26  ="'  Milroy  v.  Stockwell,  1  Ind.  35. 
Atl.  985;  Vreeland  v.  Loubat.  2  N.  J.  ■''  Cundiff  v.  Brokaw,  7  Bradw.  147. 
Eq.  104;  Chester  v.  King,  2  N.  J.  Eq. 


375  WHO    AHK    XECE8SARY    OR    PROPER.       [§§    1417-1419. 

necessary  to  make  his  heirs  or  personal  representatives  parties  to  it, 
because  the  title  vests  in  the  surviving  partners,  who  alone  are  the 
proper  defendants.-'" 

\A'hen  a  mortgage  is  given  by  one  partner  to  secure  a  partnership 
debt,  the  other  partner  is  not  a  necessary  party.-" 

§  1417.  Although  the  mortgage  be  of  a  term  of  years  the  mort- 
gagor's heirs  are  alone  interested,  and  therefore  must  be  made  par- 
ties to  a  bill  to  foreclose  the  mortgage."^ 

§  1418.  Devisees. — Under  the  same  rule,  a  devisee  of  the  mort- 
gagor, whether  in  trust  or  beneficially,  is  a  necessary  party  in  re- 
spect to  so  much  of  the  equity  of  redemption  as  has  been  given  to 
him.-'^  If  the  whole  equity  has  been  devised  to  him,  the  heir,  hav- 
ing no  interest  in  it,  is  not  a  proper  party;  but  if  the  title  of  the 
devisee  under  the  will  be  disputed  by  the  heir,  then  he  should  be 
joined  as  well;2^'°  and  since  the  probate  of  a  will  may  within  a  lim- 
ited period  be  impeached,  a  plaintiff  who  proceeds  without  joining 
the  heirs  does  so  at  the  risk  of  their  afterwards  proving  to  be  the 
real  parties  in  interest.-^^  A  discretionary  power  of  sale  for  rein- 
vestment, given  by  a  mortgagor  to  an  executor  during  the  minority 
of  a  devisee,  does  not  vest  the  executor  with  the  fee  so  as  to  make 
him  a  necessary  party  to  the  suit.-"^-  An  executor  with  such  a  power 
cannot  bind  a  devisee  not  made  a  party  to  the  suit  by  a  ratification 
of  the  foreclosure.2^^  If  the  mortgagor  by  his  will  charges  the  equity 
of  redemption  with  the  payment  of  an  annuity,  the  annuitant  should 
be  made  a  party. ^^* 

§  1419.  Legatees. — When  legacies  are  made  a  special  charge 
upon  the  mortgaged  estate  the  legatees  should  be  made  parties.^^^ 
But  they  are  not  necessary  parties  when  the  legacies  are  not  a 
charge  upon  the  mortgaged  premises,  nor  upon  the  real  estate  gen- 
erally."**^ 

='"Cullum    V.    Batre,    1    Ala.    126.  ='' Hunt  v.  Acre,  28  Ala.  580;   Bel- 

And   see   Jones   v.   Parsons,   25   Cal.  ton  v.   Summer,  31  Fla.   139,   12   So. 

100.  371. 

-''  London,   Paris   &   Am.   Bank  v.  -•'-  Chew  v.  Hyman,  7  Fed.  I",  Stein- 

Smith,  101  Cal.  415,  35  Pac.  1027.  hardt  v.  Cunningham,  130  N.  Y.  292, 

^"  Bradshaw    v.    Outram,    13    Ves.  29  N.  E.  100. 

234;  Cholmondeley  v.  Clinton,  2  Jac.  -''' Chew  v.  Hyman,  7  Fed.  7. 

&  W.  135.  "'*  Hunt  v.  Fownes,  9  Ves.  70. 

""Coles  v.   Forrest,  10  Beav.   552;  ='*■' Batchelor  v.  Middleton,  6  Hare, 

Graham  v.   Carter,  2   Hen.   &  M.   6;  75,  78;  M'Gowan  v.  Yerkes,  6  Johns. 

Mayo  v.  Tomkies,  6  Munf.  520;  Chew  Ch.  450. 

V.  Hyman,  7  Fed.  7.  ''"  Hebron     Society  v.  Schoen,     60 

='"    Macclesfield  v.  Fitton,  1  Vern.  How.  Pr.  185. 
168;    Lewis   v.   Nangle,   2   Ves.   Sen. 
430,  Ambl.  150. 


§  1420.] 


OF   PARTIES    DEFENDANT. 


376 


§  1420.  Mortgagor's  wife.— It  is  usual  to  make  the  wife  who 
has  joined  in  the  execution  of  tlie  mortgage  a  party.  In  some  cases 
she  has  been  regarded  as  a  necessary  party.-**'  But  no  objection  can 
be  taken  by  the  defendant  that  she  is  not  joined;  the  only  conse- 
quence is  that,  if  her  right  of  dower  becomes  fixed  and  absolute, 
she  may  then  redeem.^****  It  is  questioned  in  some  cases  whether 
it  is  necessary  to  join  the  wife  in  order  to  cut  ofE  her  inchoate  right 
of  dower/^^  on  the  ground  that  this  right  is  not  any  real  interest 
in  the  land.  But  generally  this  inchoate  right  of  dower  is  regarded 
as  a  right  in  the  land  created  for  her  benefit,  which  attaches  as 
soon  as  her  husband  is  seised  of  it,  although  it  is  at  the  time  and 
until  his  death  only  a  contingent  or  possible  one.  This  inchoate 
right  is  therefore  as  much  entitled  to  protection  as  the  right  when 
it  is  absolute.  The  want  of  harmony  between  the  decisions  in  this 
matter  is  in  large  part  to  be  accounted  for  by  the  statutes  of  sev- 
eral States  which  have  radically  changed  the  common  law  of  dower. 
In  all  those  States  in  which  the  common  law  doctrine  remains  un- 
changed, when  the  wife  of  a  mortgagor  has  joined  in  the  execu- 
tion of  a  mortgage  the  rule  is  general  that  she  should  be  joined 
as  a  party  when  it  is  desired  to  bar  her  rights  by  the  decree  of  fore- 
closure or  sale.-'^° 


=^'  Chadbourn  v.  Johnson,  119  N. 
C.  282,  25  S.  E.  905. 

=^»  Powell  V.  Ross,  4  Cal.  197;  Ris- 
sel  V.  Eaton,  64  Ind.  248. 

2«»  In  Denton  v.  Nanny,  8  Barb.  618. 
Brown,  J.,  said:  "I  find  it  nowhere 
expressly  adjudged  that  a  wife  is  a 
necessary  party  to  a  bill  of  fore- 
closure in  order  to  extinguish  her 
inchoate  right  of  dower."  Bell  v. 
Mayor  of  N.  Y.  10  Paige,  49;  Eslava 
V.  Lepretre,  21  Ala.  504,  56  Am.  Dec. 
266;  Gary  v.  Wheeler,  14  Wis.  281. 
But  see  Foster  v.  Hickox,  38  Wis. 
408;  Thornton  v.  Pigg,  24  Mo.  249; 
Riddick  v.  Walsh,  15  Mo.  519,  538; 
Powell  V.  Ross,  4  Cal.  197.  This 
case,  however,  is  overruled  by  later 
cases  in  this  State. 

"*  Wisconsin:  Foster  v.  Hickox,  38 
Wis.   408. 

Iowa:  Moomey  v.  Mass,  22  Iowa, 
380,  92  Am.  Dec.  395;  Chase  v.  Ab- 
bott, 20  Iowa,  154;  Burnap  v.  Cook, 
16  Iowa,  149,  85  Am.  Dec.  507. 

California:  Sargent  v.  Wilson,  5 
Cal.  504;  Revalk  v.  Kraemer,  8  Cal. 
66,  68  Am.  Dec.  304;  Kohner  v.  Ashe- 
nauer,  17  Cal.  578;  Anthony  v.  Nye, 
30  Cal.  401;  Marks  v.  Marsh,  9  Cal. 
96;  Burton  v.  Lies,  21  Cal.  87. 


Texas:  Tadlock  v.  Eccles,  20  Tex. 
782,  73  Am.  Dec.  213. 

Michig'an:  Wisner  v.  Farnham,  2 
Mich.  472. 

Illinois:  Wright  v.  Langley,  36  111. 
381;  Leonard  v.  Villars,  23  111.  377. 

Maryland:  Johns  v.  Reardon,  3 
Md.  Ch.  57. 

Mississippi:  Denniston  v.  Potts, 
19  Miss.  36;  Byrne  v.  Taylor,  46 
Miss.  95. 

Indiana:  Watt  v.  Alvod,  25  Ind. 
533;  Martin  v.  Noble,  29  Ind.  216; 
Chambers  v.  Nicholson,  30  Ind.  349. 

New  York:  Mills  v.  Van  Voorhies, 
28  Barb.  125,  20  N.  Y.  412,  10  Abb. 
Pr.  152;  Merchants'  Bank  v.  Thom- 
son, 55  N.  Y.  7, 11  ;Kursheedt V.Union 
Sav.  Inst.  118  N.  Y.  358,  23  N.  E. 
473;  Simar  v.  Canaday,  53  N.  Y. 
298;  Denton  v.  Nanny,  8  Barb.  618. 

North  Carolina:  Nimrock  v.  Scan- 
Ian,  87  N.  C.  119. 

Alabama:  Sims  v.  Bank,  73  Ala. 
248;  McGehee  v.  Lehman,  65  Ala. 
316;  Kimbrell  v.  Rogers,  90  Ala.  339, 
7  So.  241;  McGough  v.  Sweetser,  97 
Ala.  361,  12  So.  162;  Eslava  v.  Le- 
pretre, 21  Ala.  504;  Duval  v.  Mc- 
Loskey,  1   Ala.  708. 

Ohio:     McArthur   v.    Franklin,    15 


377  WHO   ARE   NECESSARY    OR   PROPER.  [§    1420. 

The  wife  having  no  separate  estate  in  the  property  at  the  time 
of  the  foreclosure,  but  only  a  possibility  of  dower  upon  the  death 
of  the  husband  leaving  her  surviving,  some  authorities  hold  that 
when  she  is  made  a  party  to  the  foreclosure  suit  a  personal  service 
of  the  summons  upon  her  is  not  necessary;  that  it  is  sufficient 
to  serve  it  upon  the  husband  only;  and  that  he  is  bound  to  appear 
for  her,  and  if  he  does  not  she  may  be  defaulted  as  if  personally 
served. ^"^  Her  right  is  regarded  as  a  mere  incident  to  her  husband's 
title.  It  would  seem,  however,  that  process  should  issue  against  her. 
Though  she  be  made  a  party  to  the  suit,  a  summons  issued  against 
and  served  on  the  husband  alone  does  not,  according  to  most  au- 
thorities, bind  her  in  any  way,  or  even  authorize  the  husband  to  ap- 
pear and  act  for  her;  and  the  doctrine  stated  above  seems  to  be 
generally  repudiated. "''- 

If  the  mortgagor  dies  before  foreclosure,  or  pending  a  foreclosure 
suit,  his  widow  should  be  made  a  defendant.-^^  The  widow  of  the 
owner  of  the  equity  of  redemption,  when  she  appears  also  to  be  the 
only  heir,  is  a  necessary  party  to  a  suit  for  the  foreclosure  of  the 
mortgage."^"* 

A  wife  in  actual  occupancy  of  a  homestead  has  such  an  interest 
as  entitles  her  to  be  made  a  party  to  the  foreclosure  of  a  mortgage 
upon  it.^^^ 

If  the  mortgage  is  upon  partnership  real  estate  the  wives  of  the 
mortgagors  are  not  necessary  parties,  for  the  reason  that  such  prop- 
erty is  a  fund  for  the  payment  of  partnership  debts,  and  the  wives 

Ohio  St.  485,  16  Ohio  St.  193,  where  and  is  an  interest  resulting  from  the 

this  matter  is  fully  discussed.  marital   relations,    seems   to   be   the 

Massachusetts:    Gibson  v.  Crehore,  ground  taken  in  the  recent  decisions 

5  Pick.  146.  for  the  rule   that  service   upon  the 

Illinois:    Gilbert  v.  Maggord,  2  111.  husband  alone  is  good. 

471;  Leonard  v.  Villars,  23  111.  377.  Under    the    present    Code   of   Pro- 

^''^  New  York:    Foote  v.  Lathrop,  53  cedure  of  New  York,  the  wife  of  the 

Barb.  183,  affirmed  in  41  N.  Y.  358;  owner  of  the  equity  of  redemption 

Watson  V.  Church,  3  Hun,  30;   Eck-  may  appear  and  defend  by  her  own 

erson  v.   Vollmer,   11   How.   Pr.   42;  attorney,  as  though  she  were  single. 

Lathrop  v.Heacock,  4  Lans.  1;  White  Janinski  v.  Heidelberg,  21  Hun,  439. 

v    Coulter,  1  Hun,  357,  359.     In  Fer-  -'-  McArthur  v.   Franklin,   15  Ohio 

guson   v.    Smith,    2    Johns.    Ch.    139,  St.  485,  16  Ohio  St.  193;  Union  Bank 

Chancellor  Kent  gives  us  the  reasc^i  v.  Bell,  14  Ohio  St.  200.  See  Denton 

for  the  rule  that  service  of  a  sub-  v.  Nanny,  8  Barb.  618,  624;   Mills  v. 

poena   against   husband   and   wife   is  Van  Voorhies,  20  N.  Y.  412,  415. 

good  if  made  on  the  husband  alone,  ^"^  Za?gel  v.  Kuster,  51  Wis.  31. 

— that  the  husband  and  wife  are  one  -"^  Holland    v.  Holland,  131  Ind.  196, 

person  in  law,  and  the  husband  is  30  N.  E.  1075;  Curtis  v.  Gooding,  99 

bound  to  answer  for  both.     Perhaps  Ind.  45;  Watts  v.  Julian,  122  Ind.  124, 

this  reason  was  better  formerly  than  23    N.    E.    698;    Daugherty   v.    Dear- 

now.     As  regards  the  matter  of  ser-  dorf,  107  Ind.  527,  8  N.  E.  296;  Pauley 

vice  upon  the  wife  in  a  foreclosure  v.  Cauthorn,  101  Ind.  91. 

suit  to  bar  her  right  of  dower,  the  -'"■  Haviland    v.    Chase,    116    Mich. 

fact  that  this  is  no  existing  claim,  214,  74  N.  W.  477. 


§    1421.]  OF    PARTIES    DEFENDAXT.  378 

have  only  contingent  rights  in  what  may  be  left  after  the   settle- 
ment of  partnership   affairs.""" 

§  1421.  If  the  wife  did  not  join  her  husband  in  his  mortgage 
in  release  of  her  dower,  she  should  still  be  made  a  party  to  the 
Ijill  if  there  is  a  defence  to  the  claim,  either  by  reason  of  a  subse- 
quent release,  or  because  the  mortgage  was  given  to  secure  the 
payment  of  purchase-money^''^  and  is  not  subject  to  dower.^^*  In 
such  cases  the  right  is  subordinate  to  the  mortgage,  and  is  barred 
if  she  be  made  a  party.  There  are  cases  in  conflict  with  this 
rule,  proceeding  upon  the  theory  that  the  wife  in  such  case  has 
no  interest  in  the  land,  or  any  equity  of  redemption,  and  is  there- 
fore barred  by  the  decree,  although  not  made  a  party.^**^  If  the 
claim  be  a  paramount  one.  a.nd  in  no  way  subject  to  the  mort- 
gage, it  cannot  then  be  barred  by  the  decree,  and  she  should  not 
be  made  a  party  to  the  suit.'""  But  if  she  has  not  joined  in  the 
mortgage,  and  there  is  no  defence  to  her  claim,  she  is  not  a  proper 
party  to  the  bill,  as  her  rights  would  not  be  affected  if  she  were 
made  a  party.""^ 

Where  the  owner  of  land  executed  two  mortgages  of  it  at  differ- 
ent times,  in  the  first  of  which  his  wife  did  not  join,  but  did  join 
in  the  second,  and  the  second  mortgage  was  first  foreclosed,  and  the 
purchaser  was  made  a  party  to  an  actio-n  to  foreclose  the  first  mort- 
gage, it  was  held  that  the  foreclosure  of  the  second  mortgage  extin- 
guished the  contingent  right  of  dower  of  the  wife  in  the  property.^*^ 
Her  dower  was  extinguished  just  as  it  would  have  been  had  she 
joined  her  husband  in  an  absolute  conveyance  to  the  same  pur- 
chaser. In  like  manner,  if  one  executes  a  mortgage,  his  wife  not 
joining  in  it,  but  afterwards  his  wife  joins  him  in  a  conveyance  of 
the  land  to  a  third  person,  and  the  mortgage  is  foreclosed  against 

==>"  Shanks  v.  Klein,  104  U.  S.  18;  Fletcher,  40  Ind.  575;  Barr  v.  Van- 
Logan  V.  Greenlaw,  25  Fed.  299;  alstine,  120  Ind.  590,  22  N.  E.  965. 
Mallory  v.  Russell,  71  Iowa.  63,  32  «"' Brackett  v.  Baum,  50  N.  Y.  8; 
N.  W.  102,  60  Am.  Rep.  776;  Lenow  Merchanis'  Bank  v.  Thomson,  55  N. 
V.  Fones,  48  Ark.  557,  4  S.  W.  56;  Y.  7;  Kittle  v.  Van  Dyck,  1  Sandf. 
Bopp  v.  Fox,  63  111.  540.  Ch.  76;  Bell  v.  Mayor  of  Nev/  York, 

-'■  Barr  V.  Vanalstine,  120  Ind.  590,  10    Paige,    49;    Mills    v.    Van    Voor- 

22  N.  E.  965.  hies,   20   N.   Y.   412,   415;    Mavrich  v. 

-«  Mills  v.  Van  Voorhies,  20  N.  Y.  Grier,  3  Nev.  52,  93  Am.  Dec.  373. 

412,  reversing  23  Barb.  125;  Wheeler  ^"  Baker  v.  Scott,  62  111.  86;   Shel- 

V.    Morris,    2    Bosw.    52'4;     Heth    v.  don  v.  Patterson,  55  111.  507;  Merch- 

Cocke,  1  Rand.  344;  Foster  v.  Hickox,  ants'  Bank  v.  Thomson,  55  N.  Y.  7; 

38  Wis.  408.  Lewis  v.  Smith,  9  N.  Y.  502.  11  Barb. 

"''Fletcher  V.  Holmes,  32  Ind.  497:  152,    61    Am.    Dec.    706;    Moomey   v. 

Etheridge  v.  Vernoy,  71  N.  C.  184-186.  Maas,  22  Iowa,  380,  92  Am.  Dec.  395. 

The    Indiana    case    is    overruled    in  ^"^  Calder  v.  Jenkins,  16  N.  Y.  Supp. 

later   cases   in   that   State.     May   v.  797. 


379  WHO   ARE    NECESSARY   OR   PROPER.    [§§    1422^    1423. 

such  third  person  without  making  the  wife  of  the  mortgagor  a 
party,  the  purchaser  under  foreclosure  will  take  the  land  free  from 
the  inchoate  dower  of  the  wife  of  tlie  mortgagor. ^''^ 

§  1422.  In  those  States  where  the  common  law  doctrine  of 
dower  is  changed,  and  husband  and  wife  are  made  wholly  inde- 
pendent of  each  other  as  to  their  rights  of  property,  the  wife  is 
not  a  necessary  party.-''''*  If  she  has  no  interest  and  makes  no  claims 
of  interest,  she  should  not  be  made  a  party. ^"'^  The  wife  of  the 
mortgagor  who  has  released  her  interest  in  the  mortgage,  and  then 
joined  her  husband  in  conveying  the  equity  of  redemption  to  a  pur- 
chaser, can  have  no  possible  interest  in  the  land,  and  therefore  is 
not  a  proper  defendant.  Of  course,  if  the  mortgaged  estate  be  the 
separate  property  of  a  married  woman,  she  is  then  owner  of  the 
equity  of  redemption,  and  as  such  is  a  necessary  paxty.^"®  The  de- 
fendant cannot  take  the  objection  that  his  wife,  who  joined  in  the 
execution  of  the  mortgage,  is  not  joined  as  a  party.^*''^ 

§  1423.  If  the  premises  mortgaged  are  subject  to  a  homestead 
right,  the  wife  should  be  made  a  party.^""*  If,  however,  the  mort- 
gage was  given  to  secure  the  purchase-money  and  the  wife  did  not 
join  in  it,  she  is  not  a  necessary  party  by  reason  of  the  homestead 
right;  such  a  mortgage  is  valid  and  not  subject  to  the  homestead 
right. ^°^     A  wife  who  has  joined  in  a  mortgage  releasing  her  home- 

^"'Boorum   v.    Tucker,    (N.   J.),   26  gas,  116  Cal.  278,  48  Pac.  90,  58  Am. 

Atl.  456;  Hinchman  v.  Stiles,  9  N.  J.  St.  164;  Morris  v.  Ward,  5  Kans.  239; 

Eq.  361;  Chilver  v.  Weston,  27  N.  J.  Willis    v.    Whitead,    59    Kans.    221, 

Eq.  435;    Atwater  v.  West,  28  N.  J.  52  Pac.  445. 

Eq.  361;  Mount  v.  Manhattan  Co.  43  In    Kentucky    a    statute    provides 

N.     J.    Eq.    25,    9    Atl.    117,    44     N.  that    no    mortgage    or   release    of   a 

J.  Eq.    297,    18    Atl.    80;     Hoogland  homestead  exemption  shall  be  valid 

V.   Watt,   2   Sandf.    Ch.   14S;    Elmen-  unless   subscribed   by   both  husband 

dorf  V.  Lockwood,  57  N.  Y.  322;  Man-  and  wife;  G.  S.  ch.  38,  art.  13,  §  13; 

hattan  Co.  v.  Bverston,  6  Paige,  457;  and  it  is  held  that  where  the  wife 

Carter  v.  Walker,  2  Ohio  St.   339.  did    not   join    in    the    mortgage,    al- 

See,  however,  Littlefield  v.  Crocker,  though   on   foreclosure,     the    home- 

30  Me.  192.  stead    is   sold   subject  to   the   wife's 
""Miles    V.     Smith,    22    Mo.    502;  homestead    and    dower    rights,    the 

Thornton  v.  Pigg,  24  Mo.  249;  Powell  sale  does  not  even  pass  the  husband's 

V.  Ross,  4  Cal.  197.  interest.     Atkinson   v.    Gov/dy,   8   S. 

^"^  Stevens  v.  Campbell,  21  Ind.  471.  W.  698;   Tong  v.  Eifort,  80  Ky.  152; 

'""Hill  V.  Edmunds,  5  De  G.  &  S.  Thorn   v.    Darlington,   6   Bush,    448; 

603.  Wing  V.  Hayden,  10  Bush.  276. 

'»'  Powell  V.  Ross,  4  Cal.  197.  '"■'  Amphlett  v.   Hibbard,   29   Mich. 

^"*  Sargent   v.   Wilson,   5   Cal.    504;  298.     Christiancy,  J.,  said:    "We  see 

Revalk    v.    Kraemer,    8    Cal.    66,    68  no  substantial  ground  for  requiring 

Am.  Dec.   304;    Moss.  v.  Warner,  10  her  to  be  made  a  party,  nor  can  we 

Cal.    296;    Mabury   v.    Ruiz.    58    Cal.  see  any  such  substantial  benefit  to 

11;    Watts  V.   Gallagher,  97  Cal.   47,  arise   from    such    a    requirement    as 

31  Pac.  626:  Hefner  v.  Urton.  71  would  counterbalance  the  embar- 
Cal.  479,  12  Pac.  486;  Stockton  Bldg.  rassments  which  would  arise  from 
&  Loan  Ass'n  v.   Chalmers,  75   Cal.  such  a  rule." 

332,   17  Pac.   229;   Bracket  v.   Bane- 


§    1424.]  OF    PARTIES    DEFENDANT.  380 

stead  rights  is  not  a  necessary  party  to  a  foreclosure  suit  by  reason 
of  such  homestead. ^^°  If  for  any  reason  the  mortgage  is  paramount 
to  the  right  of  homestead,  the  mortgagor's  wife  is  not  a  necessary 
though  a  proper  party  by  reason  of  such  right.^^^  Wlien  the  mort- 
gagor has  become  a  bankrupt,  and  in  his  schedule  claims  the  mort- 
gaged premises  to  be  his  homestead,  he  must  be  made  a  party  de- 
fendant in  proceedings  to  foreclose  the  mortgage.  It  is  not  sufficient 
to  make  the  assignee  in  bankruptcy  a  party  unless  the  mortgagor 
.had  executed  the  mortgage  in  such  a  form  as  to  effectually  cut  off 
his  right  of  homestead.^^^ 

Of  course  if  the  homestead  be  acquired  by  use  as  such  after  the 
execution  of  the  mortgage,  the  wife  has  no  homestead  rights,  and 
therefore  she  is  not  entitled  to  be  made  a  party  defendant.^^^ 

§  1424.  Husband.—  In  an  action  to  foreclose  a  mortgage  exe- 
cuted by  husband  and  wife  on  the  separate  estate  of  the  wife,  the 
husband  is  a  proper  co-defendant,  both  by  reason  of  his  interest  in 
the  land,  and  in  some  cases  by  his  personal  liability  on  the  note.^^'* 
Upon  the  decease  of  the  husband  pending  such  action,  the  action  may 
proceed  against  the  wife  alone.^^^  But  in  those  States  where  the  in- 
terests of  husband  and  wife  are  made  completely  separate  and  inde- 
pendent as  to  the  property  they  respectively  own,  there  is  no  good 
reason  for  joining  the  husband  in  such  case  unless  he  has  become 
personally  responsible  for  the  debt,  and  a  personal  judgment  is 
sought  against  him;^^*'  and  of  course,  when  not  a  necessary  party 
himself,  his  heirs  or  personal  representatives  are  not  necessary  par- 
ties to  a  suit  brought  after  his  death.'^^^ 

Upon  the  decease  of  the  husband  his  personal  repreentative  may 
be  made  a  party  to  such  action;  and  he  is  a  necessary  party  if  the 
debt  secured  was  the  debt  of  the  husband.^^^ 

A  mortgage  upon  community  property  may  be  foreclosed  against 
the  surviving  husband  or  wife  without  first  presenting  it  against  the 
estate  of  the  deceased  husband  or  wife.^^^ 

=•'"  Townsend  Sav.  Bank  v.  Epping,  N.  J.  Eq.  382;   Thornton  v.  Pigg,  24 

3  Woods,  390.  Mo.  249;    Riddick  v.  Walsh,   15  Mo. 

2^1  Connecticut  Mut.   Life   Ins.   Co.  519,    538;    Marshall    v.    Marshall,    86 

V.  Jones,  1  McCrary,  388.  Ala."  383,  5  So.  475;  Kimbrell  v.  Rog- 

^i^Dendel  v.  Sutton,  20  Fed.  787.  ers,  90  Ala.  339,  7  So.  241;  Summers 

="Kuhnert  v.  Conrad,  6  N.  D.  215,  v.  Sprigg  (Ky.),  35  S.  W.  1033. 

69  N.  W.  185.  ^''  Building   Asso.    v.    Camman,    11 

'"Wolf  V.   Banning,  3  Minn.  202;  N.  J.  Eq.  382. 

Mavrich  v.  Grier,  3  Nev.  52,  93  Am.  ^^^  Mebane  v.  Mebane,  80  N.  C.  34, 

Dec.    373;    Andrews   v.    Swan  ton,    81  44  Am.  Dec.  102. 

Ind.  474.  ''°  McGahey  v.  Forrest,  109  Cal.  63, 

^"Lawrence  v.  Armstrong  (Tenn.),  41  Pac.  817;  Hibernia  Sav.  &  L.  Soc. 

48  S.  W.  403.  v.    Thornton,    109   Cal.   427,   42    Pac. 

""Building   Asso.    v.    Camman,   11  447,  50  Am.  St.  52. 


381 


WHO   ARE   NECESSARY    OR   PROPER. 


[§    1425. 


§  1425.  All  subsequent  mortgagees,  as  well  as  other  incumbranc- 
ers should  be  made  parties  to  tlie  action,  or  tliey  may  afterwards 
redeem;  but  they  are  not  necessary  parties.^^"  The  assignees  of  sub- 
sequent mortgagees  are  parties  as  necessary  as  the  original  mort- 
gagees.^-^ If  the  entire  interest  is  assigned,  the  mortgagee  is  no 
longer  a  proper  party,  but  the  assignee  becomes  such  in  his  place.^^^ 
The  assignee  in  bankruptcy  of  the  subsequent  mortgagee  must  be 
made  a  party  to  the  suit,  or  he  will  have  the  right  to  redeem.^-^ 

If  the  plaintiff  be  himself  the  owner  of  a  second  mortgage  upon  the 


'-"New  York:  Peabody  v.  Roberts, 
47  Barb.  91;  Franklyn  v.  Hayward, 
61  How.  Pr.  43;  Arnot  v.  Post,  6 
Hill.  65;  Waller  v.  Harris,  7  Paige, 
167;  Vanderkemp  v.  Shelton,  11 
Paige,  28. 

California:  Carpentier  v.  Bren- 
ham,  40  Cal.  221,  50  Cal.  549;  Hay- 
ward  V.  Stearns,  39  Cal.  58,  60; 
Davenport  v.  Turpin,  43  Cal.  597, 
601;  Carpentier  v.  Williamson,  25 
Cal.  161;  Schadt  v.  Heppe,  45  Cal. 
433,  437. 

Iowa:  Gower  v.  Winchester,  33 
Iowa,  303,  Newcomb  v.  Dewey,  27 
Iowa,  381;  Street  v.  Beal,  16  Iowa,  68, 
55  Am.  Dec.  504;  Chase  v.  Abbott, 
20  Iowa,  154;  Heimstreet  v.  Winnie, 
10  Iowa,  430;  Anson  v.  Anson,  20 
Iowa,  55,  89  Am.  Dec.  514;  Johnson 
V.  Harmon,  19  Iowa,  56;  Donnelly 
V.  Rusch,  15  Iowa,  99;  Semple  v.  Lee, 
13  Iowa,  304;  Ten  Eyek  v.  Casad,  15 
Iowa,  524;  Crow  v.  Vance,  4  Iowa, 
434;  Veach  v.  Schaup,  3  Iowa,  194; 
Bates  V.  Ruddick,  2  Iowa,  423,  65 
Am.  Dec.  774.  See  this  last  case  for 
a  full  discussion  of  the  point. 

Illinois:  Kenyon  v.  Shreck,  52  111. 
382;  Augustine  v.  Doud,  1  Bradw. 
588. 

Indiana:  Pattison  v.  Shaw,  6  Ind. 
377;  Hosford  v.  Johnson,  74  Ind.  479; 
Mack  V.  Grover,  12  Ind.  254;  Mere- 
dith V.  Lackey,  16  Ind.  1;  Murdock 
V.  Ford,  17  Ind.  52;  McKernan  v. 
Neff,  43  Ind.  503;  .Etna  L.  Ins.  Co. 
V.  Finch,  84  Ind.  301;  Buchanan  v. 
Berkshire  L.  Ins.  Co.  96  Ind.  510. 

Maryland:  Leonard  v.  Groome,  47 
Md.  499;  Johnson  v.  Hambleton,  52 
Md.  378;  Harris  v.  Hooper,  50  Md. 
537. 

Kentucky:  Cooper  v.  Martin,  1 
Dana,  23,  25;  Roney  v.  Bell,  9  Dana, 
3. 

Alabama:  Wiley  v.  Ewing,  47  Ala. 
418. 


Mississippi:  Brown  v.  Nevitt,  27 
Miss.   801. 

New  Jersey:  Vanderveer  v.  Hol- 
comb,  17  N.  J.  Eq.  87;  Atwater  v. 
West,  28  N.  J.  Eq.  361;  Gould  v. 
Wheeler,  28  N.  J.  Eq.  541. 

Texas:  Webb  v.  Maxan,  11  Tex. 
678. 

Michigan:  Walker  v.  Fisher,  117 
Mich.  72,  75  N.  W.  144. 

Oklahoma:  Blanchard  v.  Schwartz, 
7  Okl.  23,  54  Pac.  303. 

Minnesota:  Rogers  v.  Holyoke,  14 
Minn.  22. 

In  Tennessee  it  is  held  that  subse- 
quent mortgagees  are  bound,  though 
not  made  parties,  if  there  was  no 
collusion  between  the  parties  to  the 
bill,  or  other  special  ground  of 
equity.  Rowan  v.  Mercer,  10  Humph. 
359. 

If  the  subsequent  mortgagee  is  not 
recorded,  or  if  it  is  upon  the  property 
of  a  corporation  and  it  is  not 
executed  as  a  deed  of  the  corpora- 
tion, but  is  signed  by  its  officers  in 
their  individual  names,  there  is  no 
constructive  notice  of  such  mortgage 
and  it  is  not  necessary  to  make  the 
holder  of  such  a  mortgage  a  party. 
Shackelton  v.  Allen  Chapel,  25  Mont. 
421,  05  Pac.  428;  Hager  v.  Spect,  52 
Cal.  579. 

Under  a  statute  which  provides 
that  it  is  sufficient  to  make  the 
mortgagee  or  his  assignee  as  shown 
by  the  record,  defendant,  a  non-resi- 
dent second  mortgagee  who  is  made 
a  party  by  the  name  given  in  the 
record,  though  incorrect  is  bound. 
Baugher  v.  Woollen,  147  Ind.  308, 
45  N.  E.  94. 

■■'-^  Swift  v.Edson,5  Conn.  531;  Van- 
derkemp V.  Shelton,  11  Paige.  28, 
Clarke,  351;  Bigelow  v.  Davol,  16  N. 
Y.  Supp.  646.    . 

''-'-  Pullen  V.  Heron,  Min.  Co.  71  N. 
C.  567. 

^'^  Avery  v.  Ryerson,  34  Mich.  362. 


§    142G.]  OF    PARTIES    DEFENDANT.  382 

same  property,  he  should  set  out  this  fact  in  his  complaint.  He  can- 
uot,  without  such  reference  in  the  complaint  or  exception  in  the 
judgment,  require  bids  to'  be  made  subject  to  his  second  mort- 
gage.^-* A  junior  mortgagee  whose  mortgage  has  never  been  re- 
corded, and  of  which  the  senior  mortgagee  has  no  notice,  need 
not  be  made  a  party  to  the  latter's  foreclosure  suit.^-^ 

An  assignee  of  a  mechanic's  lien  is  a  necessary  party  to  a  suit  to 
foreclose  a  mortgage  given  after  the  lien  commenced,  although  the 
mortgagee  had  no  knowledge  of  its  existence,  and  the  mortgage 
was  recorded  before  the  commencement  of  statutory  proceedings  to 
enforce  the  lien.^^'^ 

§  1426.  A  subsequent  mortgagee  who  has  assigned  the  mort- 
gage, although  he  has  not  indorsed  the  note,  is  not  prima  facie  a 
necessary  party  ;^"  nor  is  he  although  the  assignment  shows  that  he 
assigned  the  mortgage  as  collateral  security. '^"^  But  when  he  has 
assigned  the  mortgage  merely  as  collateral  security,  it  is  desirable, 
at  least,  that  he  should  be  made  a  party;  because,  if  not  assigned 
for  its  full  value,  he  has  still  an  interest  in  it;  and  he  may  in  fact 
be  able  to  show  that  the  deljt  for  which  he  has  assigned  the  mort- 
gage has  been  paid,  and  that  he  is  really  the  only  one  beneficially 
interested  in  the  security.'^-^  The  better  practice,  therefore,  is  to 
make  the  assignor  of  the  mortgage  a  party,  whenever  it  appears 
either  from  the  assignment  or  otherwise  that  he  has  still  an  interest 
in  the  security.^^" 

Except  by  reason  of  his  personal  liability,  a  mortgagee  who  has 
assigned  the  mortgage  absolutely,  and  indorsed  the  note,  is  not  a 
proper  defendant  in  a  suit  to  foreclose  the  mortgage.  The  action 
should  be  against  the  mortgagor  without  joining  him,  for,  though 
he  is  liable  to  the  holder  of  the  mortgage  as  indorser,  and  might  be 
joined  with  the  maker  in  a  suit  on  the  note,  he  has  nothing  to  do 
with  the  mortgaged  property,  and  cannot  be  a  party  to  the  fore- 
closure suit.^^^    But  where  a  personal  judgment  may  be  had  against 

^=*  Homceopathic  Mut.  L.  Ins.  Co.  v.        "■"  Woodruff  v.  Depue,  14  N.  J.  Eq. 

Sixbury,  17  Hun,  424.  168. 

^"Henderson  v.  Grammar,  66  Cal.        ^^^Bard  v.  Poole,  12  N.  Y.  495;  Dal- 

332;   Reel  v.  Wilson,  64  Iowa,  13,  19  ton  v.  Smith,  86  N.  Y.  176. 
N.  W.  814.  ''"§  1375;  Whitney  v.  M'Kinney,  7 

'=>=«  Atkins  V.  Volmer,  21  Fed.  697.  Johns.  Ch.  144;  Kittle  v.  Van  Dyck, 

=*-' Walker    v.    Bank    of    Mobile,    6  1  Sandf.  Ch.  76;  Bloomer  v.  Sturges, 

Ala.    452;    Harwell    v.    Lehman.    72  58  N.  Y.  168,  175;   Ackerson  v.  Lodi 

Ala.  344;   Western  Reserve  Bank  v.  Branch  R.  R.  Co.  28  N.  J.  Eq.  542. 
Potter,  Clarke,  432,     •  '''  Sands  v.  Wood,  1  Iowa,  263. 


383  WHO  ARE  NECESSAUY  OR  PROPER.  [§  1427. 

any   one  liable   for   the   mortgage    debt,    such   mortgagee    could   be 
joined  for  that  purpose. •'•'- 

The  fact  tliat  a  deed  and  purcliase-money  mortgage  misdescribed 
the  land,  and  on  discovering  tlie  mistake  the  vendor  executed  a  fur- 
ther deed  locating  the  land  as  it  sliould  have  been  described,  and 
at  the  same  time  the  parties  made  an  agreement  correcting  the 
mortgage,  and  confirming  it  as  an  incumbrance,  does  not  make  the 
mortgagor  a  necessary  or  proper  party  to  an  action  by  an  assignee 
to  foreclose  the  mortgage.  No  further  obligation  rested  upon  the 
mortgagee  after  the  correction  of  tlic  mistake.^^^ 

§  1427.  Assignee  of  note.—  In  those  States  where  the  transfer 
of  the  note  or  bond  secured  by  the  mortgage  is  held  to  carry  with 
it  the  mortgage  security,  the  holder  of  the  note,  though  he  has  no 
formal  assignment  of  the  mortgage,  should  be  made  a  party  to  the 
bill;^^*  and  a  sale  made  without  joining  him  does  not  bar  his  right 
to.  redeem,''^^  or  prevent  his  maintaining  an  action  against  the  pur- 
chaser to  foreclose  his  mortgage.'*''^  In  accordance  with  this  princi- 
ple, after  a  mortgage  has  been  assigned  by  an  indorsement  upon  it, 
without  an  indorsement  of  the  note  or  bond  secured  by  it,  the  as- 
signor remains  the  real  holder  of  the  mortgage,  and  is  a  necessary 
party.^"  In  several  States  there  are  statutes  requiring  the  assignor 
to  be  made  a  party  "when  the  thing  in  action  is  not  assignable  by 
indorsement,"  or  when  it  is  not  a  negotiable  instrument.  Under 
these  provisions  the  holder  of  a  mortgage  note  transferred  by  in- 
dorsement, or  by  delivery  when  payable  to  bearer,  may  be  made  a 
party  without  the  assignor  ;^^^  but  if  the  mortgage  debt  be  evidenced 
by  a  bond  or  non-negotiable  note,  which  is  transferred  by  delivery, 
although  the  mortgage  is  fonnally  assigned,  the  assignor  is  a  neces- 
sary party. ^^'^  A  mortgagee  who  has  assigned  a  negotiable  note  with- 
out a  formal  assignment  of  the  mortgage  is  not  a  necessary  party.^*" 

If  the  mortgage  secures  several  notes,  which  have  been  assigned 
and  are  held  by  different  persons,  to  a  suit  by  one  holder  to  enforce 

'^-  Nichols  v.  Randall,  5  Minn.  304,        ''"  Holliger   v.    Bates,    43    Ohio    St. 

308;    Andrews  v.   Gillespie,  47  N.  Y.  437. 

487;  Christie  v.  Herrick,  1  Barb.  Ch.        -^^  Holdridge  v.  Sweet,  23  Ind.  118; 

254;  Ward  v.  Han  Bokkelen,  2  Paige,  Bell  v.  Shrock,  2  B.  Men.  29;   Pipe- 

289.    And  see  Delaware  Bank  v.  Jar-  stone  County  Bank  v.  Ward,  81  Minn, 

vis,  20  N.  Y.  226.  263,  83  N.  W.  991;   Goodwin  v.  Cun- 

^^'^Haaren  v.  Lyons,  9  N.  Y.  Supp.  ningham,  54  Neb.  11,  74  N.  W.  315. 
211  '""  Gower  v.  Howe,  20  Ind.  396. 

'^*  Burton  v.  Baxter.  7  Blackf.  297;        ^^^' Holdridge  v.  Sweet,  23  Ind.  118; 

Dewing  v.  Scribner,  53  Vt.  1.  French  v.  Turner,  15  Ind.  59. 

^^^  Holliger   v.   Bates,   43   Ohio   St.        '*"  Wilson  v.  Spring,  64  111.  14. 
437. 


g    1428.]  OF    PARTIES    DEFENDANT.  381 

the  mortgage,  the  holders  of  the  other  notes  should  be  made  parties  f*'^ 
though  they  are  not  necessary  parties  if  the  effect  of  the  foreclosure  is 
to  leave  the  mortgage  in  force  as  to  the  other  notes.^"  A  decree 
rendered  without  making  a  holder  of  a  note  party  does  not  bar 
him  from  a  subsequent  foreclosure. ^*=*  But  an  objection  that  an 
assignee  of  an  interest  in  the  mortgage  was  not  made  a  party  to  the 
foreclosure  suit  furnishes  no  ground  for  a  collateral  attack  upon 
the  decree  by  a  purchaser  of  emblements  upon  the  land  prior  to  the 
foreclosure  suit.^**  But  in  Iowa  an  assignee  of  a  note,  though  not 
made  a  party,  is  affected  by  a  foreclosure  decree  obtained  by  the 
holder  of  an  earlier  maturing  note  secured  by  the  same  mortgage, 
and  his  only  remedy  is  to  make  statutory  redemption  from  the  fore- 
closure sale.''*''  When  a  junior  mortgagee  seeks  to  redeem  from  a 
foreclosure  sale  under  a  senior  mortgage,  because  he  was  not  made 
a  party  to  the  suit,  he  must  show  that  he  was  the  owner  of  the 
mortgage  when  the  suit  was  brought  to  foreclose  the  senior  mort- 
gage. If  such  junior  mortgagee  holds  his  mortgage  by  virtue  of  an 
assignment  of  the  mortgage  note,  without  any  written  assignment 
of  the  mortgage,  and  he  fails  to  show  that  such  assignment  was 
made  before  the  action  was  brought  to  foreclose  the  senior  mortgage, 
he  cannot  redeem.^**^  If  the  assignment  has  not  been  recorded,  the 
assignee  need  not  be  made  a  party  to  the  suit,  unless  the  plaintiff 
has  notice  of  the  assignment  before  he  takes  his  decree.^'*^  The 
assignee  in  such  case  is  bound  by  proceedings  to  which  his  assignor 
was  made  a  party.^** 

If  a  bond  and  mortgage  under  foreclosure  are  claimed  by  a  third 
person,  he  may  be  made  a  party  on  his  own  application.  The  owner 
of  the  equity  in  such  case  may  have  to  pay  into  court  the  amount  of 
his  mortgage  debt,  and  may  compel  the  adverse  claimants  to  litigate 
their  rights  between  themselves.^*" 

§  1428.  "Upon  the  death  of  a  junior  mortgagee  his  personal 
representative  is  a  proper  party  to  a  bill  by  the  prior  mortgagee  to 

'"Delespine   v.   Campbell,   45   Tex.  6  N.   W.   725.     And  see  Kemerer  v. 

628.  Bournes,  53  Iowa,  172,  4  N.  W.   521. 

=*- Beyer  v.   Chandler,  160  111.  394,  ^"Shoemaker  v.  Austin  (Iowa),  54 

43  N.  E.  803,  32  L.  R.  A.  113.  N.  W.  137. 

2"  Todd  V.  Cremer,  36  Neb.  430,  54  ^"  Dickerman  v.  Lust,  66  Iowa,  444, 

N.  V7.  674;  Connecticut  Trust  &  Safe  23  N.  W.  916. 

Deposit  Co.  v.  Fletcher,  61  Neb.  166,  ^'^  Cannon  v.  Wright,  49  N.  J.  Eq. 

85  N.  W.  59.  17,  23  Atl.  285. 

^"Batterman    v.    Albright,    122    N.  =^'-' Van    Loan   v.    Squires,    23    Abb. 

Y.  484,  25  N.  E.  85G.  N.  C.  230,  7  N.  Y.  Supp.  171. 

'*=  Hensley  v.  Whiffin,  54  Iowa,  655, 


385  WHO   ARE   NECESSARY    OR   PROPER.    [§§    1429-143 la, 

foreclose.  His  heir  has  no  interest  in  the  mortgage.^^"  If  such 
mortgagee  was  a  non-resident  of  the  State,  the  plaintiff  may  take 
out  administration  for  the  purposes  of  the  foreclosure  suit.^^^ 

§  1429  After  default. —  Incumbrancers  who  have  been  made  par- 
ties to  the  bill,  and  suffered  default,  cannot  complain  that  one  of 
them  was  not  duly  served  with  process,  when  afterwards  it  appears 
that  the  property  was  sold  for  a  sum  less  than  the  amount  due  upon 
the  mortgage.  The  defendant  not  served  can  alone  take  advantage  of 
the  want  of  service.^^- 

§  1430.  After  payment. — A  junior  mortgagee,  after  receiving  full 
satisfaction  for  his  debt,  though  not  made  a  party  to  a  foreclosure 
of  a  prior  mortgage,  has  no  right  of  redemption  which  he  can  ex- 
ercise himself  or  transfer  to  another;  and  the  rule  is  the  same  in 
ease  his  mortgage  is  in  the  form  of  an  absolute  conveyance,  and  he 
has  upon  payment  conveyed  the  premises  at  the  request  of  the  mort- 
gagor to  a  third  party.  He  cannot  invest  the  mortgagor  or  a  third 
party  with  a  right  to  redeem  when  he  himself  has  ceased  to  have  that 
right.  ^^^ 

§  1431.  The  only  right  of  a  junior  mortgagee,  who  has  not 
"been  made  a  party  to  the  foreclosure  of  a  prior  mortgage,  is 
to  redeem  the  property  from  that  mortgage.  It  does  not  matter 
that  on  the  sale  of  the  property  nnder  the  foreclosure  of  the  prior 
mortgage  there  was  a  surplus  which,  with  the  consent  of  the  mort- 
gagor, was  paid  to  a  third  mortgagee  who  was  made  a  party  to  the 
suit,  and  the  property  subsequently  depreciated  so  that  there  was 
no  value  above  the  first  mortgage.  The  middle  mortgagee  has  no- 
claim  upon  the  surplus.  Whether  the  property  has  increased  or 
depreciated  in  value  since  the  sale  under  the  first  mortgage  does 
not  affect  his  right  to  redeem,  which  is  the  only  right  he  has  in  the 
matter.^^* 

§  1431a.  A  joint  and  several  maker  of  the  note  secured  should 
be  joined  as  a  party,  although  the  mortgage  was  executed  by  an- 
other. The  judgment  should  settle  the  obligations  of  all  the  principal 
debtors.     This  is  especially  the  case  where  the  mortgage  has  been 

'="  Whitla  v.  Halliday,  4  Dr.  &  War.  ^53  McHenry  v.  Cooper,  27  Iowa,  137. 
267;    Shaw  v.   McNish,   1   Barb.    Ch.        ='*  McKernan  v.  Neff.  43  Ind.  503; 

326;   Citizens'  Nat.  Bank  v.  Dayton,  Spurgin  v.  Adamson,  62  Iowa,  661,  18 

116  111.  257;  Plummer  v.  Doughty,  58  N.  W.  293;  Gault  v.  Equitable  Trust 

Me.  341;  Lockman  v.  Reilly,  10  Abb.  Co.  100  Kv.  578,  38  S.  W.  1065;  Sanger 

N.  C.  351,  95  N.  Y.  64.  v.  Nightingale,  122  U.   S.  176,  185,  7 

"''  Lothrop's  Case,  33  N.  J.  Eq.  246.  S.  Ct.  1109. 

2"  Montgomery  v.  Tutt,  11  Cal.  307. 


S    1432.]  OF    PARTIES    DEFENDANT.  38G 

assigned  and  the  defence  to  the  note  could  only  be  enforced  by  a 
joint  cross-action  for  damages.^^^ 

§  1432.  A  guarantor  of  the  mortgage  debt  is  not  a  proper  party 
to  the  foreclosure  suit,  because  he  is  not  liable  to  the  holder  of  the 
mortgage  until  the  remedy  against  the  mortgagor  and  the  property 
mortgaged  is  first  exhausted.^^"  But  where  the  court  has  power  to 
decree  the  payment  of  any  deficiency  there  may  be  after  the  sale  of 
the  property,  as  well  against  a  third  person  as  against  the  mort- 
gagor, then  a  mortgagee  who  has  assigned  his  mortgage  and  guar- 
anteed the  payment  of  it,  or  any  other  person  who  has  become  a  guar- 
antor or  surety  of  the  debt,  is  a  proper=^"  though  not  a  necessary^^' 
party  to  a  suit  to  foreclose  the  mortgage.  One  who  has  guaranteed  that 
the  mortgage  debt  is  collectible  is  in  this  way  a  proper  party.^*"^  But 
in  all  cases  when  the  collateral  undertaking  is  strictly  one  of  guar- 
anty, the  judgment  should  provide  that  execution  should  not  issue 
against  the  guarantor  until  an  execution  against  the  persons  pri- 
marily liable  has  been  returned  unsatisfied.^"''^  Upon  a  guaranty  made 
by  the  holder  of  a  mortgage  upon  assigning  it,  that  the  mortgaged 
premises  are  sufficient  to  pay  the  debt,  and  that  the  mortgage  is 
collectible,  the  guarantor  is  not  liable  unless  the  assignee  makes 
a  diligent  foreclosure  of  the  mortgage.  Any  unreasonable  delay, 
such  as  the  lapse  of  nine  months  after  the  maturity  of  an  instalment 
of  the  mortgage,  to  foreclose  it,  will  discharge  the  guarantor.=^«^ 

A  guarantor  of  "collection"  is  not  generally  a  proper  party,^*'^' 
because  no  obligation  arises  on  the  part  of  such  guarantor  until 
there  is  found  to  be  a  deficiency  after  foreclosure  f''^  nor  is  a  surety 
for  the  provision  by  the  mortgagor  of  a  sinking  fund  to  be  invested 
for  the  payment  of  the  mortgage.^*'* 

A  State  which  has  indorsed  the  bonds  of  a  railroad  company,  se- 

^^^Dederick  v.  Barber,  44  Mich.  19,  kins,  51  Wis.  135,  8  N.  W.  15;  Thorne 

5  N    W.  1064.  V.  Newby,  59  How.  Pr.  120. 

^^"^  Newton  v.  Egmont,  4  Sim.  574;  '=»  Cases  above  cited,  and  Stiger  v. 

Gedye  v    Matson,  25  Beav.  310;   Joy  Mahone,  24  N.  J.  Eq.  426,  430. 

V    Jackson  &  Mich.  Plank  Road  Co.  ^^^  Leonard  v.  Morris,  9  Paige,  90; 

11  Mich    155;   Borden  v.  Gilbert,  13  Curtis  v.  Tyler,  9  Paige.  432. 

Wis     670-    Cottrell   v.    New    London  =>»»  Leonard  v.  Morris,  9  Paige,  90. 

Furniture  Co.  94  Wis.  176,  68  N.  W.  ="  Northern    Ins.    Co.    of   N.    Y.    v. 

g74  Wright,   13   Hun,   166,   19   Alb.   L.   J. 

5"§    1710;    Jarman  v.  WIswall,  24  378;    Craig  v.   Parkis,  40  N.   Y.   181, 

N    J    Eq.  267;   Bristol  v.  Morgan,  3  100  Am.  Dec.  469. 

Edw.  Ch.  142;  Rushmore  v.  Miller  4  382  Baxter  v.    Smack,    17   How.    Pr. 

Edw.  Ch.  84;  Jones  v.  Steinbergh,  1  183. 

Barb   Ch  250;  Luce  v.  Hinds,  Clarke.  -^''Johnson  v.  Shepard,  35  Mich.  115. 

453-  Fond  du  Lac  Harrow  Co.  V.  Has-  ^"  Jov  v.   Jackson   &  Mich.   Plank 

Road  Co.  11  Mich.  155. 


387  WPIO   ARE    NECESSARY   AND   PROPER.    [§§    1433,    1434. 

cured  by  a  statutory  mortgage,  is  uot  considered  a  necessary  party  to 
a  suit  to  foreclose  the  mortgage.^"^ 

§  1433.  Collateral  to  g^iaranty. — And  the  courts  have  gone  still 
further  in  this  direction,  and  have  held  that  the  maker  of  a  collateral 
obligation  taken  by  the  guarantor  as  further  security  for  the  amount 
due  on  the  mortgage  is  a  proper  party  to  the  suit,  because  the  holder 
of  the  mortgage  is  entitled  in  equity  to  tlije  benefit  of  the  collateral  un- 
dertaking, and  to  have  a  decree  against  him  if  the  proceeds  of  the  sale 
are  insufficient.^*"^  But  the  maker  of  a  collateral  obligation  is  not  a 
necessary  party  to  the  suit.^"^ 

The  heirs  and  devisees  of  a  deceased  guarantor  cannot,  however,  be 
made  parties  to  the  suit  for  the  purpose  of  reaching  real  estate  that 
has  come  to  them  from  the  deceased  to  satisfy  an  anticipated  defi- 
ciency in  the  mortgaged  property  to  meet  the  debt.^"^ 

§  1434.  Indorser  of  note.— Except  for  the  purpose  of  obtaining 
a  personal  judgment  against  one  who  is  merely  an  assignor  or  indorser 
of  a  promissory  note  secured  by  the  mortgage,  he  is  neither  a  neces- 
sary nor  proper  party  to  an  action  against  the  maker  to  foreclose  the 
mortgage,  except  as  provided  by  statute.  But  such  indorser  is  a 
proper  party  defendant  for  the  purpose  of  obtaining  a  deficiency  judg- 
ment against  him.-'*'^''  The  indorser  is  concluded  by  the  amount  for 
which  the  property  is  sold  imder  the  decree  of  foreclosure,  and  cannot 
afterwards  object  in  a  suit  against  himself  on  his  indorsement  that 
he  was  not  a  party  to  the  foreclosure  suit.^^°  And  so  also  the  maker 
of  a  note  which  is  secured  by  a  mortgage  executed  by  another  is  not 
a  necessary  party,  and,  if  no  personal  claim  is  made  against  him,  is 
not  a  proper  party  to  the  suit  to  foreclose.^'^^ 

A  surety  who  has  paid  the  mortgage  note,  and  thereby  become  the 
owner  of  the  mortgage  debt,  should  be  made  a  party,  or  he  will  not 

'"=  Young    V.    Montgomery    &    Eu-  liable  for   the   debt   may  be"  joined. 

faula  R.  R.  Co.  2  Woods,  606,  3  Am.  How.  St.  §  6704;  Michigan  State  Bank 

L.  T.  R.  (N.  S.)  9.  V.  Trowbridge,  92  Mich.  217,  52  N.  W. 

=■<=«  Curtis  v.  Tyler,  9  Paige,  432.  632;    Steele   v.    Kent    Circuit  Judge, 

^'^'  O'Conner  v.  Nadel,  117  Ala.  595,  109  Mich.  647,  67  N.  W.  963. 

23  So.  532;  First  Nat.  Bank  v.  Lam-        '"' Kearsing  v.  Kilian,  18  Cal.  491. 

bert,  63  Minn.  263,  65  N.  W.  451.  And  see  Deland  v.  Mershon,  7  Iowa, 

5"^  Leonard  V.  Morris,  9  Paige,  90.  70;   Wilkerson  v.   Daniels,  1  Greene 

'"''Meehan  v.   First  Nat.   Bank,  44  (Iowa),  179;   De  Cottes  v.  Jeffers,  7 

Neb.  213,  62  N.  W.  490;   Jarman  v.  Fla.    284.      See,    however,    Davis    v. 

Wiswall,  24  N.  J.  Eq.  267.  Converse,  35  Vt.  503,  where  the  prin- 

='■"  Markel    v.    Evans,    47    Ind.    326.  cipal    was    held    a   proper    party   by 

In    California    it   is    held    that   it   is  reason  of  the  accounting  before  the 

proper    under    the    Practice    Act    to  master,  and  the  court  for  that  rea- 

join  the  mortgagor  and  indorser  as  son  might  compel  his  being  brought 

defendants.     Eastman  v.  Ttirman,  24  in    if    the    objection    was    made    in 

Cal.  379.    So  in  Michigan  any  person  season. 


§§  4134a-1436.]  of  parties  defendant.  388 

be  bound  by  the  proceedings.^'^  If  a  surety  of  the  mortgage  debt  is 
made  a  party  defendant,  and  dies  pendente  lite,  the  action  may  pro- 
ceed without  making  his  representative  a  party. ^" 

§  1434a.  In  proceedings  to  foreclose  a  mortgage  given  by  a  trus- 
tee, his  cestui  que  trust  is  not  ordinarily  a  necessary  party.  If,  for  any 

reason,  the  presence  upon  the  record  of  the  cestui  que  trust  as  a 
party  defendant  is  desirable,  a  motion  should  be  made  that  he  be 
brought  in.  The  bill  is  not  demurrable  because  of  the  non-joinder  of 
the  cestui  que  trust.^"^^ 

§  1435.  Joint  mortgagees. — 'In  a  bill  to  foreclose  by  one  of  two 
joint  mortgagees,  the  other  mortgagee  must  be  made  a  party,  either 
by  joining  in  the  bill,  or,  if  he  declines  to  do  this,  as  a  respondent.^^" 
If  one  joint  mortgagee  has  died  his  executor  or  the  administrator  of 
his  estate  may  join  with  the  surviving  mortgagee  in  a  suit  to  foreclose 
the  mortgage. ^'^°  But  where  a  mortgage  secures  several  notes  falling 
due  at  different  times,  in  a  suit  by  the  holder  of  one  of  the  notes  to 
foreclose  the  mortgage,  the  holder  of  a  note  subsequently  falling  due 
is  not  a  necessary  party ;  but  if  not  made  a  party,  of  course  his  rights 
are  unaffected  by  the  decree  and  sale.^"  The  mortgagee  not  made  a 
party  may  subsequently  file  his  complaint  to  foreclose,  and  may  make 
the  debtor  and  all  the  other  mortgagees  parties,  and  may  contest  the 
claims  of  the  latter.^'^^  If  there  be  two  mortgages,  one  collateral  to 
the  other,  both  mortgagors  should  be  made  parties  to  the  bill  to  fore- 
close; for  the  mortgagor  in  the  collateral  mortgage  has  a  right  to  re- 
deem, and  it  is  his  interest  that  his  property  should  be  called  upon  to 
satisfy  as  small  a  deficiency  as  possible. ^'^^ 

§  1436.  Judgment  creditors. —  A  subequent  judgment  creditor  of 
the  mortgagor  having  a  lien  upon  the  property  should  be  made  a  party 
to  the  proceedings,  but  he  is  not  a  necessary  defendant.^^"    The  judg- 

"==  Coleman  v.   Hunt,  77  Wis.   263,  538;  Stonehewer  v.  Thompson,  2  Atk. 

45  N.  W.  1045.  440;  Blagrave  v.  Clunn,  2  Vern.  576; 

="  Daniels  v.  Moses,  12  S.  C.  130.  Henry  v.  Smith,  2  Dr.  &  War.  381, 

"*  Harlem     Cofip.    Bldg.     Asso.     v.  390;   Adams  v.  Paynter,  1  Coll.  530; 

Quinn,  10  N.  Y.  Supp.  682.  Winebrener  v.  Johnson,  7  Abb.  N.  S. 

''"  Hopkins   v.    Ward,    12   B.    Mon.  Pr.   202;    Brainard  v.   Cooper,   10  N. 

185.     As  to  simultaneous  mortgages,  Y.  356;  Proctor  v.  Baker,  15  Ind.  178; 

see  Cain  v.  Hanna,  63  Ind.  408.  Muir  v.  Gibson,  8  Ind.  187;  Gaines  v. 

""Minn.  G.  S.  1894,  §§  4502,  4503;  Walker,     16     Ind.     361;      Harris   v, 

Eliason  v.  Sidle,  61  Minn.  285,  63  N.  Hooper.  50  Md.  537;  De  Lashmutt  v. 

W.  730.  Sell  wood,    10    Oreg.    319;     Moon    v. 

"'Harris   v.    Harlan,   14   Ind.   439;  Wellford,    84    Va.    34,    4    S.    E.    527; 

Murdock  v.  Ford.  17  Ind.  52.  Campbell  v.  Bane,  119  Mich.  40,  11 

"^Goodall  V.   Mopley,  45  Ind.   355.  N.  W.  322;  Boynton  v.  Pierce,  151  111. 

"^"Stokes  V.  Clendon,  3  Swans.  150.  197,  37  N.  E.   1024;    People  v.  Bow- 

'^^Sharpe   v.    Scarborough,    4    Ves.  man,  181  111.  421,  55  N.  E.  148. 


389  WHO   ARE    NECESSARY    AND    PROPER.  [§    1436. 

ment  creditor  is  not,  however,  Iw  reason  of  liis  being  made  a  party,  de- 
prived of  his  statutory  right  to  redeem  from  the  sale  as  a  judgment 
creditor. ^^^  He  cannot,  however,  have  the  sale  set  aside  by  petition  in 
the  foreclosure  suit.^^-  There  has  been  some  question  as  to  what  acts 
are  necessary  to  constitute  this  lien,  and  when  it  accrues.  A  judgment 
is  generally  a  lien  from  the  time  it  is  docketed,  and  no  execution  or 
sale  is  necessary  to  establish  a  title  to  redeem.  The  judgment  itself 
carries  with  it  the  right  of  redemption,  and  therefore  makes  the  cred- 
itor a  necessary  party.^*^  In  case  the  mortgage  be  for  purchase-money, 
no  lien  by  subsequent  judgment  would  attach,  and  therefore  the  cred- 
itor is  without  remedy  whether  made  a  party  or  not.^^'*  And  so  also  if 
the  judgment  creditor  has  not  perfected  the  proceedings  under  his 
judgment,  so  as  to  have  made  it  a  charge  upon  the  debtor's  land,  he  is 
not  a  proper  party.^^^  A  creditor  of  the  mortgagor  who  has  attached 
the  equity  of  redemption  should  be  made  a  party  ;^®*'  as  also  one  who 
has  levied  an  execution  upon  it,  though  the  time  allowed  the  debtor  to 
redeem  has  not  expired.^*^  But  a  creditor  of  the  mortgagor  who  prior 
to  the  foreclosure  has  levied  an  execution  upon  growing  crops,  but  has 
not  removed  them  at  the  time  of  the  foreclosure,  is  not  a  necessary 
party  to  the  foreclosure  suit.  Neither  is  the  purchaser  at  such  sale, 
for  he  acquired  no  interest  in  the  land  by  his  purchase. ^^® 

A  judgment  rendered  against  a  person  prior  to  his  purchase  of  land 
is  not  generally  a  lien  upon  it ;  and  even  a  mortgage  given  at  the  time 
of  the  purchase  by  him  for  the  purchase-money  would  not  be  affected 
by  it;  and  upon  the  foreclosure  of  such  a  mortgage,  though  the  judg- 
ment creditor  be  not  made  a  party  to  the  suit,  if  the  property  sell  for 
less  than  the  mortgage  debt,  the  purchaser  obtains  a  valid  and  irre- 
deemable title."®® 

A  judgment  creditor  whose  claim  accrued  while  the  mortgaged 
premises  were  subject  to  a  homestead  exemption  has  no  lien  thereon, 
and  is  therefore  not  a  necessary  party  to  proceedings  to  foreclose  the 
mortgage  begun  while  the  homestead  right  exists.^®" 

^^^  People  V.  Bowman,  181  111.  421,  695.     Contra,  see  Nichols  v.  Holgate, 

55  N.  E.  148;  Boynton  v.  Pierce,  151  2  Aik.  (Vt.)  138. 

111.    197,    37    N.    E.    1024;    Wood    v.  ^*"  Bullard  v.  Leach,  27  Vt.  491. 

Whelen,  93  111.  153.  ^*' Batterman    v.    Albright,    122    N. 

'*'-■  Pratt  V.  Frear,  13  Wis.  462.  Y.  484,  25  N.  E.  856. 

'^^  Brainard    v.    Cooper,    10    N.    Y.  "^^  De  Saussiire  v.  Bollmann,  7  S.  C. 

356.  329. 

^^*  Person  v.   Merrick,   5  Wis.   231.  '"» Sutherland    v.    Tyner,    72    Iowa, 
="*'■  Cork  v.  Russell,  L.  R.  13  Eq.  210.  232,  33  N.  W.  645.     Neither  is  such 
^^■'  Dickinson  v.   Lamoille  Co.  Nat.  judgment     creditor     entitled    to    re- 
Bank,  12  Fed.  747;  Lyon  v.  Sanford,  deem  the  homestead  from  the  mort- 
5    Conn.    544.      See,    also.    Carter    v.  gage    sale.      Sutherland     v.     Tyner, 
Champion,  8  Conn.  549,  21  Am.  Dec.  72  Iowa,  232,  33  N.  W.  645;  Grant  v. 

Parsons,  67  Iowa,  31,  24  N.  W.  578. 


§§  l-136a-l-i38.]  OF  parties  defexdakt.  390 

All  lien-holders  subsequent  to  the  mortgage  should  be  made  par- 
ties/''^ if  their  liens  are  contested. •^'''- 

§  1436a.  A  general  creditor  having  no  lien  upon  the  property  is 
not  a  proper  party  to  a  foreclosure  suit,^"^  and  cannot  intervene. ^^* 
In  a  foreclosure  suit  upon  a  mortgage  given  by  a  street  railroad  com- 
pany, a  village  which  had  granted  the  company  permission  to  lay  its 
tracks  in  its  streets  asked  to  be  made  a  party  defendant,  on  the  ground 
that  the  company  had  been  required  to  give  its  bond  conditioned  to 
indemnify  the  village  from  all  damages  sustained  from  the  building 
of  the  road,  and  a  suit  on  the  bond  was  pending  for  a  breach  of  the 
condition  thereof.  It  was  held  that  the  village  was  not  a  proper  party 
to  the  foreclosure  suit,  and  its  motion  was  denied.  The  railroad,  after 
its  construction,  took  subject  to  tlie  conditions  contained  in  the  con- 
sent to  the  laying  of  the  tracks,  and  the  purchaser  at  the  foreclosure 
sale  will  take  subject  to  the  same  conditions.^^^ 

§  1437.  Judgment  after  decree. —  A  creditor  having  a  judgment 
rendered  before  the  sale,  but  subsequent  to  the  decree,  may  redeem  at 
any  time  before  the  sale  by  virtue  of  his  lien.  But  after  the  sale  the 
right  is  as  effectually  barred  as  if  the  creditor  had  been  made  a  party  to 
the  proceeding.  Neither  has  such  creditor  any  right  to  come  in  by 
petition,  and  make  defence  to  the  suit.^^® 

A  creditor  holding  a  judgment  rendered  prior  to  the  mortgage  is 
not  a  proper  party  to  a  suit  to  foreclose  it.^^^ 

§  1438.  Bankrupt. —  If  the  owner  of  the  equity  of  redemption  be- 
comes bankrupt,  and  his  estate  is  assigned  under  the  law,  he  should 
not  generally  be  made  a  party,  for  he  has  no  longer  any  right  of  re- 
demption in  it,  but  his  assignee  should  be  made  a  party  in  his  place.^** 
A  discharge  of  the  mortgagor  is  a  bar  to  any  recovery  against  him,  but 
is  of  course  no  bar  to  the  foreclosure  of  the  mortgage.'^''''    If  the  bank- 

='^  Wilson  v.   California  Bank,   121  Herring  v.    Railroad   Co.   105   N.    Y. 

Cal.  630,  54  Pac.   119;    Blanshard  v.  340,  12  N.  E.  763. 

Schwartz,    7   Okla.    23,    54   Pac.    303;  ==■'=  Farmers'  Loan  &  T.  Co.  v.  New 

Commonwealth  v.  Robinson,  96  Ky.  Rochelle  R.  Co.  10  N.  Y.  Supp.  810. 

553,  29  S.  W.  306.  ''"  People's      Bank      v.      Hamilton 

="'  Cressee  v.  Security  Land  Co.  (N.  Manuf.  Co.  10  Paige,  481. 

J.   Eq.),   35   Atl.   451;    Hughes   Bros.  ^'"^  Hendry  v.   Quinaij,  8  N.  J.   Eq. 

Manuf.  Co.  v.  Conyers,  97  Tenn.  274,  534. 

36  S.  W.  1093.  ^'"See    §§    1231-1236;      Kerrick    v. 

""^Gardner    v.    Lansing,    28    Hun,  Saffrey,   7   Sim.   317;    Lloyd  v.   Lan- 

413;    McMurtry  v.   Montgomery  Ma-  der,  5  Madd.  282;  Richards  v.  Cooper, 

sonic  Temple  Co.  86  Ky.  2S6,  5  S.  W.  5    Beav.    304;    Anon.    10    Paige,    20; 

570.  Willink  v.  Morris  Canal  &  Banking 

''■"  Omaha    &     St.    L.    Rv.     Co.    v.  Co.  4  N.  J.  Eq.  377. 

O'Neill,  81  Iowa,  463,  46  N.  W.  1100;  ™' Wisconsin      State      Grange      v. 

Kniffen,  90  Wis.  14,  62  N.  W.  943. 


391  WHO    ARE    NECESSARY    AND    PROPER.    [§§    1438a,    1439. 

ruptcy  occur  after  the  foreclosure  suit  has  been  coinnienced,  he  sliould 
suggest  his  bankruptcy  and  move  for  a  continuance  of  the  suit,  to 
await  the  termination  of  the  proceedings  in  bankruptcy,  when  he  may 
plead  his  discharge  if  any  judgment  is  sought  on  his  personal  liability. 
The  assignee  may,  however,  appear  and  allow  the  proceedings  to  go 
on,  so  far  as  the  foreclosure  and  sale  of  the  property  is  concerned.  But 
Unless  the  proceedings  are  continued  in  the  state  court  upon  motion, 
or  are  restrained  by  the  bankruptcy  court,  -they  may  proceed  to  judg- 
ment and  sale.*""  An  assignee  in  bankruptcy,  to  whom  land  subject 
to  a  mortgage  has  been  assigned  before  the  foreclosure,  is  a  necessary 
party  to  proceedings  to  foreclose  the  mortgage.*''^ 

§  1438a.  A  receiver,  appointed  by  the  court,  of  the  property  of  a 
corporation,  partnership,  or  individual,  upon  the  foreclosure  of  a 
mortgage  upon  the  property,  should  be  made  a  party  defendant  in  his 
official  capacity;  but  if  made  a  party  in  his  individual  capacity,  he 
cannot  stand  by  without  objecting,  and  after  a  decree  of  sale  claim  to 
be  heard  against  the  proceedings  on  the  ground  that  he  was  not  made 
a  party  as  receiver.*''- 

§  1439.  Persons  having  interests  in  the  property  paramount  to 
the  mortgage  sought  to  be  foreclosed  are  generally  neither  necessary 
nor  proper  parties  to  the  suit,  because  the  only  proper  object  of  the 
proceedings  is  to  bar  all  rights  subsequent  to  the  mortgage.  The  de- 
cree can  have  no  effect  upon  the  rights  of  parties  having  priority, 
whether  they  are  made  parties  to  the  action  or  not.*°^ 

^o'Eyster  v.  Gaff,  91  U.  S.  521,  525,        New  York:    Wakeman  v.  Grover,  4 

13  Albany  L.  J.  272;   Oliver  v.  Gun-  Paige  23;    McReynolds  v.   Munns,  2 

ningham,  6  Fed.  60;  Lenihan  v.  Ha-  Keyes  214;    Eagle  Fire  Co.  v.   Lent, 

mann,    55    N.    Y.    652;    Cleveland   v.  6  Paige,  635,  637;  Lewis  v.  Smith,  11 

Boerum,  23  Barb.  201.  Barb.  152,  9  N.  Y.  502,  61  Am.  Dec. 

*"'  Ostrander  v.  Hart,  8  N.  Y.  Supp.  706;  Kay  v.  Whittaker,  44  N.  Y.  565; 

809;    Olcott  V.  Davis,  67  Vt.   685,  32  Hancock  v.  Hancock,  22  M.  Y.  568; 

Atl.  813.  Brundage  v.   Missionary  Society,   60 

^"- Kirkpatrick  v.  Corning,  38  N.  J.  Barb.   204;    Payn  v.   Grant,  23   Hun, 

Bq.    234.     See   Heffron  v.   Gage,   149  134;    Merchants'   Bank   v.   Thomson, 

111.  182,  36  N.  B.  569.  55  N.  Y.  7;  Rathbone  v.  Hooney,  58 

^"' See  S  1440;  England:  Rose  v.  N.  Y.  463;  Emigrant  Industrial  Sav. 
Page,  2  Sim.  471;  Shepherd  v.  Gwin-  Bank  v.  Goldman,  75  N.  Y.  127;  Frost 
net,  3  Swans.  151;  Richards  v.  v.  Koon,  30  N.  Y.  428;  Koch  v.  Pur- 
Cooper,  5  Beav.  304;  Delabere  v.  Nor-  cell,  13  Jones  &  S.  162;  Hotchkiss  v. 
wood,  3  Swans.  144,  n.  Clifton     Air     Cure,    4    Keyes,     170; 

United  States:     Jerome  v.  McCus-  Smith  v.  Roberts,  91  N.  Y.  470;  Gug- 

ter,  94  U.  S.  734;  Woodworth  v.  Blair,  genheimer  v.  Sayre,  4  N.  Y.  Supp.  22; 

112  U.  S.  8,  5  Sup.  Ct.  6;   Hagan  v.  Ruyter  v.  Reid,  121  N.  Y.  498,  24  N. 

Walker,  14  How.  29,  37;  Wabash,  St.  E.   791;    Jordan  v.  Van  Bpps,  85  N. 

L.  &.  P.  Rv.  Co.  V.  Central  Trust  Co.  Y.    427;    Barnard    v.    Onderdonk,    98 

22  Fed.  138;  Dial  v.  Reynolds,  96  U.  N.  Y.  158;   Goebel  v.  Iffla,  111  N.  Y. 

S.  340;   Peters  v.  Bowman,  98  U.  S.  170,  18  N.  B.  649;  Jacobie  v.  Mickle, 

56.  144  N.  Y.  237,  39  N.  B.  66. 


1439.] 


OF    PARTIES    DEFENDANT. 


392 


In  some  cases  prior  mortgagees  are  made  parties  to  the  bill^  so  that 
the  court  may  with  tlieir  consent  order  a  sale  of  the  wliole  estate,  and 
thus  make  a  good  and  complete  title  in  the  purchaser.'*"'*  Sometimes 
a  i^rior  mortgagee  is  made  a  party  to  the  suit,  with  a  view  to  his  as- 
senting to  a  decree  for  the  sale  of  the  whole  estate,  in  which  case  his 
mortgage  is  first  paid,  and  the  proceeds  then  applied  to  the  second 
mortgage.''"^  In  such  case  the  legal  presumption  is  that  a  j^urchaser 
at  a  foreclosure  sale  gives  the  full  value  of  the  property ;  and  the  whole 
proceeds  of  the  property  are  then  applied  to  the  payment  of  the  incum- 


Vermont:  Weed  v.  Beebe,  21  Vt. 
495,  499;  Lyman  v.  Little,  15  Vt.  576. 

Wisconsin:  Strobe  v.  Downer,  13 
Wis.  10,  80  Am.  Dec.  709;  Walker  v. 
Jarvis,  16  Wis.  29;  Macloon  v.  Smith, 
49  Wis.  200,  5  N.  W.  336;  Murphy  v. 
Farwell,  9  Wis.  102;  Pelton  v.  Far- 
min,  18  Wis.  222. 

New  Jersey:  Hoppock  v.  Ramsey, 
28  N.  J.  Bq.  413. 

Maryland:  Post  v.  Mackall,  3 
Bland,  486,  495;  Tome  v.  Loan  Co. 
34  Md.  12. 

Texas:  Hall  v.  Hall,  11  Tex.  526, 
547;  Hague  v.  Jackson,  71  Tex.  761, 
12  S.  W.  63. 

Virginia:  Lange  v.  Jones,  5  Leigh, 
192. 

North  Carolina:  Bogey  v.  Shute,  4 
Jones  Eq.  174;  Weil  v.  Uzzell,  92  N. 
C.  515. 

Alabama:  Hambrick  v.  Russell,  86 
Ala.  199,  5  So.  298;  Boiling  v.  Pace, 
99  Ala.  607,  12  So.  796;  Young  v. 
Montgomery  &  Eufaula  R.  Co.  2 
Woods,  606;  Flowers  v.  Barker,  79 
Ala.  445;  Flournoy  v.  Harper,  81  Ala. 
494,  1  So.  545;  Wells  v.  American 
Mortg.  Co.  109  Ala.  430,  20  So.  136. 

Michigan:  Converse  v.  Michigan 
Dairy  Co.  45  Fed.  18;  Summers  v. 
Bromley,  28  Mich.  125;  Wurcherer  v. 
Hewitt,  10  Mich.  453;  Corastock  v. 
Comstock,  24  Mich.  39;  Pool  v.  Hor- 
ton,  45  Mich.  404,  8  N.  W.  59;  Wil- 
kinson V.  Green,  33  Mich.  221;  Bell 
V.  Plate,  47  Mich.  468,  11  N.  W.  275; 
Dickerson  v.  Uhl,  71  Mich.  398,  39 
N.  W.  472. 

Indiana:  Pattison  v.  Shaw,  6  Ind. 
377;  Wright  v.  Bundy,  11  Ind.  398; 
Krutsinger  v.  Brown,  72  Ind.  466. 

Nebraska:  Forrer  v.  Kloke,  10 
Neb.  373;  Stratton  v.  Reisdorph,  35 
Neb.  314,  53  N.  W.  136;  White  v. 
Bartlett,  14  Neb.  320,  15  N.  W.  702; 
Burnett  v.  Hoffman,  40  Neb.  569,  58 
N.  W.  1134. 

California:     McComb  v.   Spangler, 


71    Cal.    418,    12    Pac.    347;    Cody    v. 
Bean,  93  Cal.  578,  29  Pac.  223. 

Washington:  California  Saf.  Dep. 
&  T.  Co.  V.  Cheney  Elec.  L.  T.  & 
P.  Co.  12  Wash.  138,  40  Pac.  732. 

Minnesota:  Banning  v.  Bradford, 
21  Minn.  308,  18  Am.  Rep.  398;  Fos- 
ter v.  Johnson,  44  Minn.  290,  46  N. 
W.  350. 

Otherwise  in  Kansas:  German  Ins. 
Co.  V.  Nichols,  41  Kans.  133,  21  Pac. 
Ill;  Fisher  v.  Cowles,  41  Kans.  418, 
21  Pac.  228;  Bradley  v.  Parkhurst,  20 
Kans.  462;  Ferguson  v.  Tarbox  3 
Kans.  App.  656,  44  Pac.  905;  Mort- 
gage Trust  Co.  v.  Cowles,  3  Kans. 
App.  656,  45  Pac.  605. 

Otherwise  also  in  Iowa:  Standish 
v.  Dow,  21  Iowa,  363;  Heimstreet  v. 
Winnie,  10  Iowa,  430;  Case  v.  Bar- 
thollow,  21  Kans.  300.  See  Mor- 
ris V.  Wheeler,  45  N.  Y.  708,  which, 
though  seemingly  in  conflict  with 
the  decisions  in  that  State,  is  not 
really  so. 

""'Champlin  v.  Foster,  7  B.  Mon. 
104;  Clark  v.  Prentice,  3  Dana,  468. 
In  this  case  the  court  say  that  the 
interest  of  the  mortgagor  and  of  the 
mortgagee,  as  well  as  the  security  of 
purchasers,  renders  this  the  proper 
course;  that,  if  each  of  several  suc- 
cessive mortgagees  could  have  a  de- 
cree and  sale,  there  would  be  no 
confidence  in  judicial  sales.  Per- 
sons V.  Alsip,  2  Ind.  67;  Troth  v. 
Hunt,  8  Blackf.  580;  Warren  v.  Bur- 
ton, 9  S.  C.  197;  Evans  v.  McLucas, 
12  S.  C.  56;  Waters  v.  Bossel,  58 
Miss.  602. 

*"^  Vanderkemp  v.  Shelton,  11 
Paige,  28;  Smith  v.  Roberts,  62  How. 
Pr.  196;  Ducker  v.  Belt,  3  Md.  Ch. 
13;  Rucks  v.  Taylor,  49  Miss.  552; 
Miller  v.  Finn,  1  Neb.  254;  Emi- 
grant Industrial  Sav.  Bank  v.  Gold- 
man, 75  N.  Y.  127;  Metropolitan 
Trust  Co.  V.  Tonawanda,  &c.  R.  R. 
Co.  18  Abb.  N.  C.  368. 


393  WHO   ARE   NECESSARY   AND    PROPER.  [§    1439. 

brances  in  the  order  of  their  priorities.*"*'  But  it  is  proper  to  make 
the  person  who  holds  the  prior  legal  title  a  party  only  when  his  debt 
is  payable,  and  he  is  willing  to  receive  payment,  and  for  the  purpose 
of  making  a  sale  of  the  whole  title.  He  is  not  a  necessary  party  ex- 
cept for  such  a  decree.*"'  The  court  may  order  a  sale,  subject  to  a 
prior  incumbrance;  and  unless  the  mortgagee  with  paramount  title 
expressly  consents  to  a  sale  of  the  mortgaged  estate,  the  sale  must  be 
made  subject  to  his  mortgage;*"^  and  no  portion  of  the  proceeds  of 
the  sale  can  be  applied  in  payment  thereof.*"'' 

When  a  prior  incumbrancer  is  made  a  party  to  a  foreclosure  suit, 
there  should  be  an  allegation  of  the  purpose  for  which  he  is  made  a 
party ;  as,  for  instance,  that  the  rank  and  amount  of  his  mortgage  may 
be  ascertained  and  determined  by  the  judgment  of  the  court,  so  that 
the  mortgage  can  be  paid  out  of  the  proceeds  of  the  sale,  or  so  that  the 
sale  may  be  made  subject  to  the  known  amount  of  the  lien.*^"  If  such 
purpose  is  not  indicated  in  the  complaint  nor  provided  for  in  the  judg- 
ment, the  prior  incumbrancer  will  not  be  affected  by  the  judgment."^ 

If  a  sale  of  the  entire  property  be  decreed  in  a  suit  to  which  tire 
senior  mortgagee  is  not  a  party,  he  may  enjoin  the  execution  of  the 
decree  ;*^^  though  in  such  case  the  decree  would  be  void  so  far  as  it 
might  affect  his  rights. 

When  one  is  made  a  party  to  a  foreclosure  suit  as  the  holder  of  a 
subsequent  mortgage,  and  such  party  is  also  the  owner  of  mortgages 

•""' Vanderkemp     v.      Shelton,      11  once;  and  then,  if  he  concurs,  a  sale 

Paige,  28;    Buel  v.   Farwell,   8  Neb.  of  the  whole  estate  is  decreed;  other- 

224.     '       '  wise  the  decree  is  for  a  sale  subject 

^"^  Jerome    v.    McCarter,    94    U.    S.  to  his  security.     Wickenden  v.  Ray- 

734;    Norton  v.   Joy,   6   Bradw.   406;  son,  6  De  G.,  M.  &  G.  210.    See,  also, 

Warner  v.  De  Witt  Co.   Nat.  Bank,  Delabere  v.  Norwood,  3  Swans.  144, 

4  Bradw.  305;   Hagan  v.  Walker,  14  n.;   Parker  v.  Fuller,  1  Russ.   &  M. 

How.  29,  37    In  this  case  Judge  Cur-  656;  Bigelow  .v.  Cassedy,  26  N.  J.  Eq. 

tis    explains    and    limits    the    state-  557;   Potts  v.  N.  J.  Arms.  Co.  17  N. 

ment   of   Chief   Justice   Marshall    in  J.  Eq.  518;   Gihon  v.  Belleville  Co.  7 

Finley  v.  Bank  of  United  States,  11  N.  J.  Eq.  536. 

Wheat.  304,  306,  that  the  prior  mort-  ■"'•■' Bache  v.  Doscher,  67  N.  Y.  429; 

gagee  is  a  necessary  party.    And  see  Emigrant  Industrial  Savings  Bank  v. 

White    V.    Holman,     32     Ark.     753;  Goldman,  75  N.  Y.  127,  19  Alb.  L.  J. 

Emigrant    Industrial    Savings    Bank  159. 

V    Goldman,  75  N.  Y.  127;   Wabash,  ^'"Missouri   K.   &  T.    Trust  Co.   v. 

St    L.  &  P.  Ry.  Co.  V.  Central  Trust  Richardson,   57   Neb.   617,   78  N.   W. 

Co    22  Fed    138;    White  v    Bartlett,  273;    Seeley   v.   Wickstrom,   49   Neb. 

14  Neb    320,  15  N.  W.  702.  730,   68  N.   W.   1017;    McGillivray  v. 

*""  Langton    v.    Langton,    7   De    G.,  McGillivray,  9  S.  D.  187,  68  N.  W.  316. 

M.  &  G.  30.    In  England  the  practice  '"  Emigrant      Industrial      Savings 

upon    a    sale    under    a    subsequent  Bank  v.   Goldman,    75    N.    Y.    127; 

mortgage  is  to  make  the  mortgagee  Metropolitan    Trust    Co.     v.     Tona- 

with  paramount  title  a  party  to  the  wanda,  &c.  R.  R.  Co.  18  Abb.  N.  C. 

suit,  if  it  is  desired  to  sell  the  whole  368.     See  Scribner  v.  York,    (Iowa), 

estate,  when  he  is  required  to  con-  55  N.  W.  10. 

sent  to  such  sale,  or  to  refuse  it  at  *"  Rucks  v.  Taylor,  49  Miss.  552. 


§    1439.]  OF    PARTIES    DEFENDANT.  394 

prior  to  that  of  the  plaintiff,  he  may  answer  in  the  action  and  ask 
to  have  such  prior  mortgages  paid  out  of  the  proceeds  of  sale  before 
applying  any  portion  thereof  to  the  satisfaction  of  the  plaintiff's 
mortgage  ;^^^  and  it  is  even  held  that  the  senior  mortgagee  when  made 
a  party  may  set  up  his  mortgage  as  a  counter-claim,  and  may  demand 
affirmative  relief  by  way  of  foreclosure  and  sale.*^* 

When  a  subsequent  mortgagee  makes  a  prior  mortgagee  a  party  to 
the  suit,  as  well  as  the  owner  of  the  equity,  his  proceeding,  so  far  as 
the  former  is  concerned,  becomes  a  bill  to  redeem. ^^'^  The  prior  mort- 
gage stands  unaffected  by  the  proceeding,  although  the  holder  of  it  suf- 
fers default,*^®  and  may  be  foreclosed  against  one  who  purchases  at 
the  foreclosure  sale  under  the  junior  mortgage.*^'^  A  prior  judgment 
lien*^^  or  a  mechanic's  lien*^"  stands  unaffected  in  the  same  way,  al- 
though the  creditor  was  made  a  party  to  the  suit  to  foreclose  a  junior 
mortgage.*-'' 

On  the  same  principle,  in  a  suit  to  foreclose  a  mortgage  made  of  a 
title  bond,  the  vendor  is  not  a  proper  party.  He  cannot  be  affected  by 
the  decree.*^^  A  prior  mortgagee  cannot  properly  be  made  a  party  to 
a  bill  to  enforce  a  mechanic's  lien ;  and  if  he  is,  and  a  decree  be  taken 
against  him  by  default,  it  will  be  set  aside. *-^ 

The  usual  practice  of  courts  of  equity,  in  cases  where  persons  claim- 
ing adversely  to  the  mortgagor  have  been  improperly  made  defend- 
ants, is  to  order  the  action  to  be  dismissed  as  to  such  defendants,  with- 
out prejudice  to  the  plaintiffs  rights  in  any  other  proceeding.'*-^  If  a 
judgment  has  been  taken  without  a  dismissal  of  the  action  as  against 
such  adverse  parties,  the  judgment  may  be  modified  so  as  to  preserve, 
unaffected  and  unprejudiced,  the  adverse  rights  of  such  defendants.*^* 

Where,  however,  the  complaint  states  such  facts  as  will,  if  admitted, 
subject  the  defendant's  title  to  the  plaintiff's  mortgage  and  to  the  re- 
lief sought,  the  defendant  may  be  estopped  from  afterwards  setting  up 
his  interest  as  against  the  judgment  in  the  foreclosure  action.     The 

*"  Doctor  v.  Smith,  16  Ilun,  245.  reason  for  bringing  him  in.     Bisbee 

''*  Metropolitan  Trust  Co.  v.  Tona-  v.  Carey,  17  Wash.  224,  49  Pac.  220. 

wanda   &c.    R.   Co.    43   Hun,   521,   18  *-"■  Pridgen  v.  Andrews,  7  Tex.  461. 

Abb.  N.  C.  368.  *--  Smith  v.  Shaffer,  46  Md.  573. 

^'^  Hudnut  v.  Nash,  16  N.  J.  Eq.  550.  ^=^  Corning  v.    Smith,   G   N.   Y.   82; 

""Straight  v.  Harris,  14  Wis.  509;  Banning  v.  Bradford,  21  Minn.   308, 

Dawson  v.  Banbury  Bank,  15  Mich.  18  Am.  Rep.  398.     See,  also,  Wilker- 

489.  son  V.  Daniels,  1  Greene,  179. 

*'"  Williamson  v.  Probasco,  8  N.  J.  But  without  dismissing  them,  their 

Ch.  571.  adverse     rights     may    be    expressly 

"^  Frost  v.  Koon,  30  N.  Y.  428.  saved  in  the  decree.     San  Francisco 

""  Emigrant      Industrial      Savings  v.  Lawton,  18  Cal.  465,  79  Am.  Dec. 

Bank  v.  Goldman,  75  N.  Y.  127.  187. 

*™But    a    prior    lien-holder    is    a  ^=' Gregory    v.    Keating    (Cal.),  22 

proper  party  when  there  is  a  special  Pac.  1084. 


395  WHO  ARE  NECESSARY  AND  PROPER.  [§    1440. 

judgment  rendered  is  conclusive  between  the  same  parties  and  their 
privies,  upon  all  mattei's  embraced  within  the  issue  in  the  action, 
whether  the  issue  was  joined  by  the  defendant  or  left  unanswered. 
Thus,  in  a  suit  upon  a  mortgage  made  by  a  life  tenant,  hut  purporting 
to  convey  the  fee,  certain  contingent  remainder-men  were  made  par- 
ties, the  complainant  alleging  that  their  interest  was  inferior  to  the 
mortgage,  and  a  decree  was  rendered  against  them  by  default.  It  was 
held  that  the  decree  barred  their  interest,  and  gave  the  purchaser  at 
the  foreclosure  sale  a  good  title. ''-^ 

With  the  consent  of  the  prior  mortgagee  who  has  brought  a  fore- 
closure suit,  a  subsequent  mortgagee  may  file  a  cross-bill  for  the  fore- 
closure of  his  mortgage,  and  the  mortgagor  cannot  object,  as  it  can 
work  no  injury  to  him.*-** 

A  prior  mortgagee  is  a  proper  party  to  a  bill  in  which  a  receiver  is 
prayed  for.*-^ 

§  1440.  Adverse  claimants  cannot  be  made  parties  to  a  foreclosure 
suit  for  the  purpose  of  litigating  their  titles.  The  only  proper  par- 
ties are  the  mortgagor  and  mortgagee,  and  those  who  have  acquired 
any  interests  from  them  subsequently  to  the  mortgage.  An  adverse 
claimant  is  a  stranger  to  the  mortgage  and  the  estate.  His  interests 
can  in  no  way  he  affected  by  the  suit,  and  he  has  no  interest  in  it. 
There  being  no  privity  between  him  and  the  mortgagee,  the  latter  can- 
not make  him  a  party  defendant  for  the  purpose  of  trying  his  adverse 
claim  in  the  foreclosure  suit.''-^    Even  if  an  adverse  claimant  appears 

^='Goebel  v.  Iffla,  11  N.  Y.  170,  19  v.    Lent,   6   Paige,   635;    Holcomb   v. 

St.  Rep.  105,  18  N.  B.  649,  affirming  Holcomb,    2    Barb.    20;    Brundage   v. 

48  Hun,  21;  Jacobie  v.  Micltle,  144  N.  Missionary    Society,    60    Barb.    204; 

Y.  237,  39  N.  E.  66.  Meigs  v.  Willis,  66  How.  Fr.  466. 

*-"  Crocker  v.  Lowenthal,  83  111.  579.  Michigan:    Wilkinson  v.  Green,  34 

*-•  Miltenberger  v.  Logansport  Ry.  Mich.  221;   Farmers'  and  Mechanics' 

Co.  106  U.  S.  286.  Bank  v.  Bronson,  14  Mich-  361;  Hor- 

*-"  ^   1445;   Dial  v.  Reynolds,  96  U.  ton  v.  Ingersoll,  13  Mich.  409;  Cham- 

S.  340;    Peters  v.  Bowman,  98  U.  S.  berlain   v.    Lyell,   3   Mich.    448;    Mc- 

56,  11  Chicago  L.  N.  118,  17  Albany  Clure    v.    Holbrook,     39     Mich.     42; 

L.  J.  132.  Shafer  v.    Thomson,   109   Mich.    406, 

Alabama:    Hambrick  v.  Russell,  86  67  N.  W.  511. 

Ala.  199,  5  So.  298;   Randle  v.  Boyd,  Illinois:      Gage    v.    Perry,    93    111. 

73  Ala.  282;  Lyon  v.  Powell,  78  Ala.  176;    Gage  v.   Board  of  Directors,   8 

351;  McHan  v.  Ordway,  82  Ala.  463;  Bradw.  410;   Carbine  v.  Sebastian,  6 

Boiling  v.  Pace,  99  Ala.   607,  12  So.  Bradw.     564,     567;     Whittemore     v. 

796;    Wells    v.    Mortg.    Co.    109    Ala.  Shiell,   14  Bradw.   414;    Waughop  v. 

430,  20  So.  136;  Equitable  Mortg.  Co.  Bartlett,  165  111.  124,  46  N.  E.  197. 

v.  Finley.  133  Ala.  575,  31  So.  985.  Minnesota:     Banning  v.  Bradford, 

New  York:  Frost  v.  Koon,  30  N.  21  Minn.  308,  18  Am.  Rep.  398; 
Y.  428;  Merchants'  Bank  v.  Thom-  Newman  v.  Home  Ins.  Co.  20  Minn, 
son,  55  N.  Y.  7;  Lewis  v.  Smith,  9  N.  422;  McLaughlin  v.  Nicholson,  70 
Y.  502,  61  Am.  Dec.  706;  Jnnes  v.  St.  Minn.  71,  72  N.  W.  827,  73  N.  W.  1. 
.John,  4  Sandf.  Ch.  208;  Corning  v.  California:  San  Francisco  v.  Law- 
Smith,  6  N.  Y.  82;  Eagle  Fire  Ins.  Co.  ton,   IS   Cal.    465,   79   Am.   Dec.   187; 


§    1440.]  OF    PARTIES    DEFENDANT  396 

and  puts  his  claim  in  issue,  the  court  may  refuse  to  pass  upon  it.*-^ 
A  bill  which  makes  defendants  persons  who  claim  title  adversely  for 
the  purpose  of  litigating  and  settling  their  rights  is  bad  for  misjoinder 
and  for  multifariousness.'^"  One  who  claims  under  a  tax  title  which 
became  a  lien  after  the  mortgage  is  a  proper  party,  as  the  claim  is 
made  for  an  interest  in  the  equity  of  redemption  f^^  but  one  claiming 
under  a  tax  deed  as  a  paramount  title  is  not  a  proper  party.*^-  If, 
however,  it  appears  that  such  person,  independent  of  his  tax  title,  has 
purchased  the  equity  of  redemption  and  assumed  the  payment  of  the 
mortgage  debt,  he  is  a  proper  party  defendant.*^^  Where  the  descrip- 
tion in  the  mortgage  is  erroneous,  in  a  bill  to  foreclose  it  a  person  who 
owns  lands  which  would  be  affected  by  the  erroneous  description  is  not 
a  proper  party,  when  it  appears  that  he  was  never  interested  in  any 
portion  of  the  premises  identified  by  proof  to  be  those  really  mort- 
gaged.'*^* The  holder  of  the  subsequent  mortgage  in  foreclosing  it  can- 
not make  one  claiming  adversely  to  the  mortgagor's  title  a  defendant, 
for  the  purpose  of  trying  the  validity  of  the  adverse  claim.*^^ 

Whether  an  asserted  claim  is  such  an  adverse  one  as  to  come  within 
the  rule  depends,  not  upon  what  is  set  up  in  the  answer  in  regard  to 
it,  but  upon  the  allegations  of  the  bill,  and  upon  the  testimony  in  the 
case  as  to  the  nature  of  the  alleged  adverse  claim.*^"  Should  it  appear 
that  a  defendant  has  a  legal  title  which,  if  valid,  is  adverse  and  para- 

Marlow  v.  Barlew,  53  Cal.  456;   Mc-  345;      State  v.    Superior     Court,     17 

Comb    V.    Spangler,    71    Cal.    418,    12  Wash.  380,  49  Pac.  507. 

Pac.  347;    Crogan  v.  Spence,  53  Cal.  Contra     in     Kansas:       Fisher     v. 

15;    Randall  v.  Duff,  79  Cal.  115,  21  Cowles,   41   Kans.   418,   21   Pac.   228; 

Pac.  610;  Ord  v.  Bartlett,  83  Cal.  428,  Bradley  v.  Parkhurst,  20  Kans.  462. 

23  Pac.   705;    Cody  v.  Bean,  93  Cal.  *="  Ord  v.   Bartlett,  83  Cal.  428,  23 

578,  29  Pac.  223.  Pac.  705. 

Montana:    Murphy   v.    Cannon,    18  ■'^^  Dial  v.  Reynolds,  96  U.  S.  340; 

Mont.  348,  45  Pac.  216.  Wells    v.    American   Mortg.    Co.    109 

North  Carolina:    Bogey  v.  Shute,  4  Ala.  430,  20  So.  136. 

Jones  Eq.  174.  *^^  Horton    v.    Ingersoll,    13    Mich. 

Wisconsin:     Pelton  v.   Farmin,   18  409;    McAlpin  v.  Zitser,  119  111.  273, 

Wis.  222;  Gilchrist  v.  Foxen,  95  Wis.  10  N.  B.  901;  Mather  v.  Darst,  13  S. 

428,  70  N.  W.  585.  D.  75,  82  N.  W.  407. 

Virginia:       Lange     v.     Jones,     5  "=  Roberts   v.    Wood,   38   Wis.    60; 

Leigh,  192.  Gage  v.  Perry,  93  111.  176;  Bozarth  v. 

Vermont:     Lyman  v.  Little,  15  Vt.  Landers,      113      111.      181;      McAlpin 

576;  Kinsley  v.  Scott,  58  Vt.  470.  v.  Zitser,  119  111.  273;  Whittemore  v. 

Indiana:     Comley  v.   Hendricks,  8  Shiell,   14  111.   App.   414;    Murphy  v. 

Blackf.  189;  Pattison  v.  Shaw,  6  Ind.  Cannon,  18  Mont.  348,  45  Pac.  216. 

377;   Crogan  v.  Minor,  6  Cent.  L.  J.  ■'"=' Carbine  v.   Sebastian,  6  Bradw. 

354.  564. 

Nebraska:     Joslin  v.  Williams,  61  "*  Ramsdell  v.  Eaton,  12  Mich.  117. 

Neb.  859,  86  N.  W.  473.  «^' Corning  v.    Smith,   6   N.   Y.   82; 

South  Carolina:   Hunt  v.  Nolen,  40  Palmer  v.  Yager,  20  Wis.  91. 

S.  C.  284,  18  S.  E.  798.  "°  Carbine  v.   Sebastian,  6  Bradw. 

Washington:   Kizer  v.  Caufield,  17  564,  quoting  text.     Wells  v.   Ameri- 

Wash.  417,  49  Pac.  1064.     See  John-  can  Mortg.  Co.  109  Ala.  430,  441,  20 

son  V.  Irwin,  16  Wash.  652,  48  Pac.  So.  136,  quoting  text. 


397  WHO   ARE   NECESSARY   AND   PROPER.  [§    1441. 

mount  to  the  claim  of  both  mortgagor  and  mortgagee,  then  neither  is 
the  foreclosure  suit  a  suitable  proceeding,  nor  a  court  of  equity  the 
appropriate  tribunal  in  which  to  settle  the  question.*^^  The  title  of 
one  who  claims  by  adverse  possession  may  be  adjudicated  in  a  suit  to 
foreclose,  in  case  the  original  validity  of  the  mortgage  is  not  ques- 
tioned.*^^ 

But  a  subsequent  purchaser  who  has  procured  releases  from  a  for- 
mer owner  merely  to  perfect  his  title  of  record,  and  under  such  cir- 
cumstances as  would  render  it  fraudulent  for  him  to  set  up  such  con- 
veyances as  a  title  adverse  and  paramount  to  that  of  the  mortgagor, 
may,  under  proper  allegations,  be  made  a  party  to  the  bill  for  fore- 
closure, and  his  title  may  in  such  suit  be  declared  null  and  void.*^" 

It  has  been  claimed,  however,  that  when  one  has  been  made  a  de- 
fendant in  a  foreclosure  suit,  and  has  set  up  by  answer  a  paramount 
title,  and  without  objections  has  gone  to  trial  upon  that  issue,  he  can- 
not, if  beaten,  ask  a  reversal  on  the  ground  that  the  issue  was  not  prop- 
erly triable  in  ihat  action.'**"  But  the  authorities  do  not  sustain  tliis 
view.  All  the  title  a  mortgagee  can  obtain  by  foreclosure  is  the  title 
of  his  mortgagor,  and  that  is  the  only  title  that  can  be  considered  in 
the  foreclosure  suit.**^ 

Persons  having  claims  adverse  to  the  parties  to  the  original  bill  can- 
not intervene  by  a  cross-bill,  and  have  their  claims  litigated  in  the 
foreclosure  suit.**^ 

§  1441.  Priority  between  mortgag'es. — It  lias  been  held,  however, 
that  a  question  of  priority  between  mortgages  may  be  settled  in  a  fore- 
closure suit  upon  a  first' mortgage,  by  allowing  the  second  mortgagee 
to  intervene  and  set  up  the  statute  of  limitations  or  other  defences  as 
a  bar  to  the  mortgage  upon  which  the  suit  was  brought  ;**^  and  in  like 
manner  judgment  creditors  have  been  allowed  to  intervene  and  contest 
the  validity  of  a  mortgage;***  and  a  junior  mortgagee  might  perhaps 
be  allowed  to  make  a  prior  mortgagee  a  party  to  the  suit  upon  special 

*^^  Wilkinson    v.    Green,    34    Mich.  Bradley  v.  Parkhurst,  20  Kans.  462. 

221;   Summers  v.  Bromley,  28  Mich.  "-Dial  v.   Reynolds,  96  U.  S.  340; 

126.  Farmers'  Loan  and  Trust  Co.  v.  San. 

^-^  St.  Johnsbury  &  L.  C.  R.  R.  Co.  Diego  Street  Car  Co.  40  Fed.  105. 

v.  Willard,  61  Vt.  134,  17  Atl.  38.  "^  Lord    v.    Morris,    18    Cal.    482; 

43«  Wilkinson  v  Green,  34  Mich.  221.  Pennsylvania  Mortg.  Ins.  Co.  v.  Gil- 

**"  Bradley  v.   Parkhurst,  20  Kans.  bert,    13    Wash.     684,    45    Pac.    43; 

462;    Lounsbury    v.    Catron,    8    Neb.  Schmidt  v.  Zahrndt,  148  Ind.  447,  47 

469;    Shellenberger  v.   Riser,  5  Neb.  N.  E.  335. 

195.  "'  Union  Bank  v.  Bell,  14  Ohio  St 

*"  §    1445,    per    Horton,    C.    J.,    in  200. 


8    1442.]  OF    PARTIES    DEFENDANT.  398 

allegations  of  facts,  which  would  give  him  equitable  precedence,  or 
would  put  the  validity  of  the  prior  mortgage  in  issue.**^ 

As  already  noticed,  it  is' a  rule  of  equity,  adopted  also  in  the  several 
codes,  that  additional  parties  may  be  brought  in  when  a  complete  de- 
termination of  the  controversy  cannot  be  had  without  their  presence. 
The  application  may  be  made  either  by  the  plaintiff  or  defendant, 
though  practically  it  is  generally  made  hj  the  former.  But  the  court 
may,  of  its  own  motion,  order  in  additional  parties  when,  without 
them,  its  decree  would  be  ineffectual  and  incomplete.*"  Furtliermore, 
in  the  progress  of  the  suit  a  third  person  who  has  an  interest  in  the 
matter  of  the  suit  may,  on  his  own  application,  be  made  a  party.**^  In 
Iowa"«  and  California"*'*  it  is  provided  that  any  person  having  an  in- 
terest in  the  matter  in  litigation  may  of  right  intervene  by  petition 
and  become  a  litigant  party.  He  may  act  with  either  party  to  the 
suit  or  adversely  to  both.  This  system  is  an  innovation  upon  the  es- 
tablished principles  of  equity. 

In  the  last-named  State,  in  an  action  to  foreclose  a  mortgage  given 
by  a  corporation  which  had  become  insolvent,  certain  judgment  cred- 
itors alleging  fraud  in  the  execution  of  the  mortgage,  and  that  it  was 
void  against  the  creditors,  were  allowed  to  intervene.*^"  So,  in  an  ac- 
tion brought  to  foreclose  a  mortgage  which  was  barred  by  the  statute 
of  limitations,  a  subsequent  incumbrancer  was  allowed  to  intervene 
and  set  up  the  statute  as  a  defence.*^^  In  an  action  to  foreclose  a  mort- 
gage on  a  homestead,  the  mortgagor's  wife  was  allowed  to  intervene."^^ 
§  1442.  New  parties  who  are  found  to  have  an  interest  in  the 
premises  may  be  joined  in  the  bill  by  amendment,  or  in  a  supplemental 
bill,  if  application  be  made  within  a  reasonable  time;"'  or  they  may 

*«  Dawson    v.    Danbury    Bank,    15  titled  to  the  decree  of  foreclosure ; 

Mich.    89;     Dickerman    v.    Lust,    66  and  as  against  the  defendants,  that 

Iowa    444,  23   N.  W.   916;    Foster  v.  the   mortgage   debt   is   due   and   un- 

Johnson,  44  Minn.  290,  46  N.  W.  350;  paid,   and   that  he   is   entitled   to   a 

First    Nat.    Bank    v.    Salem    Capital  foreclosure.     In  this  case  the  mter- 

Flour  Mills  Co.  61  Fed.  580.  venor    claims    the    demand    in    suit, 

""Leonard  v.  Groome,  47  Md.  499.  viz.,  the  note  and  mortgage,  and  we 

"'  Dodge  V  Fuller,  28  N.  J.  Eq.  578.  can  perceive  no  reason  founded  on 

^'•*Code  of  Iowa   1873,  ^§  2683-2685.  the  policy  of  the  law  which  should 

"«  Code    Civil    Procedure    of    Call-  preclude  the  settlement  of  ^the  whole 

fornia     1872     §    387.      In    the    latter  controversy  in  one  action." 
State  '  the    intervenor    must    obtain        ''■'  Coster   v.    Brown,    23    Cah    142 

leave  of  court  to  file  his  petition.  Portmore  v.  Morns,  18  Cal.  482. 

^^"Stich  V.  Dickinson,  38  Cal.  608.        *^=  Sargent  v.   Wilson,   5   Cal.   504 
Mr.  Justice  Crockett  said:  "The  sub-  Moss  v.  Warner,  10  Cal.  296. 
iect-matter   of  the  litigation   is  the        '''  Heyman  v.  Lowell,  23  Cal.  10b 
note  and  mortgage,  and  the  right  of  Cerf  v.  Ashley.  68  Cal.  419;  Johnston 
the    plaintiff    to    have    a    decree    of  v.  Donvan,  50  Hun,  215.  2  N.  Y.  Supp. 
foreclosure  and   sale.     The   interve-  858,   20  N.   Y.   St.   30,  12  N.  E.   594; 
nor  claims,  as  against  the  plaintiff,  Jones  v.  Porter,  23  Ind.  66:    Lever- 
that  he  and  not  the  plaintiff  is  en-  idge  v.  Marsh,  30  N.  J.  Eq.  59;  Kirk- 


399  WHO    ARE    NECESSARY    AND    PROrER.  [§    1442. 

themselves  intervene  in  the  original  cause  by  petition,  or  may  main- 
tain a  separate  bill.'*'^*  A  suit  may  be  stayed,  even  on  final  hearing,  to 
bring  in  subsequent  mortgagees  and  incumbrancers  who  are  found  to 
be  proper  parties.  It  is  not  only  a  detriment  to  the  complainant,  Ijut 
unjust  to  all  other  persons  interested  in  the  proceeds  of  the  sale,  to 
allow  this  to  be  made  subject  to  an  outstanding  right  to  redeem,  for 
that  invariably  prejudices  the  sale.*^^  The  want  of  necessary  parties 
may  be  objected  to  by  demurrer  when  the  defect  appears  upon  the  face 
of  the  bill ;  otherwise  objection  may  be  taken  by  answer.'*^"'  The  mort- 
gagor having  an  interest  in  the  sale,  by  reason  of  liis  personal  liability 
for  the  debt,  may  object  to  tlie  omission  of  parties  necessary  to  the 
making  of  a  perfect  title. ''^^  TJiere  is  no  error  in  refusing  to  allow  per- 
sons who  have  acquired  an  interest  pending  the  suit  to  be  made  parties 
to  the  bill,  if  they  are  allowed  to  defend  in  the  name  of  their  grantor 
who  is  a  party  to  the  suit.*"'''®  Those  who  have  acquired  liens  upon  the 
mortgaged  property  during  the  pendency  of  the  foreclosure  suit,  if  not 
allowed  to  interpose  a  defence  in  the  name  of  the  defendant,  can  only 
make  themselves  parties  to  the  suit  by  filing  a  bill  to  protect  their 
rights. ■^^^  After  adding  new  parties,  the  statutory  notice  of  lis  pendens 
should  be  made  to  conform  to  the  amended  bill.^"" 

When  a  person  made  a  party  to  the  suit,  on  the  supposition  that 
he  had  some  interest  in  the  premises  subject  to  the  mortgage,  claims 
no  such  interest,  he  should  make  a  disclaimer  and  have  the  suit  dis- 
missed as  to  himself  .•*'^^ 

land  V.  Kirkland,  26  N.  J.  Eq.  276;  sary  party  to  a  foreclosure  suit  may 

Conrad  v.  Mullison,  24  N.  J.  Eq.  65;  be  joined  after  judgment  and  before 

Wells   V.    American    Mortg.    Co.    109  sale,  and  the  judgment  so  amended 

Ala.  430,  20  So.  136.     In  Alabama  this  as  to  bar  and  foreclose  such  party, 

may  be  done  by  petition  even  after  R.    S.    §    3161;    Moore    v.    Kirby,    76 

decree    and    sale.      Glidden    v.    An-  Wis.  273,  45  N.  W.  114.     As  to  con- 

drews,  6  Ala.  190.    In  New  Jersey  the  ditions  imposed  upon  one  interven- 

right  to  be  made  a  party  is  secured  ing,  see  Lawton  v.  Lawton,  54  Hun, 

by  statute.     Rev.  p.   110,   §§   41,  42;  415,  7  N.  Y.  Supp.  556. 

Smith  V.  Davis   (N.  J.  Eq.),  19  Atl.  «*  Harris   v.    Hooper,    50   Md.    537; 

541.    But  this  statute  does  not  allow  Blanshard  v.  Schwartz,  7  Okl.  23,  54 

one  who,  pending  a  foreclosure  suit,  Pac.  303;  Johnson  v.  Keeler,  46  Kans. 

has  acquired  a  doubtful  claim  to  part  304,  26  Pac.  728. 

of  the  surplus  paid  into  court  on  the  *'•'■  Gould  v.  Wheeler,  28  N.  J.  Eq. 

foreclosure  sale  after  satisfying  the  541. 

complainant's  mortgage,  to  be  made  ""  Morris  v.  Wheeler,  45  N.  Y.  708. 

a  party  to  the  suit  by  petition,  since  ^"  Hall  v.  Nelson,  14  How.  Pr.  32; 

his  claim  is  not  within  the  issues  of  Morris  v.  Wheeler,  45  N.  Y.  708. 

the    cause.      Mutual    L.    Ins.    Co.    v.  ''^*' Chickering  v.   Fi'Jlerton,   90  111. 

Schwab  (N.  J.  Eq.),  26  Atl.  533,  dis-  520;   Lunt  v.  Stephens,  75  111.  507. 

tinguishing   Hewitt   v.    Railway   Co.  *■'•'  People's      Bank      v.      Hamilton 

25  N.  J.  Eq.  100,  and  Conrad  v.  Mul-  Manuf.     Co.  10  Paige.  481. 

lison,  24  N.  J.  Eq.  65.  ■"'"  Clark  v.  Havens,  Clarke,  Ch.  560. 

In  Wisconsin  any  proper  or  neces-  *''•'  Felton  v.  Farmin,  18  Wis.  222. 


S    1442a.]  OF    PARTIES    DEFENDANT.  400 

§  1442a.  A  guardian  ad  litem  should  be  appointed  if  a  defendant 
is  under  legal  disability;  thoiigh  if  process  be  served  upon  an  infant 
without  the  appointment  of  a  guardian,  and  judgment  be  taken  by  de- 
fault, the  judgment  is  not  void  but  voidable.^"'  The  plaintiff  is  bound 
to  bring  infant  defendants  before  the  court  in  the  manner  provided  by 
statute,"^  and  to  see  that  they  are  duly  served  with  process,  and  that 
a  guardian  ad  litem  is  appointed ;  but  he  is  not  bound  to  see  that  such 
guardian  appears  in  the  suit,  or  that  he  performs  his  duties  required 
by  law  or  by  the  rules  of  practice.**^* 

If  a  guardian  ad  litem  be  so  appointed  for  an  infant  who  was  made 
a  defendant  in  the  suit,  but  such  guardian  has  no  notice  of  his  ap- 
pointment until  after  final  judgment,  he  may  then  upon  his  prompt 
application  be  allowed  to  answer.  But  the  application  will  be  denied 
if  the  plaintiff  consents  to  strike  out  the  infant's  name  as  a  party  to 
the  proceedings.*^^  If  the  guardian  ad  litem  makes  no  defence,  and 
the  court  has  jurisdiction  of  the  cause,  a  judgment  without  proof  is 
valid  and  cannot  be  set  aside.**'® 

There  is  so  much  uncertainty  whether  service  upon  the  guardian  ad 
litem,  without  service  upon  the  infant,  is  sufficient,  that  a  purchaser 
at  a  foreclosure  sale  who  refuses  to  complete  his  purchase  because 
there  was  no  service  upon  the  infant  will  not  be  compelled  to  pay  his 
bid  and  accept  a  deed."''  But  a  recital  in  the  judgment  that  the  sum- 
mons in  the  action  was  duly  served  on  all  the  defendants  therein,  and 
that  one  of  them  was  an  infant,  and  appeared  by  her  guardian  ad 
litem,  is  prima  facie  evidence  of  the  service  of  summons  on  said  in- 
fant sufficient  to  sustain  the  jurisdiction  of  the  court  as  to  her.*®^ 

If  the  infant  be  a  non-resident  and  does  not  appear,  or  is  not  made 
a  party  to  the  suit,  the  court  has  no  jurisdiction  to  appoint  a  guard- 
ian ad  litem,  and  consequently  an  appearance  by  the  guardian  is  not 
an  appearance  by  the  infant ;  and  a  judgment  in  a  suit  so  conducted 
is  not  binding  upon  the  infant,  and  the  sale  conveys  no  title  as  against 
him.*®^ 

An  insane  ward  under  guardianship  is  neither  a  proper  nor  neces- 

«=McMurray  v.   McMurray,   66   N.  ^"  Ingersoll    v.    Mangam.    24    Hun, 

Y.  175.  202,  affirmed  84  N.  Y.  622.     Question 

«^  Johnson    v.    Trotter    (Ark.).    15  raised  but  not  passed  upon  in  Bos- 

S  W    1025  worth  v.  Vandewallver,  53  N.  Y.  597. 

'  *'^  Hopkins  v.  Frey,  18  N.  Y.  Supp.  *"'  Ingersoll    v.    Mangam,    24    Hun, 

903  202. 

«=^  Farmers'   Loan  &  Trust  Co.   v.  "''''  Fuchs  v.  Devlin,  12  N.  Y.  Supp. 

Erie  Ry   Co  9  Abb.  N.  C.  264.  574,    following  Bosworth   v.    Vande- 

"•■-  Boyd  v.  Roane,  49  Ark.  397.  5  S.  walker,  53  N.  Y.  597,  and  Pringle  v. 

W    704".     See,   however,   Johnson  v.  Woolworth,  90  N.  Y.  502. 
Trotter  (Ark.),  15  S.  W.  1025. 


401  WKO   ARE   NECESSARY   AND   PROPER.  [§    l'i4:2b. 

sary  party  to  an  action  to  foreclose  a  mortgage  on  his  land;  but  the 
guardian  must  be  made  a  party .■*^'' 

Where  the  mortgaged  property  is  limited  to  persons  not  in  being,  a 
guardian  ad  litem  may  be  appointed  to  protect  their  interests,  though  it 
has  been  held  that  they  are  represented  by  the  living  owner  of  the  in- 
heritance and  bound  by  a  decree  in  a  suit  to  which  he  is  a  party.*^^ 

§  1442b.  Provision  is  made  in  some  States  for  service  by  publica- 
tion in  case  the  mortgagor,  or  any  one  holding  under  him,  has  ab- 
sconded, conceals  himself,  or  is  unknown,  or  the  complainant,  after 
diligent  inquiry,  has  been  unable  to  ascertain  whether  any  person  hav- 
ing or  having  had,  or  claiming  or  having  claimed,  or  believed  to  claim 
or  to  have  claimed,  any  interest  or  estate  in  the  lands,  or  any  lien 
upon  the  same,  is  alive  or  dead,  and  has  been  unable  to  ascertain  the 
names  or  residences  of  his  heirs  and  devisees  or  personal  representa- 
tives, or  such  of  them  as  are  proper  parties  defendant,  in  case  such  per- 
son is  dead.  A  decree  may  then  be  made  against  such  unknown  per- 
son or  claimant  for  a  sale  of  the  property,  and  the  proceeds  of  the  sale 
belonging  to  such  person  may  be  deposited  in  court  for  the  benefit  of 
such  unknown  owner  or  claimant.*^^ 

'™  Jones  V    Crowell,  143  Ind.  218,  New    Jersey.      Laws    1891,    ch.    63; 

42  N.  E.  612.  Laws  1982,  ch.  110.    The  North  Caro- 

"^  Dunham   v.   Doremus,   55   N.   J.  lina  statute  is  more  brief  and  simple. 

Eq.  511,  37  Atl.  62.  Code  of  Civ.  Pro.  1891,  §  221. 

'■^  There  is    such    a   provision    in 


CHAPTER  XXXII. 

FORECLOSURE  BY  EQUITABLE  SUIT. 


I.  Jurisdiction,   and   the  object   of 
the  suit,   1443-1450. 
II.  The  bill  or  complaint,  1451-1478. 


III.  The   answer  and   defence,  1479- 
1575. 


I.     Jurisdiction^,  and  the  Object  of  the  Suit. 

§  1443.  Jurisdiction. — Courts  of  equity  have  inherent  original 
jurisdiction  of  the  subject  of  mortgages  both  for  the  foreclosure  and 
redemption  of  them.  Eedemption  is  purely  a  matter  of  equity,  and  the 
only  remedy  is  here.  Although  other  remedies  are  used  for  the  fore- 
closure of  mortgages  under  different  systems  of  law  and  practice 
adopted  in  different  States,  yet  generally  courts  of  equity  are  not  de- 
prived of  jurisdiction  by  the  existence  of  other  remedies.  In  many 
States,  as  already  seen,  jurisdiction  in  equity  of  the  foreclosure  of 
mortgages  is  expressly  conferred  by  statute.^  When  provisions  in  de- 
tail are  made  On  this  subject,  they  are  generally  founded  upon  prin- 
ciples and  rules  of  practice  already  established  by  courts  of  equity 
under  the  general  jurisdiction  they  have  always  exercised  of  the  sub- 
ject ;  and  the  powers  of  these  courts  are  only  enlarged  and  defined  by 
the  statutes.  But  even  where  systems  of  foreclosure  not  derived  di- 
rectly from  chancery  courts  have  been  adopted,  courts  of  equity,  where 
they  have  not  been  superseded  by  codes  of  practice,  which  do  away 
*vith  all  distinctions  between  actions  at  law  and  in  equity,  still  have 
concurrent  jurisdiction  of  the  subject,  and  are  resorted  to,  if  not  gen- 
erally, then  in  particular  instances,  for  the  reason  that  they  afford  a 
more  complete  and    certain  remedy.-     Even  the  peculiar    statutory 

1  See  chapter  xxx. ;  Byron  v.  May,  =  Shaw  v.  Norfolk  Co.  R.  Co.  5 
2  Chand.  10.3;  State  Bank  v.  Wilson,  Gray,  162;  Hall  v.  Sullivan  Ry.  -Co. 
9  111.  57;  Warehime  v.  Carroll  Co.  21  Law  Rep.  138;  Shepard  v.  Rich- 
Build   Asso.  44  Md.  512.  ardsou,  145  Mass.  32,  11  N.  E.  738; 

403 


403  JURTSDICTIOX,    AXD    THE   OBJECT.  [§    1444. 

mortgage  of  Louisiana,  wliich  is  a  public  act  before  a  notary  public, 
and  imports  a  confession  of  judgment,  and  under  the  statutes  of  that 
State  is  enforced  at  law  by  a  writ  of  seizure  and  sale,  may  be  fore- 
closed in  a  court  of  the  United  States  having  jurisdiction  of  the  case 
by  a  bill  in  equity.'^ 

Although  the  mortgage  contains  a  power  of  sale,  courts  of  chan- 
cery are  not  generally  deprived  of  their  jurisdiction  to  foreclose  it.* 
Neither  is  an  abortive  attempt  to  foreclose  under  a  power  of  sale  a 
bar  to  a  foreclosure  in  equity.^  It  has  been  stated,  as  a  reason  why 
jurisdiction  in  equity  should  be  retained  in  such  cases,  that  a  mort- 
gagee may  be  incapable  of  purchasing  at  his  own  sale  under  the 
power,**  though  he  may  at  a  sale  made  by  an  officer  under  a  judgment 
or  decree.  Neither  does  the  fact  that  there  is  a  statutory  remedy  oust 
the  jurisdiction  of  a  court  of  equity.'^ 

One  result  of  the  equitable  character  of  the  statutory  processes 
for  enforcing  mortgages  is,  that  the  parties  have  no  right  as  a  matter 
of  course  to  have  the  issues  tried  by  a  jury,  even  when  judgment  is 
asked  for  any  deficiency  and  the  execution  of  the  note  is  denied;* 
although  the  court  may  in  its  discretion  call  in  the  aid  of  a  jury  in 
any  case.*^ 

§  1444.     Venue. — A  foreclosure  suit  in  its  usual  form  is  partly  an 

action  in  rem,  for  the  seizure  and  sale  of  the  property,  and  partly  an 

action  in  personam,  for  the  ascertainment  of  the  debt  of  the  mortgage 

debtor,  and  ol^taining  a  personal  judgment  against  him.^°     When  no 

personal  judgment  is  sought  the  suit  is  essentially  a  proceeding  in 

rem,  and  service  by  publication,  when  this  is  allowed  by  statute,  is 

sufficient  to  give  jurisdiction."     Actions  for  foreclosure  of  mortgages 

are  generally  required  by  statute  to  be  brought  in  the  county  where 

the  mortgaged  premises  or  some  part  thereof  are  situated.^-     Such  a 

statute  gives  to  a  mortgagee  whose  mortgage  covers  several  discon- 

Merchants'  Nat.  Bank  v.  Greene,  150  ^  Rogers   v.    Benton,    39    Minn.    39, 

Mass.  317,  23  N.  E.  103;    McCiirdy's  38  N.  W.  765,  12  Am.  St.  Rep.  613. 

Appeal,  65  Pa.  St.  290;   McElrath  v.  "Marriott    v.    Givens,    8   Ala.    694; 

Pittsburg  &  Steubenville  R.   R.   Co.  McGowan  v.  Branch  Bank  at  Mobile, 

55  Pa.  St.  189.  7  Ala.  823. 

^  Benjamin   v.   Cavaroc,   2   Woods,  '  Benjamin   v.   Cavaroc,   2   Woods, 

168.  168. 

*  Walton    V.    Cody,    1    Wis.    420-:  ''Carroll  v.  Deimel,  95  N.  Y.  252; 

Byron  v.  May,  2  Chand.  (Wis.)  103;  Downing  v.   Le  Dii,  82   Cal.   471,  23 

Carradine  v.  O'Connor,  21  Ala.  573;  Pac.  202. 

Alabama   Life    Ins.    &   Trust   Co.    v.  "  Knickerbocker    Life    Ins.    Co.    v. 

Pettway,    24    Ala.    544;     Martin    v.  Nelson,  8  Hun,  21. 

Ward,   60   Ark.   510,   30   S.  W.   1041;  "'Wagner  v.  Skygert,  30  S.  C.  296. 

Green  v.   Gaston,  56  Miss.  748.  751;  9  S.  E.  107. 

Morrison  v.  Bean, 15  Tex.  267;  Ware-  "Martin  v.  Pond,  30  Fed.  Rep.  15. 

hime  v.  Carroll  Co.  Build.  Asso.  44  '=Goldtree    v.    McAllister,    86   Cal. 

Md.   512;    §   1773;    and  cases  note  2  93,  24  Pac.  Rep.  801. 
supra. 


§  l-i44.] 


FORECLOSURE  BY  EQUITABLE  SUIT. 


404 


nected  tracts  of  land  in  different  counties  the  right  to  foreclose  as  to 
all  of  them  by  a  single  suit,  in  any  county  where  one  tract  is  situated." 
But,  aside  from  this  requirement,  this  action  is  not  local,  but  transi- 
tory, and  a  bill  may  be  brought  wherever  there  is  jurisdiction  of  the 
parties.^*  The  titles  to  the  land  cannot  be  investigated.^^  The  courts 
in  England  regard  the  right  to  redeem  as  a  mere  personal  right,  and 
not  as  an  estate  in  a  proper  technical  legal  sense,  and  on  this  ground 
take  jurisdiction  of  the  foreclosure  of  land  situated  in  tlxe  colonies, 
when  they  have  jurisdiction  of  the  parties.^®  A  court  of  chancery,  act- 
ing primarily  in  personam  and  not  merely  in  rem,  may,  by  virtue  of 

If  the  statute  of  the  State  also 
provides  that,  "if  the  county  desig- 
nated in  the  complaint  be  not  the 
proper  county,  the  action  may  not- 
withstanding be  tried  therein,  un- 
less the  defendant,  before  the  time 
of  answering  expires,  demands  in 
writing  that  the  trial  be  had  in  the 
proper  county,"  the  latter  provision 
is  a  qualification  of  the  former,  and 
the  defendant  simply  has  a  personal 
right  to  have  the  action  tried  in  the 
county  in  which  the  land  is  situated, 
and  may  waive  this  right  by  not  in- 
sisting upon  if  or  by  default.  Ter- 
ritory V.  Judge,  5  Dak.  275,  38  N.  W. 
439;  O'Neil  v.  O'Neil,  54  Cal.  187; 
Lane  v.  Burdiclc  17  Wis.  92;  March 
V.  Lowry,  16  How.  Pr.  41;  Gill  v. 
Bradley,  21  Minn.  15. 

In  Iowa  the  code  is  not  imperative 
in  directing  the  suit  to  be  brought 
in  th.e  county  where  the  land  is  situ- 
ated. It  may  be  brought  in  another 
county  if  personal  service  of  the 
process  is  had,  so  that  the  court  in 
such  other  county  acquires  jurisdic- 
tion of  the  defendant,  and  can  ren- 
der a  personal  judgment  against 
him;  and,  having  acquired  such 
jurisdiction  and  rendered  personal 
judgment,  the  court  will  not  require 
him  to  institute  another  suit  to  ob- 
tain a  decree  of  foreclosure,  but  will 
render  such  decree  although  the 
land  is  in  another  county.  But  the 
action,  so  far  as  the  enforcement  of 
the  mortgage  is  concerned,  is 
strictly  in  rem,  and  as  such  must  be 
brought  in  the  county  where  the 
land  lies.  If  the  service  of  process 
is  by  publication  only,  the  suit  must 
be  in  the  county  where  the  l-and  is. 
Iowa  Loan  &  Trust  Co.  v.  Day,  63 
Iowa,  459.  19  N.  W.  301;  Equitable 
Life  Ins.  Co.  v.  Gleason,  56  Iowa,  47, 
8  N.  W.  790. 
"  Paget  V.  Ede,  L.  R.  18  Eq.  118. 


'^Stevens  v.  Ferry,  48  Fed.  7; 
Holmes  v.  Taylor,  48  Ind.  169.  Even 
a  suit  to  foreclose  several  mortgages 
made  by  one  mortgagor  to  secure 
one  debt  of  lands  lying  in  several 
counties  may  be  brought  in  any 
county  in  which  the  land  in  one  of 
the  mortgages  is  located.  Lomax  v. 
Smyth,  50  Iowa,  223. 

A  court  does  not  lose  jurisdiction 
by  reason  of  the  fact  that  pending 
the  suit  a  new  county  is  created  in- 
cluding the  mortgaged  land.  Tol- 
man  v.  Smith,  85  Cal.  280,  24  Pac. 
743. 

An  objection  that  the  complaint 
does  not  show  that  the  premises 
were  so  situated,  will  not  pre- 
vail where  the  description  in  the 
mortgage,  annexed  to  and  made  part 
of  •  the  complaint,  shows  that  the 
mortgaged  premises  were,  at  the 
time  the  suit  was  commenced,  in  a 
legal  subdivision  which  the  court 
judicially  knows  to  have  been  with- 
in the  boundaries  of  the  county  in 
which  tWfe  suit  was  brought.  Scott 
V.  Sells,  88  Cal.  -599,  26  Pac.  350. 

^*  Penn  v.  Baltimore,  1  Ves.  Sr.  444; 
Seymour  v.  DeMarsh,  11  Ont.  Prac. 
Rep.  472;  Phelps  v.  McDonald,  99  U. 
S.  298;  Muller  v.  Dows.  94  U.  S.  444; 
Reeves  v.  Brown,  103  Ala.  537,  15  So. 
824;  Harwell  v.  Lehman,  72  Ala. 
344;  Ashurst  v.  Gibson,  57  Ala.  584; 
Pingree  v.  Coffin,  12  Gray  (Mass.), 
288;  Reed  v.  Reed,  75  Me.  264;  Baton 
V.  McCall,  86  Me.  346,  29  Atl.  1103. 

1=  Paget  V.  Ede,  L.  R.  18  Eq.  118 
Toller   V.    Carteret,     2    Vern.     494 
Broome  v.    Beers,   6   Conn.    198-207 
Palmer  v.   Mead,   7  Conn.   149,   157 
Kinney  v.  McCleod,  9  Tex.  78:  Cauf- 
man  v.  Savre.  2  B.  Mon.  202;  Owings 
v.  Beall,  3  Lift.  103;  Grace  v.  Hunt, 
Cooke,  341 ;  Cole  v.  Conner,  10  Iowa, 
299;     Finnagan  v.  Manchester,     12 
Iowa,  521. 


405  JURISDICTION,    AND    THE   OBJECT.  [§    1445. 

its  jurisdiction  of  the  parties,  make  a  decree  respecting  property  situ- 
ated out  of  the  jurisdiction,  and  may  enforce  the  decree  by  process 
against  the  defendant  of  whom  it  has  jurisdiction.^'^ 

Tlie  court  may  decree  the  foreclosure  of  a  mortgage  which  embraces 
property  out  of  the  State  as  well  as  within  it,  such,  for  instance,  as  a 
railroad  existing  in  two  or  more  States.^^  But  neither  the  decree  nor 
the  conveyance  under  it,  except  this  be  by  the  person  in  whom  the 
title  is  vested,  can  operate  beyond  the  jurisdiction  of  the  court.^* 
Thus,  if  a  decree  of  foreclosure  be  entered  in  New  York  of  a  mortgage 
upon  land  in  Connecticut,  and  a  referee  appointed  by  the  court  sells 
the  land  and  gives  a  deed  to  the  purchaser,  the  deed  will  be  held  to 
convey  no  title  to  the  land  in  Connecticut,  and  the  rights  of  the  par- 
ties in  respect  to  such  land  will  remain  unaffected  by  the  proceedings 
had  in  New  York.-" 

In  those  States  in  this  country  where  the  mortgage  is  considered  a 
mere  lien,  and  the  legal  estate  as  remaining  in  the  mortgagor,  the 
decree  operates  either  to  deprive  the  mortgagor  of  that  estate,  by  vest- 
ing it  in  the  mortgagee  as  by  strict  foreclosure,  or  by  sale  to  convey 
it  to  the  purchaser,  and  therefore  would  be  regarded  as  a  local  action. 
If  a  sale  of  the  property  is  asked  for,  as  this  operates  in  rem,  juris- 
diction is  restricted  to  the  local  court  of  the  county  in  which  the  land 
lies.'^ 

§  1445.  It  is  not  proper  in  a  foreclosure  suit  to  try  a  claim  of 
title  paramount  to  that  of  the  mortgagor.  The  only  proper  object  of 
the  suit  is  to  bar  the  mortgagor  and  those  claiming  under  him.-- 

"  Eaton  V.  McCall,  86  Me.  346,  29  mortgagor,  in  the  former  case  it  acts 

Atl.  1103;    Union  Trust  Co.  v.  01m-  emphatically    on    the    thing    mort- 

sted,  102  N.  Y.  729,  7  N.  E.  822.  gaged.      Stevens    v.    Ferry,    48    Fed. 

^"Mead    v.    N.    Y.,    Housatonic    &  7;  Wood  v.  Mastick,  2  Wash.  T.  64, 

Northern   R.    R.    Co.    45    Conn.    199;  3  Pac.  612;   Owings  v.  Beall,  3  Litt. 

Jones   on   Corp.    Bonds   &   Mortg.    §  (Ky.),  103.     And  see  Chadbourne  v. 

360.  Oilman,  29  Iowa,  181. 
•   i»Watldns  v.  Holman,  16  Pet.  25;         -- Pelton  v.   Farmin,   18  Wis.   222; 

Booth  V.  Clark,  17  How.  322.  Palmer  v.  Yager,  20  Wis.  91;   Hekla 

^''  Farmers'    Loan    &    Trust   Co.    v.  F.  Ins.  Co.  v.  Morrison,  56  Wis.  133, 

Postal  Tel.  Co.  55  Conn.  334,  11  Atl.  14  N.  W.  12;    Summers  v.  Bromley, 

184,  3  Am.  St.  Rep.  53.  28  Mich.  125,  per  Graves,  J.  "A  court 

"  Campbell  v.  West,  86  Cal.  197,  of  equity  is  not  the  appropriate  tri- 
24  Pac.  Rep.  1000;  Caufman  v.  Sayre,  bunal,  nor  is  a  foreclosure  suit  a 
2  B.  Mon.  202.  "A  mortgagee  may  suitable  proceeding  for  the  trial  of 
either  compel  the  sale  of  the  estate,  claims  to  the  legal  title  which  are 
in  order  to  get  the  whole  of  his  hostile  and  paramount  to  the  inter- 
money  immediately,  or  else  call  upon  ests  and  rights  and  title  of  both 
the  mortgagor  to  redeem  his  estate  mortgagor  and  mortgagee.  Such  a 
presently,  or  in  default  thereof  to  be  trial  will  neither  fall  in  with  the  na- 
forever  foreclosed  from  redeeming  ture  of  the  jurisdiction,  or  the  genius 
the  same;  and  though  in  the  latter  or  frame  of  the  particular  remedy." 
case  the  decree  might  be  supposed  See,  further,  Rathbone  v.  Hooney, 
to  properly  act  on  the  person  of  the  58   N.   Y.   463;    Merchants'   Bank  v. 


§    14-J5.]  PORECLOSURE   BY   EQUITABLE    SUIT.  406 

Whether  the  claim  of  title  be  made  imder  a  conveyance  by  a  third 
party  prior  to  the  mortgage  or  subsequent  to  it,  it  is  not  a  proper 
subject  of  determination  in  a  foreclosure  suit;  nor  is  a  claim  under  a 
conveyance  by  the  mortgagor  made  prior  to  the  mortgage.^^  Such  ad- 
verse claims  of  title  are  generally  matters  of  purely  legal  jurisdiction. 
A  claim  under  a  tax  title  is  one  which  cannot  be  considered  in  a  fore- 
closure suit,  unless  it  affects  the  equity  of  redemption.^*  Even  if  a 
party  having  paramount  title  is  made  a  party  and  a  judgment  is  en- 
tered after  a  hearing,  it  will  not  bind  his  interest,  but  will  be  set  aside 
on  application.^-^ 

The  rule,  that  adverse  titles  cannot  be  litigated  in  a  foreclosure 
suit,  applies  only  to  interests  not  subject  to  the  mortgage.  It  is  proper 
to  try  the  question  whether  the  property  is  community  or  separate 
property.'''  Questions  of  priority  of  lien  as  between  two  mortgages 
by  the  same  mortgagor  may  properly  be  determined  in  a  foreclosure  of 
one  of  them.^^  Thus  a  junior  mortgagee  may  show  that  the  senior 
mortgage  has  been  paid.^^  Questions,  too,  of  priority  between  the 
owTiers  of  different  parcels  of  land  mortgaged  together  may  be  deter- 
mined, and  the  order  in  which  they  shall  be  sold  fixed. ^^ 

There  are  cases,  however,  which  hold  that  when  the  plaintiff  in  a 
foreclosure  action  makes  any  person  defendant,  alleging  "that  he 
claims  to  have  some  interest  or  lien  upon  the  mortgaged  premises,  or 
some  part  thereof,  which  lien,  if  any,  has  accrued  subsequently  to  the 
time  of  said  mortgage,"  such  defendant  may  by  his  answer  set  up  a 
paramount  claim  to  the  mortgaged  premises,  or  to  some  part  thereof, 
and  that  such  right  may  be  tried  and  adjudged  in  the  foreclosure  ac- 
tion. The  only  way  the  plaintiff  can  avoid  the  trial  of  the  right  of 
the  defendant  so  brought  into  court  by  him,  as  to  his  paramount  title, 

Thomson,    55   N.    Y.    7;    Corning   v.  =^  Kelsey  v.  Abbott,  13  Cal.  609;   § 

Smith,  6  N.  Y.  82;  Brundage  v.  Mis-  1440. 

sionary  Society,  60  Barb.  204;    Bol-  -^Corning   v.    Smith,   6   N.    Y.    82; 

ling  v.  Pace,  99  Ala.  607,  12  So.  796;  Lewis  v.  Smith,  9  N.  Y.  502,  61  Am. 

Equitable  Mortg.  Co.  v.   Finley,  133  Dec.   706;    Emigrant  Industrial   Sav. 

Ala.  575,  31  So.  985:  §§  1439,  1440.  Bank    v.    Goldman,    75    N.    Y.    127; 

In  Connecticut,  under  §  12  of  the  Eagle    Fire    Co.    v.    Lent,    6    Paige, 

Practice    Act,    any    person    may    be  635;    Adams   v.    McPartlin,    11    Abb. 

made  a  defendant  who  claims  an  in-  N.  C.  369. 

terest    adverse    to    the    plaintiff,    or  -**  Tolman  v.  Smith,  85  Cal.  280,  24 

whom  it  is  necessary  to  bring  in  for  Pac.  743. 

a    complete    determination    of    any  "  Iowa  Co.  v.  Mineral  Point  R.  Co. 

maters  involved  in  the  suit.    An  ad-  24  Wis.  93;  Bell  v.  Pate,  47  Mich.  468, 

verse     claimant   may   therefore     be  11  N.  W.  275. 

made  a  party  defendant  to  a  fore-  -^^  McGillivray  v.  McGillivray,  9  S. 

closure    suit.      De   Wolf   v.    Sprague  D.  187,  68  N.  W.  316. 

Manuf.  Co.  49  Conn.  282,  304,  308.  =' New  York  Life  Ins.  &  Trust  Co. 

'^  San  Francisco  v.  Lawton,  18  Cal.  v.  Milnor,  1  Barb.  Ch.  353. 
465,  79  Am.  Dec.  187. 


407  JURISDICTION,    AND   THE   OBJECT.     [§§    1446,    1447. 

is  to  discontinne  his  case  as  to  such  defendant,  so  that  he  may  not  be 
prejudiced  by  the  judgment  to  be  entered  in  the  foreclosure  action.^*' 

If  a  claim  paramount  to  the  mortgage  is  set  up  ])y  a  defendant,  and 
this  question  is  litigated,  both  parties  will  be  bound  by  the  decree. 
Thus,  where  a  bill  alleges  that  defendant  asserts  some  claim  to  or  in- 
terest in  the  property,  but  that  whatever  interest  he  has  is  subordinate 
to  the  mortgage,  and  prays  only  that  all  claims  under  the  mortgagor 
be  foreclosed,  and  such  defendant  sets  up  in  his  answer  a  paramount 
claim,  and  the  same  is  litigated  without  objection  and  decided  in  his 
favor,  the  decree  cannot  be  attacked  on  appeal  on  the  ground  that  the 
question  could  not  properly  be  litigated  in  that  action.^^ 

A  prior  mortgagee  may  elect  for  himself  the  time  and  manner  of 
enforcing  his  security,  and  cannot  be  compelled  to  enforce  it  by  being 
made  a  party  to  a  suit  by  a  junior  incumbrancer  to  foreclose  his  lien. 
A  junior  mortgagee  who  has  brought  a  suit  to  enforce  his  own  mort- 
gage, to  which  he  has  made  the  prior  mortgagee  a  party,  cannot  set 
up  in  answer  to  a  suit  of  foreclosure  by  the  prior  mortgagee  that  he 
had  already  commenced  a  foreclosure  suit,  and  had  made  the  prior 
mortgagee  a  party  defendant.    S-uch  a  defence  is  frivolous.^- 

§  1446.  It  is  proper  in  a  foreclosure  suit  to  determine  the  right 
of  the  mortgagor  to  remove  a  building  erected  by  him  on  the  land, 
and  to  direct  that  the  land  be  sold  subject  to  such  right.  If  the 
building  has  been  removed  and  sold,  the  court  may  determine  the 
ownership  of  the  building.  This  is  not  a  litigation  of  the  title  to  the 
mortgaged  property.^^  This  is  incident  to  the  general  power  and 
authority  of  the  court  to  define  and  describe  in  its  judgment  the 
property  to  be  sold.  Such  a  question  should  be  settled  before  the  sale, 
so  that  the  sheriff  may  know  what  he  is  selling  and  the  purchaser  may 
know  what  he  is  buying.  In  the  meantime  the  mortgagor  may  be  en- 
joined from  impairing  the  security  by  removing  the  building,  which 
is  presumably  a  part  of  the  freehold.^* 

§  1447.  A  court  of  equity  will  prevent  an  improper  use  of  its 
process,  even  in  a  legal  way,  as,  for  instance,  when  it  is  apparent 
that  the  object  of  the  foreclosure  suit  is  not  to  procure  the  satisfac- 

^''Lego  v.  Medley,  79  Wis.  211,  48  donk,  98  N.   Y.   158,   163;    Jordan  v. 

N.  W.  375;  Wickes  v.  Lake,  25  Wis.  Van  Epps,  85  N.  Y.  427,  435. 

71;    Roche   v.   Knight,   21   Wis.   324;  '-Adams  v.  McPartlin,  11  Abb.  N. 

Newton    v.    Marshall,    62    Wis.    8-17,  C.  369. 

21  N.  W.  8.03.  "^  Partridge  v.  Hemenway,  89  Mich. 

=!' Boiling    V.    Pace    (Ala.),    12    So.  454,  50  N.   W.   1084,   Morse,   J.,   dis- 

796;  Helck  v.  Reinheimer,  105  N.  Y.  sen  ting. 

470,  12  N.  E.  37;  Barnard  v.  Onder-  ^*  Brown  v.  Keeney  Asso.  59  N.  Y. 

242. 


§§    1448,    1449.]      FORECLOSURE   BY    EQUITABLE   SUIT.  408 

tion  of  the  debt,  but  to  obtain  a  different  end  by  coercing  the  owner  of 
the  equity  of  redemption.  This  was  done  in  a  case  where  a  wife  who 
owned  the  fee  tendered  the  mortgagee  the  amount  of  his  debt,  and 
asked  for  an  assignment  of  the  mortgage,  which  he  refused  to  make, 
and  the  evidence  showed  that  the  mortgage  was  being  foreclosed  in 
the  interest  of  the  husband,  in  order  to  force  her  to  settle  a  suit  by. 
her  to  annul  the  marriage,  and  litigation  was  then  pending  about 
other  property.  As  a  new  mortgage  could  not  be  obtained  on  account 
of  the  litigation,  the  court  ordered  that  if  the  mortgagee  refused  to 
assign  it  the  proceedings  should  be  stayed.^^ 

Of  course  there  can  be  no  decree  of  foreclosure  or  suit  to  foreclose 
until  the  mortgage  debt  or  some  part  of  it  is  due,  or  there  is  some  pro- 
vision enabling  the  mortgagee  to  foreclose  for  some  other  default.^** 

§  1448.  A  trust  deed  made  for  the  security  of  all  the  creditors 
of  the  grantor  who  are  not  named,  and  providing  for  a  sale  by  the 
trustee  only  upon  request  made  by  a  majority  of  the  creditors,  should 
be  enforced  by  a  bill  in  equity,  under  which  the  necessary  parties  can 
be  convened,  and  their  rights  ascertained  and  adjusted.^^  The  court 
will  in  any  cast  undertake  the  supervision  of  the  execution  of  the  trust. 
The  decree  of  sale  should  embody  the  provisions  of  the  deed  in  regard 
to  the  sale;  but  these  provisions  may  be  altered  when  necessary,  and 
in  such  case  the  sale  must  be  in  accordance  with  the  terms  of  the  de- 
cree. ^^ 

§  1449.  In  the  foreclosure  of  a  title  bond  the  purchaser  is  treated 
as  a  mortgagor  for  all  purposes  of  the  suit.  The  rights  of  the  parties 
are  the  same  as  those  of  the  parties  to  a  formal  mortgage.  Persons 
interested  in  the  property  not  made  parties  to  the  suit  are  not  af- 
fected by  the  decree.^''  As  in  the  case  of  the  foreclosure  of  a  mort- 
gage, the  plaintiff  may  have  judgment  for  foreclosure,  and  for  the 
amount  due  on  the  bond  at  the  same  time.*"  A  decree  of  foreclosure 
may  be  entered  under  a  prayer  for  general  relief,  although  not  spe- 
cifically asked  for.*^  A  decree  for  the  sale  of  the  land  described  in 
the  bond,  and  payment  of  the  proceeds  upon  the  judgment,  may  fur- 
ther provide  that  upon  full  payment  the  vendor  shall  convey  the  prop- 

35  §    1801;     Foster    v.    Hughes,    51  ^'Micliie  v.  Jeffries,  21  Gratt.  334. 

How    Pr.    20.     See,   also,   a   similar  ^^  Dukes  v.  Turner,  44  Iowa,  575. 

case,  Struve  v.  Childs,  63  Ala.  473;  ^«  Mullin  v.  Bloomer,  11  Iowa,  360; 

Geuda  Springs  Town  &  Water  Co.  v.  Merritt   v.   Judd,   14    Cal.    59;    Kier- 

Lombard,  57  Kans.  625,  47  Pac.  532.  nan  v.  Blackwell,  27  Ark.  235;  Hart- 

="'Kirk  V.  Van-Petten  38  Fla.   335,  man  v.   Clarke,   11   Iowa,   510.     And 

21  So    286.  see  Lewis  v.  Boskins,  27  Ark.  61. 

"  Hudgins  v.  Lanier,  23  Gratt.  494.  •'^  Herring  v.  Neely,  43  Iowa,  157.. 


409  JURISDICTION,    AXD   THE   OBJECT.  [§    1450. 

erty  to  the  purchaser,  by  a  deed  containing  all  covenants  stipulated 
for  in  the  bond.''- 

If  the  vendor  retaining  the  legal  title  assigns  a  promissory  note  re- 
ceived in  consideration  of  the  sale,  the  assignee  upon  non-payment  of 
it  may  proceed  to  foreclose  in  his  own  name,  as  if  it  were  a  mortgage 
note." 

A  mortgage  of  a  lease  may  be  foreclosed  by  a  sale  of  the  lease.  The 
purchaser  in  such  case  becomes  an  assignee  of  the  lease  and  term,  and 
takes  subject  to  the  obligation  to  pay  rent.'** 

§  1450.  A  tender  of  payment  not  accepted  does  not  prevent  the 
mortgagee's  proceeding  with  a  bill  to  foreclose.*^  There  may  be  ques- 
tions as  to  the  amount  due  on  the  mortgage,  and  these  can  be  settled 
and  the  mortgage  enforced  for  what  is  actually  due  only  by  a  fore- 
closure suit.  Even  the  pendency  of  a  bill  by  the  mortgagor  to  redeem 
does  not  suspend  the  right  to  foreclose.  The  mortgagor,  notwithstand- 
ing a  decree  for  redemption,  may  make  default  when  the  actual  time 
for  payment  arrives.*®  In  a  foreclosure  suit,  however,  the  mortgagor 
is  bound  to  pay  the  sum  that  shall  be  found  due,  or  else  to  stand  fore- 
closed of  his  right  of  redemption.  Until  the  mortgage  debt  is  actu- 
ally paid  off,  the  mortgagee  retains  all  the  rights  and  remedies  inci- 
dent to  his  mortgage.  By  statute,  however,  in  some  States,  a  bill 
must  be  dismissed  upon  the  defendant's  bringing  into  court  at  any 
time  before  the  decree  of  sale  the  principal  and  interest  due  with 
costs.*'^  Should  there  be  a  disagreement  as  to  costs,  the  party  making 
the  tender  may  apply  to  the  court  for  directions  as  to  the  amount 
of  them.*^  Although  the  tender  should  properly  be  brought  into 
court,  an  irregularity  in  this  respect  will  be  considered  waived  if  the 
answer  of  the  defendant  making  the  tender  be  accepted  and  acted  upon 
without  objection.*" 

*-  Wall  v.  Ambler,  11  Iowa,  274;  §  brought,  and  that  there  was  no  hard- 

235.  ship  of  which  the  mortgagor  could 

*^  Blair  v.  Marsh,  8  Iowa,  144.  complain.    Probasco  v.  Vaneppes  (N. 

"People  v.  Dudley,  58  N.  Y.  323;  J.),  13  Atl.  598. 

Catlin  v.  Grissler,  57  N.  Y.  363;  Gra-  ''^  Grugeon  v.  Gerrard,  4  Young  & 

ham  V.  Bleakie,  2  Daly,  55;  Pardee  v.  C.  119. 

Steward,  37  Hun,  259.  "As   in   New   York:    see   Allen   v. 

"  See  §§  886-893.     In  a  case  where  Malcolm.  12  Abb.  Pr.  N.  S.  335;  Hart- 

the  interest  on  a  mortgage  debt  was  ley  v.  Tatham,  1  Keyes,  222;   Kor.t- 

not  paid  when  due,  and  the  mortgagor  right  v.  Cady,  21  N.  Y.  343,  78  Am. 

informed    the    mortgagee    the    next  Dec.  145. 

day  that  he  was  ready  to  pay  it,  but  ^'*  Morris  v.  Wheeler,  45  N.  Y.  708; 

made  no  tender,  and  the  mortgagee  Pratt  v.  Ramsdell,  16  How.  Pr.  59; 

directed    his    solicitor    to    foreclose,  Bartow    v.    Cleveland,    16    How.    Pr. 

but  the  solicitor  before  doing  so  no-  364. 

tified    the    mortgagor,    and    waited  *^  Roosevelt  v.  N.  Y.  &  Har  R.  R. 

several  days  before  filing  the  bill,  it  Co.  30  How.  Pr.  226,  45  Barb.  554. 
was  held  that  the  bill  was  properly 


§    1451.]  FORECLOSURE   BY    EQUITABLE    SUIT.  410 

It  has  been  observed  in  a  former  chapter  that  in  several  States  a 
tender  of  the  amount  due  on  a  mortgage  discharges  the  lien,  but  does 
not  discharge  the  debt.  The  consequence  of  this  doctrine  is,  that  upon 
proof  of  a  tender  of  the  debt,  together  with  any  costs  incurred  at  the 
time,  an  action  for  foreclosure  will  be  defeated ;  but  as  the  debt  is  not 
discharged  a  judgment  for  that  may  still  be  entered  and  enforced  ;^° 
or,  where  the  law  and  equity  systems  are  distinct,  an  action  at  law  may 
be  maintained  upon  the  debt.^^ 


II.     The  Bill  or  Complaint. 

§  1451.  General  principles.— It  is  not  proposed  to  set  forth,  ex- 
cept quite  brieily,  the  rules  and  principles  upon  which  a  bill  in  equity 
to  foreclose  a  mortgage  is  to  be  drawn,  prosecuted  and  defended. 
Although  the  more  important  features  of  the  pleadings  are  the  same 
wherever  this  remedy  is  used,  yet  in  matters  of  practice  there  is  much 
diversity  in  the  different  States  arising  from  enactments  of  different 
systems  of  procedure,  and  the  adoption  of  different  rules  of  practice 
by  the  courts.  As  already  noticed  when  treating  of  the  parties  to  an 
equitable  action  for  foreclosure,  several  States^^^  have  adopted  and 
made  applicable  to  all  civil  actions  alike  codes  of  procedure  in  which 
the  equity  method  of  pleading  and  practice  in  a  simple  form  is  pre- 
served. The  special  provisions  of  these  codes  relating  to  mortgages  are 
there  given.  The  general  theory  and  form  of  the  pleadings  as  a  whole 
are  determned  by  provisions  that  the  complaint  or  petition  shall  con- 
tain "a  plain  and  concise  statement  of  the  facts  constituting  the  cause 
of  action  without  unnecessary  repetition,"  and  "a  demand  of  the  relief 
to  which  the  plaintiff  supposes  himself  entitled.  If  a  recovery  of 
money  be  demanded,  the  amount  thereof  shall  be  stated."^^  The  an- 
swer must  contain:  "1.  A  general  or  specific  denial  of  each  material 
allegation  of  the  complaint  (or  petition)  controverted  by  the  defend- 
ant, or  of  any  knowledge  or  information  thereof  sufficient  to  form  a 
belief;  2.  A  statement  of  any  new  matter  constituting  a  defence  or 
counter-claim  (or  set-off),  in  ordinary  and  concise  language,  without 
repetition."^*  These  provisions  are  merely  the  essential  requisites  of 
a  l^ill  and  answer  in  equity;  and  therefore  the  more  important  de- 
cisions relating  to  the  substance  of  the  pleadings  apply  in  those  States 

•"  McCoy  V.  O'Donnell,  2  Thomp.  &        ''  See  §  1367. 
Q    671.  ^=  See  Pomeroy's  Remedies,   §   433. 

^' §    893;    as   in   New  York  before        "See  Pomeroy's  Remedies,  §   583. 
the  Code:    Mann  v.  Cooper,  1  Barb. 
Ch.  185. 


411  THE    BILL   OR   COMPLAIXT.  [§    1452. 

in  which  foreclosure  is  by  a  formal  bill  in  a  chancery  court,  and  equally 
in  those  having  these  codes  of  procedure. 

§  1452.  The  general  requisites  of  the  complaint  are,  that  it  shall 
allege  the  execution  and  delivery  of  the  mortgage  and  of  the  note  or 
bond  secured  by  it;^''  the  names  of  the  parties  to  it;  the  date  and 
amount  of  it;^"  when  and  where  recorded;  a  description  of  the  prem- 
ises; the  amount  claimed  to  be  due;  and  the  default  upon  which  th-e 
right  of  action  has  accrued."  It  must  show  also  that  the  complainant 
is  entitled  to  maintain  the  action,  and  that  the  defendants  have,  or 
claim  to  have,  certain  interests  in  the  premises,  or  liens  upon  them. 
If  the  plaintiff  is  not  the  mortgagee,  his  right  to  maintain  the  action, 
by  virtue  of  an  assignment,  bequest,  or  otherwise,  must  be  set  forth 
with  reasonable  fulness  and  certainty.  The  terms  and  conditions  of 
both  the  mortgage  and  of  the  bond  or  note  secured  by  it  should  be  set 
out.  This  may  be  done  by  proper  recitals  in  the  complaint  itself,  or 
by  annexing  copies  of  these  instruments,  which  are  referred  to  in  the 
complaint  and  made  part  of  it.^^  The  relief  which  is  sought  should 
be  fully  and  explicitly  stated.^^  A  decree  of  foreclosure  of  a  mortgage 
should  not  be  denied  for  want  of  proper  prayer  for  relief,  if  such  re- 
lief is  embraced  within  the  issue  made  by  the  pleadings."" 

In  those  States  in  which  a  personal  judgment  may  be  rendered  for 
the  debt,  though  there  is  no  judgment  for  foreclosure  and  sale,  a  com- 
plaint which  fails  to  allege  the  facts  essential  to  a  foreclosure,  but 
does  sufficiently  set  out  the  note  secured,  is  not  demurrable,  since 
plaintiff  is  entitled  to  a  personal  judgment  on  the  note."^ 

"  Laurent  v.  Lanning,  32  Oreg.  11,  and     default     are     fully     described. 

51  Pac.  80.  Berry  v.   King,   15  Or.    165,   13   Pac. 

'"'  If  the  true  date  of  the  mortgage  772. 

is  different  from  that  stated  in  the  •"■'■' See  §  1578. 

mortgage,    the   actual    date   may   be  «» Johnson    v.    Polhemus,     99     Cal. 

proved.     McFall  v.  Murray,  4  Kans.  240,   33   Pac.   908.     In   this   case   the 

App.  554,  45  Pac.  1100.  complaint    alleged    the    payment   of 

"  Coulter   V.    Bower,    64   How.   Pr.  the  contract,  and  that  there  was  a 

132.    As  to  sufficiency  of  description:  balance  due  on  the  note,  and  asked 

Stevenson    v.    Kurtz,    98    .Mich.    493,  judgment    on    the    note    and    fore- 

57  N.  AV.  580.  As  to  allegation  of  de-  closure   of   the   mortgage.     The  an- 

fault:    Ryan    v.    Holliday,    110    Cal.  swer    alleged    the    payment    of    the 

335,  42  Pac.  891.  note,  and  that  the  contract  had  been 

As  to  amending  description:  Keys  cancelled  by  agreement  of  the  mort- 

v.  Lardner,  55  Kan.  331,  40  Pac.  644.  gagee.      The    court    found    that    the 

A  copy   of  the  mortgage  may   be  note    had    been    paid,    but    that    the 

referred    to    and    made    part   of   the  contract   was   in   force   and    unpaid, 

complaint,  for  a  description  of  the  Held,  that  plaintiffs  were  entitled  to 

premises,  Krathwohl  v.  Dawson,  140  decree  of  foreclosure  for  the  amount 

Ind.  1,  39  N.  E.  496.  due  on  the  contract. 

=*  The   mortgage   need   not  be   set  "'  Taylor  v.  Hearn,  131  Ind.  537,  31 

out  in  full,  if  the  debt  its  ownership  N.  E.  201. 


g§  1453,  1454.]   FORECLOSURE  BY  EQUITABLE  SUIT.  413 

§  1453.     Facts  not  inconsistent  with  the  bill  may  be  proved.    The 

evidence  may  iu  some  respect  show  a  different  state  of  facts  from  that 
alleged  in  the  bill;  and  yet  this  will  be  sufficient  if  the  facts  shown 
are  not  inconsistent  with  the  allegations ;  as,  for  example,  the  amount 
actually  due  may  be  shown  to  be  less  than  the  amount  alleged  to  be 
due.^^ 

§  1454.  An  allegation  of  the  execution  and  delivery  of  the  mort- 
gage is  a  sufficient  allegation  of  its  proper  execution  and  of  its  valid- 
ity.*^^  An  allegation  of  the  execution  of  the  mortgage  is  also  sufficient 
without  any  averment  of  title  in  the  mortgagor.  He  is  estopped  by  his 
deed  from  denying  his  title ;  and,  whatever  his  title  may  be,  the  mort- 
gage may  be  foreclosed  against  him.''*  The  possession  of  the  mort- 
gage by  the  mortgagee,  duly  executed,  acknowledged,  and  recorded,  is 
presumptive  evidence  of  delivery.*'^ 

The  witnessing  and  acknowledgment  of  the  mortgage,  where  made 
essential  to  the  validity  of  it,  should  be  alleged;  but,  if  the  plaintiff 
be  an  assignee  of  the  mortgage,  these  facts  are  not  presumably  within 
his  knowledge,  and  he  may  properly  aver  them  upon  information  and 
belief  only."** 

The  mortgage  and  the  note  or  bond  secured  by  it  are  usually  in  some 
manner  made  part  of  the  complaint.  Copies  of  them  may  be  set  out 
in  the  complaint  or  annexed  to  it.  It  is  not  sufficient  merely  to  file  the 
originals  or  copies  with  the  complaint  without  referring  to  them  and 
making  them  part  of  it.'''^  But  it  is  sufficient  if  the  bill  sets  out  the 
substance  of  the  mortgage.'^* 

If  properly  set  forth  in  the  complaint,  the  production  of  the  note 
and  mortgage,  and  proof  of  service  of  the  summons,  is  sufficient  to 
justify  a  decree  where  no  defence  is  interposed.*'^  If  the  answer  ad- 
mits the  execution  of  the  mortgage  and  note,  and  does  not  deny  that 

«=  Collins  v.  Carlile,  13  111.  254.  Murrell,  3  Dana,  180.     A  copy  of  the 

"'Moore  v.  Titman,  33  111.  358;  Mc-  note  need  not  be  set  out  when  the 

Allister  v.  Plant,  54  Miss.  106;   Lau-  action  is  only  for  the  foreclosure  of 

rent  v.  Lanning,  32  Oreg.  11,  51  Pac.  the    mortgage.      Shin    v.    Bosart,    72 

SO.  Ind.  105. 

"  Shed  v.  Garfield,  5  Vt.  39.  ""  Cecil  v.  Dynes,  2  Ind.  266.     The 

"^  Commercial  Bank  v.  Reckless,  5  acknowledgment    being    no    part    of 

N.  J.  Eq.  650;  Greeley  State  Bank  v.  the  cause  of  action,  a  copy  of  the 

Line,  50  Neb.  434,  69  N.  W.  966;  An-  certificate  need  not  be  set  out.     Ind. 

drews  v.  Reed,— Kans.— 48  Pac  29.  302. 

""  Fairbanks  v.  Isham,  16  Wis.  118.  Sturgeon  v.  Daviess  Co.  65. 

"Hiatt  V.  Goblt,  18  Ind.  494;  Her-  ™  Woodward    v.    Brown,    119    Cal. 

ren  v.  Clifford,  18  Ind.  411.     And  see  283,  51  Pac.  2,  63  Am.  St.  108;  Whit- 

Dumell    V.    Terstegge,    23    Ind.    397;  ney  v.  Buckman,  13  Cal.  536;    Har- 

Brown  v.  Shearon,  17  Ind.  239;  Trip-  Ian  v.  Smith.  6  Cal.  173;    Mickle  v. 

lett  v.  Sayre,  3  Dana,  590;  Harlan  v.  Maxfield,  42  Mich.  304,  3  N.  W.  961. 


413  THE    BILL   OR    COMPLAINT.  [§§    1455,    1456. 

the  amount  claimed  in  the  petition  is  due,  there  is  nothing  for  the 
plaintiff  to  prove.'''' 

§  1455.  Proof  of  execution.—  The  mortgage  and  the  personal  ob- 
ligation acconipan3ing  it,  unless  admitted,  must  be  produced  and 
proved  by  competent  evidence.'^  If  these  instruments  be  attested  by 
a  witness,  the  execution  must  be  proved  by  him,  unless  his  attendance 
cannot  be  procured,  or  other  circumstances  make  other  evidence,  such 
as  proof  of  the  handvv^riting,  competent.  When  the  execution  is  con- 
tested by  a  person  who  is  not  a  party  to  the  deed,  the  admission  of  the 
mortgagor  is  not  sufficient  if  tlie  securities  are  attested  by  a  witness.''- 
The  mortgagee's  possession  of  the  mortgage  and  the  note  or  bond 
secured  by  it  is  strong  evidence  of  their  delivery,  and  the  defendant's 
answer  under  oath  alleging  that  they  had  not  been  delivered  is  not 
enough  to  overcome  the  presumption  of  delivery  arising  from  the 
mortgagee's  possession.''^ 

In  an  action  upon  a  bond  and  mortgage  executed  by  one  as  executor 
and  trustee  in  his  representative  capacity,  it  is  not  necessary  to  allege 
and  prove  that  the  mortgagor  was  in  fact  such  executor  and  trustee, 
and  the  facts  relating  to  his  appointment.'''* 

§  1456.  The  complainant  must  show  by  his  bill  either  that  he  is 
the  mortgagee,  or  that  he  has  legal  title  to  the  security  by  assignment 
or  otherwise.  It  is  not  necessary  in  so  many  words  to  aver  that  the 
complainant  has  title  to  the  mortgaged  premises;  it  is  sufficient  to 
aver  the  making  of  the  mortgage.''^    The  estate  or  interest  in  the  land 

'"  Cooley  V.  Hobart,  8  Iowa,  358.  often,  in  proceedings  of  foreclosure, 

"  Matteson  v.  Morris,  40  Mich.  52;  that  the  title  of  the  mortgage  is  di- 

Ward  v.  Munson,  105  Mich.   647,  63  rectly  put  in  issue,  or  constitutes  the 

N.    W.    498;    George    v.    Ludlow,    66  principal  subject  of  controversy;  al- 

Mich.  176,  33  N.  W.  169;  Field  v.  An-  though     the   entire   purpose   of    the 

derson,  55  Ark.  546,  18  S.  W.  1038;  plaintiff  is,  in  default  of  payment,  to 

Butler  V.  Washington,  28  S.  C.  607,  5  make   a   perfect   title,   which   before 

S.  E.  601;  Wagener  v.  Kirven,  47  S.  was  qualified;  and  the  ground  of  his 

C.  347,  25  S.  E.  130;   Buckmaster  v.  application  is,  that  he  has  a  mort- 

Kelly,   15    Fla.    180;    Bergen   v.   Ur-  gage  title;  and  without  an  averment 

bahn,  83  N.  Y.  49.  of  facts  constituting  such  title,   his 

'-Leigh    V.    Lloyd,    35    Beav.    455;  bill  would  be  defective.     It  may  not 

Inman  v.  Parsons,  4  Madd.  271.  be  necessary  either  to  allege  or  prove 

'^'Long  V.  Kinkel,  36  N.  J.  Eq.  359;  the    precise    condition    of    the    title, 

Ashley  Wire  Co.  v.  Illinois  Steel  Co.  whether  it  be  in  fee  or  in  tail,  for 

164  111.  149,  45  N.  E.  410.  life  or  for  years;  but  it  seems  to  us, 

■*  Kingsland  v.  Stokes,  25  Hun,  107.  as  the  right  of  the  plaintiff  to  ask 

^^  Bull    V.    Meloney,   27    Conn.    560.  the    interference    of    the    court    de- 

The  allegation  in  this  case  was  that  pends  upon  some  title  in  himself  to 

the   respondent,   to   secure   the  debt  the  land  mortgaged,  either  legal  or 

described,    "did    execute   to   the   pe-  equitable,  that  it  is  incumbent  upon 

titioner  a  deed  of  a  certain  piece  of  him   to   establish   it  at   least   prima 

land,"  described,  with  the  condition,  facie;    and  of  course  the  defendant 

In  Frink  v.  Branch,  16  Conn.  260,  must  have  a  corresponding  right  to 

268,    Church,    J.,    says:      "It   is   not  attack  it." 


§    1457.]  FORECLOSURE   BY    EQUITABLE    SUIT.  -il-i 

is  not  in  issue.  The  only  questions  are  whether  the  mortgage  lias  been 
properly  executed,  and  the  complainant  rightfully  holds  it  and  may 
enforce  it.  The  complainant  showing  prima  facie  title,  it  is  for  the 
defendant  to  allege  and  prove  that  he  has  no  title;  that,  for  instance, 
the  mortgage  has  been  discharged.  The  complainant  need  not  antici- 
pate the  defence,  and  set  out  in  his  bill  the  facts  which  would  invali- 
date the  discharge.'^'^ 

§  1457.  Assignee's  title. — If  the  bill  be  brought  by  an  assignee  of 
the  mortgage,  the  assignment  to  him  should  be  fully  and  distinctly 
alleged.  The  same  technicality  in  pleading  required  at  law  is  not 
necessary  in  a  court  of  equity;  and  accordingly,  where  the  bill  alleges 
an  assignment  of  the  mortgage,  but  not  of  the  note  or  bond,  it  is  suffi- 
cient if  it  appears  substantially  from  the  bill  that  the  debt  belongs  to 
the  complainant."  But  if  it  does  not  so"  appear,  a  failure  to  aver  that 
the  bond  or  note  was  assigned  to  the  plaintiff,  or  that  he  is  the  holder 
or  owner  of  it,  has  been  held  a  fatal  defect. '^^  It  is  held,  however,  that 
if  the  bill  alleges  an  assignment  of  the  mortgage,  an  omission  to  al- 
lege an  assignment  of  the  bond  does  not  invalidate  the  judgment, 
where  the  assignment  of  both  the  bond  and  mortgage  appears  of  rec- 
ord, and  the  referee's  report  of  the  amount  due  refers  to  such  record.^® 
If  the  mortgage  was  given  without  a  bond,  or  other  extrinsic  written 
evidence  of  the  debt  secured,  an  assignment  of  the  mortgage  passes 
the  title  to  the  debt ;  and  a  complaint  which  alleges  that  the  mortgage 
was  given  for  a  part  of  the  purchase-money,  and  sets  out  the  assign- 
ment of  it  to  the  plaintiff,  is  sufficient.*"  The  bill  need  not  aver  the 
record  of  the  assignment,*^  for  there  is  no  legal  necessity  for  it.*^    The 

In   an   action  by  Edward  "H.    An-  gagor  is  not  sufficient.     The  assign- 

drews   to   foreclose   a   mortgage,   an  ment  of  the  estate  cannot  be  implied 

allegation  that  the  defendant  made  from   this.     But  contra,   see   Ercan- 

a  mortgage  and  note  to  E.   H.  An-  brack  v.   Rich,   2   Chand.   100;    Bab- 

drewR,    without    alleging    that    the  bitt  v.  Bowen,  32  Vt.  437.    A  copy  of 

plaintiff  and  said  E.  H.  Andrews  are  the  assignment  need  not  be  set  out. 

the  same  person,  or  that  the  plain-  Stanford  v.   Broadway   Sav.   Co.   122 

tiff  is  the  holder  and  owner  of  the  Ind.    422;    24    N.    E.    154;    Keith    v. 

mortgage,  does  not  state  a  cause  of  Champer,  69  Ind.  477. 

action.     This  court  cannot  take  jii-  "  Hays  v.  Lewis,  17  Wis.  210.    And 

dicial  notice  that  Edward  H.  and  E.  see  Pattie  v.  Wilson,  25  Kans.  326. 

H.    are    one    and    the.  same    person.  "  Preston   v.    Loughran,    12    N.    Y. 

Andrews  v.  Wynn  (S.  D.),  54  N.  W.  Supp.  313. 

1047.  ™  Severance  v.  Griffith,  2  Lans.  38 

■"  Frink  v.   Branch,   16   Conn.   260,  and  cases  cited;  Caryl  v.  Williams,  7 

268;    Palmer   v.   Mead,   7   Conn.    149,  Lans.  416;   Coleman  v.  Van  Rensse- 

157;   Spear  v.  Hadden,  31  Mich.  265;  laer,  44  How.  Pr.  368. 

Cornelius  v.  Halsey,  11  N.  J.  Eq.  27.  "  King  v.    Harrington,   2   Aik.    33, 

"  Cornelius  v.  Halsey,  11  N.  J.  Eq.  16  Am.  Dec.  675. 

27;  Buckner  v.  Sessions,  27  Ark.  219;  *=  Fryer   v.    Rockefeller.    63    N.    Y. 

Gill  V.  Truelsen,  39  Minn.  373,  40  N.  268;    Terry  v.  Durand  Land  Co.  112 

W.     254.       A     description     of     the  Mich.    665.    71    N.    W.    525;    Gray   v. 

plaintiff  "as  assignee"  of  the  mort-  Waldron,  101  Mich.  612,  60  N.  W.  288. 


415  THE   BILL  OR   COMPLAINT.  [§    l-io8. 

fact  that  the  assignee  holds  the  mortgage  merely  as  security  does  not 
affect  his  right  to  recover,  but  goes  only  to  limit  his  interest  in  the 
proceeds.*^  An  assignee  who  files  a  bill  to  foreclose  one  of  several 
mortgage  notes  should  account  for  the  other  notes,  but  upon  the  hear- 
ing, if  he  proves  the  payment  of  such  other  notes,  the  defect  in  his 
bill  may  be  disregarded.'^'* 

Other  liens  which  the  plaintifi:  may  have  upon  the  property  he  may 
set  out  in  his  complaint  and  establish  beforehand,  or  may  present  and 
establish  a  claim  to  the  surplus  in  the  same  manner  as  any  other  per- 
son.^^ 

§  1458.  A  mortgagee  having  two  or  more  mortgages  upon  the 
same  premises  may,  under  the  several  codes,  include,  them  in  one  bill 
for  foreclosure.  Several  suits  being  unnecessary,  he  will  be  allowed 
costs  in  one  only.®*^  If  one  mortgage  covers  only  a  part  of  the  prem- 
ises included  in  the  other,  suit  should  be  brought  in  the  first  place  for 
the  foreclosure  of  the  mortgage  covering  the  entire  premises,  as  then 
a  second  suit  will  be  unnecessary.*'^ 

One  having  two  mortgages  on  the  same  property  may  file  his  bill 
for  the  foreclosure  of  both,  although  the  second  of  them  be  not  due. 
If  the  second  mortgage  becomes  due  before  the  decree,  the  defendant 
cannot  defeat  the  action  as  to  this  mortgage  by  tendering  the  amount 
due  on  the  first  mortgage  after  the  maturity  of  the  second.*®  If  the 
last  mortgage  be  due,  but  only  a  part  of  the  first  is  due,  the  plaintiff 
is  entitled  to  a  decree  for  the  sale  of  enough  of  the  mortgaged  premises 
to  pay  both  mortgages,  unless  the  defendant  pay  the  second  mortgage 
and  all  that  has  become  due  of  the  first.*® 

One  having  two  mortgages  made  by  one  mortgagor  upon  che  same 
property,  may  foreclose  the  senior  mortgage  and  purchase  the  property 
thereunder,  when  his  senior  mortgage  will  merge  in  the  title  then  ac- 
quired and  his  title  will  be  complete.®" 

If  such  mortgagee  brings  a  suit  to  foreclose  the  first  mortgage,  he 
may  after  judgment,  and  before  a  sale,  consolidate  this  action  with  an- 
other on  the  second  mortgage,  and  have  a  judgment  and  sale  for  both.°^ 

"'McKinney  v.  Miller,  19  Mich.  142.  76  N.  W.  1011;   Thompson  v.  Skeen, 

^^  Cooper   v.    Smith,   75   Mich.    247,  14  Utah,  209,  46  Pac.  1103. 

42  N.  W.  815.  "  Demarest  v.  Berry,  16  N.  J.  Eq. 

"^  Field  V.  Hawxhurst,  9  How.  Pr.  481. 

75;  Tower  v.  White.  10  Paige,  395.  «"  Hawkins  v.  Hill,  15  Cal.  499,  7G 

*"  S    1083;    Roosevelt   v.   Ellithorp,  Am.  Dec.  499. 

10   Paige,  415;    Wooster  v.   Case,  12  «"  Hall  v.  Bamber,  10  Paige,  29G. 

N.   Y.   Supp.   769;    Oconto  County  v.  »"  McDonald    v.    Magirl,    97    Iowa, 

Hall,  42  Wis.  59.     See  McDonald  v.  677,  GC^  N.  W.  904. 

Second  National  Bank,  106  Iowa,  517,  "Thompson    v.    Skeen,    14    Utah, 

209,  46  Pac.  1103. 


§  1459.]         FORECLOSUllE  BY  EQUITABLE  SUIT.  416 

A  bill  to  foreclose  four  distinct  mortgages  of  different  dates,  given 
by  the  same  person,  and  owned  by  the  complainant,  personal  judg- 
ment being  asked  only  against  the  mortgagor,  is  not  multifarious.®^ 

If  the  mortgages  do  not  cover  precisely  the  same  land,  a  consolida- 
tion for  actions  for  foreclosure  is  not  proper.®^  But  the  holder  of  a 
second  mortgage  in  a  foreclosure  suit  upon  that  is  not  obliged  to  bring 
forward  and  include  in  the  decree  the  first  mortgage  which  he  has  ac- 
quired by  assignment.''*  The  piirchaser  under  a  sale  in  such  suit  ac- 
quires an  interest  subject  to  the  first  mortgage. 

§  1459.  Foreclosure  for  instalment. —  When  the  debt  is  payable  by 
instalments,  action  to  foreclose  may  be  brought  when  the  first  instal- 
ment falls  due  and  is  not  paid.'*^  If  the  mortgage  secures  the  pay- 
ment of  several  notes,  it  may  be  foreclosed  upon  the  non-payment 
when  due  of  any  of  them.®°  Foreclosure  may  be  had  for  any  part  of 
the  mortgage  debt,  whether  principal  or  interest,  due  at  that  time,  and 
no  more ;  and  w  hen  the  mortgagee  elects  to  sell  under  a  power  in  the 
mortgage,  or  to  foreclose  in  chancery,  he  can  only  sell  or  foreclose  for 
the  amount  then  due  according  to  the  terms  of  the  mortgage ;  and  if 
he  sells  the  entire  estate,  that  of  necessity  operates  to  release  the  se- 
curity for  the  amount  not  due.®^  If  after  a  foreclosure  sale  for  an  in- 
stalment, and  before  the  foreclosure  has  become  complete  by  the  ex- 
piration of  the  time  allowed  for  redemption,  the  owner  redeems,  then 
the  foreclosure  sale  is  in  efEect  annulled,  and  the  same  land  may  be  sold 
for  the  satisfaction  of  the  other  instalments  of  the  mortgage  debt.®^ 
For  stronger  reasons  a  foreclosure  for  a  part  only  of  a  mortgage  debt, 
when  it  is  all  due,  operates  as  a  release  of  the  portion  not  embraced  in 

»=  Torrent  v.  Hamilton  (Mich.),  54  "^Wooster  v.  Case,  12  N.  Y.  Supp. 

N.  W.  634.    "Here  all  of  the  defend-  769.      See,    however,    Van    Laer    v. 

ants  are  proper  parties  to  the  fore-  Kansas  &c.  Brick  Works,  56  Kans. 

closure  of  the  first  mortgage.     The  54-5,  43  Pac.  1134. 

ownership   of   all    the    mortgages   is  '*'  Wahl  v.  Zoelck,  178  111.  158,  52  N. 

in  complainant.  The  claims  are  of  the  E.  870. 

same  character.     The  proceeding  as  «^  Grattan  v.  Wiggins,  23  Cal.  16. 
to  all  of  the  defendants  except  the  ^  Miller  v.  Remley,  35  Ind.  539. 
mortgagor  is  one   against  property.  ""  §    1378;    Smith   v.   Smith,   32   111. 
The  interests  of  all  the  defend-  198;  Cleveland  v.  Booth,  43  Minn.  16, 
ants  are  best  subserved  by  avoiding  44  N.  W.  670;    Standish  v.  Vosberg, 
a  multiplicity  of  suits,  and  the  equi-  27  Minn.  175,  6  N.  W.  489;  Fowler  v. 
ties  of  each  and  all  can  be  as  well,  if  Johnson,  26  Minn.  338,  3  N.  W.  986, 
not    more    effectuallv,    protected    in  6  N.  W.  486;   Probasco  v.  Vaneppes 
this  proceeding  as  in  four  separate  (N.  J.),  13  Atl.  598;  McLean  v.  Pres- 
foreclosure  suits.    Whatever  compli-  ley,  56   Ala.   211;    Johnson  v.   Buck- 
cations  exist  are  not  incident  to  the  haults,  77  Ala.  276;  Scheibe  v.  Ken- 
consolidation,  and  they  can  be  best  nedy,    64   Wis.    564,    25    N.    W.    646; 
adjusted     in    a    single    proceeding.  Hatcher  v.  Chancey,  71  Ga.  689. 
where  the  court  has  before  it  all  the  "^  Standish    v.    Vosberg,    27    Minn, 
parties  and  all  the  claims."    Per  Me-  175,  6  N.  W.  489. 
Grath,  C.  J.     See  §  1460. 


417  THE   BILL   OR   COMPLAINT.  [§    1459. 

the  foreclosure.  The  mortgage  of  record  showing  that  the  entire  debt 
is  due,  and  a  portion  only  foreclosed,  all  persons  have  a  right  to  con- 
clude that  the  other  part  of  the  debt  has  been  paid.  The  lien  of  the 
mortgage  is  released  as  to  creditors,  and  as  to  parties  holding  the  land 
under  the  prior  foreclosure  and  sale.^" 

But  by  statute  in  several  States  a  portion  of  the  property,  if  it  be 
divisible,  may  be  sold  to  pay  the  instalment  due;  and  then,  upon  the 
happening  of  another  default,  a  further  order  of  sale  may  be  obtained. 
If  the  premises  cannot  be  divided  the  whole  may  be  sold  and  the  pro- 
ceeds paid  to  the  mortgagee,  subject  to  a  proper  rebate  of  interest,  or 
the  balance,  after  paying  the  amount  due,  may  be  paid  into  court.^"" 

When  a  decree  of  foreclosure  to  satisfy  a  part  of  the  mortgage  debt 
expressly  declared  that  the  property  should  be  sold  subject  to  a  lien 
to  secure  the  payment  of  the  notes  not  then  due,  and  at  the  sale  the 
premises  were  purchased  by  the  mortgagee,  it  was  held  that  this  oper- 
ated as  a  satisfaction  of  the  entire  debt,  as  well  the  portion  not  due 
as  that  which  was.  The  purchaser  virtually  became  a  mortgagor  to 
the  extent  of  the  balance  of  the  mortgage  debt.  No  action  at  law  can 
afterwards  be  maintained  on  the  notes.^"^  But  the  mortgage  may  be 
foreclosed  for  an  instalment  of  the  interest  due  without  waiting  for 
the  maturity  of  the  note,  and  a  sale  may  be  had  of  so  much  of  the 
mortgaged  premises  as  will  be  necessary  to  pay  this  with  costs  of 
suit.^°-  Interest  falling  due  yearly  on  a  note  secured  by  mortgage,  is 
an  instalment  of  the  debt  for  which  the  mortgage  may  be  foreclosed  in 
equity.  It  is  due  and  payable  as  much  as  if  a  separate  note  had  been 
given  for  it.  Failure  to  pay  interest  is  a  breach  of  the  condition  of  the 
mortgage  for  which  it  may  be  foreclosed,  although  the  mortgage  does 
not  expressly  provide  for  such  foreclosure.^"^  An  action  at  law  may 
also  be  maintained  for  the  interest  as  it  falls  due."* 

It  is  also  sometimes  provided  that  when  the  foreclosure  suit  is  for 
an  instalment  of  principal  or  interest,  and  there  are  other  instalments 
not  due,  the  defendant  may  pay  into  court  the  principal  and  interest 
due  with  costs,  and  proceedings  shall  then  be  stayed  until  a  subsequent 
default."^ 

Although  a  mortgagee  holding  several  notes  maturing  at  different 

"=  Rains  v.  Mann,  68  111.  264.     And  "'  Scheibe  v.  Kennedy,  64  Wis.  564, 

see  Hughes  v.  Frisby,  81  111.  188.  25  N.  W.  646;  Walton  v.  Cody,  1  Wis. 

""' SS 1616-1619.      See    Statutes,    §§  420,    431.      Brodribb    v.    Tibbets,    58 

1322-1366;    also,   Allen   v.   Wood,   31  Cal.    6,    to    the    contrary,,    is    unsup- 

N.  J.  Eq.  103.  ported  by  authority  or  reason. 

''"Mines    v.    Moore,    41    111.    273;  "^  Morgenstern  v.  Klees,  30  111.  422. 

Weiner  v.  Heintz,  17  111.  259;  Hughes  "'^Washing-ton:    Bal.  Code,  §  5894; 

V.  Frisbv,  81  111.  188.  Bank  v.   Doherty,  29  Wash.  233,  69 

"-  Morgenstern  v.  Klees,  30  111.  422.  Pac.  732. 


§    14.G0.]  FORECLOSUKE   BY   EQUITABLE    SUIT.  418 

times  may,  by  stipulation  in  the  mortgage  or  by  statute,  foreclose  as 
to  all  when  one  of  them  is  due,  yet  he  may  institute  his  suit  to  fore- 
close that  note  alone,  and  a  judgment  upon  this  and  a  foreclosure  sale 
of  a  part  of  the  land  are  no  bar  to  a  subsequent  suit  to  enforce  payment 
of  another  note  afterwards  maturing,  upon  which  more  land,  or  the 
rest  of  it,  may  be  sold.  The  several  notes  are  considered  as  so  many 
successive  mortgages.^**''  A  mortgage  given  to  secure  several  notes 
payable  at  different  times  is  not,  it  would  seem,  so  far  divisible  that 
the  holder  of  all  the  notes  may,  after  they  have  all  matured,  have  sepa- 
rate actions  upon  each  note.  All  the  notes  should  in  such  case  be  in- 
cluded in  one  action ;  and  if  the  holder  obtains  a  decree  and  sale  upon 
one  note,  it  is  probable  that  he  would  not  be  allowed  to  maintain  a 
subsequent  action  upon  either  of  the  other  notes."^  At  any  rate  it 
has  been  held  that,  when  such  holder  has  foreclosed  for  the  note  last 
due  only,  a  subsequent  purchaser,  without  notice  that  the  other  notes 
remain  unpaid,  has  a  right  to  presume  that  they  have  already  been 
paid,^"^  although  in  his  deed  of  purchase  he  assumed  the  amount  of  the 
mortgage  as  part  of  the  purchase-money."^  When  the  whole  mortgage 
debt  becomes  due  upon  a  default  in  the  payment  of  interest,  and  there- 
upon the  mortgagee  forecloses  for  the  principal  and  a  part  of  the  in- 
terest, such  foreclosure  exhausts  the  lien."° 

§  1460.  When  the  bill  is  filed  by  the  holder  of  one  of  several 
mortgage  notes  it  should  state  whether  the  other  notes  have  been  paid, 
and,  if  not  paid,  by  whom  they  are  held  and  the  dates  of  their  matur- 
ing, so  that  the  rights  of  the  holders  of  the  other  notes  may  be  deter- 
mined and  protected."^  But  if  the  complainant  holds  all  the  notes 
he  is  not  obliged  to  foreclose  for  all  of  them.  He  may  take  judgment 
in  the  foreclosure  suit  for  part  of  them,  and  for  those  not  included 
in  the  decree  of  foreclosure  he  may  recover  in  a  suit  at  law."^ 

When  the  notes  secured  by  a  mortgage  are  held  by  different  per- 
sons and  each  brings  a  foreclosure  suit,  the  actions  may  be  consoli- 
dated, and  the  holders  of  the  notes  may  have  separate  judgments."^ 

""  §§  606,  1577,  1591,  1700;   Grouse  28  N.  W.  221;  Dick  v.  Moon,  26  Minn. 

V    Holman,    19    Ind.     30;     Moffit    v.  30,  4  N.  W.  39;  Loomis  v.  Clambey, 

Roclie,      76      Ind.      75;      Studebaker  69  Minn.  469,  72  N.  W.  707. 
Manuf'.  Co.  v.  McCargur,  20  Neb.  500,        "^  Levert  v.  Redwood,  9  Port.  79; 

30  N.  W.  686;  Bressler  v.  Martin,  133  Hartwell  v.  Blocker,  6  Ala.  581. 
Ill  278   24  N.  E.  518.  "■  Langdon  v.  Paul,  20  Vt.  217. 

"^  Minor    v.    Hill,    58    Ind.    176,    26        "=  §  1458;  Benton  v.  Barnet,  59  N. 

Am.  Rep.  71,  per  Worden,  J.  H.  249.    Otherwise  in  California,  un- 

^0*  Rains  v.  Mann,  68  111.  264.  less  the   mortgage   provides  for  the 

"^  Minor   v     Hill,    58    Ind.    176,    26  foreclosure    upon     non-payment     of 

Am.  Rep.  71.  the   interest.     Brodribb    v.    Tibbets, 

""  Hanson  v.  Dunton,  35  Minn.  189,  58  Cal.  6. 


4.19  THE    BILL    OR   COMrLAINT.  [§§    1461,    1462. 

§  1461.     When  one  mortg^agor  is  not  liable  for  the  debt,  as,  for  ic- 

stance,  when  only  one  of  two  or  more  persons  who  have  joined  in  the 
execution  of  the  mortgage  has  executed  the  note,  or  incuiTed  any  per- 
sonal liability  for  the  payment  of  the'  debt,  or  when  a  wife  has  mort- 
gaged her  land  to  secure  her  husband's  note,  the  bill  should  properly 
pray  for  a  decree  of  sale  against  -tlie  persons  who  executed  the  mort- 
gage, and  for  a  personal  judgment  only  against  the  debtor.^^* 

§  1462.  The  bill  should  so  describe  the  mortgaged  property  that 
if  a  sale  is  ordered  the  officer  may  know  on  what  land  to  execute  the 
order  of  court."^  A  bill  which  contains  no  sufficient  description  of  the 
property,  and  refers  to  a  mortgage  annexed  which  in  turn  contains  no 
sufficient  description,  but  itself  refers  therefor  to  another  instrument, 
is  fatally  defective.^^*^  A  reference  to  the  record  of  another  deed  in 
which  the  property  is  correctly  described  is  sufficient.^^'^  A  cross-com- 
plaint seeking  foreclosure  of  a  mortgage  is  sufficient,  though  it  refers 
to  the  complaint  for  a  description. ^^^  It  is  generally  sufficient,  how- 
ever, to  describe  the  premises  as  they  appear  in  the  mortgage  itself.^''' 
And  though  the  description  in  the  mortgage  be  erroneous  in  some  par- 
ticular, yet,  if  the  rest  of  the  description  is  enough  to  enable  the  land 
to  be  located,  the  foreclosure  will  not  be  invalid  on  account  of  the  de- 
scription.^-" The  uncertainty  of  that  description  is  no  ground  for  re- 
fusing a  decree  of  sale,  though  it  may  affect  the  title  to  the  premises 
when  sold.^-^  If  the  description  be  correct  in  the  bill,  a  decree  entered 
by  default  cannot  be  avoided  by  showing  that  the  mortgage  as  re- 
corded misdescribed  the  premises. ^-^  If  a  bill  to  foreclose  a  mortgage 
upon  several  tracts  of  land  describe  some  of  them  sufficiently,  though 
others  be  insufficiently  described,  there  is  no  ground  for  demurrer  to 
the  entire  bill.^-" 

"'Rollins  V.  Forbes,  10  Cal.  299.  "''Graham  v.  Stewart,  68  Cal.  374; 

"^  Triplett  v.    Sayre,  3  Dana,  590;  German   Loan   Soc.   v.   Kern,   38  Or. 

Struble    v.    Neighbert,    41    Ind.    344;  232,  62  Pac.  788,  63  Pac.  1052. 
Magee    v.    Sanderson,    10    Ind.    261;         '="  Schoenwald  v.  Rosenstein,  5  N. 

Whittlesey   v.   Beall,   5   Blackf.   143;  Y.  Supp.  766. 

Davis   V.    Cox,   6   Ind.    481;    Cecil   v.        '^^  Tryon    v.    Sutton,    13    Cal.    490; 

Dynes,  2  Ind.  266;  Nolte  v.  Libert,  34  Whitney   v.    Buckman,    13   Cal.   536; 

Ind.    163;    White   v.    Hyatt,    40    Ind.  Howe  v.   Towner,   55   Vt.   315;    Ger- 

385;    Howe   v.    Towner,   55   Vt.   315;  man  Loan  Soc.  v.  Kern,  38  Or.  232,  62 

Lindsey  v.  Delano,  78  Iowa,  350,  43  Pac.  788,  63  Pac.  1052. 
N.  W.  218.  As  to  what  is  a  sufficient  descrip- 

""  Struble    v.    Neighbert,     41     Ind.  tion,  see  Hurt  v.  Blount,  63  Ala.  327; 

344;  Bmeric  v.  Tarns,  6  Cal.  155.  Hurt  v.  Freeman,  63  Ala.  335. 

"' Sepulveda    v.    Baugh    (Cal.),    16        For  a  case  of  incompatible  descrip- 

Pac.  223,  overruling  Crosby  v.  Dowd,  tion,  see  Schmidt  v.  Mackey,  31  Tex. 

61      Cal.      557;      Bailey   v.    Fanning  659. 
Orphan  School  (Ky.),  14  S.  W.  908.  '--  Dietrich  v.  Lang,  11  Kans.  636. 

"*  Loeb  V.  Tinkler,  124  Ind.  331,  24        ^-^  Rapp  v.  Thie,  61  Ind.  372. 
N.  E.  235. 


§    1-163.]  PORECLOSURE   BY   EQUITABLE   SUIT.  420 

A  description  in  the  mortgage  may  be  sufficient  to  convey  the  prop- 
erty as  against  the  mortgagor,  and  yet  be  insufficient,  unaided  by 
proper  averments  in  the  complaint,  to  authorize  a  decree  of  foreclosure 
and  sale.  Such  averments  cannot  aid  a  description  which  is  so  indefi- 
nite as  to  render  the  mortgage  void;  but  they  will  cure  a  description 
which  is  merely  insufficient,  and,  proper  evidence  being  introduced  to 
support  such  averment,  the  decree  may  specify  the  true  boundaries.^** 
In  a  bill  to  foreclose  a  mortgage  upon  certain  real  estate,  with  two 
mills,  and  all  "appurtenances  thereunto  belonging,"  an  allegation  that 
a  certain  milldam  and  water-power  are  appurtenant  to  said  mills  and 
real  estate,  sustained  by  admissions  by  the  defendant,  will  support  a 
judgment  that  the  mortgage  is  a  lien  upon  said  dam  and  water-power 
as  well  as  upon  the  real  estate  more  particularly  described.^-^ 

But  a  complaint  upon  a  promissory  note,  and  also  upon  the  mort- 
gage, may  be  sustained  for  the  purpose  of  a  judgment  upon  the  note, 
although  the  description  in  the  mortgage  be  insufficient  to  sustain  a 
judgment  for  foreclosure  and  sale.^-® 

§  1463.  May  omit  part. — Although  a  mortgage  cannot  be  the  sub- 
ject of  several  different  foreclosure  suits  with  reference  to  different 
tracts  embraced  in  it,  yet  if  part  of  the  land  has  been  sold  vmder  a  prior 
mortgage,  or  the  mortgagor's  title  to  a  part  of  it  fails  from  any  cause, 
or  he  has  released  a  part  from  the  operation  of  the  mortgage,  he  may 
omit  such  part  from  his  bill.^-'  In  like  manner  when  a  part  has  not 
been  released,  but  the  mortgagee  enforces  his  mortgage  upon  one  piece 
only,  he  thereby  waives  the  lien  upon  the  remainder  though  the  omis- 
sion was  unintentional.^-®  The  mortgage  cannot  be  foreclosed  piece- 
meal. The  mortgagor,  however,  if  he  still  owns  the  equity  of  redemp- 
tion, cannot  complain  of  the  omission,  although  there  be  a  deficiency 
for  which  a  personal  judgment  is  rendered  against  him.^-^ 

The  mortgagee  may  also  foreclose  upon  a  part  or  one  parcel  of  the 
mortgaged  property  if  he  seeks  for  no  judgment  against  the  mortgagor 
for  a  deficiency;  but  the  effect  of  his  so  doing  would  be  to  waive  his 
security  upon  the  omitted  part  of  the  property.^^" 

'-*  Halstead    v.    Lake    County,    56  "'  Sedam   v.   Williams,   4   McLean, 

Ind.    363;    Hannon    v.    Hilliard,    101  51 ;  Watson  v.  Dundee  M.  £:  T.  Co.  12 

Ind.  310;    Slater  v.  Breese,  36  Mich.  Oreg.  474,  8  Pac.  548. 

77;    Shepard    v.    Shepard,    36    Mich.  ^-*  Dooly   v.    Eastman,     28     Wash. 

173.  564,  G8  Pac.  1039. 

'"'Lanoue  v.   McKinnon,  19  Kans.  ^-' Mascarel  v.  Raffour,  51  Cal.  242; 

408.  Barley  v.  Roosa,  13  N.  Y.  Supp.  209. 

^^'Bayless  v.  Glen,  72  Ind.  5;   Nix  ^-"  Bull  v.  Coe,  77  Cal.  54,  18  Pac. 

v.  Williams,  110  Ind.  234,  11  N.  E.  36.  808. 


421  THE    BILL   OR    CO:\IPLx\IXT.  [§    1464. 

§  1464.  Reforming. —  Where  by  mistake  a  piece  of  land  not  in- 
tended to  be  mortgaged  is  included  in  the  description,  the  mortgage 
may  be  foreclosed  as  to  the  other  land  without  first  reforming  the 
deed.^^^  But  if  the  premises  are  misdescribed,  so  that  the  instrument 
must  be  reformed  before  proceeding,  the  equity  jurisdiction  of  the 
court  is  broad  enough  to  accomplish  this  in  the  same  suit,  whicli  may 
afterwards  proceed  to  foreclosure.^^-  A  bill  asking  for  reformation 
and  foreclosure  may  be  amended  so  as  to  ask  for  reformation,  and  the 
removal  of  a  cloud  on  complainant's  title  as  mortgagee.^^^  The  mort- 
gage may  be  reformed  not  only  in  the  matter  of  the  description,  but 
in  any  other  way,^^*  such  as  supplying  the  omission  of  words  of  inher- 
itance, so  that  the  estate  shall  be  one  in  fee  instead  of  a  life  estate  ;^^^ 
or  such  as  a  mistake  in  the  condition,  the  mortgage  containing  a  pro- 
vision  making  it  suljject  to  foreclosure  on  a  failure  to  pay  interest  an- 
nually, when  the  parties  had  agreed  that,  the  mortgage  should  not  be 
foreclosed  for  any  default  in  interest.^^®  In  New  Jersey,  however,  it 
is  held  that  a  mortgage  cannot  be  reformed  or  corrected  in  a  fore- 
closure suit,  Init  that  the  only  remedy  is  by  a  cross-bill  for  that  pur- 
pose."^ A  mistake  in  the  description  first  made  in  the  mortgage,  and 
afterwards  carried  all  through  the  proceedings  and  into  the  sheriff's 
deed,  may  afterwards,  by  a  proceeding  i"n  equit}^,  be  reformed  in  all  the 
instruments  so  as  to  make  them  conform  to  the  intention  of  the  par- 
ties.^^^  A  mistake  in  the  mortgage  carried  into  the  decree  of  foreclos- 
ure may  l>e  corrected  by  reforming  the  mortgage  and  foreclosing 
anew.^^^  When  reformed,  the  lien  attaches  to  the  property  intended 
to  be  cover-ed  by  it  from  the  date  of  the  execution  of  the  mortgage,  and 

^^  Conklin    v.    Bowman,      11      Ind.  "'  Hawkins  v.  Pearson,  96  Ala.  369, 

254.     And  see  Andrews  v.  Gillespie,  11  So.  .304. 

47   N.   Y.   487;    Gillespie  v.   Moon,  2  ^"  Hendon  v.  Morris,  110  Ala.  106, 

Johns.  Ch.  585,  7  Am.  Dec.  559.  20  So.  27. 

''- §§    97-99;    Bright    v.    Buckman,  "' Durant  v.  Crowell,  97  N.  C.  367, 

39  Fed.  243;  Davis  v.  Cox,  6  Ind.  481;  2  S.  E.  541. 

Halstead    v.    Lake    County,    56    Ind.  '''  Gas&ert  v.  Black,  11  Mont.  185, 

363;  Barnaby  v.  Parker,  53  Ind.  271;  27    Pac.    791.      And    see    Barton    v. 

Axtel  V.  Chase,  83  Ind.  546;  Alexan-  Sackett,  3  How.  Pr.  358;  Wemple  v. 

der    V.    Rea,    50    Ala.    450;    Hendon  Stewart,  22  Barb.  154. 

V.    Morris.   110   Ala.   106,   20   So.    27;  "'Graham   v.   Berryman,   19  N.   J. 

Clement  v.  Draper,  108  Ala.  211,  19  Eq.  29;  French  v.  Griffin,  18  N.  J.  Eq. 

So.   25;    Clement  v.   Pearce,  63   Ala.  279. 

284;  San  Jose  Ranch  Co.  v.  San  Jose  "' Quivey   v.    Baker,    37    Cal.    465; 

L.    &  W.    Co.    132   Cal.   582,    64   Pac.  Zingsem  v.  Kidd,  25  N.  J.  Eq.  516. 

1097;     McCrary    v.    Austell,    46    Ga.  "•*  McCasland  v.   .^tna  L.   Ins.  Co. 

450;  McKay  v.  Wakefield,  63  Ind.  27;  108  Ind.  130,  9  N.  E.  119;  Conyers  v. 

Citizens'   Nat.   Bank  v.   Dayton,   116  Mericles,    75    Ind.    443;    McGehee    v. 

111.    257;    Noland   v.    State,   115   Ind.  Lehman,    65    Ala.    316;    Bnrkham   v. 

529,   18-  N.   E.   26;    Palmer  v.  Wind-  Burk,   96  Ind.   270:    Jones  v.   Sweet, 

rom.  12  Neb.  494;   Keys  v.  Lardner,  77  Ind.   187;    Sanders  v.   Farrell,  83 

59  Kans.  545.  53  Pac.  758,  55  Kans.  Ind.  28. 
331,  40  Pac.  644. 


§    1465.]  FORECLOSURE   BY   EQUITABLE    SUIT.  423 

not  merely  from  the  date  of  th-e  reformation.^'**'  If  the  description  in 
the  mortgage  deed  contains  a  latent  ambiguity  as  to  the  boundaries,  the 
court  may  in  the  foreclosure  suit  determine  them.^"'^ 

A  mistake  in  a  mortgage  may  be  corrected,  and  the  mortgage  re- 
formed and  foreclosed  anew,  after  a  foreclosure  decree,  and  even  after 
a  sale  under  the  decree.^*-  But  where  the  mistake  consists  in  describ- 
ing other  land  than  that  which  the  owner  intended  to  mortgage, 
though  the  land  described  belonged  to  him  and  the  mortgage  is  fore- 
closed and  the  land  sold  for  a  sum  sufficient  to  pay  the  debt,  the  mort- 
gage will  not  be  reformed  for  the  purpose  of  a  new  foreclosure,  in 
order  to  include  the  land  originally  intended,  since,  the  debt  being 
satisfied,  there  is  no  ground  for  such  relief.^*^ 

A  mortgagee  who  has  purchased  the  property  at  the  foreclosure  sale 
cannot  ask  for  a  reformation  of  the  mortgage  after  he  has  assigned  his 
certificate  of  purchase,  for  such  assignment  passes  all  his  title  to  the 
mortgaged  land  and  to  the  debt  secured.^** 

Where  a  bill  to  foreclose  a  mortgage  alleges  a  mistake  in  the  trans- 
position of  the  names  of  the  parties  in  the  commencement,  but  does 
not  ask  specifically  for  its  reformation,  and  the  decree  finds  the  fact  of 
the  mistake,  but  does  not  in  express  terms  order  its  correction,  but 
orders  a  sale,  the  mortgage  is  thus  treated  as  already  corrected;  and 
this  correction  may  be  done  under  the  general  prayer.^*^  A  clerical 
error  in  a  name  does  not  require  reformation.^*^ 

§  1465.  Record. —  In  a  bill  against  the  mortgagor  it  is  not  neces- 
sary to  aver  that  the  mortgage  is  recorded,  for  he  is  liable  without  any 
record  ;^*^  or  to  aver  that  he  has  not  conveyed  away  the  land,  for  he 

"°  Adams  V.  Stutzman  (Ohio,  1878),  may    be    a    reformation    even    after 

7  Am.  L.  Record,  76.  sale.      In    such   a   case    there   i&  no 

"^  Doe  v.  Vallejo,  29  Cal.  385.  merger  of  the  mortgage,  and  it  cer- 

""^  Conyers  v.  Mericles,  75  Ind.  443;  tainly  cannot  be  said   there  is  any 

Armstrong    v.    Short,    95    Ind.    326;  satisfaction    of    the    debt,    for    the 

McCasland  v.   .Etna  L.   Ins.   Co.   108  purchaser   acquires   nothing   by   the 

Ind.  130,  9  N.  E.  119;  Curtis  v.  Good-  sale.     Indeed  the  sale  is  a  mere  nul- 

ing,  99   Ind.  45;   Jones  v.   Sweet,  77  lity." 

Ind.    187;    Rav   v.    Ferrell,    127    Ind.  "=  Ray  v.  Ferrell^  127  Ind.  570,  27 

570,  27  N.  E.  159.     In  this  case  l-ast  N.  E.  159. 

cited,    McBride,    J.,    said:       "These  '"  Whipperman  v.   Dunn,  124   Ind. 

authorities,    and    many    others    that  349,  24  N.  E.  166. 

might  be  cited,  settle  the  proposition  "''  Beaver   v.    Slanker,    94    111.    175, 

that  when,  by  reason  of  the  mutual  177. 

mistake  of  the  parties,  the  descrip-  ''^  Germantown  Ins.  Co.  v.   Dhein, 

tion  of  the  mortgaged  premises  is  so  57  Wis.  521,  15  N.  W.  840. 

defective    that   no   title   would    pass  "'Snyder  v.  Bunnell,  64  Ind.  403; 

under  sale,  or  when,  bv  such  mutual  Hoes  v.  Boyer,  108  Ind.  494;  Mann  v. 

mistake,    land    is    described    which  State,    116   Ind.    383,   19   N.   E.    181; 

does  not  belong  to  the   mortgagor.  Downing  v.   L.e  Du,  82  Cal.   471,  23 

instead   of   land  which  does,  there  Pac.  202. 


423  THE   BILL   OR    COMPLAINT.  [§    1-16G. 

is  a  proper  party  in  that  case.^'*^  But  if  it  be  against  a  purchaser  from 
the  mortgagor,  according  to  the  practice  in  some  States,  the  bill  should 
allege  either  that  the  mortgage  was  duly  recorded,  or  that  the  pur- 
chaser bought  with  notice  of  it,^***  or  assumed  the  payment  of  it;^'^" 
but  in  others  it  is  held  that  this  is  unnecessary;  that  it  is  purely  a 
matter  of  defence ;  that  the  defendant  purchased  in  good  faith  without 
notice,  and  he  must  set  this  up  for  himself.^^^ 

An  averment  that  the  mortgage  was  recorded  within  ninety  days 
after  its  execulion,  without  any  further  averment  that  it  was  properly, 
duly,  or  legally  recorded,  or  statement  where  it  was  recorded,  is  in- 
sufficient; and  the  memorandum  or  certificate  of  the  recorder  on  the 
copy  of  the  mortgage  filed  with  the  complaint  and  therein  referred  to, 
being  no  part  of  the  complaint,  does  not  cure  the  defect.^'"'-  But  a 
failure  to  allege  the  recording  of  the  mortgage,  or  a  notice  to  the  pur- 
chaser of  its  existence,  is  cured  by  proof  made  of  the  one  fact  or  the 
other  without  objection, ^^^ 

§  1466.  The  debt  secured  by  the  mortgage  must  be  set  out  and 
described.  An  indebtedness  must  be  alleged  as  the  foundation  of  the 
mortgage.^^*  If  the  note  or  bond  secured  by  the  mortgage  be  set  forth, 
it  is  not  necessary  to  allege,  or  if  alleged  to  prove,  the  consideration  or 
debt  for  which  this  was  given.^^^  Although  the  note  does  not  corre- 
spond with  that  described  in  the  mortgage,  as  where  this  refers  to  a 
note  payable  in  one  year,  whereas  the  note  was  payable  in  sixty  days, 
under  an  agreement  for  renewals  for  a  year,  if  the  complaint  fully  ex- 
plains this  misdescription,  and  that  the  mortgage  was  really  designed 
to  secure  this  note,  it  states  a  good  cause  of  action.^^''  A  complaint 
which  set  out  an  indebtedness  of  the  mortgagors  upon  certain  notes  in- 
dorsed by  them  and  discounted  by  the  plaintiffs,  and  alleged  that  the 
mortgage  was  given  to  secure  the  payment  of  a  bond  for  the  amount  of 
the  indebtedness,  the  payment  of  which  was  thereby  considerably  ex- 
tended, and  that  the  mortgagors  had  failed  to  comply  with  the  condi- 
tions of  the  bond,  was  held  to  allege  a  sufficient  cause  of  action."^ 

"«  Faulkner    v.    Overturf.    49    Ind.  "^  Lyon  v.  Perry,  14  Ind.  515. 

265;  Perdue  v.  Aldridge,  19  Ind.  290.  ^^^  Nye   v.    Gribble,   70  Tex.   458,   8 

""Lyon    V.    Perry,    14    Ind.    515;  S.  W.  608;  Bank  v.  Navarro,  22  Fla. 

Peru    Bridge    Co.    v.    Hendricks,    18  474. 

Ind.  11;  Magee  V.  Sanderson,  10  Ind.  ^^^  Day    v.    Perkins,    2    Sandf.    Ch. 

261;    Culph  v.  Phillips,  17  Ind.  209;  359;  Brown  v.  Kahnweiler,  28  N.  J. 

Faulkner   v.    Overturf,   49    Ind.    265;  Eq.   311;    Farnum  v.  Burnett,  21  N. 

Stevens    v.    Campbell,    21    Ind.    471;  J.  Eq.  87. 

Hiatt  V.  Renk,  64  Ind.  590.  "<=  Merchants'    Nat.    Bank   v.    Ray- 

^"'  Scarry  v.  Eldridge,  63  Ind.  44.  mond,  27  Wis.  567. 

'"  Stacy  V.  Barker,  1  Sm.  &  M.  Ch.  '-  Troy  City  Bank  v.  Bowman,  43 

112;  Gallatian  V.  Cunningham,  8  Cow.  Barb.  639,  19  Abb.  Pr.  18;   Matteson 

361,  374.  V.   Matteson,  55  Wis.  450,  13  N.  W. 

"-Faulkner    v.    Overturf,    49    Ind.  463. 
265. 


§  1467.]         FORECLOSURE  BY  EQUITABLE  SUIT.  424 

If  the  condition  of  a  mortgage  be  that  a  third  person  shall  account 
to  the  mortgagee  for  all  goods  sold  by  such  third  person  as  the  mort- 
gagee's agent,  a  bill  to  foreclose  the  mortgage  alleging  that  the  agent 
had  sold  goods  and  had  not  accounted  for  the  proceeds,  and  was  in- 
debted to  the  mortgagee  in  a  certain  amount  which  the  mortgagor  had 
not  paid,  is  good,  without  first  establishing  by  suit  at  law  the  amount 
of  the  agent's  indebtedness.^^^ 

If  the  indebtedness  is  one  resting  upon  mutual  accounts,  or  is  an  in- 
debtedness which  it  is  understood  the  mortgagor  is  to  pay  by  his  labor, 
the  account  of  which  is  kept  by  the  mxartgagee's  agent,  the  complain- 
ant should  make  out  a  clear  case  of  indebtedness,  and  should  in  evi- 
dence of  this  make  a  full  statement  of  the  accounts,  especially  if  con- 
siderable time  is  allowed  to  pass  without  attempting  to  enforce  pay- 
ment.^"® 

§  1467.  Keference  to  determine  amount  of  debt. — It  is  the  prac- 
tice for  the  courts,  in  New  York,  in  case  the  bill  is  taken  as  confessed, 
or  the  right  of  the  plaintiff  is  admitted  by  the  answer,  to  order  a  refer- 
ence as  a  matter  of  course  to  determine  the  amount  due  upon  the 
mortgage  debt.""  According  to  the  practice  of  some  courts,  such  a 
reference  may  be  had  whether  the  defendant  has  answered  or  not."^ 
The  reference  generally  embraces  other  matters  also,  as  whether  the 
premises  can  be  sold  in  parcels,  or  whether  there  are  equities  requiring 
the  sale  to  be  made  in  a  particular  order;  but  the  referee  is  always 
limited  in  his  exainination  to  the  subjects  specified  in  the  order."^  He 
should  report  the  facts,  and  not  merely  his  conclusions."^  Upon  the 
coming  in  of  the  report,  exceptions  may  be  taken  to  it,  otherwise  it  is 
confirmed."*  A  final  order  of  sale  before  the  filing  of  the  report  is 
erroneous  j"^  as  it  is  also  when  made  after  the  filing  of  it,  and  l^ef ore 
it  is  confirmed  or  set  down  for  hearing."^  The  decree  is  founded  upon 
the  report. 


167 


1^' Haskell  V.  Burdette,  32  N.  J.  Eq.  159;   Gregory  v.   Campbell,  16  How. 

422.  Pr.  417;  Kelly  v.  Searing  4  Abb.  Pr. 

150  Webber  v.  Ryan,  54  Mich.  70,  19  354. 

N  W   751;  Lashbrooks  v.  Hatbeway,  "^McCrackan  v.  Valentine,  9  N.  Y. 

52  Mich.  124,  17  N.  W.  723.  42. 

^""Corning  v.  Baxter,  6  Paige,  178;  «=  Anon.  Clarke,  423;  Security  Fire 

Chamberlain  v.   Dempsey,   36  N.  Y.  Ins.  Co.  v.  Martin,  15  Abb.  Pr.  479. 

144-    Anon.  3  How.  Pr.  158.  ^"  Swarthoiit    v.    Curtis,    4    N.    Y. 

1"^  Bassett    v.     McDonel,    13    Wis.  415,  5  How.  Pr.  198. 

444-    Seville   v.    Mcintosh,    41   Miss.  >'- Graham  v.  King,  15  Ala.  5G3. 

516;    Guy   v.    Franklin,    5    Cal.    416;  i""  Dean    v.    Coddington,    2    Johns. 

Bla'ckledge    v.    Nelson,    1    Dev.    Eq.  Ch.  201. 

422.  '"Pogue  V.  Clark,  25  111.  351;  Sims 

As  to  duties  of  referee  generally,  v.  Cross,  10  Yerg.  460. 
see  Wolcott  v.  Weaver,  3  How.  Pr. 


425  'J^HE  BILL  Oil  COMPLAINT.  [§§    14.G8-14:G9a. 

§  1468.  A  renewal  of  the  note  should  be  alleged.  The  bill  should 
contain  all  the  allegations  necessary  to  cover  tlie  facts  intended  to  be 
introduced  in  evidence,  otherwise  the  evidence  will  be  inadmissible. 
Therefore,  where  a  bill  to  foreclose  a  mortgage  given  to  indemnify  an 
indorser  of  a  note  alleged  the  indorsement  of  a  note  of  a  certain  date 
and  amount  for  the  mortgagor,  under  the  mortgage,  but  did  not  allege 
that  the  note  was  a  renewal  of  a  former  one,  it  was  held  that,  although 
the  mortgage  secured  the  liability  on  the  renewed  note  in  the  same 
manner  as  it  secured  the  liability  on  the  original  one,  yet,  without 
amending  the  bill,  evidence  to  prove  the  note  described  in  the  bill  to 
have  been  given  in  renewal  of  a  former  one  was  inadmissible.^*^* 

§  1469.  Proof  of  note. —  [t  is  no  objection  to  the  introducing  of  a 
note  in  evidence  that  it  was  not  fully  or  perfectly  described  in  the 
mortgage,  the  words  "or  order"  in  the  note  being  omitted  in  the  de- 
scription.^"'* Although  the  mortgage  note  be  imperfectly  described  in 
the  complaint,  if  it  be  filed  with  the  complaint,  and  alleged  to  be  the 
same  note  mentioned  in  the  mortgage,  and  on  the  trial  it  be  proved 
to  be  such,  the  defective  description  is  cured.^^"  The  fact  that  th-e 
note  offered  in  evidence  corresponds  in  date,  names,  and  amount  with 
that  recited  in  the  mortgage  deed,  is  priina  facie  evidence  that  it  is  the 
note  secured.^'^^  Where  one  seeks  as  assignee  to  foreclose  a  mortgage 
securing  a  non-negotiable  note,  he  should  give  evidence  of  title  beyond 
that  derived  from  the  mere  possession  of  the  note.^^^ 

§  1469a.  The  note  or  bond  must  be  produced,  or  a  good  reason 
given  for  its  non-production.^^^  Failure  to  produce  the  note  or  bond 
where  one  was  given  is  evidence  of  the  non-existence  or  discharge  of 
the  mortgage  debt,  and  when  unexplained  is  conclusive  against  the 
mortgagee's  right  to  recover.^'*     If  the  mortgage  does  not  recite  any 

"^  Boswell  V.  Goodwin,  31  Conn.  74,  v.    Titman,   35    111.   310;    Burgv/in   v. 

81,  81  Am.  Dec.  169.     See  Schumpert  Richardson,   3   Hawks  203;    Dowden 

v.'Dillard,  55  Miss.  348.  v.  Wilson,  71  111.  485;  Hungerford  v. 

^'''' Hough  V.  Bailey,  32  Conn.  288;  Smith,   34   Mich.   300;    Schumpert  v. 

Boyd  V.  Parker,  43  Md.  182.  Dillard,  55  Miss.  348;  George  v.  Lud- 

i'«Dorsch    V.    Rosen  than,    39    Ind.  low,    66    Mich.    176,    33    N.    W.    169; 

209;  Cleavinger  v.  Beath,  53  Ind.  172.  Norris  v.  Kellogg,  7  Ark.  112;  Field 

And  see  Hadley  v.  Chapin,  11  Paige,  v.   Anderson,  55   Ark.   546,  18  S.  W. 

245.  1038.    A  complaint  which  recites  the 

'"  Steinbeck  v.  Stone,  53  Tex.  382;  full  names  of  the  makers  of  the  note 

Cov/lev  V.  Shelby,  71  Ala.  122;  Mixer  secured    sufficiently    identifies    notes 

V.  Bennett,  70  Iowa,  329;    Bailey  v.  which  are  signed  by  makers'  initials 

Fanning    Orphan    School    (Ky.),    14  for    their   given    names.      Humboldt 

S.  W.  908.  Sav.  &  L.  Soc.  v.  Burnham,  111  Cal. 

"'Lashbrooks     v.     Hatheway,     52  343,  43  Pac.  971. 
Mich.  124,  17  N.  W.  723.  '''Bergen  v.  Urbahn,  83  N.  Y.  49; 

'■3  Beers  v.   Hawley,   3   Conn.   110;  Merritt  v.  Bartholick,  36  N.  Y.  44. 
Lucas  v.  Harris,  20  111.  165;   Moore 


§  14G9a.]        FORECLOSURE  BY  EQUITABLE  SUIT.  426 

note  or  bond,  and  the  mortgagor  testifies  he  has  it  in  his  possession, 
but  fails  to  produce  it,  the  inference  that  no  bond  or  note  was  given 
is  justified."^  The  plaintiff  need  not  give  evidence  of  a  fact  alleged 
in  his  pleading,  and  not  denied  in  the  answer ;  and  therefore,  if  the 
answer  does  not  deny  the  execution  of  the  bond  and  mortgage,  but 
simply  pleads  payment,  plaintiff  is  not  obliged  to  produce  the  bond 
in  order  to  entitle  him  to  recover."''  The  possession  of  the  mortgage 
alone  furnishes  no  conclusive  evidence  of  the  ownership  of  the  bond 
or  note  which  represents  the  debt  secured,  as  this  may  have  been  trans- 
ferred to  another,  who  would  be  entitled  to  the  mortgage  security.  But 
although  the  mortgage  may  recite  the  existence  of  a  bond  or  note,  it 
may  be  shown  that  no  bond  or  note  was  ever  given ;  and  if  the  mort- 
gage itself  expressly  admits  the  indebtedness  and  contains  a  covenant 
to  pay  it,  the  non-production  of  the  bond  or  note  is  then  sufficiently 
accounted  for,  and  furnishes  no  ground  for  denying  a  decree  of  fore- 
closure/" especially  if  no  exception  is  taken  to  the  absence  of  the 
bond."^  Although  the  note  representing  the  debt  be  declared  void, 
because  of  a  material  alteration  of  it  hj  the  holder,  the  mortgage  may 
nevertheless  be  enforced  if  the  terms  and  amount  of  the  debt  suffi- 
ciently appear  in  that  instrument."''  The  fact  that  the  note  is  in  the 
possession  of  the  defendant  is  a  good  reason  why  the  plaintiff  should 
not  produce  it  in  evidence.  If  in  such  case  it  contains,  by  way  of  in- 
dorsement or  otherwise,  anything  to  the  advantage  of  the  defendant,  he 
may  avail  himself  of  it  by  offering  the  note  in  evidence.^^"  If  no  per- 
sonal judgment  is  sought,  the  recitals  in  the  mortgage,  without  pro- 
ducing the  note,  are  sufficient  to  authorize  a  foreclosure  of  the  mort- 
gage simply,  according  to  some  authorities,^  ^^  though  by  others  re- 
citals without  the  note  are  not  sufficient  unless  the  absence  of  the  note 
is  accounted  for.^^^  In  a  suit  against  a  subsequent  purchaser,  after 
the  death  of  the  mortgagor,  and  nearly  twenty  years  after  the  maturity 
of  the  mortgage,  a  very  satisfactory  showing  of  a  continuing  obligation 
is  required,  in  the  absence  of  the  securities  themselves.^^^ 

Secondary  evidence  of  the  contents  of  the  note  and  mortgage  is  in- 

'"Parkhurst   v.    Berdell,    5    N.    Y.  "^  Smith  v.  Smith,  27  S.  C.  166,  3 

Supp.  328,  24  N.  Y.  St.  430.  S.  E.  78;   Plyler  v.  Elliott,  19  S.  C. 

'•«  Anderson   v.    Culver,   127   N.   Y.  257. 

377    28  N    E.   32,  affirming  6  N.   Y.  ^^^  Hawes  v.  Rhoads,  34  Ind.  79. 

S^^pp    181                                "  i«^  Arnold  v.   Stanfield,  8  Ind.  323; 

'•■  Munoz  V.  Wilson,  111  N.  Y.  295,  Hawes  v.  Rhoads,  34  Ind.  79. 
19  St    272.  18  N.  E.  Rep.  855.  affirm-  ^*- See  cases  cited  above,  and  Ben- 
ing  42  Hun.  656;  Goodhue  v.  Berrien,  nett    v.    Taylor,    5    Cal.    502.      The 
2   Sandf.   Ch.   630;    Vaughn  v.   Tate,  reason    is    that    the    mortgage    is    a 
Tenn 36  S    W    748.  mere  incident  to  the  debt. 

^^»  MotRtt  V.  Maness,  102  N.  C.  457,  '''  Hungerford   v.   Smith,   34   Mich. 

9  S.  E.  399.  300. 


4.27  THE   BILL   OR    COMPLAIXT.  [§§    1470,    1471. 

admissible  until  proof  is  made  of  the  loss  or  destruction  of  the  orig- 
inals,^** 

Usually  the  introduction  and  proof  of  the  mortgage  and  the  note  or 
bond  secured  makes  a  prima  facie  case  for  the  complainant,  and  the 
burden  is  upon  the  defendant  to  prove  the  defences  set  up  in  his  an- 
swer. ^^^ 

Where  it  is  provided  that  no  proceedings  to  foreclose  a  mortgage  by 
equitable  suit  shall  be  had,  in  case  proceedings  at  law  have  been  com- 
menced to  collect  the  mortgage  debt,  the  introduction  of  the  note  and 
mortgage  in  evidence  is  not  sufficient  to  sustain  an  allegation  to  that 
effect.^*^ 

§  1470.  It  is  not  generally  necessary  to  prove  payment  of  the 
consideration  money,  unless  this  is  put  in  issue  by  the  pleadings,  as 
the  deed  itself  is  sufficient  evidence  of  it.^^^ 

A  mortgage  made  without  consideration,  and  under  a  promise  never 
performed,  is  void  for  all  purposes  as  against  the  mortgagor,  whether 
in  the  hands  of  the  mortgagee  or  of  a  third  person  who  has  taken  it  as 
security  without  notice  of  the  want  of  consideration.^®^  The  assignee 
could  only  take  what  the  mortgagee  could  give  him,  and  that  was 
nothing  at  all.  He  can  stand  in  no  better  situation  than  the  mort- 
gagee himself ;  and  his  only  remedy  is  against  the  mortgagee. 

§  1471.     The  bill  must  show  that  a  right  of  action  has  accrued. ^^® 

The  right  of  action  to  foreclose  a  mortgage,  in  general,  accrues  upon 
any  breach  of.  the  condition.  If  there  are  several  breaches,  it  is  neces- 
sary to  allege  and  prove  only  one ;  and  if  several  are  alleged,  it  is  only 
necessary  to  prove  one  to  be  entitled  to  a  decree.^^"  If  the  mort- 
gagee's right  to  the  money  secured  by  the  mortgage  is  expressly  made 
dependent  upon  his  complying  with  a  certain  requirement,  as,  for  in- 
stance, the  perfecting  of  the  title  in  some  particular,  the  bill  to  fore- 
close the  mortgage  must  distinctly  allege  the  performance  of  such  con- 
dition precedent."^  If  the  mortgage  debt  is  payable  upon  demand, 
the  mortgagee  may  proceed  at  any  time  to  foreclose,  and  need  not 
make  or  allege  a  previous  demand  ;^^^  and  although  the  interest  has 

"*  Dowden  v.  Wilson,  71  111.  485.  ""  What  averments  sufficient,  Lud- 

"5  Boudinot  v.  Winter,  190  111.  394,  dy   v.    Pavkovitch,    137   Cal.    284,    70 

60  N.  E.  5.53.  Pac.  177. 

'^'^  Woolworth  V.  Sater,  63  Neb.  418,  ""  Beckwith  v.  Windsor  Manuf .  Co. 

88  N.  W.  682.  14     Conn.     594,     602;     Canandarqua 

'"§§   610,  613;    Minot  v.  Eaton,  4  Academy    v.    McKechnie,    90    N.    Y. 

L.  J.  Ch.  134.  618. 

^'^'^  Parker   v.    Clarke,   30  Beav.    54.  "'  Curtis  v.  Goodenow,  24  Mich,  18. 

The  mortgage  in  this  case  was  given  "-  See  chapter  xxv. ;  Gillett  v.  Bal- 

by  a  person  in  prison,  under  prom-  com,   6  Barb.   370;    Bolman   v.   Loh- 

ises    to    release    him,    which    were  man,  79  Ala.  63. 
never  realized. 


§  1473.]         FORECLOSURE  BY  EQUITABLE  SUIT.  428 

been  regularly  paid/^^  if  no  time  of  payment  be  limited  in  a  mort- 
gage, it  is  payable  within  a  reasonable  time/^*  and  generally  would 
be  regarded  as  due  upon  demand.  If  the  mortgage  secures  a  debt  al- 
ready due,  and  it  specifies  no  time  of  payment,  it  may  be  foreclosed 
at  any  time.^^^ 

It  is  no  valid  defence  to  the  foreclosure  of  a  mortgage  containing  a 
clause  making  the  principal  sum  due  in  case  of  default  in  paying  the 
interest  for  a  certain  time  after  it  is  due,  that  the  defendant  was  un- 
able to  find  the  holder  of  the  mortgage  until  after  the  time  for  pay- 
ing the  interest  had  passed,  unless  the  answer  alleges  fraud  on  the 
part  of  the  plaintiff  to  prevent  the  payment  of  interest.^^''  The  court 
will  not  stay  the  suit  when  such  default  of  the  whole  debt  occurs 
through  the  mere  negligence  of  the  mortgagor."^ 

§  1472.     A  bill  to  foreclose  a  mortgage  given  to  indemnify  a  surety 

must  allege  a  payment  by  the  surety  on  account  of  the  liability,^^''  and 
the  precise  amount  paid;^^'*  though,  if  the  aggregate  sum  paid  be 
stated,  it  is  not  necessary  that  the  several  sums  constituting  this  should 
be  set  out  in  detail. ^^^  The  contract  of  indemnity  is,  however,  some- 
times broken  when  there  is  a  failure  to  do  a  specific  act,  or  when  a  lia- 
bility is  incurred.^'*^  Where  the  indemnifying  mortgage  contains  an 
express  agreement  of  the  mortgagor  to  pay  the  debt  descriljed,  upon  his 
failure  to  do  so  when  his  liability  is  ascertained  and  the  debt  is  due, 
the  mortgagee  may  at  once,  without  having  paid  the  debt,  maintain  an 
action  for  the  foreclosure  of  the  mortgage,  and  recover  as  damages 
the  total  probable  loss.^°- 

^"^  Austin  V.  Burbank,  2  Day,  474,  2  plied  to  the  debt.     Hellams  v.   Ab- 

Am    Dec    119.  ercrombie,  15  S.   C.   110;    Bellune  v. 

1"' Trieijert  V    Burgess,  11  Md.  452.  Wallace,   2   Rich.    L.    80;    Norton  v. 

1"^  Wright  V.  Shumway,  1  Biss.  23.  Reid,    11    S.    C.    593;     McDaniel    v. 

'""Dwight  V    Webster,  32  Barb.  47,  Austin,   32   S.   C.   601,   11   S.   E.   350. 

10    Abb    Pr.    128,    19    How.    Pr.    349.  See  §§  379-387. 

And  see  Rosseel  v.  Jarvis,  15  Wis.  ••'■■' Seely   v.    Hills,   44   Wis.   484,   7 

571  Reporter,  312. 

'"  Noyes  v.  Clark,  7  Paige,  179,  32  "">  Dye  v.  Mann,  10  Mich.  291.    See, 

Am.  Dec.  620.  however,  Shepard  v.  Shepard,  3  Conn. 

^'■-^Shepard  v.  Shepard,  6  Conn.  37;  37. 

Lathrop   v.    Atwood,    21    Conn.    117;  ==°i  Gilbert  v.  Wiman,  1  N.  Y.  550, 

Collier  v  Ervin   2  Mont.  335;  Forbes  49  Am.  Dec.  359;  Brower  v.  Buxton, 

V.  McCoy,  15  Neb.  632,  20  N.  W.  17;  101  N.  C.  419,  8  S.  E.  116. 

Gregory    v     Hartley,    6    Neb.    356;  ^"^  Malott    v.    Goff,    96    Ind.    496; 

Stout  v    Folger,  34  Iowa,  71,  74,  11  Loehr  v.   Colborn,  92   Ind.   24;    Dur- 

Am    Rep.  138.     In  South  Carolina  it  ham  v.  Craig,  79  Ind.  117 ;  Bodkm  v. 

is  well  settled  that,  after  the  prin-  Merit,  86  Ind.  560;  Reynolds  v.  Shirk, 

cipal    debtor    has    made    default    of  98     Ind.     480;     Catterlm     v.      Arm- 

pavment,    the    surety    may    enforce  strong,  101  Ind.  258;  Wilson  v^  Stil- 

payment  of  a  mortgage  given  to  se-  well,  9  Ohio  St.  467,  75  Am.  Dec.  477. 
cure  him,  and  have  the  money  ap- 


429  THE    BILL   OR   COMPLAINT.  [§    1473. 

8  1473.  An  allegation  in  the  bill  that  a  person  made  a  defendant 
has,  or  claims  to  have,  a  lien  on  the  premises,  which,  if  it  exists,  is 
subsequent  to  the  plaiiitifr's  mortgage,  sufficiently  shows  that  he  is  a 
proper  party;  and  such  allegation  is  not  bad  on  demurrer  as  stating 
no  cause  of  action  against  him.-"^  It  is  not  necessary  to  describe  the 
interest  which  each  defendant  has  or  claims  to  have  in  the  mortgaged 
property.^***  What  his  interest  in  the  property  may  be  is  only  impor- 
tant in  determining  the  rights  to  the  surplus.^"^  Though  this  general 
allegation  of  interest  is  held  sufficient,  it  is  also  the  practice  to  allege 
the  nature  of  the  interest  of  each  subsequent  incumbrancer,  as  that 
he  claims  to  have  an  incumbrance  by  mortgage,  the  date  and  record 
of  which  are  given,  or  by  judgment  entered  at  such  a  date.^°^ 

If,  in  an  action  by  a  junior  mortgagee  against  several  defendants, 
the  complaint  contains  such  general  allegation  of  interest,  and  one  of 
the  defendants  is  a  senior  mortgagee  who  also  holds  a  judgment  lien 
junior  to  the  plaintiff's  mortgage,  and  the  complaint  further  alleges 
"that  if  any  such  interest,  lien,  or  claim  exists,  ...  it  is  junior  and 
subordinate  to  the  lien  of  said  mortgage,"  and  the  senior  mortgagee 
fails  to  plead  his  prior  mortgage,  and  it  is  adjudged  that  the  mort- 
gage sued  on  is  senior  to  any  lien  held  by  any  of  defendants,  such  judg- 
ment estops  the  senior  mortgagee  subsequently  to  assert  his  right 
Tinder  his  mortgage.^'^'^ 

Where  one  made  a  defendant  in  a  foreclosure  suit,  as  claiming  some 
interest  in  the  land  which  accrued  subsequently  to  the  lien  of  the 
mortgage,  answers  and  proceeds  to  trial,  he  cannot,  after  the  plaintiff 
has  made  out  a  prima  facie  case  for  foreclosure  and  rested,  for  the 
first  time  raise  the  objection  that  defendant's  title  was  paramount  to 
plaintiff's  mortgage,  and  demand  that  the  complaint  be  dismissed.  It 
is  too  late  at  such  stage  of  the  proeeedings  for  the  defendant  to  claim 
that  he  had  been  improperly  made  a  party  defendant.-"* 

If  any  one  of  the  defendants  is  an  infant,  this  fact  should  appear, 

^'''^Bowen    v.    Wood,    35    Ind.    268;  v.    Look,   93   Cal.    600,   29    Pac.    220; 

Aldrich  v.  Lapham,  6  How.  Pr.  129;  Poett   v.    Stearns,   28   Cal.    226;    An- 

Constant    v.    Am.    Baptist,    &c.    See.  "thony  v.  Nye,  30  Cal.  401.     Such  an 

21  Jones  &  S.  170;  Carpenter  v.  In-  averment    is    not    an    issuable    fact. 

s:alls  (S.  D.),  51  N.  W.  948;  Hoes  v.  Elder  v.  Spinks,  53  Cal.  293. 

Beyer,    108    Ind.    494,    9    N.    E.    427;  ''« Drury    v.    Clark,    16    How.    Pr. 

Anthonv  v.  Nye,  30  Cal.  401;  Dexter  424.     See   Frost  v.   Koon,   30   N.    Y. 

V.    Long;,    2    Wash.    St.    435,   27   Pac.  428,  448. 

271;    Drurv    v.    Clark,    16    How.    Pr.  -"» 1  Crary,  N.  Y.  Prac.  289;  Clay  v. 

424;   Short  v.  Nooner,  16  Kans.  220;  Hildebrand,  34  Kans.  694. 

Kehm  v.  Mott,  187  111.  519,  58  N.  E.  -'"  English  v.  Aldrich,  132  Ind.  500, 

467.  81  N.  E.  456. 

="*  Hoes  v.  Boyer,  108  Ind.  494,  9  N.  ="«  Cromwell  v.  MacLean,  123  N.  Y. 

E.  427;  Daniel  v.Hester,  24  S.  C.  301;  474,  25  N.  E.  932. 
McCoy  v.  Boley,  21  Fla.  803;  Sichler 


§§    1474-1476.]       FOKECLOSURE   BY    EQUITABLE    SUIT.  430 

with  a  statement  of  his  interest  in  the  premises,  so  that  a  guardian 
may  be  appointed. 

§  1474.  The  bill  must  show  that  defendant's  interest  is  subject 
to  the  mortgage.  Unless  the  bill  discloses  that  the  interest  of  a  per- 
son named  as  a  defendant  is  an  interest  junior  or  inferior  to  the  mort- 
gage lien  of  the  plaintiff,  it  is  insufficient  to  support  a  judgment 
against  him.  It  should  allege  that  his  claim  is  subject  to  the  lien  of 
the  mortgage.^""  But  if  a  defendant  be  joined  upon  the  allegation 
that  he  has  or  claims  some  interest  adverse  to  the  plaintiff,  the  nature 
and  amount  of  which  the  latter  is  ignorant  of,  and  desires  that  the 
defendant  may  be  compelled  to  disclose,  and  such  defendant  answers 
by  a  general  denial,  he  is  in  no  condition  to  question  a  judgment  fore- 
closing the  defendant  of  all  right,  title,  and  interest  in  the  premises 
adverse  to  the  plaintiff,  because  his  answer  denies  that  he  has  any 
claim  or  interest  therein.-" 

§  1475.  All  the  relief  sought  for  in  the  action  should  be  prayed 
for  in  the  bill,  inasmuch  as  the  court  will  not  generally  grant  any  re- 
lief not  demanded  in  the  complaint,  especially  when  no  answer  is  in- 
terposed.-" As  will  be  noticed  in  a  subsequent  chapter,  a  judgment 
for  the  deficiency  may  be  had  in  most  of  the  States  where  foreclosure 
is  obtained  by  an  equitable  action,  at  the  same  time  that  a  decree  for 
a  sale  of  the  property  is  entered ;  but  if  both  of  these  remedies  are  de- 
sired, the  complaint  must  ask  for  them ;  for  otherwise,  after  default, 
no  judgment  for  a  deficiency  can  be  rendered  f^^  and  the  omission  of  a 
prayer  for  a  sale  of  the  property  is  ground  for  demurrer.^" 

§  1476.  The  essential  grounds  for  relief  or  decree  asked  for  must 
be  set  out  in  the  bill ;  as,  for  instance,  if  the  priority  of  the  mortgage 
depends  upon  the  fact  that  it  was  given  for  purchase-money,  or  upon 
the  fact  that  subsequent  mortgagees  had  notice  of  the  mortgage  be- 
fore they  took  their  liens  upon  the  property,  no  relief  founded  on 
these  facts  can  be  given  unless  they  are  stated  in  the  bill;  though 
being  formal  defects  the  bill  may  be  amended.-^*    The  bill  is  not  de- 

=°^See  §  1440;  Short  v.  Nooner,  16  ='- Simonson  v.  Blake,  20  How.  Pr. 

Kans.  220;  Nooner  V.  Short,  20  Kans.  484;    12   Abb.   Pr.    331;    Hansford   v. 

6'>4-     Neitzel    v.    Hunter,    19    Kans.  Holdam,   14   Bush,   210,    7   Reporter, 

221.'  177. 

""Blandin  v.  Wade,  20  Kans.  251;  "s  g^ntacruz  v.  Santacruz,  44  Miss. 

Bradley  v.  Parkhurst,  20  Kans.  462;  714. 

Kehm  v.  Mott,  187  111.  519,  58  N.  E.  ="  Armstrong  v.  Ross,  20  N.  J.  Eq. 

467    quoting  text.  109;    Iowa  County  v.  Mineral  Point 

-'"■  Bullwinker  v.  Ryker,  12  Abb.  Pr.  R.  Co.  24  Wis.  93. 
311.     And  see  Grant  v.  Vandercook, 
8  Abb.  Pr.  N.  S.  455,  57  Barb.  165. 


431  THE   BILL   OR    COMPLAINT.  [§§    1477,    1478. 

murrable,  however,  because  the  relief  demanded  is  greater  than  or 
different  from  that  which  the  facts  entitle  the  plaintilf  tor^'^ 

§  1477.  A  personal  judgment  for  a  deficiency  cannot  be  entered 
against  a  defendant  imlcss  it  is  asked  for  in  the  complaint.-^"  But 
such  a  judgment  may  be  entered  upon  a  complaint  which  asks  that 
the  mortgage  shall  be  foreclosed,  that  the  mortgaged  property  shall 
be  sold  to  pay  the  debt  evidenced  by  the  note,  and  to  pay  the  costs, 
attorney's  fees,  etc.,  and  that  execution  shall  be  issued  for  the  balance. 
A  petition  no  more  defective  than  this  may  be  amended  at  any  time, 
Avithout  costs,  so  as  to  make  it  formal. '^^  If  a  personal  judgment  is 
sought  against  a  purchaser  from  the  mortgagor,  the  ground  of  his  lia- 
bility must  be  set  forth. -^*  Where,  after  an  action  of  foreclosure  is 
commenced  against  the  mortgagor,  he  answers  alleging  that  he  has 
sold  the  land  to  a  purchaser  who  assumed  the  payment  of  the  mort- 
gage, and  such  purchaser  is  thereupon  served  with  a  summons  requir- 
ing him  to  answer,  it  is  error  for  the  court,  in  his  absence,  and  with- 
out any  pleadings  having  been  filed  by  him,  to  render  against  him  a 
personal  judgment,  when  the  petition  does  not  state  any  cause  of  ac- 
tion against  him,  or  mention  or  refer  to  him.-^^ 

§  1478.  "When  the  mortgage  secures  several  notes  some  of  which 
are  not  due  when  the  bill  is  filed,  the  complainant  should  ask  in  his 
bill  that  so  much  of  the  debt  as  may  become  due  before  final  decree 
should  be  included  in  it.--"  It  is  irregular  to  include  in  the  judgment 
a  note  which  matured  after  the  filing  of  the  bill,  unless  some  foun- 
dation is  laid  for  it  in  the  pleadings.  If  this  is  not  done  a  supple- 
mental bill  should  be  filed,  praying  that  the  note  which  has  matured 
since  the  filing  of  the  bill  should  be  included  in  the  decree.--^  ,  The  ac- 
tion, however,  cannot  be  commenced  before  anything  is  due,  and  then 
be  made  good  by  a  supplemental  complaint  after  a  portion  of  it  has 

^'^  Scheibe  v.  Kennedy,  64  Wis.  564,  -^^  Beecher  v.  Ireland,  46  Kans.  97, 

25  N.  W.  646.  26   Pac.    448;    Kimball   v.    Connor,    3 

"'"  Simonson  v.  Blake,  12  Abb.  Pr.  Kans.  414,  distinguished. 

331,  20  How.  Pr.  484;  French  V.  New,  ^^"  See    §§     606,    1459,     1577,    1591, 

20    Barb.    481,    484;     Bullwinker    v.  1700;  Malcolm  v.  Allen,  49  N.  Y.  488; 

Ryker,  12  Abb.  Pr.  311.  Dan   Hartog  v.   Tibbitts,  1  Utah   T. 

-'' Foote  V.  Sprague,  13  Kans.  155.  328;   McLane  v.  Piaggio,  24  Fla.  71, 

=>^Hammons   v.   Bigelow,   115   Ind.  3  So.  823. 

363,  17  N.  E.  192.  --'  Williams   v.    Creswell,    51   Miss. 

In  South  Carolina  a  personal  judg-  817;   McLane  v.  Piaggio,  24  Fla.  71, 

ment    for    a    deficiency    cannot    be  3  So.  823;   Adams  v.  Essex,  1  Bibb, 

rendered  until  a  report  of  the  sale  149;    Manning  v.   McClurg,    14   Wis. 

has  been  made.     Parr  v.  Lindler,  40  350. 
S.  C.  193,  18  S.  E.  636. 


§§  1479,  1479a.]  foreclosure  by  equitable  suit.  433 

matured;^--  but  the  action  being  properly  begun,  additional  relief 
may  in  this  way  be  had  for  rights  that  have  since  accrued.^-* 


III.     The  Answer  and  Defence. 

§  1479.  In  general. —  Besides  the  special  defences  arising  out  of 
the  circumstances  of  the  particular  case,  there  may  of  course  be  as 
many  general  defences  as  there  are  general  allegations  in  the  bill  or 
complaint,  as  well  as  the  defences  applicable  to  contracts  generally. 
There  may  be  a  denial  of  the  execution  and  delivery  of  the  mort- 
gage, and  of  the  plaintiff's  right  to  maintain  the  action;  a  denial  of 
personal  liability;  a  denial  of  any  title  in  the  mortgagor  at  the  time 
of  giving  the  mortgage ;  an  allegation  of  want  of  consideration,  usury, 
or  the  statute  of  limitations;  an  allegation  of  payment,  or  that  the 
debt  is  payable  upon  an  event  which  has  not  happened;^-*  an  allega- 
tion of  a  counter-claim  or  set-off;  of  non-joinder  of  defendants;  of  a 
discharge;  of  an  equity  of  redemption  in  a  part  of  the  premises,  and 
an  equitable  right  to  require  the  sale  of  the  residue  of  them  first ;  and 
finally,  a  disclaimer  of  title  or  interest.  Some  of  these  defences  will 
be  illustrated  with  such  citations  of  cases  as  seem  of  general  impor- 
tance and  application.'-^ 

If  the  default  for  which  foreclosure  is  had  consists  in  the  non-pay- 
ment of  the  principal,  interest  or  taxes,  or  a  like  default,  payment  or 
tender  of  payment  after  the  action  is  brought  is  no  defence.^^^ 

As  a  general  rule,  one  defendant  cannot  by  his  answer  impeach  the 
mortgage  of  a  co-defendant;  although  he  alleges  in  his  answer  that 
such  mortgage  was  fraudulent  and  void,  his  co-defendant,  to  whom  it 
belongs,  is  not  bound  to  put  in  any  defence.  Such  answer  cannot  be 
taken  as  confessed  against  him.  One  defendant  can  have  relief  against 
another  only  upon  a  cross-bill. ^-^ 

§  1479a.  A  cross-bill  is  generally  confined  to  the  subject-matter 
of  the  bill.  If  the  answers  of  the  various  parties  claim  liens  the  court 
has  power,  without  the  filing  of  a  cross-bill,  to  determine  the  existence 

"-  McCullough   V.    Colby,    4   Bosw.  set  up  in  defence  were  pronounced 

603.  frivolous,  see  Weil  v.  Uzzell,  92  N.  C. 

"'  Candler  v.  Pettit,  1  Paige,  168,  19  515-. 

Am.  Dec.  399;  Bostwick  v.  Menck,  8  -<>  Plummer  v.   Park,  62  Neb.   665, 

Abb.  Pr.  N.  S.  169.  87  N.  W.  534. 

"'Lucas    V.    Hendrix,    92    Ind.    54;  -' Brinkerhoff  v.  Franklin,  21  N.  J. 

Manley     v.    Felty,    146    Ind.    194,    45  Eq.  334;   Vanderveer  v.  Holcorab,  21 

N.  E.  74;  Prez  v.  Bank  of  Key  West,  N.  J.  Eq.  105;  Davis  v.  Cook,  65  Ala. 

36  Fla.  467,  18  N.  E.  74.  617. 

"5  For   a  case   where   the   matters 


433  THE  ANSWER  AND   DEFENCE,  [§    1480. 

and  priority  of  the  various  liens,  and  to  order  the  premises  sold  and  the 
proceeds  distributed  in  discharge  of  such  liens  according  to  their 
priority. ^-^  A  mechanic's  lien  may  be  set  up  by  answer  without  a 
cross-bill/-''  and  when  so  confined  the  summons  issued  on  the  bill  is 
sufficient  notice  to  sustain  a  judgment  on  the  cross-bill.-^°  It  is 
proper  whenever  it  is  necessary  to  adjust  all  the  equities  between  the 
parties  connected  with  the  subject-matter  of  the  original  bill.  Though 
matters  wholly  foreign  to  the  original  bill  cannot  be  introduced,  new 
issues  in  relation  to  the  matters  contained  in  that  bill  may  be  brought 
up  by  the  cross-bill.-^^  If  the  defendant  is  entitled  to  affirmative  re- 
lief against  the  plaintiff,  as,  for  instance,  in  case  he  has  overpaid  the 
mortgage,  he  should  file  a  cross-bill.^^-  If  a  cross-bill  is  filed  by  one 
who  has  a  junior  title  of  record,  insisting  that  he  nevertheless  has  a 
prior  equity,  he  must  allege  all  the  facts  necessary  to  show  his  prior 
right.^^^  If  a  junior  mortgagee  of  record  files  a  cross-bill  alleging  the 
superiority  of  his  mortgage,  his  bill  should  not  be  dismissed  upon  a 
finding  that  his  mortgage  is  subject  to  the  complainant's  mortgage. 
He  may  retain  his  bill  to  claim  a  surplus.^^* 

On  a  cross-bill  filed  in  answer  to  a  bill  to  cancel  a  mortgage,  the 
execution  and  amount  of  which  is  admitted  and  its  validity  estab- 
lished, a  decree  of  foreclosure  may  be  granted. ^^^ 

A  cross-bill  by  one  who  claims  priority  over  the  mortgage  must  al- 
lege a  title  or  lien  on  the  mortgaged  land  at  the  time  of  the  execution 
of  the  mortgage. ^^^ 

In  an  action  to  foreclose  a  purchase-money  mortgage  the  mort- 
gagor may  file  a  cross-bill  setting  up  his  grantor's  breach  of  a  cove- 
nant against  incumbrances.^^^ 

§  1480.  An  answer  founded  upon  a  release  or  any  written  instru- 
ment may  set  it  out  at  length  with  proper  averments,  or  may  give 
a  brief  description  of  it,  with  averments  of  the  facts  connected  there- 
with. An  answer  which  states  merely  a  conclusion  of  law,  without 
facts  to  support  it,  as,  for  instance,  that  there  is  nothing  due  on  the 

"« Gardner  v.  Cohn,  191  111.  553,  61  ="  Porter  v.  Grady,  21  Colo.  74,  39 

N.   E.   492;    Boone  v.  Clark,  129  111.  Pac.  1091;  Phillips  v.  Anthony,  47  S. 

466,    21    N.    E.    850;    Soles   v.    Shep-  C.  460,  25  S.  E.  2^4. 

pard,   99   111.   616.  ='=•  Newaygo  Co.  Manuf.  Co.  v.  Ste- 

""Blatchford  v.  Blanchard,  160  111.  vens,    79   Mich.    398,   44   N.    W.    852; 

115,  43  N.  E.  794.  Smith  v.  Atkins,  27  Neb.  248,  42  N. 

==">  Southward  v.  Jamison,  66  Ohio  W.  1043. 

St.  290,  64  N.  E.  135.  -■"'  Dudenhofer  v.  Johnson,  144  Ind. 

"1  Davis  V.  Cook,  65  Ala.  617.  631,  43  N.  E.  868. 

"-  Hathway  v.  Hagan,  59  Vt.  75,  8  ="  Duroe    v.    Stephens,    101    Iowa, 

Atl.  678.  358,  70  N.  W.  610;  Kuhnen  v.  Parker, 

"'  Blair  v.   St.   Louis,  H.   &  K.   R.  56  N.  J.  Eq.  286,  38  Atl.  641. 
Co.  27  Fed.  176. 


§§  1481,  1482.]   FORECLOSURE  BY  EQUITABLE  SUIT.  434 

debt  or  that  the  mortgage  is  of  no  binding  effect,  and  no  lien  upon 
the  preimses  described,  is  unavailing.-^® 

§  1481.     The  denial  of  an  allegation  must  be  explicit,  and  not  be 

left  to  be  inferred.  Where  a  complaint  sets  forth  the  condition  of  a 
bond,  and  avers  that  a  mortgage  securing  it  was  executed  "with  the 
same  condition  as  said  bond,"  an  answer  which  merely  repeats  the 
words  of  the  condition  as  stated  in  the  complaint,  and  avers  that  it 
is  not  contained  in  the  mortgage,  is  not  a  denial  that  such  was  in  sub- 
stance the  condition  of  the  mortgage.  The  answer,  to  avail  anything, 
should  at  least  show  that  there  was  nothing  on  the-  face  of  the  mort- 
gage to  connect  it  with  the  bond.^^'^  No  defence  can  be  availed  of 
which  is  not  set  up  in  the  answer.-*^  In  like  manner  any  defence  set 
up  by  the  answer  must  be  set  forth  by  averments  which  make  a  com- 
plete defence.^*^ 

8  1482.  The  mortg^agfee's  title  cannot  be  questioned  in  defence  to 
the  bill.^"  This  can  only  be  investigated  at  law.-*^  If  he  took,  by 
virtue  of  his  mortgage,  any  estate  whatever  which  is  still  subsisting, 
he  is  entitled  to  a  decree;  and  the  court  will  not  inquire  what  inter- 
est he  has  in  the  mortgaged  estate,  or  whether  he  has  any  interest 
at  all  in  some  part  of  it.^**  If  the  mortgage  was  given  by  the  heir  on 
land  to  which  he  had  title  by  descent,  the  rights  of  decedent's  cred- 
itors cannot  be  tried  on  a  bill  by  the  mortgagee  to  foreclose  such  mort- 
gage, though  no  administrator  has  ever  been  appointed.^*^ 

=^«  Caryl  v.  Williams,  7  Lans.  416;  ="  §    1440;     Chapin    v.    Walker,    6 

Baldwin  v.  Burt,  43  Neb.  245,  61  N.  Fed.  794.     In  this  case  the  respond- 

W.  601.  ent  having  set  up  an  adverse  title, 

"°  Dimon   v.    Dunn,   15   N.    Y.    498,  the    decree    was    modified    so    as    to 

reversing  Dimon  v.  Bridges,  8  How.  provide    that    the    decree    and    sale 

Pr.  16.     "It  simply  pleads  the  exist-  thereunder  should  be  without  preju- 

ence    of    certain    language,    without  dice    to    the    respondent's    right    to 

denying   the   substance   of   the   con-  contest    the    title    in    an    action    at 

tract    as   set   out   in   the   complaint,  law.     Gage  v.  Perry,  93  111.  176;  Bo- 

and  without  setting  out  the  contract  zarth    v.    Landers,      113      111.      181; 

itself,    so    that    the    court    may    see  Waughop  v.  Bartlett,  165  111.  124,  136, 

what    it    is.      It    may    be    well    that  46  N.  E.  197;  Fergus  Falls  v.  Fergus 

nothing    is    said,    in    terms,    in    the  Falls  Hotel  Co.  80  Minn.  165,  83  N. 

mortgage,  as  to  the  effect  of  the  non-  W.  Si. 

payment  of  interest  and  yet  it  may  '"  Bull  v.   Meloney,  27  Conn.   560; 

refer  to  the  bond  in  such  a  manner  Palmer  v.  Mead,  7  Conn.  149;  Broome 

as    to    adopt    its    provisions."      Per  v.  Beers,  6  Conn.   198;    Anderson  v. 

Chief  Justice  Denio.  Baxter,  4  Oreg.  105. 

An    admission    by    the    mortgagor  ="  Hill    v.    Meeker,    23    Conn.    592; 

that  he  made  "some  such  bond  and  Wooden  v.  Haviland,  18  Conn.   101; 

mortgage"     obviates     necessity     of  Williams  v.  Robinson,  16  Conn.  517. 

proof    ^Wills  V.  McKinney.  30  N.  J.  ="  Lebanon    Sav.    Bank   v.    Water- 

Eq.  465.  man,  65  N.  H.  88,  19  Atl.  1000,  17  Atl. 

""  Higman  v.  Stewart,  38  Mich.  513.  577. 

="Mann  v.  State,  116  Ind.  383,  19 
N.  E.  181. 


435  THE   ANSWER  AND   DEFENCE.  [§    1483. 

An  exception  is  apparently  made  to  this  rule  that  the  title  is  not 
in  issue,  in  cases  where  usury  may  be  shown  in  defence  under  statutes 
which  would  make  the  deed  absolutely  void,  and  usury  in  the  loan  is 
established.  This,  however,  is  not  strictly  an  investigation  of  the 
title,  but  rather  of  the  validity  of  the  instrument;  just  as  this  is  the 
inquiry  when  it  is  claimed  that  the  maker  of  it  was  not  of  sound  mind, 
or  that  he  made  it  under  duress,  or  that  he  did  not  make  it  at  all.^*® 

The  owner  of  the  equity  of  redemption  subject  to  two  mortgages 
cannot  object  that  the  senior  mortgagee  yields  his  priority  of  lien  to 
the  junior  mortgagee.^*^ 

It  is  no  defence  that  the  mortgage  was  executed  by  the  heirs  of  the 
owner  after  his  death,  and  that  he  left  debts  which  remain  unpaid,  and 
that  the  estate  is  under  administration  in  the  probate  court.-*^ 

§  1483.  A  mortgagor  is  estopped  to  deny  his  title.-*^  He  cannot 
set  up  as  a  defence  for  himself  against  tlie  mortgagee,  that  the  prop- 
erty so  mortgaged  is  trust  property  which  he  had  no  right  to  mort- 
gage. He  cannot  claim  adversely  to  his  deed,  but  is  estopped  by  it.^^* 
Whether  this  estoppel  arises  from  the  making  of  the  mortgage  deed, 
or  from  the  relation  of  the  mortgagor  at  common  law  as  a  quasi  ten- 
ant of  the  mortgagee,  or  from  express  or  implied  covenants  for  title, 
has  been  an  unsettled  question.  But  at  the  present  time,  and  especially 
where  a  mortgage  is  merely  a  lien  and  not  a  title,  this  estoppel  must 
be  regarded  as  arising  only  from  a  covenant  for  title,  express  or  im- 
plied. In  the  absence  of  such  a  covenant,  the  mortgagor  may  there- 
fore show  what  his  interest  in  the  mortgaged  land  was  at  the  time  of 
the  delivery  of  the  mortgage,  and  may  show  that  a  subsequently  ac- 
quired title  does  not  inure  to  the  benefit  of  the  mortgagee.^^^  A  wife 
joining  her  husband  in  a  deed  of  his  land,  but  not  making  any  cove- 
nants, is  not  estopped  to  claim  title  to  the  land  imder  a  mortgage  held 
by  her.^^*  The  decree  binds  his  interest,  whatever  that  may  be,  and 
nothing  more.^^^  A  mortgage  made  by  tl^e  heirs  of  a  deceased  owTier, 
before  the  settlement  of  the  estate,  cannot  be  objected  to  by  them  on 

=''Cowles  v.  Woodruff,  8  Conn.  35.  -'"§8   682,   683;    Boisclair  v.  Jones, 

"'Mobile  &  Cedar  Point  R.  Co.  v.  36  Ga.  499;   Usina  v.  Wilder,  58  Ga. 

Talman,  15  Ala.  472.  178;  Strong  v.  Waddell,  56  Ala.  471; 

-*^  Cook  v.  De  la  Giierra,  24  Cal.  237.  McLoon  v.  Smith,  49  Wis.  200,  5  N. 

-"Bush   v.   Marshall,   6  How.   284;  W.  836. 

Dime  Sav.  Bank  v.   Crook,  29  Hun,  =^'  National  Fire  Ins.  Co.  v.  McKay, 

671;    Herber    v.    Christopherson,    30  1  Sheldon,  138;    Haggerty  v.  Byrne, 

Minn.   395,  15  N.  W.   676;    Krupp  v.  75  Ind.  479. 

Krugel,    12    Phila.    174;     Strong    v.  =^°- Van    Amburgh    v.    Kramer,    16 

Waddell,    56    Ala.    471;     Carson    v.  Hun,  205. 

Cochran    (Minn.).    53    N.    W.    1130;  ="  Bird  v.  Davis,  14  N.  J.  Eq.  467. 

Stanford   v.   Broadway  Sav.   Co.   122  See  Hoff  v.  Burd,  17  N.  J.  Eq.  201. 
Ind.  422,  24  N.  W.  154;  Joslin  v.  Wil- 
liams, 61  Neb.  859,  86  N.  W.  473. 


§  1484.]         FORECLOSURE  BY  EQUITABLE  SUIT.  436 

the  ground  that  the  creditors  and  legatees  of  the  estate  have  not  been 
paid.^^*  A  mortgagor  may,  however,  in  an  action  brought  by  an  as- 
signee, set  up  and  prove  a  mistake  in  tlie  drawing  of  the  instrument 
and  have  it  reformed.^^^  But  it  has  been  hekl  that  a  mortgagor  who 
had  given  a  mortgage  upon  land  held  by  him  under  the  preemption 
act,  after  filing  his  declaratory  statement  and  before  entry,  and  there- 
fore void,  was  not  estopped  from  setting  up  the  invalidity  of  it  in  de- 
fence, when  no  fraud,  misrepresentation,  or  concealment  on  his  part 
was  shown. ^^^ 

A  wife  who  has  joined  in  her  husband's  mortgage  of  certain  lands, 
including  the  homestead,  cannot  on  foreclosure  claim  that  the  home 
lot  was  her  separate  property,  and  that  she  had  not  known  that  the 
mortgage  covered  it, — that  she  had  not  read  the  mortgage  nor  1  eard 
it  read ;  and  that,  if  she  had,  she  would  not  have  recognized  the  '  ome 
lot  by  its  description — if  it  appear  that  the  mortgagee  had  acted  in 
good  faith,  and  had  done  nothing  to  mislead  her.^" 

A  defence  by  a  married  woman  that  she  executed  her  mortgage 
to  secure  a  debt  of  her  husband  must  be  specially  pleaded.^^^  It 
would  seem  that  the  same  rule  would  apply  where  a  wife  has 
joined  her  husband  in  a  mortgage  of  land  standing  in  his  name,  in 
case  she  objects  to  a  foreclosure  on  the  ground  that  the  land  mortgaged 
is  her  property,  having  been  purchased  with  her  money.  In  such  a 
case  in  Alabama,  however,  where  such  a  defence  was  taken,  and  the 
claim  that  the  land  was  the  property  of  the  wife  rested  upon  alleged 
declarations  of  the  husband  when  he  bought  the  land,  ten  years  before, 
that  he  was  buying  for  his  wife,  who  furnished  the  money,  that  the 
evidence  was  of  a  species  to  be  received  with  great  caution,  and  was  not 
to  be  regarded  as  against  the  positive  evidence  of  the  mortgagee,  that 
he  loaned  the  money  to  the  husband,  the  money  with  which  the  pur- 
chase-money of  the  lot  was  paid.^^'' 

8  1484.     The    mortgagor    may  be  estopped    by  Ms    declarations 

or  ao-reements  from  setting  up  a  defence  otherwise  valid ;  as  w^here  a 
purchaser  of  land  subject  to  a  mortgage  admitted  to  a  third  person 
that  it  was  all  right  and  valid,  and  thereby  induced  him  to  buy  it,  he 

='*Cook  v.   De  la  Guerra,  24   Cal.  deny  that  the  mortgagor  had   title 

237.  to   the   land,   as   he   is   the   common 

-^''  Andrews  v.    Gillespie,   47   N.   Y.  source  of  title  of  both  parties.     Sul- 

4g7.  livan  v.  McLaughlin,  99  Ala.   60,  11 

""« Brewster    v.    Madden,    15    Kans.  So.  447. 

249.  ="Peake  v.  Thomas,  39  Mich.  584, 


585. 


The   respondent   to   a   bill   to   set 
side    a    mortgage    sale    the    stand- 
ing   title    through    a    purchaser    at  _  „    .,      ^.., 
the    mortgage    sale,    is    estopped    to        ="  Ingram  v.  Illges,  98  Ala.  511. 


aside    a    mortgage    sale    the    stand-        =■"' Chadron    Banking    Co.    v.    Ma- 
ing    title    through    a    purchaser    at    honey,  43  Neb.  214,  61  N.  W.  594. 


437  THE  ANSWER  AND   DEFENCE.  [§    1485. 

was  not  allowed  afterwards  to  urge  a  failure  of  consideration  of  the 
mortgage  to  the  injury  of  the  assignee.^""  And  so  he  may  be  estopped 
from  taking  advantage  of  a  sale  made  without  proper  authority  in  the 
officer  to  sell,  because  no  judgment  of  foreclosure  had  been  entered  on 
the  mortgage;  his  admission  that  the  debt  was  due;  his  acts  at  the  sale 
in  forwarding  it  and  waiving  matters  of  form;  his  delivery  of  posses- 
sion to  the  purchaser,  and  his  standing  by  and  suffering  purchasers 
to  improve  the  property,  are  sufficient  for  this  purpose.^*'^  And  so 
where  a  mortgage  made  by  one  member  of  a  banking  firm  to  his  co- 
partner was  sold  by  them  to  a  purchaser,  with  the  representation  that 
it  was  a  good  bond  and  mortgage,  each  of  them  was  held  to  be  estopped 
from  setting  up  the  defence  of  usury.^*'-  A  mortgagor  who  has  induced 
another  to  take  an  assignment  of  his  mortgage  is  estopped  from  deny- 
ing the  validity  of  it  in  the  assignee's  hands.^**^ 

Where  a  wife  has  given  a  mortgage  as  surety  for  her  husband,  in  an 
action  to  foreclose  the  mortgage  after  her  death,  the  husband,  having 
procured  the  mortgagee's  money  by  the  mortgage,  is  estopped  from 
disputing  its  validity.^^*  And  so,  imder  a  statute  forbidding  married 
women  from  becoming  sureties,  where  a  married  woman  represents 
that  a  loan  which  is  secured  by  mortgage  on  her  lands  is  for  her  own 
use,  she  will  be  estopped,  as  against  one  who  in  good  faith  has  con- 
tracted with  her  in  reliance  upon  her  statements,  from  asserting  that 
she  is  a  surety,  and  not  the  principal  in  the  transaction.^^^ 

Where  a  married  woman  makes  application  in  her  own  name  for 
a  loan,  and,  with  her  husband,  gives  a  note  and  mortgage  on  her  sepa- 
rate estate  to  secure  the  loan,  and  is  paid  the  proceeds  of  the  loan,  she 
cannot,  in  an  action  to  foreclose  the  mortgage,  set  up  as  a  defence 
that  she  signed  the  note  and  mortgage  merely  as  surety  for  her  hus- 
band. If  she  paid  over  to  her  husband  the  money  received,  it  was  the 
result  of  her  own  folly.  Prohibiting  married  women  from  becoming 
sureties  was  intended  as  a  protection,  and  was  never  intended  to  shield 
them  in  the  perpetration  of  a  fraud.^®** 

§  1485.  Defences  against  assignee. —  It  is  not  often  that  the  mort- 
gage is  an  obligation  to  the  mortgagee  personally  which  neither  his 

'""Smith  V.  Newton,  38  111.  230.  31    N.    E.    200,    citing   Ward    v.    In- 

'"  Cromwell  v.  Bank  of  Pittsburg,  surance    Co.    108    Ind.    301,    9    N.    B. 

2  Wall.  Jun.  569.  361 ;  Rogers  v.  Insurance  Co.  Ill  Ind. 

="Hoeffler    v.    Westcott,    15    Hun,  343,  12  N.  E.  495;  Lane  v.  Schlemmer, 

243.  114  Ind.  296,  15  N.   E.   454;    Bouvey 

'«» Johnson    v.    Parmely,    14    Hun,  v.    McNeal,    126    Ind.    541,   26    N.    E. 

398;  Norris  v.  Wood,  14  Hun,  196.  396;    Cummings  v.   Martin,  128  Ind. 

=«*  Ellis  V.  Baker,  116  Ind.  408,  19  20,  27  N.  E.  173. 
N.  E.  193.  =»"  State  v.  Frazier  (Ind.),  34  N.  E. 

"» Taylor  v.   Hearn,   131   Ind.   537,  636. 


§  1485.]         FORECLOSURE  BY  EQUITABLE  SUIT.  438 

assignee  nor  personal  representative  can  enforce ;  yet  such  a  mortgage 
may  be  made;  and  such  was  held  to  be  the  effect  of  a  mortgage  which 
was  the  only  evidence  of  the  indebtedness  secured,  and  this  was  "to 
be  paid  by  the  mortgagor  to  the  mortgagee  when  called  on  by  said 
mortgagee;  and  the  mortgagor  does  not  agree  to  pay  the  above  sum 
to  any  one  else  except  the  mortgagee."  The  mortgagee  having  died 
without  demanding  payment,  his  administrator  could  not  make  de- 
mand, and  maintain  a  suit  upon  the  mortgage.-**^  It  may  be  presumed 
in  such  a  case  that  the  mortgagee  intended  that  the  debt  should  not 
be  paid  at  all  unless  he  himself  should  see  proper  to  demand  it;  and 
that,  if  he  made  no  demand,  the  indel^tedness  should  be  retained  by 
the  mortgagor  as  a  gift;  and  having  died  without  making  such  de- 
mand, the  gift  became  complete. 

In  those  States  in  which  a  transfer  of  the  mortgage  note  carries 
with  it  the  mortgage  security,  it  is  no  defence  to  a  suit  by  an  assignee 
that  he  had  no  formal  assignment  of  the  mortgage.^^®  The  fact  that 
he  purchased  the  mortgage  at  a  discount  is  no  defence.-®^  If  the  as- 
signment was  obtained  by  fraud,  the  defendant  may  show  that  he  has 
paid  it  to  the  mortgagee  from  whom  the  plaintiff  so  obtained  it.^^° 

In  a  suit  by  an  assignee  he  should  ordinarily  prove  the  execution 
of  the  assignment  to  himself;  but  if  he  produces  the  note  and  mort- 
gage, and  the  mortgagee,  who  is  made  a  party,  is  defaulted,  a  judg- 
ment creditor  of  the  mortgagor  cannot  call  in  question  the  assignee's 
title.^''^  It  is  no  defence  for  the  mortgagor  that  the  assignee  is  admin- 
istrator of  the  mortgagee's  estate,  and  has  assigned  the  mortgage 
through  a  third  person  to  himself.^^^ 

The  motives  of  the  assignee  in  acquiring  the  assignment,  and  in 
foreclosing  the  mortgage,  cannot  be  set  up  in  defence,  and  afford  no 
ground  for  staying  the  suit.'"^  It  is  no  defence  to  a  suit  by  an  as- 
signee to  foreclose  a  mortgage  that  the  assignee  took  title  from  mo- 
tives of  malice,  and  solely  with  a  view  to  bring  an  action,  and  that  the 
assignor  assigned  it  from  a  like  motive,  and  without  consideration. 
It  is  sufficient  to  sustain  the  action  that  the  debt  is  due  and  has  been 
transferred  to  the  plaintiff;  and  the  mortgagor  can  only  arrest  the 
action  by  paying  or  tendering,  and  bringing  into  court,  the  amount 
due.2'* 

="Sebrell  v.  Couch,  55  Ind.  122.  ^'''Hall  v.  Erwin,  60  Barb.  349,  57 

="  Rice  V.  Cribb,  12  Wis.  179;  Jack-  N.  Y.  643,  66  N.  Y.  649. 

son    v.    Blodget,    5    Cow.    202,    205;  ^'' Markson  v.  Ide,  29  Kans.  649. 

Jackson  v.  Willard,  4  Johns.  41,  43.  ""-Read  v.  Knell,  143  N.  Y.  484,  39 

=<^''Knox  v.  Galligan,  21  Wis.  470;  N.  E.  4. 

Croft  V.  Bunster,  9  Wis.  503;   Griss-  ="  Davis  v.  Flagg,  35  N.  J.  Eq.  491. 

ler  V.  Powers.  53  How.  Pr.  194,  and  "*  Morris  v.  Tuthill,  72  N.  Y.  575. 

cases  cited,  37  Am.  Rep.  475. 


439  THE   ANSWER   AXD   DEFENCE.  [§§    1486,    1487. 

Where  an  assignee  seeks  to  foreclose  a  mortgage  which  the  mort- 
gagee testilies  was  given  without  consideration  moving  from  him,  and 
that  he  assigned  it  at  the  request  of  one  of  tlie  mortgagors  witliout 
consideration,  tiiis  evidence  casts  upon  the  complainant  the  burden  of 
proof  that  there  was  a  consideration  for  the  mortgage.^^^ 

A  mortgagor  is  not  estopped  from  setting  up  a  valid  defence,  as 
against  an  assignee  for  value  without  notice,  merely  on  the  ground 
that  he  failed  before  the  assignment  to  take  proceedings  to  procure 
the  discharge  of  record  and  delivery  up  of  a  mortgage.-^** 

§  1486.  Assignee  for  value. —  It  is  not  necessary  to  constitute  a 
bona  fide  holding  by  t]ie  assignee  that  he  should  have  paid  value  for 
the  security  at  the  time  of  receiving  it.  A  past  consideration  is  suffi- 
cient.^''^'^  A  farmer  and  his  wife,  on  the  line  of  a  proposed  railroad 
in  Wisconsin,  subscribed  to  stock  in  the  road,  and  mortgaged  their 
farm  to  secure  a  negotiable  note  given  in  payment  of  the  subscription, 
upon  representations  made  by  agents  of  the  road  and  others  that  the 
road  would  prove  a  very  lucrative  investment,  and  a  very  profitable 
thing  to  the  neighborhood.  After  a  good  deal  of  money  had  been  laid 
out  in  grading  and  other  work  upon  the  road,  the  further  building  of 
it  was  stopped  for  want  of  funds,  and  it  remained  unfinished.  The 
mortgage  having  been  assigned  before  maturity  to  a  director  of  the 
road,  who  was  also  a  large  creditor  of  it  at  the  time  the  mortgage  was 
made,  upon  a  bill  filed  by  him  to  foreclose  it,  he  was  held  to  be  a  bona 
fide  holder  for  a  alue,  and  entitled  to  a  decree.-'^^ 

The  fact  that  the  consideration  for  an  assignment  of  a  mortgage 
was  a  gaming  debt  owed  the  assignee  by  the  assignor  is  no  defence  to 
an  action  by  the  assignee  against  the  mortgagor  for  the  foreclosure  of 
the  mortgage.^'^" 

§  1487.  When  assignee  takes  free  from  equities.— The  assignee 
before  maturity  of  a  negotiable  note  secured  by  mortgage  takes  it  free 
from  any  equitable  defences  which  the  mortgagor  might  have  had 
against  it  in  the  hands  of  the  mortgagee,  of  which  the  assignee  had  no 

"•■Bishop    v.    Felch,    7    Mich.    371.  "^  Croft  v.   Bunster,   9  Wis.   503. 

See  Hughes  v.  Thweatt,  57  Miss.  576.  -"*'  Sawyer  v.  Prickett,  19  Wall.  146. 

-''"' Magie   v.   Reynolds,    (N.   J.),  26  In  this  case,  moreover,  the  represen- 

Atl.   150.     "He  had   a  right  to  rely  tations  were  not  considered  binding, 

upon    the    well-settled    rule    of   law  because  they  were  promissory,   and 

that  the  purchaser  of  a  chose  in  ac-  not  representations  of  existing  facts 

tion   of  this  character    (a  mortgage  peculiarly  within   the  knowledge  of 

securing  a  non-negotiable  obligation)  the    party   making   them.      And    see 

takes  it  subject  to  all  equities,  and  Leavitt  v.  Pell.  27  Barb.  322. 

that   he    has    the    power    to    protect  ""  Reed  v.  Bond,  96  Mich.  131,  55 

himself  by  making  inquiries  at  the  N.  W.  619: 
proper  sources."    Per  Pitny,  V.  C. 


§    1487.]  FORECLOSURE    BY   EQUITABLE   SUIT,  440 

notice  at  the  time  the  assignment  was  macle.^®°  The  defendant  can- 
not set  up  payment  to  the  mortgagee  after  the  assignment  of  the  mort- 
gage.-*^ Even  duress  or  fraud  in  the  execution  of  the  mortgage  is  not 
available  as  a  defence  against  such  an  assignee.^*^  When  a  defence 
valid  against  the  assignor  is  made,  the  plaintiff  must  show  that  he  is 
a  bona  fide  purchaser  for  value,  where  that  issue  is  raised  by  the  plead- 
ings.^*^ The  rule  in  this  respect  is  the  same  whether  the  negotiable 
note  is  secured  by  a  mortgage  or  not.  "The  contract  as  regards  the 
note,"  says  Mr.  Justice  Swayne,^**  "was,  that  the  maker  should  pay 
it  at  maturity  to  any  bona  fide  indorsee,  without  reference  to  any  de- 
fences to  which  it  might  have  been  liable  in  the  hands  of  the  payee. 
The  mortgage  was  conditioned  to  secure  the  fulfilment  of  that  contract. 
To  let  in  such  a  defence  against  such  a  holder  would  be  a  clear  de- 
parture from  the  agreement  of  the  mortgagor  and  mortgagee,  to  which 
the  assignee  subsequently  in  good  faith  became  a  party.  If  the  mort- 
gagor desired  to  reserve  such  an  advantage,  he  should  have  given  a  non- 
negotiable  instrument.  If  one  of  two  innocent  persons  must  suffer 
by  a  deceit,  it  is  more  consonant  to  reason  that  he  who  'puts  trust  and 
confidence  in  the  deceiver  should  be  a  loser  rather  than  a  stranger.'  "^*' 
Moreover,  the  mortgage  being  considered  a  mere  incident  of  the  debt, 
an  accessory  to  the  principal  thing,  the  rights  of  the  assignee  in  respect 
to  the  mortgage  are  determined  by  his  rights  respecting  tlie  debt.^*" 
If,  therefore,  the  mortgage  be  given  to  secure  the  payment  of  a  non- 
negotiable  note  or  bond,  the  assignee  takes  it,  as  he  would  such  note 
or  bond,  subject  to  the  equitable  defences  which  the  defendant  would 
have  against  it  in  the  hands  of  the  assignor.^*^  And  so  an  assignee  of 
a  mortgage,  taking  it  after  the  maturity  of  the  debt,  takes  it  subject  to 
any  defence  that  would  have  been  admissible  against  the  mortgagee.^** 

""See    §    884;    Carpenter    v.    Lon-  "'' Mead  v.  Leavitt,  59  N.  H.  476. 

gan,  16  Wall.  271;  Beals  v.  Neddo,  1  "=  Beals  v.  Neddo,  1  McCrary,  206; 

McCrary,  206;  Swett  v.  Stark,  31  Fed.  Simpson  v.  Del  Hoyo,  94  N.  Y.  189. 

858;    Taylor    v.    Page,    6    Allen,    86;  ='' Getzlaff  v.  Seliger,  43  Wis.  297; 

Pierce  v.  Faiince,  47  Me.  507;  Reeves  Matteson  v.  Morris,  40  Mich.  52. 

V.    Scully,    Walk.    (Mich.)    248;    Ci-  "'See    Carpenter    v.    Longan,    16 

cotte     v.     Gagnier,     2     Mich.     381;  Wall.  271. 

Bloomer  v.  Henderson,  8  Mich.  395,  ^"^  "Accessorium     non     ducit,     se- 

77   Am.   Dec.   453;    Fisher  v.   Otis,   3  quitur  suum  principale." 

Chand.   83;    Martineau  v.  McCollunx,  ='"' Carpenter   v.    Longan,    16   Wall. 

4   Chand.    153;    Croft  v.    Bunster,    9  271;      Martineau     v.     McCollum,     4 

Wis.    503;     Cornell    v.    Hichens,    11  Chand.    153;    Potts    v.    Blackwell,    4 

Wis.  353.    Contra,  see  Bailv  v.  Smith,  Jones  Eq.   58;    Bennett  v.  Taylor,  5 

14   Ohio   St.    396,    84   Am.    Dec.    385;  Cal.  502. 

Palmer  v.  Yates,  3  Sandf.  137;  Magie  ="  Matthews    v.    Wallwyn,    4    Ves. 

V.  Reynolds  (N.  J.),  26  Atl.  150,  154.  118,  126. 

Otherwise  in  Illinois:    Colehmir  v.  -^''Robeson  v.  Robeson  (N.  J.  Eq.), 

State  Sav.  Inst.  90  111.  152;  §  838.  23  Atl.  612. 


441  THE  ANSWER  AND  DEFENCE.  [§§    1488,    1490. 

8  1488.  It  is  a  good  objection  to  a  suit  that  the  complainant  has 
parted  with  his  interest  in  the  mortgage  before  the  time  ol'  answer- 
ing; the  party  in  interest  is  not  before  the  court.-**"  But  the  assign- 
ment of  a  note  and  mortgage  after  the  commencement  of  foreclosure 
proceedings  does  not  affect  a  decree  obtained  therein,  if  the  assign- 
ment neither  appears  of  record  nor  is  brought  to  the  knowledge  of  the 
court.-'*"  On  the  other  hand,  a  defendant  who  has  no  interest  in  the 
property  cannot  assail  the  mortgage. -^^  If  the  mortgagor,  after  hav- 
ing suffered  a  bill  of  foreclosure  to  be  taken  as  confessed  against  him, 
conveys  his  interest  in  the  property,  the  purchaser  takes  it  subject  to 
the  rights  whicli  the  complainant  has  acquired  in  the  suit,  and  to  the 
admissions  made  by  the  mortgagor's  default ;  and  no  defence  can  then 
be  taken  which  would  not  have  been  open  to  the  mortgagor  had  he  not 
sold  his  interest.^^^ 

§  1489.  Indemnity. — Although  the  condition  of  a  mortgage  may 
be  for  the  payment  of  a  certain  sum  of  money,  it  is  competent  to  show, 
by  parol  evidence,  that  the  mortgage  was  really  given  to  indemnify 
the  mortgagee  as  a  surety,  and  that  his  liability  has  been  discharged 
without  his  being  damnified.  The  effect  of  such  proof  is  not  to  con- 
tradict or  vary  the  mortgage,  but  to  indemnify  the  demand  to  which 
it  really  refers.^^^  If  there  has  been  no  breach  of  the  condition  of  a 
mortgage  of  indemnity,  there  can  be  no  foreclosure  of  it.^^* 

Where  a  suit  is  brought  to  foreclose  a  lost  mortgage  and  note,  the 
defendant  cannot  resist  the  payment  of  either  principal  or  costs  on 
the  ground  of  a  refusal  to  give  him  indemnity.^''^  In  case  the  defend- 
ant is  entitled  to  any  indemnity,  he  cannot  take  advantage  of  the 
right  in  this  suit,  unless  he  can  show  he  was  ready  before  suit  to  ten- 
der payment  on  receiving  indemnity.-^® 

§  1490.  Want  of  consideration  for  the  mortgage  or  failure  of  it  is 
a  good  defence  to  it  as  between  the  original  parties,^^^  but  the  proof 

^^^  Wallace  v.  Dunning,  Walk.  416.  -"'  Sharp  v.  Cutler,  25  N.  J.  Eq.  425. 

And  see  Smith  v.  Bartholomew,  42  -^°  Massaker  v.  Mackerley,  9  N.  J. 

Vt.  356.  Eq.  440. 

='"'Bigelow  V.  Booth,  39  Mich.  622.  ^"^  §    610;    Conwell   v.    Clifford,    45 

And  see  Ellis  v.  Sisson,  96  111.  105.  Ind.  392;  Mell  v.  Moony,  30  Ga.  413; 

-"  Carleton  v.   Byington,   IS   Iowa,  Akerly  v.  Vilas,  21  Wis.  S8;   Pacific 

482.  Iron    Works    v.    Newhall,    34    Conn. 

^'"Watt  V.  Watt,  2  Barb.  Ch.  371.  67,   77;    Banks   v.   Walker,   2    Sandf. 

™'Colman  v.  Post,  10  Mich.  422,  82  Ch.  344,  3  Barb.  Ch.  438;   Morris  v. 

Am.  Dec.  49;    Kimball  v.  Myers,  21  Davis,    83    Va.    297.    8    S.    E.    247; 

Mich.   276,  4  Am.   Rep.   487;   Man  v.  Cawley  v.  Kelley,  60  Wis.  315,  19  N. 

Elkins,  10  N.  Y.  Supp.  488.  W.  65;   Marshall  v.  Reynolds,  12  N. 

=»*Ide  v.   Spencer,  50  Vt.  293.     As  Y.    Siipp.    19;    Hicklin   v.   Marco,    56 

to  breach  of  condition  of  a  mortgage  Fed.  Rep.  549. 
to  secure  one  for  becoming  bail,  see 
Griswold  v.  Barker,  57  Vt.  53. 


§  141)0.]         FORECLOSURE  BY  EQUITABLE  SUIT.  442 

should  be  as  clear  and  convincing  as  that  required  for  the  reformation 
of  written  instruments.-'-***  A  partial  failure  of  consideration  is  a  de- 
fence pro  tanto.  These  defences  must  be  distinctly  pleaded. ^^'^  A 
mortgage  given  in  consideration  that  the  mortgagee  should  serve  nine 
months  in  the  army  as  a  substitute  for  the  mortgagor,  who  had  been 
drafted,  cannot  be  enforced  when  it  appears  that  the  mortgagee  de- 
serted within  a  few  weeks  after  being  mustered  into  the  service.^"* 
In  an  action  to  foreclose  the  mortgage  of  a  married  woman  she  may 
show  by  parol  evidence  that  the  consideration  on  which  the  mortgage 
was  executed  was  her  husband's  indebtedness,  then  existing  or  there- 
after to  be  incurred.'^'*^ 

Evidence  of  ex  parte  statements,  or  declarations  of  the  mortgagor, 
made  after  the  execution  of  the  mortgage,  that  it  was  given  without 
consideration,  and  only  for  the  purpose  of  putting  the  property  be- 
yond the  reach  of  his  wife,  with  whom  he  was  having  difficulty,  is  in- 
admissible.^"^ 

A  mortgagor  may  show  a  failure  of  consideration  of  a  mortgage  to 
secure  a  non-negotiable  note  in  an  action  to  foreclose  the  mortgage  by 
an  assignee  of  the  note  and  mortgage.''"^ 

If  it  appears  that  the  mortgage  was  given  to  secure  future  advances 
which  were  never  made,  the  bill  will  be  dismissed.^"*  If  some  advances 
are  made  upon  the  mortgage,  though  not  to  the  stipulated  amount,  the 
mortgage  will  be  enforced  to  the  amount  actually  advanced  upon  it.^°^ 
On  the  foreclosure  of  a  mortgage  given  to  secure  the  payment  of  judg- 
ments confessed  by  the  mortgagor,  but  which  were  void  for  want  of 
compliance  with  the  statute,  the  defence  may  be  taken  that  no  indebt- 
edness is  shown,  and  the  bill  should  be  dismissed.^**"  But  when  there 
was  an  actual  consideration  for  a  mortgage,  generally  the  inquiry  can- 
not be  made  whether  the  consideration  was  full  and  adequate."" 

A  junior  mortgagee  or  purchaser  cannot  set  up  want  of  consider- 
ation in  a  senior  mortgage  which  he  has  assumed,  or  expressly  taken 
or  bought  subject  to.^*'^  Payment  is  the  only  defence  open  to  him 
against  the  mortgage  assumed. '°° 

=»«Bray  v.    Comer,   82   Ala.   183;    1  ^"'McDowell  v.  Fisher,  25  N.  J.  Eq. 

So.    77;    Chaffe  v.   Whitfield,  40   La.  93. 

Ann.  631,  4  So.  563.  '■""'  Baldwin  v.  Flagg,  36  N.  J.  Eq.  48. 

-^^  Philbrooks  v.   McEwen,   29   Ind.  '""  Austin  v.  Grant,  1  Mich.  490. 

347;    Matteson    v.    Morris,    40    Mich.  =»' Norton  v.  Pattee,  68  N.  Y.  144. 

52  ="^  Terry  v.  Durand  Land   Co.,  112 

^"o  Nelson  V.  McPike,  24  Ind.  60.  Mich.    66.5,    71    N.    W.    525;    Dyer   v. 

301  Ferris  v.  Hard,  135  N.  Y.  354,  32  Dean,  69  Vt.  370,  37  Atl.  1113.     See 

N   E    129  however,    Coleman   v.    Witherspoon, 

'=»=  Silva   V.   Serpa,   86   Cal.   241,   24  76  Ind.  285. 

Pac.  1013.  '"'  Crawford  v.  Edwards,  33  Mich. 

'"=  Walker  v.  Thompson,  108  Mich.  354. 
686,  66  N.  W.  584. 


443 


THE   ANSWER  AND   DEFENCE. 


[§  1-191. 


§  1491.  Failure  or  want  of  consideration  as  between  the  parties 
to  a  mortgage  cannot  be  set  up  as  a  defence  by  a  purchaser  of  the 
land  subject  to  the  mortgage,  whicli  is  in  fact  a  pai't  of  the  considera- 
tion, whether  he  has  expressly  assumed  the  mortgage  as  a  part  of  the 
purchase-money  or  not.^^**  In  a  case  in  New  York  the  owner  of  land 
made  a  mortgage  to  an  insurance  company  for  four  thousand  dollars, 
upon  which  the  company  advanced  only  two  thousand  dollars  at  the 
time.  A  further  loan  from  the  company  of  two  thousand  dollars  was 
then  contemplated,  but  was  never  made.  The  owner  conveyed  his 
equity  of  redemption  subject  to  the  mortgage,  for  a  consideration  ex- 
pressed in  the  deed,  from  which  the  four  thousand  dollars  were  de- 
ducted. Several  subsequent  conveyances  of  the  premises  were  made 
in  the  same  manner.  Afterwards  the  owner  procured  the  insurance 
company  to  assign  the  mortgage  to  a  creditor,  who  paid  the  company 
the  amount  advanced  upon  the  mortgage,  and  credited  the  owner  the 
balance  of  the  four  thousand  dollars  secured.  The  creditor  was  al- 
lowed to  foreclose  the  mortgage  for  the  entire  sum  of  four  thousand 
dollars,  against  the  objection  of  the  purchaser  of  the  equity  of  redemp- 
tion that  it  was  a  valid  lien  for  only  the  amount  originally  advanced 
upon  it  with  interest.^^^    The  court  said  that  the  purchaser's  position 


"'"  §  744;  Horton  v.  Davis,  76  N. 
Y.  495;  Pratt  v.  Nixon,  91  Ala.  192,  8 
So.  751;  Price  v.  Pollock,  47 
Ind.  362;  West  v.  Miller,  125 
Ind.  70,  25  N.  E.  143;  Bennett  v. 
Mattingly,  110  Ind.  197,  10  N.  E. 
299,  11  N.  E.  792;  Schee  v.  McQuil- 
ken,  59  Ind.  269;  Studabaker  v.  Mar- 
quardt,  55  Ind.  341;  Terry  v.  Durand 
Land  Co.,  112  Mich.  665,  71  N.  W. 
525.  In  some  of  the  earlier  cases 
in  New  York,  grantees  who  had 
assumed  the  payment  of  existing  lia- 
bilities were  allowed  to  set  up  de- 
fences other  than  usury;  all  authori- 
ties agreeing  that  such  grantees  can- 
not defend  on  that  ground.  See  Rus- 
sell V.  Kinney,  1  Sandf.  Ch.  34; 
Jewell  v.  Harrington,  19  Wend.  471; 
Hartley  v.  Tatham,  26  How.  Pr.  158; 
Lester  v.  Barron,  40  Barb.  297.  But 
the  rule  is  established  that  the  grant- 
or may  create  any  lien  he  pleases 
upon  the  land,  whether  it  be  found- 
ed on  any  consideration  as  between 
him  and  the  person  in  whose  favor 
it  is  made  or  not;  and  if  his  grantee 
either  expressly  or  impliedly  under- 
takes for  a  consideration  to  pay  it, 
he  cannot  defend  against  it.  See 
cases  cited  under  this  section,  and 
also  Ritter  v.  Phillips,  53  N.  Y.  586. 


^"  Freeman  v.  Auld,  44  N.  Y.  50, 
overruling  same  case  in  37  Barb. 
587.  Mr.  Justice  Hunt  said:  "Two 
objections  are  mainly  relied  upon  as 
justifying  the  judgment  below:  1st. 
That  the  insurance  company  ad- 
vanced only  the  sum  of  $2,000;  that 
they  could  have  enforced  the  mort- 
gage for  no  greater  amount  against 
Allen  and  Stevens  (the  mortgag- 
ors) ;  and  that  they  could  transfer 
to  their  assignee  no  greater  rights 
than  they  possessed;  2d.  That  if  Al- 
len and  Stevens,  or  the  insurance 
company  as  their  trustee,  could  have 
recovered  the  whole  amount,  that  it 
was  a  lien  or  equitable  claim,  and 
that  the  simple  transfer  of  the 
mortgage  did  not  carry  with  it 
such  lien  or  claim.  1st.  I  look  upon 
the  insurance  company  as  holding 
this  mortgage  in  a  double  capacity; 
as  owners  to  one-half  of  the  amount, 
and  as  trustee  for  Allen  and  Stevens 
for  the  residue.  The  latter  wished 
to  impose  a  mortgage  of  $4,000  iipon 
the  lot.  The  insurance  company  did 
not  wish  to  advance  the  whole 
amount,  and  the  mortgagees  were 
willing  to  accept  a  reduced  amount, 
allowing  the  mortgage  to  stand  for 
its  face.     It  is  quite  true  that  in  a 


§  1493.]         FORECLOSURE  BY  EQUITABLE  SUIT.  444 

was  in  no  respect  different  from  what  it  would  have  been  had  the  orig- 
inal owner  counted  out  in  cash  the  sum  specified  in  the  mortgage,  and 
placed  it  in  the  hands  of  their  grantee  as  their  messenger,  with  direc- 
tions to  place  it  in  the  hands  of  the  company,  and  he  had  placed  it  in 
the  hands  of  his  grantee,  who  had  in  turn  delivered  it  to  his  grantee, 
the  owner  of  the  equity  of  redemption,  with  the  same  directions,  who 
with  the  money  in  his  pocket  nevertheless  proposed  to  prove  that  the 
mortgage  was  not  a  valid  security  for  the  amount  in  excess  of  the  orig- 
inal advance. 

§  1492.  Fraud  is  a  good  defence  when  it  is  shown  that  it  was  prac- 
ticed by  the  mortgagee  or  his  agents  upon  the  mortgagor ;  or  when  the 
mortgagee  or  his  assignee,  at  the  time  of  taking  the  mortgage,  was 
aware  that  a  fraud  had  been  committed  upon  the  mortgagor.^^^  The 
answer  should  distinctly  state  the  several  facts  necessary  to  consti- 
tute the  fraud,  and  to  bring  the  knowledge  of  it  home  to  the  mort- 
gagee. Evidence  of  fraud  is  inadmissible  if  the  answer  contained  no 
allegations  of  fraud.^^^  The  fraud  may  be  a  defence  to  the  whole 
claim,  or  it  may  be  a  defence  in  part,  and  available  as  a  counter-claim. 
The  burden  of  proof,  that  a  mortgage  was  procured  by  false  repre- 
sentation, lies  with  the  defendant.^^'* 

In  a  foreclosure  suit  against  a  husband  and  wife,  the  latter  may  in 
her  answer  aver  that  she  did  not  intend  to  convey  the  land  described, 
and  was  induced  to  sign  the  mortgage  through  fraud  and  collusion  on 
the  part  of  her  husband  and  the  mortgagee.  She  need  not  assert  this 
defence  by  cross-bill.^^^  An  answer  by  the  wife,  alleging  that  she  exe- 
cuted the  mortgage  under  duress  by  her  husband,  is  insufficient,  unless 

controversy  between  the  mortgagees  How.   Pr.    194,    distinguished    from 

and   the   company,   the   latter   could  above. 

not  have  compelled  the  payment  of  ''■  §§  624-632;  Hicks  v.  Jennings,  4 

the  full  amount.     It  is  equally  true  Woods,  496;  Aiken  v.  Morris,  2  Barb, 

that,  where  there  is  no  such  contro-  Ch.  140;  Reed  v.  Latson,  15  Barb.  9; 

versy,  where  the  makers  desire  it  to  Allen  v.  Shackelton,  15  Ohio  St.  145. 

be  enforced  to  its  nominal  amount.  And  see  Abbott  v.  Allen,  2  Johns.  Ch. 

where   the   holders   of   the   property  519,    7    Am.    Dec.    554;    Champlin   v. 

have   consented   and   agreed   that   it  Laytin,    6    Paige,    189,    affirmed    18 

should  be  so  enforced,  and  have  had  Wend.  407,  31  Am.  Dec.  382;  Bennett 

a  deduction  of  $2,000  from  their  pur-  v.    Bates,    26    Hun,    364;    Cornell    v. 

chase-money    based    upon    the    pay-  Corbin,  64  Cal.  197;  Lurch  v.  Holder, 

ment  by  them,  or  the  subjecting  the  (N.  J.),  27  Atl.  81;  Manley  v.  Felty, 

premises     to     the    full     amount     of  146  Ind.  194,  45  N.  E.  74. 

the  mortgage,  that  the  payment  in  '^^  Wilson  v.  White,  84  Cal.  239,  24 

full    should    be    enforced.     The    in-  Pac.  114. 

surance    company    may    collect    the  =i*  Sloan  v.  Holcomb,  29  Mich.  153; 

full    sum.      They    hold    it   for    their  Perrett  v.  Yardsdorfer,  37  Mich.  596; 

own  benefit  to  the  amount  advanced  Elphick  v.  Hoffman,  49  Conn.  331. 

by  them;   as  trustees  for  Allen  and  ^"  Genthuer  v.  Pagan,  85  Tenn.  491, 

Stevens     for     the     amount     not   al-  3  S.  W.  351. 
lowed."     See  Grissler  v.  Powers,  53 


445  THE  AXSWER  AND  DEFENCE.  [§    1492a. 

it  also  shows  that  the  mortgagee  was  in  some  way  connected  with  or 
had  knowledge  of  the  duress.'*^" 

A  subsequent  mortgagee  may  set  up  fraud  in  the  consideration  of  a 
prior  mortgage  by  answer,  without  filing  a  cross-bill;  and  a  general 
allegation  of  such  fraud  is  sufficient  where  the  fraud  alleged  is  that  the 
mortgage  was  given  to  defraud  creditors,  and  was  without  considera- 
tion.^^^  If  the  mortgagee  was  aware  when  he  took  the  mortgage  that 
such  was  the  purpose  of  the  mortgagor,  he  cannot  avail  himself  of  this 
defence. ^^^ 

A  simulated  decree  of  foreclosure  and  sale  upon  a  mortgage  upon 
real  property,  without  the  consent  or  knowledge  of  the  owner  of  the 
debt  and  instrument  which  the  mortgage  was  given  to  secure,  and  in  a 
name,  as  plaintiff,  that  does  not  appear  in  the  mortgage  or  upon  the 
records  of  the  register  of  deeds,  and  a  sale  and  conveyance  pursuant  to 
such  simulated  decree,  are  ineffectual  upon  the  rights  of  the  true  owner 
of  the  debt  and  mortgage.^^® 

§  1492a.  A  fraudulent  alteration  of  a  mortgage  or  of  the  note  se- 
cured, made  by  the  mortgagee,  may  defeat  a  recovery ;  but  the  burden 
of  proof  to  show  the  alterations  and  the  fraudulent  intent  is  on  the 
mortgagor. ^^*^  To  have  this  effect  the  alteration  must  be  one  made  by 
the  holder  of  the  mortgage  in  a  material  matter,  with  a  fraudulent  in- 
tent. An  alteration  not  made  by  a  party  to  the  instrument  is  without 
effect,  and  the  original  validity  of  the  instrument  remains. ^-^  Thus 
the  alteration  of  a  mortgage  by  an  agent  of  the  mortgagee  without  his 
knowledge,  so  as  to  make  it  secure  other  notes,  does  not  affect  the  valid- 
ity of  the  mortgage,  in  an  action  to  foreclose  it  for  non-payment  of  the 
notes  which  it  was  originally  given  to  secure. ^-- 

If  an  alteration  appears  on  the  face  of  the  mortgage  note,  and  there 
is  no  evidence  that  it  was  made  with  a  fraudulent  intent,  and  the  ef- 

='"  Gardner   v.    Case,   111    Ind.    494,  N.  Y.  130,  141;   Martin  v.  Insurance 

13  N.  E.  36;  Line  v.  Blizzard,  70  Ind.  Co.  101  N.  Y.  498,  5  N.  E.  338;  Solon 

23;    Talley    v.    Robinson,    22    Gratt.  v.   Savings  Bank,   114  N.   Y.   122,  21 

888;  Green  v.  Scranage,  19  Iowa,  461,  N.  E.  168. 

87  Am.  Dec.  447;   Berry  v.  Berry  57  Vermont:     Bigelow  v.  Stilphen,  35 

Kan.  691,  47  Pac.  837,  57  Am.  St.  351.  Vt.  521. 

''^^  McGiickin  v.  Kline,  31  N.  J.  Eq.  Pennsylvania:     Robertson  v.  Hay, 

454;    McConihe   v.    Fales,   107   N.    Y.  91  Pa.  St.  242. 

404,  14  N.  E.  285.  New  Jersey:     Hunt  v.  Gray,  35  N. 

^'^Barwick  v.  Moyse,  74  Miss.  415,  J.  L.  227. 

21  So.  238,  60  Am.  St.  512,  citing  text.  Massachusetts:  Nickerson  v.  Swett, 

^'^  Bradford  Sav.  Bank  &  Trust  Co.  135  Mass.  514. 

V.    Crippen,   63    Neb.    210,   88   N.   W.  Indiana:    Brooks  v.  Allen,  62  Ind. 

166.  401. 

^^-'^  Cosgrave  v.  Fanebust,  10  S.  D.  '=- Gleason  v.   Hamilton,  138  N.  Y. 

213,  72  N.  W.  469.  353.  24  N.  E.  283,  affirming  19  N.  Y. 

^^^  New  York:     Casoni    v.    .Terome,  Supp.  103. 
58  N.  Y.  315,  321;  Smith  v.  Kidd,  68 


§§  1492b,  1493.]  FORfiCLOsrRE  by  equitable  suit.  446 

feet  of  it  is  merely  to  make  the  note  mature  at  an  earlier  date  than  it 
would  as  originally  written,  such  alteration  is  no  defence  to  an  action 
for  foreclosure  brought  after  the  maturity  of  the  note  and  mortgage 
as  originally  written."-^ 

Forgery  of  a  mortgage  is  of  course  a  defence,  when  proved,  and  a 
judgment  cancelling  the  apparent  lien  caused  by  such  mortgage  may 
be  entered.^-*  Such  a  mortgage  can  be  validated  or  ratified  only  by 
execution  of  a  new  mortgage.^-^ 

§  1492b.     Fraud  as  against  mortgagors  creditors. —  In  an    action 

by  a  mortgagee  to  foreclose  a  mortgage,  against  the  assignee  for  the 
benefit  of  creditors  of  the  mortgagor,  an  answer,  seeking  to  avoid  the 
mortgage  as  in  fraud  of  subsequent  creditors,  must  expressly  aver  that 
it  was  executed  with  intent  to  defraud  them,  where  by  statute  the 
question  of  fraudulent  intent  is  one  of  fact.^-^ 

A  subsequent  purchaser  of  the  mortgaged  premises,"  who  has  pur- 
chased with  notice  of  the  existence  of  the  mortgage,  cannot  set  up  that 
the  note  was  without  consideration,  and  was  given  for  the  purpose  of 
defrauding  the  mortgagor's  creditors,  even  as  against  an  assignee  of 
the  note  and  mortgage  after  maturity.^^' 

§  1493.  Tlsury  is  a  defence.^-® — The  efi'eet  of  the  illegal  rate  of  in- 
terest may  be  obviated  if  it  can  be  shown 'that  it  was  inserted  by  mis- 
take when  the  parties  intended  to  provide  for  the  legal  rate  only.^-^ 
The  law  governing  the  contract  as  to  usury  is  that  of  the  State  where 
it  was  made,  if  made  in  a  State  other  than  that  in  which  the  mort- 
gaged property  is  situate.^^°  It  may  be  availed  of  by  a  wife  for  the 
protection  of  her  homestead  or  of  her  dower  interest,  although  her  hus- 
band be  estopped  by  his  acts  from  setting  it  up  as  a  defence.^^^ 

An  answer  pleading  usury  should  set  out  the  facts  constituting  it.^^^ 
If  the  answer  alleges  generally  that  the  mortgage  contract  is  usurious 
without  any  specific  allegation,  the  defence  must  be  limited  to  a  vio- 

"'Wolferman  v.  Bell    (Wash.),  32  Cowles    v.    Woodruff,    8    Conn.    35; 

Pac.   1017.  Piatt  v.  Robinson,  10  Wis.  128;  Fay 

^"Capital  Nat.  Bank  v.  Williams,  v!    Lovejoy,    20    Wis.    407;     Cox    v. 

35  Neb.  410,  53  N.  W.  202.    See  as  to  Douglas,    12    Iowa,    185;     Outten    v. 

evidence  Oregon  Mortg.  Co.  v.  Estes,  Grinstead.  4  J.  J.  Marsh.  608. 

20  Wash.  659,  56  Pac.  834.  ''"  See  §S  633-649;    Griffin  v.  N.  J. 

^-'  Finley  v.  Babb,  144  Mo.  403,  46  Oil  Co.  11  N.  J.  Eq.  49. 

S.  W.  165.  '"' §  657;  Dolman  v.  Cook,  14  N.  J. 

'=«  Hutchinson  v.  First  Nat.  Bank  56;    Meroney  v.   Atlanta  Bldg.   &  L. 

(Ind.),  30  N.  E.  952.  Asso.    116   N.    C.    882,    21    S.    E.    924, 

3"  Blake  v.  Koons,  71  Iowa,  356,  32  41  Am.  St.  841. 

N.    W.    379;    Crosby    v.    Tanner,    40  ''^  Campbell    v.    Babcock,    27    Wis. 

Iowa,  136.  512. 

'^'§§   633-663;   De  Butts  v.  Bacon,  --Stanley  v.  Chicago  Trust  &  Sav. 

6  Cranch,  252;   Fanning  v.  Dunham,  Bank,  165  111.  295,  46  N.  E.  273. 
5   Johns.    Ch.    122,   9   Am.   Dec.   283; 


447  THE   ANSWER  AND   DEFENCE.  [§    1493, 

lation  or  the  statute  of  the  State  regarding  usury,  and  its  usurious 
character  under  any  other  statute  cannot  be  shown  y-^'-^  and  such  an  an- 
swer under  the  systems  of  pleading  and  practice  generally  in  vogue 
would  amount  to  nothing.'^'^*  The  answer  must  allege  the  usury,  and 
strict  proof  of  the  usurious  character  of  the  mortgage  must  be  given.^*^^ 
After  default  has  been  entered,  it  would  seem  that  it  will  not  be  re- 
moved to  allow  this  defence  except  upon  special  terms.^*^'' 

Whether  the  defence  of  usury  is  a  personal  privilege  of  the  debtor, 
or  may  be  taken  advantage  of  by  others,  is  a  question  upon  which  the 
courts  are  divided  in  opinion.  On  the  one  hand,  it  is  affirmed  that 
any  person  who  has  become  interested  in  the  property  subject  to  the 
mortgage,  unless  he  has  bought  expressly  subject  to  the  mortgage,  or 
has  assumed  the  payment  of  it,  may  use  this  defence.^^^  Thus  a  sec- 
ond or  other  subsequent  mortgagee  may  take  this  defence.^"*^ 

A  judgment  creditor  of  the  mortgagor  may  avail  himself  of  the  de- 
fence of  usury  to  the  extent  of  his  legal  lien.^^^  Creditors  for  whose 
benefit  land  has  been  conveyed  in  trust  may  set  up  this  defence,  though 
the  trustees  have  neglected  to  do  so.^*"  Although  a  judgment  for  the 
full  amount  of  the  note  and  an  order  for  sale  have  already  been  en- 
tered, subsequent  incumbrancers  may  before  final  distribution,  by  an- 
swer or  cross-petition,  set  up  the  defence  of  usury,  and  have  the  pro- 
ceeds, to  the  amount  of  the  usurious  interest,  applied  to  the  payment 
of  their  liens.^*^ 

On  the  other  hand,  the  weight  of  authority  at  the  present  time 
favors  the  rule,  that  when  the  debtor  is  himself  willing  to  abide  by 
the  terms  of  his  contract,  no  one  else  can  interfere  and  set  up  the 
defence   of   usury.^*-      The   fact   that   a   usury   law   does   not   make 

^^^Atwater  v.  Walker,  16  N.  J.  Eq.  New     Hampshire:       Gunnison     v. 

42.  Gregg,  20  N.  H.  100. 

^^*  Hosier  v.  Norton,  83  111.  519.  New  Jersey:     Cummins  v.  Wire,  6 

335  Richards  v.  Worthley,  5  Wis.  73;  N.  J.  Eq.  73. 

Munter    v.     Linn,     Gl     Ala.     492,     2  Nebraska:     Doll  v.   Hollenbeck,  19 

South.    L.    J.    205.      See    Baldwin   v.  Neb.  639. 

Norton,    2    Conn.    161;    Wheaton    v.  "s  Qj-ggne  v.  Tyler,  39  Pa.  St.  361. 

Voorhis    53  How.  Pr.  319;   Maher  v.  See,  however,  Stickney  v.  Moore,  108 

Lanfrom,  86  111.  513.  Ala.  590,  19  So.  76. 

33«  Bard  v.  Fort,  3  Barb.  Ch.  632.  '"  post  v.  Dart,  8  Paige,  639. 

3"  Lloyd  v.  Scott,  4  Pet.  205.  ^'^  Union  Bank  v.  Bell,  14  Ohio  St. 

New  York:    Post  v.  Dart,  8  Paige,  200. 

639;  Brooks  v.  Avery,  4  N.  Y.  225.  '"Brooke  v.  Morris,  2  Cin.   (Ohio) 

Ohio:    Union  Bank  v.  Bell,  14  Ohio  528. 

gt.  200.  '"Alabama:    Fielder  v.  Warner,  45 

kississippi:     M'Alister  v.   Jerman,  Ala.  429;  Cain  v.  Gimon,  36  Ala.  168; 

32  Miss.  142.  Speakman  v.  Oaks  (Ala.),  11  So.  836. 

Maryland:    Banks  v.  McClellan,  24  Stickney  v.  Moore,  108  Ala.  590,  19 

Md.  62,  87  Am.  Dec.  594.  So.  76. 


FORECLOSURE   BY    EQUITABLE   SUIT. 


448 


void  usurious  contracts  has  been  held  to  be  decisive  in  favor  of  this 


view. 


In  litigation  after  a  judgment  of  foreclosure,  the  mortgagor  cannot 
plead  usury  in  the  mortgage  debt,  unless  the  judgment  be  shown  to 
have  been  procured  by  accident,  fraud,  or  mistake,  or  the  usury  ap- 
pears on  the  face  of  the  judgment.^** 

§  1494.  Usury  cannot  be  set  up  as  a  defence  by  one  who  has  pur- 
chased land  and  assumed  the  mortgage,  or  has  purchased  subject  to 
a  mortgage,  the  amount  of  which  is  made  part  of  the  consideration  of 
the  purchase,  whether  he  has  assumed  the  payment  of  it  or  not.^*° 
When  the  purchaser  sets  up  this  defence,  the  complainant  cannot  over- 
come it  by  proof  that  the  lands  were  conveyed  to  him  subject  to  the 
mortgage,  unless  his  pleading  set  forth  the  execution  and  terms  of  the 


Connecticut:  Loomis  v.  Eaton,  32 
Conn.  550. 

Georgia:  Scott  v.  Williams,  100 
Ga.  540,  285  E.  243,  62  Am.  St.  340. 

Illinois:  Adams  v.  Robertson,  37 
111.  45;  Primley  v.  Shirk,  163  111.  389, 
45  N.  E.  247. 

Indiana:  Studabaker  v.  Mar- 
quardt,  55  Ind.  34l. 

Iowa:  Carmichael  v.  Bodflsh,  32 
Iowa,  418;  Huston  v.  Stringham,  21 
Iowa,  36;  Powell  v.  Hunt,  11  Iowa, 
430. 

Kansas:  Pritchett  v.  Mitchell,  17 
Kans.  355,  22  Am.  Rep.  287,  where 
the  cases  are  reviewed  and  collected. 

Kentucky:  Campbell  v.  Johnston, 
4  Dana,  177,  179. 

Michigan:  Farmers'  &  Mechanics' 
Bank  v.  Kimmel,  1  Mich.  84. 

Missouri:  Ransom  v.  Hays,  39 
Mo.  445. 

Pennsylvania:  Miners'  Trust  Co. 
Bank  v.  Roseberry,  81  Pa.  St.  309; 
Bonnell's  Appeal  (Pa.),  11  Atl.  211; 
Stayton  v.  Riddle,  114  Pa.  St.  464,  7 
Atl.  72;  Reap  v.  Battle,  155  Pa.  St. 
265,  26  Atl.  439.  Under  an  earlier 
statute  in  this  State  which  made  void 
a  usurious  contract,  it  was  held  that 
a  second  mortgagee  or  other  person 
interested  in  the  equity  could  set  up 
this  defense.  Greene  v.  Tyler,  39 
Pa.  St.  361;  Bachdell's  Appeal,  56 
Pa.  St.  386. 

Vermont:  Austin  v.  Chittenden, 
33  Vt.  553. 

="  Miners'  Trust  Co.  Bank  v.  Rose- 
berry,  81  Pa.  St.  309. 


^"McLaws  V.  Moore,  83  Ga.  177, 
9  S.  E.  615. 

^«§S  633,  644,  745;  De  Wolf  v. 
Johnson,  10  Wheat.  367. 

Vermont:  Reed  v.  Eastman,  50  Vt. 
67. 

New  York:  Hartley  v.  Harrison, 
24  N.  Y.  170;  Morris  v.  Floyd,  5 
Barb.  130;  Sands  v.  Church,  6  N.  Y. 
347;  Mason  v.  Lord,  40  N.  Y.  476; 
Post  V.  Dart,  8  Paige,  C39;  Har- 
din V.  Hyde,  40  Barb.  435;  Free- 
man V.  Auld,  44  N.  Y.  50;  Merchants' 
Ex.  Nat.  Bank  v.  Commercial  Ware- 
house Co.   49  N.  Y.  635,  643,  note. 

Wisconsin:  Thomas  v.  Mitchell, 
27  Wis.  414. 

Indiana:  Stein  v.  Indianapolis,  &c. 
Asso.  18  Ind.  237,  81  Am.  Dec.  353; 
Butler  V.  Myer,  17  Ind.  77;  Wright  v. 
Bundy,  11  Ind.  398;  Price  v.  Pollock, 
47  Ind.  362,  366,  per  Downey,  J. 

Iowa:  Perry  v.  Kearns.  13  Iowa, 
174;  Greither  v.  Alexander,  15  Iowa, 
470;  Huston  v.  Stringham,  21  Iowa, 
36. 

Michigan:  Sellers  v.  Botsford,  11 
Mich.  59. 

Ohio:  Cramer  v.  Lepper,  26  Ohio 
St.  59,  20  Am.  Rep.  756. 

Maryland:  Hough  v.  Horsey,  36 
Md.  181,  11  Am.  Rep.  484. 

New  Jersey:  Conover  v.  Hobart, 
24  N.  J.  Eq.  120. 

Virginia:  Dickenson  v.  Bankers' 
Loan  &  Inv.  Co.  93  Va.  4498,  25  S.  E. 
548. 

When  grantee's  title  is  in  hostil- 
ity to  the  mortgage,  see  Chamber- 
lain V.  Dempsey,  9  Bosw.  212. 


449  THE  ANSWER  AND   DEFENCE.  [§    1495. 

conveyance.^'*^  But  a  purchaser  who  has  hought  not  merely  the  equity 
of  redemption,  but  tlie  whole  title,  paying  the  full  price,  with  no  de- 
duction on  account  of  the  mortgage,  may  set  up  usury.^*^ 

A  mortgagor  who  has  conveyed  the  property  suljject  to  a  mortgage 
which  is  usurious,  and  has  afterwards  taken  a  reconveyance  in  which 
nothing  is  said  about  the  mortgage,  is  entitled  to  set  up  the  defence 
of  usury.^*^  It  was  suggested  that  if  there  had  been  a  personal  liability 
on  the  part  of  the  intermediate  purchaser  to  pay  the  mortgage  deht, 
it  might  not  be  in  his  power  to  release  that  liability  by  such  a  recon- 
veyance without  the  consent  of  the  mortgagee. 

Usury  cannot  be  set  up  against  a  mortgage  which  is  given  wholly  or 
in  part  to  secure  the  price  of  property  purchased  by  the  mortgagor, 
though  the  price  be  large,  and  more  than  others  would  pay  for  it,  pro- 
vided  the  transaction  was  made  in  good  faith. ^*^ 

Where  the  principal  sum  secured  by  a  mortgage,  and  the  interest 
thereon,  are  not  tainted  with  usury,  but  the  mortgage  provides  for  in- 
terest at  a  usurious  rate  upon  money  advanced  by  the  mortgagee  for 
the  payment  of  taxes  and  insurance,  his  right  to  recover  the  principal 
and  interest  of  the  mortgage  debt  is  not  affected.^^*^ 


^b^b^ 


§  1495.  Accordingly  a  mortgagor  may  be  estopped  from  setting 
up  the  defence  of  usury.  If  a  mortgage  be  made  for  the  purpose  of 
being  sold  at  a  discount  to  some  third  person,  and  subsequently  as- 
signed at  a  considerable  discount  under  a  promise  of  the  mortgagor 
that  he  would  make  an  affidavit  to  the  effect  that  the  consideration  of 
the  mortgage  was  the  full  amount  expressed  in  it,  and  that  there  was 
no  defence  or  set-off,  he  would  be  precluded  from  contradicting  his  affi- 
davit if  he  obtained  the  money  upon  the  strength  of  it.^^^  And  so  if  a 
mortgagor,  upon  the  assignment  of  a  mortgage  by  the  mortgagee,  signs 
a  certificate  stating  that  the  whole  principal  sum  and  interest  thereon 
is  due  without  any  offset  or  legal  or  equitable  defence,  the  mortgagor 
is  estopped  from  setting  up  usury.^^^  But  where  part  of  the  money  is 
paid  before  the  giving  of  the  affidavit,  the  creditor  does  not,  in  paying 
it,  act  upon  the  statements  contained  in  the  affidavit,  and  therefore 
the  mortgagor  is  not  estopped  from  asserting  the  usurious  nature  of 
the  transaction  so  far  as  the  amount  then  paid  is  concerned.    That  the 

^''  Hetfield  v.  JM^wton,  3  Sandf .  Ch.  ="  Saxe  v.  Womacl^  64  Minn.  162, 

564.  66  N.  W.  269. 

^"  Lilienthal  v.   Champion,   58  Ga.  '^"  Huglies     Bros.     Manuf.     Co.    v. 

158;  Maher  v.  Lanfrom.  86  111.  513.  Conyers,  97  Tenn.  274,  36  S.  W.  1093. 

=***  Knickerbocker   Life   Ins.   Co.   v.  ^''^  Real  Estate  Trust  Co.  v.  Rader, 

Nelson,  13  Hun,  321,  affirmed  7  Abb.  53  How.  Pr.  231. 

N.  C.  170.  2^-  Smyth    v.    Lombardo,    15    Hun, 

415. 


§  1496.]  roRECLOsuiiE  by  equitable  suit.  450 

creditor  believes  that  an  estoppel  will  be  made  in  the  future  avails 
nothing.^^^ 

§  1496.  Set-off  and  counter-claim. — Upon  a  bill  to  foreclose,  the 
mortgagor  is  allowed  to  set  off  a  debt  due  to  him  from  the  complain- 
ant, not  only  in  cases  where  this  would  be  allowed  in  actions  at  lav/,^^* 
but  also  in  cases  of  peculiar  equity  not  strictly  within  the  rules  of 
law;^°^  as,  for  instance,  in  an  action  against  a  mortgagor  and  his 
surety  on  a  bond  secured  by  the  mortgage,  a  debt  due  the  mortgagor 
from  the  plaintiff  may  be  allowed  in  set-off.  The  joint  bond  in  such 
case  is  nothing  more  than  a  security  for  the  separate  debt  of  the  mort- 
gagor. The  mortgage  is  executed  by  him  alone,  and  is  a  lien  upon  his 
land,  and  his  interests  alone  are  affected  by  the  foreclosure.  That  a 
joint  judgment  might  be  rendered  on  the  bond  for  any  deficiency  does 
not  exclude  the  allowance  of  the  counter-claim.^"''  The  defendant  can- 
not make  a  coimter-claim,  and  demand  judgment  upon  it,  unless  the 
plaintiff  is  personally  liable  to  him.  His  counter-claim  must  in  some 
way  go  to  qualify  or  defeat  the  plaintiff's  demand.^"  The  mortgagor 
cannot  set  off  a  demand  he  has  against  a  prior  holder  of  the  mortgage  j 
and  note,  unless  the  demand  is  founded  on  an  agreement  supported  by 
a  new  consideration,  in  pursuance  of  which  such  holder  procured  the 
mortgage  note,  or  there  is  a  special  equity  which  withdraws  the  de-  i 

'"  Payne  v.  Burnham,  62  N.  Y.  69.  instalment  of  interest.     Peterson  v. 

='=*New  York:    National  F.  Ins.  Co.  Johnson,  20  Wash.  497,  55  Pac.  932. 
V.  McKay,  21  N.  Y.  191,  196;   Irving        '=■' Goodwin    v.    Keney,    49    Conn. 

V.  De  Kay,  10  Paige,  319;   Chapman  563;   Currie  v.  Cowles,  6  Bosw.  452; 

V.   Robertson,   6   Paige,   627,  31   Am.  Hicksville  &  C.  S.  B.  R.  Co.  v.  Long 

Dec.  264;  Holclen  v.  Gilbert,  7  Paige,  Island  R.  Co.  48  Barb.  355;  Smith  v. 

208;  Hunt  v.  Chapman,  51  N.  Y.  555.  Billings,   170  111.   543,  49  N.  B.  212; 

Michig-an:    Hess  v.  Final,  32  Mich.  Bell  v.  Ward,  10  R.  I.  503;  Raleigh  v. 

515;  Lockwood  v.  Beckwith,  6  Mich.  Raleigh,    35    III.    512;      Salladin    v. 

168.  Mitchell,  42  Neb.  859,  61  N.  W.  127. 

Alabama:  Gafford  v.  Proskauer,  59  An    answer   in   foreclosure   proceed- 

Ala.   264;    Knight  v.   Drane,  77   Ala.  ings  which  alleges  that  the  mortgage 

371;    Conner  v.   Smith,   88  Ala.   300,  sought   to   be   foreclosed   is   invalid, 

7  So.  150.  and  that  defendant  claims  title  under 

In  earlier  cases  It  was  held  that  a  subsequent  mortgage,  does  not  set 

the  defendant  could  not  set  off  a  de-  up  a  counter-claim,  but  an  equitable 

mand,   but   must  resort  to  a   cross-  defence.     Caryl  v.  Williams,  7  Lans. 

bill.     Troup  v.  Haight,  Hopk.  239.  416. 

A  shareholder  and  mortgagor  in  a        '^^^  Ex  parte  Hanson,  12  Ves.   346; 

building     association      may    set    off  Bathgate  v.    Haskin,   59   N.    Y.    533; 

claims   held    by   him    against    it,    in  Holbrook  v.  Am.  F.  Ins.  Co.  6  Paige, 

release  of  his  mortgage  debt.     Hen-  220. 

ninghausen   v.    Tischer,   50  Md.   583.        ^' Lathrop  v.  Godfrey,  3  Hun,  739, 

But  it  has  been  held  that  the  mort-  6  Thomp.  &  C.  96;   National  F.  Ins. 

gagor  cannot  set  up  the  mortgagee's  Co.    v.    McKay,    21    N.    Y.    191,    196; 

indebtedness  to  him  as  a  defense  to  Mills  v.  Carrier,  30  S.  C.  617,  9  S.  E. 

foreclosure     proceedings     instituted  350. 
by  reason  of  his  failure  to  pay  an 


451  THE   ANSWER   AND   DEFENCE.  [§    149G. 

mand  from  tlic  operation  of  the  general  rule.-''''^^  The  demand  must  be 
of  such  a  nature  as  will  sustain  an  action  by  the  defendant  against  tlie 
plaintiff.^^" 

In  an  action  to  foreclose  a  mortgage  for  purchase-money  of  land,  in 
which  a  personal  judgment  is  demanded  for  any  deficiency  of  the  pro- 
ceeds of  sale  to  pay  the  mortgage,  interest,  and  costs,  a  breach  of  the 
covenant  of  seisin  in  plaintifFs  deed  of  the  premises  to  defendant  is  a 
proper  counter-claim.^'^'^  So  is  a  claim  for  shortage  in  tlie  quantity  of 
land  conveyed,  the  vendor  having  misrepresented  the  quantity. ^''^  The 
defendant's  claim  in  such  case  arises  out  of  a  contract,  and  was  a  cause 
of  action  existing  at  the  commencement  of  the  foreclosure  suit.^'^- 

To  entitle  the  defendant  to  set  off  a  debt,  it  must  have  been  due  to 
him  from  the  plaintiff  at  the  time  the  foreclosure  suit  was  com- 
menced.^"^^  Generally  a  claim  for  unliquidated  damages  cannot  be  set 
off  when  the  defendant  has  an  adequate  remedy  at  law;^***  but  under 
the  codes  of  practice  in  some  States  such  a  claim  may  be  allowed.^^^ 
Matters  sounding  in  tort  cannot  be  pleaded  by  way  of  set-off  against  a 
mortgage  debt.''"*" 

x\n  overpayment  by  mistake  upon  the  mortgage  may  be  set  up  by 
the  defendant,  who  may  have  judgment  for  the  amount  so  overpaid.^" 
The  defendant  may  set  up  a  claim  for  rent  or  damages  arising  from 
the  occupation  and  use  of  the  property  by  the  plaintiff  prior  to  the 
foreclosure  f"^  or  a  claim  for  damages  for  the  wrongful  appropriation 

^^*  Brown  v.  Scott,  87  Ala.  453,  6  So.  amount  due  in  equity  upon  the  bond. 

384.  The  late  case  of  Kirtz  v.  Peck,  113 

351)  ^ard   V.    Comegys,   2   How.   Pr.  N.    Y.   222,   21   N.   E.    130,   is   to   the 

(N.  S.)   428;    Vassear  v.   Livingston,  same  effect. 

13  N.  Y.  248;  Cragin  v.  Lovell,  88  N.  ="'^  Holden  v.  Gilbert,  7  Paige,  627; 

Y.  258;  McKensie  v.  Farrell,  4  Bosw.  Knapp   v.   Burnham,   11   Paige,   330; 

192.    A  claim  may  be  a  valid  set-off.  Thompson  v.  Ellsworth,  1  Barb.  Ch. 

''^''Merritt    v.     Gouley,     12     N.     Y.  624;  Conner  v.  Smith,  88  Ala.  300    7 

Supp.    132;     Wilson   v.    Ott,   173   Pa.  So.  150. 

253,  34  Atl.  23,  51  Am.   St.  767.  ""  Gafford    v.    Proskauer,    59    Ala. 

="  McMichael  v.  Webster,  54  N.  J.  264;  Cleaver  v.  Mathews,  83  Va.  801 

Eq.  478,  35  Atl.  663.  3  S.  E.  439. 

"''-Hunt  V.  Chapman,  51  N.  Y.  555;  ^"^  Hattier    v.    Etinaud,     2     Desau. 

Bathgate  v.    Haskin,   59   N.    Y.   533;  570;    Schubart  v.   Harteau,  34  Barb. 

Seligman    v.    Dudley,    14    Hun,    186.  447;     Lignot    v.    Redding,    4    E.    D. 

It  is  true  that  it  has  been  held  that  Smith,  285. 

a  breach  of  the  covenant  of  a  deed  '"■'"'  Rogers  v.  Watson,  81  Tex.  400, 

without  eviction  cannot  be  pleaded  17  S.  W.  29;   People  v.  Dennison,  84 

in  bar  of  a  suit  to  foreclose  a  pur-  N.  Y.  272;    Bell  v.  Lesbini.  66  How. 

chase-money   mortgage.     In  McCon-  Pr.  385;   Insurance  Co.  v.  Parker,  64 

ihe  v.  Fales,  107  N.  Y.  404,  14  N.  B.  Neb.   411,   89   N.   W.   1040;    Watts  v. 

285,  it  is  held  that  a  failure  of  title  Gantt,  42  Neb.  869,  61  N.  W.  104. 

is   no  defence  to  a  foreclosure   suit  ■■""  Leach  v.  Vining,  18  N.  Y.  Supp. 

without    an    allegation    of    fraud  in  822. 

sale  or  an  eviction.    But  in  that  case  ^"^  First    Nat.   Bank  v.   Parker    28 

there  was  no  breach  of  covenant  set  Wash.   234,  68  Pac.  756. 
up  as  a  counter-claim  to  reduce  the 


§§  1497,  1498.]   FORECLOSURE  BY  EQUITABLE  SUIT.  452 

of  other  security  given  to  secure  the  same  debt  ;^*'^  or  a  claim  for  waste 
by  the  mortgagee  in  possession.^'" 

An  answer  that  the  mortgage  was  given  by  one  partner  to  another 
to  raise  money  for  partnership  purposes;  that,  although  the  partner- 
ship business  had  ceased,  the  parties  were  still  partners;  that,  under 
the  partnership  agreement  and  transactions,  the  plaintiff  is  indebted 
to  the  defendant;  and  that  there  had  been  no  settlement  of  the  part- 
nership affairs, — is  sufficient  to  entitle  defendant  to  an  accounting,  the 
indebtedness  as  alleged  being  a  proper  matter  of  defence.^^^ 

§  1497.  If  the  suit  to  foreclose  be  brought  in  the  name  of  a  per- 
son other  than  the  real  owner  of  the  mortgage  note,  the  defendant 
may  have  the  benefit  of  any  defence  or  set-off  he  has  against  the  real 
owner.  No  other  defence  can  be  set  up  on  the  ground  that  the  holder 
of  the  mortgage  security  is  prosecuting  the  foreclosure  for  the  benefit 
of  another  person.^^^ 

§  1498.  In  New  Jersey,  however,  a  foreclosure  suit  is  regarded  as 
so  far  a  proceeding  in  rem  as  to  exclude  the  defence  of  set-off.  Noth- 
ing can  be  set  up  in  such  suit,  by  way  of  satisfaction  of  the  mortgage, 
in  whole  or  in  part,  except  payment.  There  must  either  have  been  a 
direct  payment  of  part  of  the  debt,  or  an  agreement  that  the  sum  pro- 
posed to  be  offset  should  be  received  and  credited  as  payment  f^  be- 
cause, if  there  was  no  actual  appropriation  by  the  debtor  at  or  before 
the  time  of  payment,  the  creditor  may  apply  the  payment  to  any  other 
claim  he  has,  at  his  discretion."*  An  independent  claim  of  the  mort- 
gagor cannot  be  set  off."°  A  payment  on  account  of  the  mortgage  debt 
is  not  a  cause  of  action,  which  must  be  pleaded  as  a  counter-claim  to 
entitle  the  defendant  to  prove  it.  An  answer  of  payment  in  full  or  in 
part  is  sufficient.^^^  A  mortgagor  may  avail  himself  by  answer  and  set 
off  of  rents  received  by  the  mortgagee  in  possession."^ 

=""*  McHard  v.  Williams,  8  S.  Dak.  It  is  provided  by  statue  in  New 
381,  66  N.  W.  930,  59  Am.  St.  766.        Jersey  that  an  assignee  of  a  mort- 


370  ' 


McMichael  v.  Webster,  54  N.  J.  gage  may  avail   himself  of  all  just 

Eq.  478,  35  Atl.  663.  set-offs    and    defences   which    would 

^'^  Gassert  v.  Black,  11  Mont.  185,  have    been    allowed    if   his   assignor 

27  Pac    791.  bad  brought  the  action.     R.  S.  1877, 

=■=    Spear  v.  Hadden,  31  Mich.  265;  p.    708,    §    31;    Woodruff   v.    Morris- 

Lathrop    v.    Godfrey,    3    Hun,    729;  town  Inst,  for  Savings,  34  N.  J.  Eq. 

Chase  v.  Brown,  32  Mich.  225.  174. 

="  Parker   v.    Hartt,    32    N.    J.   Eq.  ^'"^Bird  v.  Davis,  14  N.  J.  Eq.  467. 

235;    Vanatta  v.   N.   J.  Mut.   L.   Ins.  =■=  White  v.  Williams,  3  N.  J.  Eq. 

Co.' 31  N.  J.  Eq.  17;   Williamson  v.  376;  Barnes  v.  Moore,  63  Ga.  164. 

Fox,    30   N.    J.    Eq.    488;    Dudley    v.  ^'-^  Hendrix  v.  Gore,  8  Oreg.  406. 

Bergen,   23   N.   J.   Eq.    397;    Dolman  ^' "  Krueger  v.  Ferry,  41  N.  J.  Eq. 

v    Cook    14  N.   J.   Eq.   56;    Conover  432,    affirmed   Ferry   v.    Krueger,   43 

V.    Sealy,   45   N.   J.   Eq.    589,   19   Atl.  N.  J.  Eq.  295,  14  Atl.  811. 
616;   Conaway  v.  Carpenter,  58  Ind. 
477. 


453  THE   ANSWER   AND   DEFENCE.  [§§    1499,    1500. 

A  mortgage  to  secure  future,  advances  is  valid  only  to  the  amount 
of  the  advances  actually  made;  but  the  mortgagee's  failure  to  com- 
plete the  contemplated  advances  affords  ground  for  only  nominal  dam- 
ages by  way  of  set-off  ;^^^  unless,  perhaps,  there  was  an  express  obliga- 
tion to  make  them.  Under  a  covenant  by  the  mortgagee  to  make  par- 
tial releases,  damages  sustained  by  his  refusal  to  release  may  be  a 
matter  of  equitable  offset  to  his  claim  upon  the  mortgage."" 

§  1499.  Illegal  interest  previously  paid  upon  the  mortgage  or  in- 
cluded in  it  may  be  offset  by  the  mortgagor,^*"  as  also  may  be  a  pay- 
ment of  a  bonus  in  addition  to  the  lawful  interest  paid  to  procure  an 
extension  of  time  within  which  to  pay  the  debt.^*^  But  one  who  has 
purchased  subject  to  a  mortgage,  or  has  assumed  its  payment,  is  not 
entitled  to  the  benefit  of  usurious  interest  paid  by  the  mortgagor.^®^ 

§  1500.  To  a  foreclosure  suit  on  a  purchase-money  mortgage,  it 
is  no  defence  that  there  is  an  outstanding  paramount  title  or  incum- 
brance when  there  has  been  no  actual  eviction.  The  mortgagor  is  left 
to  his  remedy  on  the  covenant.^^^  A  defence  to  the  foreclosure  of  a 
purchase-money  mortgage,  alleged  to  have  existed  at  the  time  of  its 
inception,  can  only  .arise  when  fraud  has  been  practiced  by  the  mort- 
gagee in  procuring  its  execution,  or  there  has  b6en  a  failure  of  con- 
sideration.^** The  mortgagor  must  not  only  show  the  fraudulent  rep- 
resentations, but  that  he  relied  upon  them  and  executed  his  mortgage 
accordingly.^®^  A  breach  of  the  covenant  against  incumbrances  in  his 
grantor's  deed  is  no  defence  to  a  foreclosure  of  the  mortgage  unless  the 

5^«Dart  v.  McAdam,  27  Barb.   187.  gardez,  23  Fla.  264,  2   So.   310;    Ad- 

"» Warner  v.  Gouverneur,  1  Barb,  ams  v.  Fry,  29  Pla.  318,  10  So.  559, 

og,  quoting    text;    McLelland    v.    Cook, 

^^o    §  648;   Pond  v.  Causdell,  23  N.  (Mich.),    54    N.    W.    298;    Munro    v. 

J    Eq.   181;    Harbison  v.    Hougiiton,  Long,    35    S.    C.    354,    615,    14    S.    E. 

41  111.   522;   Ward  v.  Sharo,  115  Vt.  824;    Pfirrman  v.   Wattles,   86  Mich. 

15-    Havens  v.  Jones,  45  Mich.  253,  254,  49  N.  W.  40;  Sturgis  Nat.  Bank 

7  N.  W.  818.  V.   Levanseler,  115  Mich.   372,  73  N. 

^"Real  Estate  Trust  Co.  v.  Keech,  W.  399;   Gayle  v.  Fattle,  14  Md.  69; 

7  Hun,  253;   McGregor  v.  Mueller,  1  Kinports  v.  Rawson,  29  W.  Va.  487, 

Cin.   (Ohio)   486.  2    S.    E.    85;    Emmons    v.    Gille,    51 

^**=Speakman    v.    Oaks,    (Ala.),    11  Kans.  178,  32  Pac.  916,  quoting  text; 

So    836  Edgar  v.  Golden,  36  Or.  448,  48  Pac. 

^''  Peters  v.  Bowman,  98  U.  S.  56;  1118,  60  Pac.  2. 

McConihe   v.    Fales,    107   N.   Y.    404,  ^s-*  McConihe    v.    Fales,    107    N.    Y. 

14    N.    E.    285;    Abbott    v.    Allen,    2  404,  14  N.  E.  285,  per  Ruger,  C.  J.; 

Johns.    Ch.    519.    7    Am.    Dec.    554;  Rockwell  v.  Wells,  104  Mich.  57,  62 

York  v.   Allen,  30  N.   Y.   104;    Piatt  N.    W.    165;    Frenche  v.    McConnell. 

V.  Gilchrist,  3  Sandf.  118;   Hanna  v.  (N.  J.  L.)  38  Atl.  687. 

Shields,  34  Ind.  84;  Lessly  v.  Bowie,  ^'=>  Ackman   v.   Jaster,    179   Pa.    St. 

27  S.  C.  193.  3  S.  E.  199;    Alden  v.  463,  36  Atl.  324. 
Pryal,  60  Cal.  215;  Randall  v.  Bour- 


^    1501.]  FORECLOSURE    BY    EQUITABLE    SUIT.  454 

mortgagor  has  been  evicted. ^^^  Eviction  from  a  portion  of  the  land  is 
a  partial  defence. ^*'^ 

If,  however,  the  mortgagor  has  been  evicted,  or,  according  to  some 
authorities,  if  an  ejectment  suit  has  been  commenced  against  him  on 
such  outstanding  title,  the  court  will  interfere.^***  In  the  latter  case, 
proceedings  upon  the  mortgage,  even  if  it  be  a  power  of  sale  mortgage 
not  requiring  a  suit,  will  be  enjoined  until  the  action  of  ejectment  is 
determined. ^^'*  Although  there  is  an  objection  to  undertaking  a  settle- 
ment of  unliquidated  damages  in  a  court  of  equity,  yet  this  may  be 
done  either  by  directing  an  issue,  or  by  a  reference  to  a  master  to  as- 
certain the  damages,  before  entering  a  decree  upon  the  mortgage ;  or 
the  court  may  avoid  this  objection  by  staying  the  foreclosure  suit  until 
the  damages  arising  from  the  failure  of  title  are  ascertained  in  a  suit 
at  law.^^" 

The  same  rule  applies  to  a  bill  to  enforce  a  lien  for  purchase-money. 
"The  rule,"  says  Mr.  Justice  Swayne  of  the  Supreme  Court,^"  "is 
founded  in  reason  and  justice.  A  different  result  would  subvert  the 
contract  of  the  parties,  and  substitute  for  it  one  which  they  did  not 
make.  In  such  cases  the  vendor  by  his  covenants,  if  there  be  such, 
agrees  upon  them,  and  not  otherwise,  to  be  responsible  for  defects  of 
title.  If  there  are  no  covenants,  he  assumes  no  responsibility,  and  the 
other  party  takes  the  risk.  The  vendee  agrees  to  pay  according  to  his 
contract,  and  secures  payment  by  giving  a  lien  upon  the  property. 
Here  it  is  neither  expressed  nor  implied  that  he  may  refuse  to  pay 
and  remain  in  possession  of  the  premises ;  nor  that  the  vendor  shall  be 
liable  otherwise  than  according  to  his  contract." 

^  1501.  This  defence  is  founded  on  the  covenants.  An  answer  to  a 
suit  to  foreclose  a  mortgage  given  for  the  purchase-money,  which  al- 
leges a  failure  of  title,  must,  in  the  absence  of  any  allegation  of  fraud, 
either  set  out  the  deed  or  the  covenants  contained  in  it  f^-  because  the 

.Tsopj-enche  V.  McConnell,  (N.  J.  L.)  ^^'^^  Johnson    v.    Gere.    2    Johns    Ch. 

38  AtL  687.  546;    Edwards   v.    Bodine,   26   Wend. 

'"  Chaffey    v.    Boggs,    179    Pa.    St.  109.     See,  however,  to  the  contrary, 

301,   36   AtL   241.  Piatt  v.  Gilchrist,  3  Sandf.  118,  and 

'»'' Price   v.    Lawton,   27   N.   J.   Eq.  cases  cited. 

325;   Glenn  v.  Whipple,  14  N.  J.  Eq.  ^"'^  Coster  v.  Monroe  Manuf.   Co.  2 

50;    Van    Waggoner    v.    McEwen,    2  N.    J.    Eq.    467;    Couse   v.    Boyles,    4 

N.  J.  Eq.  412;   Shannon  v.  Marselis,  N.  J.  Eq.  212,  38  Am.  Dec.  514. 

1   N.    J.    Eq.    413;    Withers   v.    Mor-  ^''^  Peters  v.  Bowman,  98  U.  S.  56, 

rell    3  Edw.  N.   Y.  560;    Ryerson  v.  11   Chicago   L.    N.    118,   7  Wash.    L. 

Willis,    81    N.    Y.    277;     Taylor    v.  R.  156. 

Whitmore,    35    Mich.    97.     Whether  ^"^  Church   v.    Fisher,   46   Ind.    145. 

there   can   be   any    defense   by    way  And    see  Davis   v.    Bean,   114   Mass. 

of  recoupment,  before  eviction,  was  358,  360. 
questioned   in  Church  v.   Fisher.  40 
Ind.  145. 


455  THE    AXSWEK    AND    DEFEXCE.  *      [§    1502. 

defence  is  founded  on  the  covenants  of  warranty  or  seisin.  Therefore, 
where  the  deed  contains  no  such  covenants,  as  in  the  case  of  a  deed 
made  by  executors,  containing  no  covenants  except  against  the  acts  of 
themselves  and  their  testator,  it  is  no  defence  that  a  portion  of  the 
property  was  covered  by  an  incumbrance  not  specified  in  the  cove- 
nant.^^^  The  existence  of  a  lease  upon  part  of  the  premises  is  no  de- 
fence to  a  suit  to  foreclose  the  purchaser's  mortgage,  if  it  is  no  breach 
of  any  of  the  covenants  of  his  deed,  and  his  grantor  did  not  fraudu- 
lently mislead  him.^'''* 

No  covenant  will  be  implied  in  such  a  mortgage.^^^ 
A  purchaser  who  has  not  been  disturbed  and  has  not  suffered  any 
damages  cannot  defend  against  a  purchase-money  mortgage  given  to 
a  corporation,  on  the  ground  that  the  corporation  has  failed  to  perform 
an  agreement  executed  by  its  president  without  authority.^''*^ 

§  1502.  If  the  mortgagor  is  in  undisturbed  possession,  and  no  suit 
is  pending  for  the  possession  of  the  property  by  an  adverse  claimant, 
the  courts  will  not  generally  interfere  to  restrain  the  vendor  from  fore- 
closing a  mortgage  given  for  the  price  of  land  conveyed  with  full 
covenants  of  warranty,  on  account  of  any  alleged  defects  in  the  title 
not  amounting  to  a  total  failure  of  consideration,  unless  there  was 
fraud  in  the  sale.^^^     Nor  will  they  allow  a  counter-claim  on  account 

^"^Niles    v.    Harmon,    80    111.    396;  268;    Ryerson    v.    Willis,    81    N.    Y. 

Barry  v.  Guild,  126  111.  439,  18  N.  E.  277. 

759-    Sandford  v.   Travers,  40  N.  Y.  New  Jersey:     Hile  v.   Davison,   20 

140.  N.    J.    Eq.    228;    Hulfish   v.    O'Brien, 

'"*  Sandford    v.    Travers,    7    Bosw.  20  N.  J.  Eq.   230;    Shannon  v.   Mar- 

49g.  sels,  1  N.  J.  Eq.  413,  426;  Van  Wag- 

">""  Brown  v.  Phillips,  40  Mich.  264.  goner  v.  McEwen,  2  N.  J.  Eq.  412 

^^"Sturgis  National  Bank  v.  Levan-  Glenn  v.  Whipple,  12  N.  J.  Eq.  50 

seler,  115  Mich.  372,  73  N.  W.  399.  Miller  v.  Gregory,  16  N.  J.  Eq.  274. 

=*"  New  York:     Leggett  v.   McCar-  Frenche  v.  McConnell,  (N.  J.  L.)  38 

ty,  3  Edw.  124;   Withers  v.  Morrell,  Atl.  687. 

3  Edw.   560;   Edwards  v.  Bodine,  26  Missouri:   Key  v.  Jennings,  66  Mo. 

Wend.  109;   Tallmadge  v.  Wallis,  25  356.   368. 

Wend.    107;    Davison    v.    De    Freest,  Michig-an:      Smith    v.    Fiting,    27 

3  Sandf    Ch.  456;   Banks  v.  Walker,  Mich.     148;       McLelland     v.     Cook 

3  Barb.   Ch.   438;    York  v.   Allen,  30  (Mich.),  54  N.  W.  298. 

N.  Y.  104;  Curtiss  v.  Bush,  39  Barb.  Vermont:    Darling  v.    Osborne,   51 

661;    Sandford   v.    Travers,   7   Bosw.  Vt.  148. 

498;    Bumpns    v.    Platner,    1    Johns.  Georgia:    Byrd   v.    Turpin,   62   Ga. 

Ch.'   213,    218;     Abbott    v.    Allen,    2  591. 

Johns.    Ch.    519,    7    Am.    Dec.    554;  Indiana:      Stahl    v.    Hammontree, 

Chesterman    v.  '  Gardner,    5    Johns.  72    Ind.    103;     Mahoney   v.    Robbins, 

Ch.  29,  9  Am.  Dec.  265;    Denston  v.  49    Ind.    147;    Douglass    v.    Thomas, 

Morris'    2  Edw.   37;    Burke  v.  Nich-  103  Ind.  187,  188. 

ols    21   How    Pr.   459,   34   Barb.   430,  South    Carolina:     Childs    v.    Alex- 

2    keyes    670;     Miller    v.    Avery,    2  ander,  22  S.  C.  169.  185;  Whitworth 

Barb.  Ch.  582;    Parkinson  v.  Jacob-  v.  Stuckey,  1  Rich.  Eq.  404,410;  Van 

son,     13     Hun,     317;     Parkinson     v.  Lew  v.   Parr,  2   Rich.  Eq.  321,  350; 

Sherman    74  N.  Y.  88,  30  Am.  Rep."  Lessly  v.  Bowie,  27   S.   C.  193,   3  S. 

E.  199. 


§    1502.]  FORECLOSURE   BY    EQUITABLE   SUIT.  456 

of  an  outstanding,  incumbrance,  unless  the  mortgagor  has  paid  such 
incumbrance  in  whole  or  in  part,  or  has  lost  the  land  in  whole  or  in 
part  under  such  incumbrance.^^^  Before  this  defence  will  avail,  there 
must  be  either  an  eviction  or  something  tantamount  to  it.^^^ 

It  is  not  always  necessary  that  the  purchaser  should  show  that  he 
has  been  dispossessed  to  establish  eviction;  it  may  be  established  by 
proof  that  at  the  time  of  his  purchase  the  lands  were  in  the  actual  pos- 
session of  one  claiming  under  a  title  hostile  to  his  vendor,  by  reason 
of  which  he  had  not  and  could  not  obtain  possession.**"^  Neither  is  it 
necessary  that  he  should  resist  the  claim  under  the  paramount  title,  or 
even  await  eviction  by  legal  process.  He  may  voluntarily  surrender 
possession ;  but  then  must  stand  ready  to  show  that  the  title  to  which 
he  surrendered  was  paramount,  and  was  covered  by  his  grantor's  cove- 
nants of  warranty.*"^  If  a  judgment  for  the  possession  of  the  prop- 
erty be  recovered  against  him,  his  delivery  of  possession,  without 
awaiting  expulsion  by  legal  process,  is  an  eviction.*''^  The  mortgagor 
may  safely  pay  the  adverse  claimant  with  the  consent  of  his  mort- 
gagee that  the  amount  may  be  applied  in  reduction  of  the  mortgage 
debt,  if  he  obtain  sufficient  evidence  of  such  consent.*"^ 

The  defence  of  eviction  cannot  be  set  up  by  one  who  has  merely  pur- 
chased the  equity  of  redemption  subject  to  the  mortgage,  without  as- 
suming any  personal  liability  for  it,  or  against  whom  no  personal 
claim  is  made,  merely  upon  the  ground  that  he  is  the  assignee  of  the 
plaintiif's  covenants.****    Eviction  is  no  defence  when  no  right  or  title 
to  the  part  of  the  land  from  which  the  mortgagor  is  evicted  was  con- 
Mr.   Justice   Nelson,   in  Patten  v.    Hill  v.  Butler,  6  Ohio  St.  207,  where 
Taylor,  7  How.  132,  159,  referring  to     numerous    cases    are    cited.     See    § 
several      authorities      there      cited,     1355,    near   end. 
said:     "These  cases  will  show  that        ='"'*  Evans  v.  McLucas,  12  S.  C.  56. 
a     purchaser,     in     the     undisturbed        ^"^  Piatt  v.  Gilchrist,  3  Sandf.  118. 
possession  of  the  land,  will  not  be    In    this    case   the   earlier   cases    are 
relieved  against  the  payment  of  the    reviewed  at  length, 
purchase      money      on      the      mere        ^""Withers    v.    Powers,    2    Sandf. 
ground  of  defect  of  title,  there  be-     Ch.   350. 

ing  no  fraud  or  misrepresentation;  ""^  York  v.  Allen,  30  N.  Y.  104; 
and  that,  in  such  a  case,  he  must  Cowdrey  v.  Coit,  44  N.  Y.  382,  392, 
seek  his  remedy  at  law  on  the  cov-  4  Am.  Rep.  690,  per  Gray,  Com'r; 
enants  in  his  deed;  that  if  there  is  Simers  v.  Saltus,  3  Den.  214. 
no  fraud,  and  no  covenants  to  se-  ""=  Dyett  v.  Pendleton,  8  Cow.  727. 
cure  the  title,  he  is  without  rem-  *"=  Hart  v.  Carpenter,  36  Mich, 
edy,  as  the  vendor,  selling  in  good  402.  After  the  death  of  the  mort- 
faith,  is  not  responsible  for  the  gagee,  there  may  be  difficulty  in 
goodness  of  his  title  beyond  the  ex-  proving  his  oral  admissions, 
tent  of  his  covenants  in  the  deed."  ^"^  National  F.  Ins.  Co.  v.  McKay, 
This  doctrine  is  affirmed  in  Noonan  21  N.  Y.  191;  Van  Houten  v.  Mc- 
V.  Lee,  2  Black,  499,  508;  Peters  v.  Carty,  4  N.  J.  Eq.  141;  Brou  v.  Bee- 
Bowman,  98  U.  S.  56,  11  Chicago  nel,  20  La.  Ann.  254.  And  see  Sand- 
L.  N.  118;   and  is  sustained  also  in    ford  v.   Travers,  40  N.   Y.   140. 


457  THE   ANSWER   AND   DEFENCE.  [§§    1503,    1504. 

veyed  to  him ;  as  where  a  building  and  fence,  not  specified  in  the  deed, 
encroached  on  an  adjoining  lot.*"^ 

§  1503.  Cases  exceptional  to  general  rule.  — The  rule  generally  is 
that  above  stated,  that  the  entire  want  of  title  in  the  vendor,  or  the 
partial  failure  of  it,  is  no  defence  to  the  action,  unless  fraud  be  shown 
or  the  mortgagor  has  been  evicted.*'^*'  Yet  is  has  been  held  by  several 
courts  that  the  mortgagor  may  defend  by  a  recoupment  or  offset  of 
damages  for  a  breach  of  the  covenants  in  the  deed  to  him,  to  the  ex- 
tent of  the  damages  sustained,  if  these  are  determined  so  that  they 
may  be  deducted,  whether  the  failure  of  title  be  complete  or  partial.*"^ 
A  breach  of  covenant  in  the  vendor's  deed  is  a  defence,  where  it  is 
shown  that  the  vendor  is  unable  to  respond  to  the  damages  occasioned 
by  the  breach.*"^  When  a  remedy  upon  the  covenants  would  be  inef- 
fectual, as,  for  instance,  when  the  mortgagee  is  insolvent,  the  defend- 
ant, in  a  suit  upon  the  note  or  mortgage,  may  set  up  the  damages  on 
the  covenahts.*^'' 

§  1504.  When  the  covenant  is  broken  at  the  time  the  suit  is 
brought  to  recover  the  purchase-money,  and  the  amount  claimed  un- 
der it  is  certain,  the  jourchaser  is  entitled  to  detain  the  purchase-money 
to  the  extent  to  which  he  would  at  that  time  be  entitled  to  recover 
damages  upon  the  covenant,  in  order  to  avoid  circuity  of  action.  It 
is  therefore  held  that  a  breach  of  the  covenant  of  seisin  in  the  vendor's 
deed  may  be  set  up  as  a  defence  to  an  action  for  the  foreclosure  of  a 
mortgage  given  for  the  purchase-money,  although  a  breach  of  the  cove- 
nant of  warranty  may  not.*^**    A  total  failure  of  title  is  a  total  failure 

^°^  Burke  v.   Nichols,  1  Abb.   App.  ^"^  McLemore    v.    Mabson,    20   Ala. 

Dec.  260,  2  Keyes,  670.  137. 

■""=  Wisconsin:     Booth   v.   Ryan,   31  ^""  Knapp  v.  Lee,  3  Pick.  452. 

Wis.  45.  ^^^  Latham  v.  McCann,  2  Neb.  276. 

Arkansas:     Robards  v.   Cooper,  16  The    court    say:     "The    parties    in 

Ark.  288.  this   case,   as   in   every   other   case, 

Indiana:     Conwell   v.    Clifford,    45  must  be  bound  by  the  bargain  they 

Ind.    392;    Rogers   v.    Place,   29    Ind.  have    chosen    to    enter    into.      The 

577;    Jordan  v.  Blackmore,     20  Ind.  grantee    might    have    demanded    a 

419;    Buell    v.    Tate,    7    Blackf.    55;  covenant    of    seizin — the    assurance 

Hume  V.  Dessar,  29  Ind.  112;    Hub-  that   the   grantor   had,   at   the   time 

bard  v.  Chappel,  14  Ind.  601;  Hanna  of    making   his    deed,    the    very    es- 

V.   Shields,  34  Ind.   84;    Plowman  v.  tate,  both  as  to  quantity  and  qual- 

Shidler,    36     Ind.    484;     Conklin    v.  ity,    that    he    professed    to    convey. 

Bowman,     7     Ind.     533;     Church    v.  In   such   case,   a  failure   of   title   to 

Fisher,  40  Ind.  145.  the  land  might  be  interposed  in  an 

*"' Coy    V.    Downie,    14    Fla.    544;  action    on    the    mortgage.     Rice    v. 

Lowry  v.  Hurd,  7  Minn.  356;  Walk-  Goddard,    14    Pick.    293;    Tallmadge 

er  V.   Wilson,   13  Wis.   522;    Hall   v.  v.  Wallis,  25  Wend.  107.     So  might 

Gale,    14    Wis.    54;     Mendenhall    v.  he   have  reserved   a   portion  of  the 

Steckel,  47  Md.  453;   Scantlin  v.  Al-  purchase-money,    by    agreement,    to 

lison,    12    Kans.    85;     Chambers    v.  await  the  clearing  up  of  any  suspi- 

Cox,    23    Kans.    393;    Kelly   v.    Ker-  cion  on  the  title;    but  he  chose,  for 

Shaw,  6  Utah,  239,  14  Pac.  804.  some  reason,  to  accept  a  deed  with 


§    1504.]  FORECLOSURE    BY    EQUITABLE    SUIT.  458 

of  consideration.  The  obligation  of  the  mortgagor  is  not  made  for  a 
covenant  of  the  mortgagee,  but  for  the  land;  and  if  the  land  fails  to 
pass,  the  promise  of  the  mortgagor  is  a  mere  nudum  pactum.  The 
damages  in  an  action  on  the  covenant  would  be  the  same  as  the  con- 
sideration for  the  promise ;  and  it  is  just  that  the  mortgagor  should  be 
allowed  to  show  a  total  failure  of  consideration  instead  of  being  com- 
pelled to  seek  his  remedy  on  the  covenants.*^^ 

A  covenant  against  incumbrances  is  broken  at  the  time  of  the  con- 
vevance  if  a  third  person  then  had  an  interest  in  or  lien  upon  the  land 
granted  which  diminished  the  value  of  the  absolute  interest  in  the 
same,  while  at  the  same  time  the  fee  passed  by  the  deed.  If  an  in- 
cumbrance upon  land  conveyed  to  the  grantee  by  deed  containing  such 
a  covenant  be  fixed  and  capable  of  deduction  out  of  the  grantee's  pur- 
chase-money mortgage,  a  suit  upon  such  mortgage  is  by  some  courts 
allowed  to  proceed  to  judgment,  when  the  amount  of  the  incumbrance 
may  be  offset  against  the  amount  of  the  mortgage  ;"2  and  if  a  sale  be 
had,  the  proceeds  will  be  applied  in  the  first  place  to  discharge  the  in- 
cumbrance, and  the  amount  so  applied  deducted  from  the  mortgage 
debt.*^^  But  in  other  courts,  and  more  generally,  it  is  held  that  unless 
the  defendant  has  been  at  cost  to  extinguish  the  incumbrance,  or  has 
suffered  through  its  enforcement,  he  can  be  allowed  only  nominal  dam- 

414 

The  possession  of  a  third  person,  without  right  and  without  the  con- 
sent of  the  grantor,  does  not  constitute  an  incumbrance,  or  a  breach 
of  a  covenant  in  the  grantor's  deed  against  incumbrances;  conse- 
quently the  purchaser  who  has  given  a  mortgage  for  a  portion  of  the 
purchase-money  cannot  charge  the  mortgagee  with  rent,  or  for  dam- 
ages equal  to  rent,  for  the  period  during  which  such  third  person  has 
held  possession.*"  Thus  it  is  held  that  if  there  be  a  breach  of  the 
covenant  against  incumbrances  by  reason  of  the  existence  of  tax  liens, 
the  amount  of  these  would  1)e  a  proper  offset  to  the  amount  due  on 
the  mortgage.*^*^    But  if  for  any  reason  a  decree  cannot  be  made  for 

covenants  of  warranty.     He  cannot  ville,  86  IlL  300;  Patterson  v.  Sweet, 

now  come  forward  and  say  he  will  3  Bradw.  550. 

pay    his    note    and    mortgage    upon  ''*  Evans  v.  McLucas,  12  S.  C.  5_6; 

certain    alleged    defects    being   rem-  Delavergne  v.  Norns,  7  Johns.   3o8, 

edied  "  5   Am.   Dec.    281 ;    Prescott  v.    True- 

"^Rice  v    Goddard,   14  Pick.   293;  man,  4  Mass.   627,  3  Am.   Dec.   249; 

Wilber  v    Buchanan,  85  Ind.  42.  M'Crady     v.     Brisbane,     1     Nott     & 

"-  Stephens  v.  Weldon,  151  Pa.  St.  McCord,  104,  9  Am.  Dec.  676. 

520    25  Atl    Rep.   28;    In  re  McGill,  "'"  Dinsmore  v.  Savage,  68  Me.  191. 

6  Pa   St    504;  Dunn  v.  Olney,  14  Pa.  «"  Union  Nat.  Bank  v.  Pinner,  25 

gt    219  N.   J.   Eq.   495;   White  v.   Stretch,   2 

"'     §'  1698     last   clause.     And   see  N.    J.    Eq.    76;    Van    Riper   v.    Will- 
Smith   V.    Fiting,   37   Mich.    148,   151,  iams,  2  N.  J.  Eq.  407. 
per    Marston,    J.;    Coffman    v.    Sco- 


459  THE    AN'SWEK    AND    DEFENCE.  [§    1505. 

the  mortgagee  directing  a  deduction  of  the  amount  due  on  the  prior 
incumbrances  against  whicli  tlie  mortgagor  is  protected  by  the  cove- 
nant, as,  for  instance,  when  such  incumbrances  exceed  the  amount  of 
the  mortgage,  the  foreclosure  suit  upon  the  latter  will  be  stayed  until 
the  property  has  been  released  from  such  incumbrances.*^^  A  provision 
in  the  purchase-money  mortgage  for  a  release  from  a  prior  mortgage 
on  the  mortgagor's  paying  certain  sums  does  not  form  an  exception  to 
the  rule,  that  the  grantor  who  has  conveyed  by  deed  having  the  usual 
covenants,  including  a  covenant  against  incumbrances,  must  procure 
a  release  from  such  prior  mortgage  before  he  is  entitled  to  a  decree  of 
foreclosure  on  the  purchase-money  mortgage.*^** 

But  if  the  purchase-deed  contained  no  covenant  against  incum- 
brances, the  purchaser,  on  a  foreclosure  of  a  mortgage  given  by  him 
for  part  of  the  purchase-money,  cannot  offset  an  incumbrance,  such  as 
taxes,  existing  as  a  lien  upon  the  land  at  the  time  the  premises  were 
conveyed  to  him.*^^ 

§  1505.  The  breach  by  the  mortgagee  of  an  independent  covenant 
is  no  defence  to  the  foreclosure  of  a  mortgage  which  by  its  terms  has 
become  due  and  payable.  Where,  for  instance,  a  mortgage  is  given  in 
part  payment  of  the  purchase-money  of  the  premises,  and  at  the  same 
time  the  mortgagee  executes  a  covenant  to  the  purchaser  that  he  will 
immediately  procure  releases  of  their  title  from  certain  persons  named, 
who  are  reputed  to  have  some  claim  upon  the  lands,  the  covenant  is 
not  dependent  upon  the  payment  of  the  mortgage  money,  and  does  not 
constitute,  with  the  mortgage,  a  condition  that  the  mortgage  shall  be 
paid  when  the  releases  shall  be  procured.*^" 

"^  Dayton  v.  Dusenbury,  25  N.   J.  of    a    covenant    for    further    assur- 

Eq.  110.  ance." 

"^Stiger   v.    Bacon,    29    N.    J.    Eq.  ^-»  Coursen    v.    Canfield,    21    N.    J. 

442.  Eq.  92.     "The  mortgagee,"  said  the 

""  Bandendistel    v.    Zabriskie     (N.  Chancellor,   "has  a  right  to  say  in 

Y.),    26    Atl.    455.     Beasley,    C.    J.,  hsec    foedera    non    veni.      He    might 

said:     "In  such  a  situation  the  un-  have   been   willing   to   bind    himself 

derstanding     is     that     the     grantor  in    a    covenant    to    procure    releases 

does    not   stipulate   that    the    prem-  which  he  knew  were  of  little  or  no 

ises   are  free   from   liens,   but   that,  importance,    a   breach    of   which,    if 

to  the  contrary,  if  liens  exist,  and  he     should     be   unable     to     procure 

the  grantee   shall  be   evicted   under  them,    would    subject   him   to   small 

them,    the    grantor    will    indemnify  damages;    but  he   might  be  unwill- 

him   for   such   damage.     The   conse-  ing  to  bind  himself  to  forfeit  $2,500 

quence  is  that  there  is  no  covenant,  of  the  purchase-money   if  he   could 

express  or  implied,  for  the  removal  not   obtain    the    releases.     The    par- 

of  incumbrances,  and  for  a  court  of  ties    could    have    made    the    bargain 

equity    to   decree    a    removal    would  either    way.     They    chose    to    make, 

be   to  order   a  specific   performance  and    did    make,    independent    cove- 

of  a  pure  interpolation.     There  can  nants.     And    there    is    no    principle 

be  no  deduction  from  the  purchase-  established    in    courts    of   equity    by 

money   by   reason   of   the   existence  which    an    effect    will    be    given    to 


§§  1506,  150Ga.]  foreclosure  by  equitable  suit.  460 

§  1506.     But  if  the  sale  was  effected  by  the  vendor's  fraud,  as  by 

fraudulently  procuring  and  exhibiting  as  true  a  false  abstract  of  title, 
the  purchaser  may  have  the  mortgage  and  the  conveyance  rescinded.*-^ 
Fraud  is  a  defence  only  when  it  was  practised  upon  the  defendant  by 
the  mortgagee  or  his  agents,  or  with  his  knowledge.*-  The  mortgagor 
may  also  set  up  a  counter-claim  for  damages  occasioned  by  the  fraud 
practised  by  the  mortgagee  in  the  sale  of  the  premises  to  the  mort- 
gagor ;'*^^  such  as  a  misrepresentation  as  to  the  amount  of  the  land  ;*^* 
its  quality  and  value  ;*^^  and  if  such  damages  exceed  or  equal  the 
amount  of  the  mortgage,  the  claim  under  the  mortgage  will  be  wholly 
defeated.''^*' 

But  fraud  in  the  sale  of  one  of  several  tracts  of  land  under  one  con- 
tract, but  conveyed  by  separate  deeds,  cannot  be  set  up  as  a  defence 
in  a  suit  to  foreclose  a  purchase-money  mortgage  upon  another  of 
such  tracts.'*^^ 

§  1506a.  A  mere  mistake  of  both  parties  as  to  the  quantity  of 
land  conveyed  is  no  ground  of  defence  to  a  mortgage  given  for  the 
purchase-money,  there  being  no  fraud  or  misrepresentation  by  the 
grantor.*^®  But  it  would  seem  that  a  misrepresentation  by  the 
grantor,  though  made  under  a  mistake  as  to  his  own  rights,  but  acted 
upon  by  the  purchaser,  may  be  ground  for  relief  in  respect  to  a  mort- 
gage given  to  the  grantor  for  the  purchase-money.*^®  The  deficiency 
in  the  property  conveyed  may  be  so  serious  that  it  may  be  regarded 
as  evidence  of  imposition  or  fraud,  and  in  such  case  the  rule  is  to 
allow  such  a  reduction  of  the  purchase-money  as  will  compensate  the 
purchaser  for  the  value  of  the  land  lost.*^^ 

such  covenants  different  from  their  75  Am.  Dec.  384;  Lathrop  v.  God- 
legal  effect,  and  independent  cov-  frey,  6  Thomp.  &  C.  96,  3  Hun,  739. 
enants  turned  into  conditional,  be-  '"  Hicks  v.  Jennings,  4  Fed.  855. 
cause  it  will  give  better  protection  ^-''  Northrop  v.  Sumney,  27  Barb, 
to  a  party,  or  will  diminish  litiga-  196;  Clark  v.  Davis,  32  N.  J.  Eq. 
tion."  And  see  Duryee  v.  Lin-  530;  Dresbach  v.  Stein,  41  Ohio  St. 
sheimer,  27  N.  J.  Eq.  366.  70. 

^=' Booth  V.  Ryan,  31  Wis.  45;   Re-  "' Champlin    v.    Laytin,    6    Paige, 

bards  v.   Cooper,  16  Ark.  288;    Fur-  189,  ariirmed  18  Wend.  407,  31  Am. 

man  v.  Meeker,  24  N.  J.  Eq.  110.  Dec.    382.     See    Heath    V.    Pratt,    51 

*"Alkin    V.    Morris,    2    Barb.    Ch.  Vt.  238. 

140  ^'"Comegys  v.  Davidson    (Pa.),  26 

"'Allen    V.    Shackelton,    15    Ohio  Atl.   618.     In  this  case  the  vendor's 

St.    145.     The  fraud   alleged   in  this  deed   purported   to   convey  a  lot  40 

case    was     a    misrepresentation    of  feet  in  width,  but  in  fact  the  width 

the  boundaries  of  the  lot,   and  the  of  it  was  only  37  feet  and  4  inches. 

property   covered   bv   the   mortgage.  In  a  suit  upon  the  purchase-money 

"'Dayton  v.  Melick,  32  N.  J.  Eq.  mortgage,  "as  it  seems  to  us  now," 

570    27  N.  J.  Eq.  362.  say    the   court,    "the    defendant   ap- 

«'^  Kobiter  v.  Albrecht,  82  Wis.  58,  pears  to  be  entitled  to  a  deduction 

51  N    W.  1124.  for   tlie   proportionate   value   of  the 

«» Grant  v.  Tallman,  20  N.  Y.  191,  2   feet  and   8   inches  which   he   did 


4G1  THE   ANSWER   AND   DEFENCE.  [§§    1507,    1508. 

In  an  action  to  foreclose  a  purchase-money  mortgage,  evidence  of  a 
deficiency  in  the  land  cannot  be  admitted  under  a  general  denial  of  lia- 
bility, but  must  be  specially  pleaded.*^^ 

A  purchaser  who  has  assumed  an  existing  mortgage  cannot  set  up 
in  defence  to  a  foreclosure  suit  upon  it  that  his  grantor  misstated  the 
number  of  acres  conveyed,  and  that  the  mortgagee,  when  he  sold  the 
land  to  such  vendor,  made  a  similar  misstatement ;  for  the  purchaser 
and  mortgagee  are  not  in  such  case  privies  in  contract.*^- 

§  1507.  An  assignee  of  a  mortgage  not  due  is  not  subject  to  this 
defence.  Failure  of  title  to  a  part  of  the  premises  for  the  purchase- 
money  of  whicli  the  mortgage  was  given  is  no  defence  to  an  action  by 
an  assignee  of  the  mortgage  who  purchased  it  before  due,  and  without 
notice  of  such  failure.-*^^  And  as  already  stated  such  defence  would 
not,  generally,  avail  against  the  original  mortgagee,  for  the  mort- 
gagor's remedy  would  be  on  the  covenants  of  the  deed  of  purchase ;  but 
when  the  defence  may  be  taken,  the  defendant  may  show  that  the  as- 
signment of  the  mortgage  was  colorable  only,  and  that  the  mortgagee 
is  still  the  equitable  owner.*^* 

^  1508.  Validity  of  title  may  be  made  a  condition  precedent  to 
the  payment  of  the  mortgage.  Where  the  mortgage  and  note  are  condi- 
tioned that  the  note  shall  not  be  deemed  due  and  payable  until  the 
title  of  the  gTantor,  which  was  known  to  be  defective  as  to  a  portion  of 
the  premises,  is  perfected,  the  mortgagor  may  set  up  the  non-perform- 
ance of  this  condition  as  a  defence,  and  be  allowed  the  value  of  that 
portion  of  the  property  in  set-off;  but  he  should  be  required  at  the 
same  time  to  release  whatever  title  he  may  have  acquired  to  it  by  his 
deed.*^^  A  mortgage  for  purchase-money  has  been  regarded  as  condi- 
tional upon  the  title,  even  when  the  condition  is  not  expressed.  And 
so  where  a  mortgage  was  given  of  one  tract  of  land  to  secure  the  pur- 
chase-money of  another  tract,  which  the  mortgagee  covenanted  by  his 

not  get  to  the  40  feet  for  which  he  could  not  be  given.     In  Rodgers  v. 

agreed   to   pav,    and    for   which   the  Olshoffsky,  110  Pa.  St.  147,  2  Atl.  44, 

deed  was  made.     But  we  do  not  de-  the  court  did  not  allow  the  defense 

cide  even  that  conclusively,  nor  do  for   the    deficiency,   which   was    1.67 

we  decide  whether  he  may  recover  feet  on  a  line  of  20  feet;   but  there 

more  than  that  proportion.     We  re-  were  special  reasons  for  the  ruling. 

verse  the  judgment  of  the  court  be-  '='  Tron  v.  Yohn,  145   Ind.   272,  43 

low  to  enable  the  defendant  to  lay  N.  E.  437. 

his    facts    before    a   jury,    and    have  *^'-  Davis    v.    Clark,    33    N .    J.    Eq. 

the  judgment  of  the  law  upon  them  579;    Clark   v.    Davis,    32    N.    J.    Eq. 

when  thev  are  all  known."     In  Ty-  530. 

son   V.    Eyrick.    141    Pa.    St.    296,    21  ''^  §§   834-847;    Stilwell  v.  Kellogg, 

Atl.   635,   a  defense  was  allowed  to  14  Wis.  461. 

the  extent  of  the  value  of  the  strip  '''  I.athrop  v.  Godfrey,  3  Hun.  739. 

of  one  foot  in  width,  to  which  title  *"  Weaver  v.   Wilson,   48   111.   125. 


§§    1509,    lolO.]      FORECLOSURE   BY    EQUITABLE    SUIT,  462 

bond  to  convey  with  covenants  of  warranty,  in  an  action  to  foreclose 
the  mortgage  the  failure  of  title  in  the  vendor  was  declared  a  good 
defence,  on  the  ground  that  the  mortgagor  only  undertook  to  pay  the 
mortgage  on  the  condition  that  the  mortgagee  had  title  to  the  tract  he 
agreed  to  convey.*^*' 

§  1509.  Statute  of  limitations. — Generally  the  fact  that  the  del)t 
secured  by  tlie  mortgage  is  barred  by  the  statute  of  limitations  is  no 
defence  to  a  bill  to  foreclose  it.*^''  In  a  few  States,  however,  when  an 
action  on  the  note  is  barred,  the  remedy  on  the  mortgage  is  gone. 
Distinct  remedies  may  be  pursued,  but  the  same  limitation  applies  to 
both.*^^  Moreover,  a  purchaser  from  the  mortgagor  subsequent  to  the 
execution  of  the  mortgage  may  plead  the  statute  of  limitations  as  a 
defence  to  an  action  commenced  after  the  statute  has  run  against  the 
debt  secured.*^^  Upon  the  same  principle  a  junior  mortgagee  may 
avail  himself  of  the  defence  of  limitation  against  the  debt  secured  by 
the  prior  mortgage  which  is  sought  to  be  foreclosed.**" 

Where  a  mortgage  is  expressly  made  subject  to  a  prior  mortgage, 
the  junior  mortgagee  cannot,  in  an  action  to  foreclose  the  prior  mort- 
gage, claim  that  the  latter  is  barred  by  the  statute  of  limitations.**^ 

§  1510.  Insanity  of  mortgagor. — If  the  sanity  of  the  mortgagor  is 
questioned,  the  burden  is  upon  the  defendant  to  show  it ;  and  he  must 
show  not  merely  an  incapacity  to  make  a  valid  contract  at  the  date  of 
its  execution,  but  that  the  mortgagee  knew  and  took  advantage  of  the 
grantor's  state  of  mind;  otherwise,  the  consideration  being  paid,  the 
security  will  be  held  good  for  the  amount,  although  the  insanity  of  the 
mortgagor  be  admitted  or  proved. 

The  mortgage  deed  must  at  the  hearing  be  admitted  or  proved.  If 
there  is  an  attesting  witness,  the  only  question  that  need  be  asked  of 
him  is  whether  the  mortgagor  executed  the  deed  in  the  witness's  pres- 
ence. It  is  not  necessary,  as  in  the  case  of  a  will,  to  prove  that  the 
person  when  he  executed  it  was  of  sound  mind.  Although  he  has 
been  found  insane  by  an  inquisition  of  lunacy,  it  is  not  the  duty  of  the 

*'"  Smith  v.   Newton,  38  111.  230.  Water  Co.   v.  Murphy's  Flat  Flum- 

*"  See  §   1204.     The    effect    of    the  Ing  Co.  22  Cal.  620. 

statute  of  limitations  is  there  fully  ^^»  McCarthy     v.     White,     21     Cal. 

examined.      See,     also,     Haskell     v.  495,    82    Am.    Dec.    754;    Grattan    v. 

Bailey,  22  Conn.  569,  573;  Mich.  Ins.  Wiggins,  23  Cal.   16;    Low  v.   Allen, 

Co.   V.   Brown,   11   Mich.   265.  26  Cal.   141;    Lent  v.   Shear,  26  Cal. 

*=' Coster   v.    Brown,    23    Cal.    142;  361. 

Heinlin  v.  Castro,  22  Cal.   100;    Mc-  ""Scott  v.  Sloan    (Tex.)   23  S.  W. 

Carthy  v.  White,  21  Cal.  495,  82  Am.  42;    Johnson  v.  Lasker  Asso.,  (Tex. 

Dec.    754;    Lord    v..    Morris,    18    Cal.  Civ.  App.)  21  S.  W.  961. 

482.     When  there  is  no  written  ob-  "'  Park  v.   Prendergast,    (Tex.)  23 

ligation    for    the    debt,    see    Union  S.  W.  535.     See  §  744. 


463  THE   ANSWER   AND    DEFENCE.         [§§    1511,    1511a. 

plaintiff  to  do  more  than  prove  the  execution  of  the  deed.  The  defend- 
ant must  bring  forward  his  own  case  to  have  the  deed  set  aside,  and 
the  burden  of  proof  lies  on  his  side.*"*- 

§  1511.  A  recovery  of  judgment  on  the  mortgage  note  or  bond  is 
no  defence  ;**^  on  the  contrary,  such  judgment  may  be  relied  upon  as 
establishing  the  validity  of  the  note  or  bond,  and  of  the  mortgage  so 
far  as  the  debt  is  concerned.***  Neither  is  the  pendency  of  a  suit  at 
law  upon  the  mortgage  debt  any  defence  to  a  suit  to  foreclose  the 
mortgage,  unless  made  so  by  statute.**^  A  judgment  may  be  liad  for 
the  mortgage  debt  although  the  mortgage  is  not  enforceable.**'^  One 
who  has  obtained  a  decree  for  foreclosure  and  a  personal  judgment  for 
the  debt  may  relea.se  the  mortgage  lien  and  enforce  the  personal  judg- 
ment by  execution.**'^  Of  course  a  satisfaction  of  a  judgment  upon 
the  debt  would  be  a  defence.**^  Under  the  Code  of  New  York  and  the 
codes  of  some  other  States  following  that,  proceedings  in  an  action  at 
law  are  suspended  by  a  foreclosure  suit;**^  and  if  judgment  has  been 
obtained  at  law,  the  remedy  upon  that  must  be  first  exhausted.*^" 

x\  judgment  against  the  mortgagee  in  an  ejectment  suit  brought  by 
him  against  the  mortgagor  has  been  held  to  be  no  bar  to  a  bill  to  fore- 
close the  mortgage.  The  verdict  and  judgment  in  such  suit  at  law 
are  not  conclusive  as  to  the  equitable  rights  and  relations  of  the  par- 
ties ;  it  is  conclusive  only  that  the  mortgagee  had  not,  at  the  commence- 
ment of  the  suit,  the  legal  right  to  the  possession.*^^ 

§  1511a.  The  defendant  may  set  up  his  liability  to  a  creditor  of 
the  plaintiff  in  a  garnishee  or  trustee  process.  But  to  a  foreclosure 
suit  brought  by  the  assignee  of  a  mortgage,  it  is  no  sufficient  answer 
for  the  defendant  to  say  that  he  is  liable  for  the  debt  as  a  garnishee  in 
an  action  against  the  mortgagee,  though  he  knew  of  the  assignment  of 
the  mortgage  to  the  plaintiff  before  he  answered  the  garnishee  process. 

"'Jacobs     v.    Richards,    18     Beav.  ford,    2    Kan.    App.    243,    41    Pacific. 

300.    .  193. 

*"  §    936;    Vansant   v.    Allmon,    23  •■"  Finch   v.    Turner,   21   Colo.    287, 

111.  30;    Jenkinson  v.  Ewing,  17  Ind.  40  Pac.  565. 

505;    Severson  v.  Moore,  17  Ind.  231;  "*  Farmers'   Loan   &  Trust  Co.   v. 

Goenen  v.  Schroeder,  18  Minn.  66.  Reid,   3   Edw.    414. 

"*  Hosford    V.    Nichols,    1    Paige,  "^  Williamson  v.  Champlin,  Clarke 

220;     Morris  v.   Floyd,  5  Barb.  130;  (N.  Y.)  9. 

Clarke    v.    Bancroft,    13     Iowa,    320.  ""  Shufelt  v.  Shufelt,  9  Paige.  137, 

See  Batchelder  v.  Taylor,  11  N.   H.  37  Am.  Dec.  381;  North  River  Bank 

129.  V.   Rogers,   8  Paige,   648. 

'^'Suydam  v.  Bartle,  9  Paige,  294;  -"'^  Smart  v.  Kennedy,  123  Ala.  627; 

Williamson  v.  Champlin,  Clarke  (N.  26  So.  198,  and  see  Harper  v.  Camp- 

Y.)   9;     Tappan  v.  Evans,  11  N.  H.  bell,  102  Ala.  342,  14  So.  650;    Wil- 

311;    Guest  v.  Byington.  14  Iowa,  30.  liamson,  v.   Mayer,   117  Ala.   253,  23 

^^^  Blossom   V.    Westbrook,    116    N.  So.  3;  Boyle  v.  Wallace,  81  Ala.  352, 

C.  514,  21  S.  E.  193;   Moors  v.  San-  8  So.  194. 


§    1512.]  FORECLOSURE    BY   EQUITABLE    SUIT.  464 

Xeither  has  the  defendant  any  right  to  answer  that  the  assignment  is 
colorable,  collusive,  or  fraudulent,  as  this  is  a  matter  which  does  not 
concern  him.*^- 

§  1512.  If  the  defendant  sets  up  satisfaction  of  the  mortgage,  he 
must  clearly  set  out  the  defence  in  his  answer,  and  his  proofs  must 
clearly  substantiate  his  answer ;  and  if  both  answer  and  the  testimony 
be  vague  and  uncertain  the  defence  will  fail.*^^  Payment  in  whole  or 
in  part,  when  properly  set  up  and  proved,  is  a  good  defence,  not  only 
for  the  mortgagor,  but  for  junior  incumbrancers.*"*  But  a  mortgagor 
who  has  not  paid  the  mortgage  debt  cannot  set  up  a  release  executed 
by  one  who  had  no  authority  at  the  time  to  execute  it.*^^  It  is  a  good 
answer  to  a  foreclosure  suit  that  the  debt  for  the  security  of  which 
the  mortgage  was  given  was  an  advancement  or  gift,  and  that  accord- 
ingly the  deed  and  note  had  been  left  with  the  mortgagor.*^''  The  de- 
fence that  the  complainant  has  received  a  piece  of  property,  which 
should  be  applied  on  the  mortgage  debt,  may  be  taken  by  answer  with- 
out filing  a  cross-bill.*^^ 

Where  in  the  foreclosure  of  a  junior  mortgage  it  appears  that  the 
prior  mortgage  was  given  by  a  son  to  his  mother  to  secure  to  her  the 
interest  of  a  certain  sum  for  her  life,  but  that  afterwards  the  mother 
resided  with  the  son,  and  the  latter  had  repeatedly  declared  that  the 
interest  due  his  mother  had  been  satisfied  by  arrangement  between 
them,  and  that  it  was  credited  on  the  bond,  which  was  not  produced 
at  the  trial,  nor  was  its  non-production  explained,  it  was  held  that, 
under  the  facts  proved,  there  was  a  presumption  that  the  interest  had 
been  satisfied.*^^ 

An  agreement  made  by  the  holders  of  the  notes  of  a  corporation, 
secured  by  mortgage,  to  convert  the  notes  into  stock  upon  a  condition 
which  has  failed,  is  no  defence  to  a  suit  to  foreclose  the  mortgage. ■'°* 

Where  the  defences  to  a  foreclosure  suit  are  the  invalidity  of  the 
mortgage,  and  also  payment  of  the  mortgage  debt,  it  is  error  for  the 
court,  after  deciding  the  first  point  in  favor  of  the  defendant,  to  re- 

«^Phipps  V.  Rieley,  15  Oreg.   494,  *"  Prouty  v.  Eaton,  41  Barb.  409; 

16  Pac.   185.  Prouty  v.   Rice,   50  Barb.    344.     See 

"^Suhr  V.  Ellsworth,  29  Mich.  57;  Edwards  v.  Thompson,  71  N.  C.  177; 

Finlayson  v.  Lipscomb,  16  Fla.  751;  Johnson    v.    Van    Velsor,    43    Mich. 

Richardson     v.     Tolman,     44     Mich.  208,  5  N.  W.  265;    Hendrix  v.  Gore, 

879,  6  N.  W.  840;    Cameron  v.  Cul-  8  Oreg.  406. 

kins,  44  ]Mich.  531,  7  N.  W.  157.  "'  Jennings  v.  Hunt,  6  Bradw.  523. 

In    Pennsylvania,    where    this    de-  *^'''  Peabody  v.  Peabody,  59  Ind.  556. 

fence  is  set  up  in  an  action  of  scire  ^"  Edgerton  v.   Young,  43   111.  464. 

facias  sur  mortgage,  the  court  may  *'^  Eckel  v.  Eckel,  49  N.  J.  Eq.  587, 

leave   the   question   of   payment,   as  27  Atl.   433. 

one   of  fact,    to   the   jurv.      German  "'•'  Pugh  v.   Fairmount  Mining  Co. 

Ins.   Co.  V.  Davenport,  9  Atl.  517.  112  U.  S.  238,  5  Sup.  Ct.  238. 


465  THE   ANSWER   AND   DEFENCE.  [§§    1513,    1514. 

fuse  to  pass  upon  the  second,  sin<;e  a  money  judgment  could  be  ren- 
dered for  the  debt  if  unpaid.***" 

§  1513.     An  agreement  by  the  parties  subsequent  to  the  mortgage 

by  which  the  rents  of  the  mortgaged  premises  are  assign-ed  to  the 
mortgagee  to  be  collected  by  him,  and  applied  to  the  debt  until  it  is 
fully  paid,  is  a  good  defence  to  a  suit  to  foreclose;***^  and  so  is  an 
agreement  to  rescind  a  sale  of  land,  the  purchase-money  of  whicli  the 
mortgage  was  given  to  secure,  by  which  the  land  is  to  be  reconveyed 
and  the  mortgage  surrendered  ;***-  or  an  agreement  to  extend  the  time 
of  payment/**^  when  made  for  a  valuable  consideration.**'*  An  agree- 
ment extending  the  time  of  payment  is  no  part  of  the  mortgage,  and 
does  not  draw  the  mortgage  within  an  act  forbidding  the  foreclosure 
of  a  mortgage  until  one  year  after  the  last  instalment  is  due.***^ 

A  parol  agreement  between  the  mortgagor  and  mortgagee,  that  the 
latter  shall  take  possession  and  receive  the  rents  and  profits  until  the 
debt  is  paid,  and  then  restore  the  property  to  the  mortgagor,  cannot 
be  specifically  enforced,  on  account  of  the  statute  of  frauds,  but  it 
may  be  ground  for  an  equitable  estoppel  to  prevent  the  mortgagee 
from  claiming  title  by  a  foreclosure  in  violation  of  the  agreeinent.*®* 

§  1514.  As  a  general  rule,  a  defendant  cannot  object  to  an  in- 
sufficient service,  or  the  want  of  service,  upon  another  defendant 

who  is  not  a  necessary  party  to  the  suit.*®^  Of  covirse  a  defendant 
may  take  advantage  of  want  of  service,  or  of  an  ineffectual  service, 
upon  himself  by  a  special  appearance  and  plea  in  the  suit ;  or  he  may 
in  such  case  take  no  notice  of  the  suit,  as  he  would  not  be  bound  by  the 
decree.  A  decree,  however,  which  recites  that  process  was  duly  served 
upon  a  defendant  is  prima  facie,  if  not  conclusive,  proof  of  notice  to 
him  of  the  foreclosure  suit.***®  It  has  been  held,  however,  that  a  per- 
son who  stands  in  the  relation  of  surety  for  the  mortgage  debt,  and 
whose  right  it  is  to  have  the  entire  equity  of  redemption  applied  in  the 
first  place  to  the  payment  of  it,  may  require  the  bringing  in  of  parties 
having  an  interest  in  it,  so  as  to  make  the  sale  perfect  against  all 
equities.***^ 

""Gleaton  v.  Gibson,  29  S.  C.  514,  Tompkins,  21  N.  J.  Eq.  338;   Mary- 

7  S.  B.   833.  ott  V.  Renton,  21  N.  J.  Eq.  381. 

"' Angier  v.  Masterson,  6  Cal.  61;  *«=  Wallace   v.    Hussey,    63    Pa.    St. 

Ford  V.  Smith,  60  Wis.  222,  18  N.  W.  24. 

925.  *'"'  Hig.srins  v.  Haberstraw,  76  Miss. 

*«=  Bledsoe  v.  Rader,  30  Ind.  354.  627,  25  So.  168. 

"'Dodge    V.    Crandall,    30    N.    Y.  ""^  Mims     v.     Mims,     35     Ala.     23; 

294;    Andrews  v.  Gillespie,  47  N.  Y.  Semple  v.  Lee,  13  Iowa.  304. 

487.  '"'  Carpenter  v.  Millard,  38  Vt.  9. 

*'*  Trayser    v.    Ind.    Asbnry    Uni-  •""'  Kortright     v.     Smith,     3     Edw. 

versity,   39   Ind.   556;     Tompkins   v.  402.  • 


§    1515.]  FORECLOSURE    BY    EQUITABLE    SUIT.  406 

Of  course  a  defendant's  appearance  in  an  action  cures  a  want  of 
service.  A  mortgagor  who  was  absent  from  the  State  when  the  action 
was  commenced,  but  availed  himself  of  a  stay  of  proceedings  obtained 
in  his  behalf  after  a  decree  was  rendered,  thereby  appeared  in  the  ac- 
tion, which  was  afterwards  concluded  by  the  decree  of  foreclosure  and 
sale  thereunder.*'^*' 

§  1515.  Bill  of  interpleader. — If  the  defendant,  admitting  the  in- 
debtedness, is  in  doubt  to  wliich  of  two  claimants  he  ought  to  pay  it, 
he  should  make  his  answer  a  bill  of  interpleader,  placing  himself  in- 
differently between  them.*^^ 

The  mortgagor  cannot  set  up  by  cross-bill  the  defence  that  the  notes 
secured  by  the  mortgage  were  improperly  made  payable  to  one  of  two 
partners  who  has  misappropriated  the  funds  of  the  firm,  and  is  in- 
debted to  his  copartner. 

*'"  Franse   v.    Armbuster,    28    Neb.        *"  Harrison  v.  Pike,  48  Miss.  46. 
467,   44   N.   W.   481. 


CHAPTER  XXXIII. 


THE  APPOINTMENT  OF  A  RECEIVER. 

I.  When  a  receiver  will  be  appoint-  I  II.  Duties  and  powers  of  a  receiver, 
ed,  1516-1534.  |  1535-1537a. 

I.     When  a  Receiver  will  he  Appointed. 

§  1516.  General  principles.^ — A  receiver  of  the  rents  and  profits 
may  be  appointed  pendente  lite  when  the  mortgage  is  insufficient,  and 
the  party  personally  liable  is  insolvent;  or  when  it  is  provided  by  the 
deed  that  the  mortgagee  shall  have  the  rents  and  profits  after  a  de- 
fault; for  otherwise,  since  the  owner  of  the  equity  of  redemption,  es- 
pecially in  all  those  States  where  the  mortgagee's  right  of  entry  upon 
the  happening  of  a  default  is  taken  away,  is  entitled  to  the  rents  and 
profits  until  a  sale  under  decree  of  court  and  possession  under  it  given 
to  the  purchaser,  the  holder  of  the  mortgage  would  be  deprived  of  a 
valuable  part  of  his  security.^    The  mere  fact  that  there  has  been  a  de- 

^  For   the   law   relating   to   receiv-  Bagley,    84    N.    Y.    461;      Argall    v. 

ers  of  railroad  companies,  see  Jones  Pitts,  78  N.  Y.  239,  242;    Wyckoff  v. 

on  Corporate  Bonds  and  Mortgages;  Scofield,  98  N.  Y.  475. 
the  appointment  and  jiirisdistion  of        Mississippi:     Whitehead    v.  Woot- 

such     receivers,     §§     456-492;     their  en,    43   Miss.    523;     Myers   v.   Estell, 

rights    and    liabilities,     S§     492-530;  48  Miss.   372;     McDonald  v.  Vinson, 

their  debts  and  certificates,   §§  533-  56  Miss.  497;     Pearson  v.  Kendrick, 

546.  74  Miss.  235,  21  So.  37. 

=  New  York:    Bank  of  Ogdensburg        Kentucky:    Douglass    v.    Cline,    12 

V.  Arnold,  5  Paige,  38,  40;    Astor  v.  Bush.  608;    Newport,  &c.  Bridge  Co. 

Turner,  11  Paige,  436,  43  Am.   Dec.  v.  Douglass,  12  Bush.  673. 
766;    Sea  Insurance  Co.  v.  Stebbins,        District    of    Columbia:     Keyser    v. 

8  Paige,  566;     Shotwell  v.   Smith,  3  Hitz,  4  Mack,  179. 
Edw.    588;     Warner   v.    Gouverneur,        New  Jersey:    Leeds  v.   Gifford,   41 

1    Barb.    36,    38;     Clason    v.    Corley,  N.  J.  Eq.  464. 

6  Sandf.   447;     Mitchell   v.   Bartlett,        South  Dakota:    Roberts  v.  Parker, 

61  N.  Y.  447;    Howell  v.  Ripley,  10  14  S.  D.  323,  85  N.  W.  591. 
Paige,  43;    Frelinghuysen  v.  Golden,        WestVirginia:    Ogden  v.  Chalfant, 

4  Paige,  204;    Syracuse  City  Bank  v.  32  W.  Va.  559,  9  S.  E.  879;     Grant- 

Tallman,    31    Barb.    201;     Rider    v.  ham  v.  Lucas,  15  W.  Va.  425.     For 

467 


§    1516.]  THE   APrOINTMENT   OP   A   RECEIVER.  468 

fault  in  the  payment  of  the  debt  is  no  ground  for  the  appointment  of 
a  receiver/  unless  there  be  a  stipulation  in  the  mortgage  that  the  mort- 
gagee shall  have  the  rents,  or  he  is  entitled  to  them  under  existing 
laws.*  This  right  to  have  a  receiver  of  the  rents  appointed  pending  the 
litigation  depends  upon  the  general  principle  of  equity,  that  the  pur- 
pose of  such  an  appointment  is  to  preserve  the  property,  so  that  it  may 
be  appropriated  to  satisfying  the  decree  of  court.  A  mortgagee  or  trust 
creditor,  to  be  entitled  to  a  receiver,  must  show  that  it  is  necessary  to 
interfere  with  the  mortgagor's  possession  on  account  of  the  inadequacy 
of  the  security  and  the  insolvency  of  the  mortgagor.^  Where  there  is 
good  equitable  ground  for  the  appointment  of  a  receiver,  it  is  no  valid 
objection  to  the  appointment  that  the  mortgage  does  not  expressly 
pledge  the  rents  and  profits  of  the  mortgaged  property.^  If  the  mort- 
gagor is  doing  noninjury  or  waste  to  the  property,  and  is  permitting  or 
threatening  none ;  if  he  has  not  failed  to  pay  the  taxes,  and  is  not  al- 
lowing the  mortgage  debt  to  increase  by  the  accumulation  of  inWrest ; 
and  if  he  is  not  shown  to  be  irresponsible  for  any  deficiency  there  may 
be,  a  receiver  will  not  be  appointed."^  This  relief  is  given  with  great 
caution,  and  only  when  the  mortgagee  has  no  other  adequate  means  of 
protecting  his  rights.^  The  necessity  for  this  protection,  and  the 
special  grounds  and  reasons  for  asking  it,  must  be  clearly  alleged  and 
proved  before  it  will  be  granted.''  The  appointment  is  a  matter  for  the 
sound  discretion  of  the  court,^*'  and  will  not  be  reviewed  unless  there 
be  a  gross  abuse  of  the  discretion. ^^ 

the    reason    intimated    in    the   text,'  (Ind.),    30    N.    E.    952;    National   F. 

the  practice  of  appointing  a  receiver  Ins.  Co.  v.  Broadbent,  77  Mmn.  175, 

is    chiefly   confined    to    those    States  79   N.   W.   676. 

where  the  mortgagee's  right  of  en-  ^  First  Nat.  Bank  v.  Gage,  79  111. 

try  upon  default  is  taken  away.  207;     Makeel   v.    Hotchkiss,   190    111. 

^Williams  v.   Robinson,   16  Conn.  311,  60  N.  E.  524;     Silverman  v.  N. 

517-     Scott    V.    Ware,    65    Ala.    174;  W.  Mut.  Life  Ins.  Co.  5  Bradw.  124; 

Warren  v    Pitts,  114  Ala.  65,  21  So.  Cortleyeu  v.  Hathaway,  11  N.  J.  Eq. 

494  39,   64  Am.   Dec.   478;  Syracuse   City 

*  Whitehead    v.    Wooten,    43   Miss.  Bank  v.  Tallman,  31  Barb.  201.    See 

523-    Morrison  v.  Buckner,  Hempst.  Eslava  v.   Crampton,  61  Ala.   507. 

442-     Jackson    v.    Hooper,    107    Ala.  "Morrison    v.     Buckner,     Hempst. 

634*  18  So    254  442;      Callanan    v.    Shaw,    19    Iowa, 

'^Shotwell   V.    Smith,   3   Edw.    588;  183;     Hackett   v.    Snow,    10    Ir.    Eq. 

Quincy  v.   Cheeseman,  4  Sandf.   Ch.  220;    First  Nat.  Bank  v.  Gage,  79  111. 

405-    Piillan  v.   Cincinnati  &  Chicago  207;      Heavilon    v.    Farmers'    Bank, 

Air  Line  R.  R.  Co.  4  Biss.  35;   War-  81  Ind.  249. 

ren  v.  Pitts,  114  Ala.  65,  21  So.  494;  ^»  Cone   v.    Paute,    12    Heisk.    506; 

Scott  V.  Ware,  65  Ala.  174.  Jacobs  v.  Gibson,  9  Neb.  380;    Rider 

As  to  evidence  of  the  mortgagor's  v.   Bagley.    84   N.    Y.    461;     Sales   v. 

insolvency,    see   Durant   v.    Crowell,  Lusk.  60  Wis.  490;  West  v.  Chasten, 

97  N.  C.  367,  2  S.  E.  541.  12  Fla.  315;    Benneson  v.  Bill,  62  111. 

"Grant  v  '  Phoenix  Mut.  L.  Ins.  Co.  408;     Cone  v.    Combs,   18   Fed.    576; 

121  U.  S.  105,  7  Sup.  Ct.  841.  Warren  v.  Pitts,  114  Ala.  65,  21  So. 

'Morris    v     Pranchaud,    52    Wis.  494;    Bean  v.  Heron,  65  Minn.  64,  67 

187;     Sales    v.    Lusk,    60   Wis.    490;  N.   W.   805. 

Hutchinson     v.     First     Nat.     Bank  "  Briggs  v.   Neal,   120  Fed.   224. 


4G9  WHEN  A  RECEIVER  WILL  BE  APPOINTED.      [§  1516. 

If  the  mortgagor  is  applying  the  rents  and  profits  to  keep  down  the 
interest  on  the  first  mortgage,  the  court  will  not  appoint  a  receiver  on 
the  application  of  the  second  mortgagee,  although  it  may  appear  that 
the  security  is  inadequate , and  the  mortgagor  insolvent.^^^  If  the  first 
mortgagee  be  in  possession,  he  cannot  be  disturbed;  and  when  a  re- 
ceiver is  appointed  on  the  application  of  a  subsequent  mortgagee,  it 
must  bo  with  the  consent  of  prior  incumbrancers,  or  without  prejudice 
to  their  rights.^^  The  first  mortgagee  may  at  any  time  enter  or  bring 
ejectment  against  such  receiver. 

The  appointment  of  a  receiver  is  an  equitable  remedy,  and  has 
been  said  to  be  in  effect  an  equitable  execution.^*  This  remedy  bears 
the  same  relation  to  courts  of  equity  that  proceedings  in  attachment 
bear  to  courts  of  law.  "The  issuing  of  an  attachment  and  the  ap- 
pointment of  a  receiver  in  a  civil  action  are  both  proceedings  which 
are  merely  ancillary  or  auxiliary  to  the  main  action.  The  action  may 
be  prosecuted  to  final  judgment,  either  with  or  without  such  proceed- 
ings.^^ These  auxiliary  proceedings  are  merely  intended  to  secure  the 
means  for  satisfying  the  final  judgment,  in  case  the  plaintiff  should 
succeed  in  the  action,  and  they  can  only  be  resorted  to  where  the  spe- 
cial circumstances  existwhich  the  lawprescribes  for  their  institution."^'' 
The  appointment  of  a  receiver  is  equivalent  to  a  sequestration  of  the 
rents  and  profits  accruing  after  the  date  of  the  order,  and  as  to  all 
which  have  previously  accrued,  and  which  remain  unpaid."  The  ap- 
pointment of  a  receiver  does  not  create  any  new  lien  upon  the  prop- 
erty, and  does  not  ordinarily  give  any  advantage  or  priority  to  the 
person  obtaining  the  appointment  over  other  parties, in  interest.^^ 

The  existence  of  a  statute  which  declares  that  the  mortgagor  retains 
the  legal  title  and  right  of  possession  does  not  affect  the  right  of  the 
court  to  appoint  a  receiver  where  this  remedy  is  appropriate  under  the 
general  equitable  rule.^'' 

When  the  application  is  for  the  appointment  of  a  receiver  of  the 

i=Cortleyeu  v.  Hathaway.  11  N.  J.  land  R.  R.  Co.  v.  Sloan,  31  Ohio  3t. 

Eq.  39,-64  Am.  Dec.  478;     Myton  v.  1,  per  White,  J. 
Davenport,    51    Iowa,    583;     Warren        i"  Gaynor  v.  Blewett,  82  Wis.  313, 

V.  Pitts,  114  Ala.  65,  21  So.  494.  52  N.  W.  313;     Syracuse  City  Bank 

"Bryan  v.   Cormick,   1   Uox's   Eq.  v.  Tallman,  31  Barb.  201,  212;    Lof- 

Cas     422;     Dalmer   v.    Dashwood,    2  sky  v.   Maujer,  3  Sandf.   Ch.   69,71; 

Cox's  Eq    Cas    378.  Johnston  v.  Riddle.  70  Ala.  219,225; 

1*  Jeremy's  Eq.  Jur.  249;   Lightcap  Argall  v.  Pitts.  78  N.  Y.  239;  Thorn- 

V   Bradley,  186  111.  510,  529,  58  N.  E.  ton  v.  Bank,  76  Va.  432. 
221-    Hass  V.  Chicago  Building  Soc.         '^  Pascault    v.     Cochran,    34    Fed. 

89  111.   498.  Rep.    358;     Wormser    v.    Merchants' 

"Muncie    Nat.    Bank    v.    Brown,  Nat.    Bank,    49    Ark.    117,    4    S.    W. 

112  Ind.  474,  14  N.  E.  358.  198. 

"Cincinnati,    Sandusky    &    Cleve-        >»  Philadelphia  Mortg.  &  T.  Co.  v. 

Goos,  47  Neb.  804,  66  N.  W.  843. 


g§    1517-1519.]     THE    APPOINTMENT   OF   A   RECEIVER. 


470 


mortgaged  property,  it  is  improper  for  the  court  to  appoint  a  receiver 
of  any  property  not  embraced  in  the  mortgage.-" 

§  1517.  A  receiver  may  be  appointed  on  the  application  of  the 
mortgagor,  as  against  the  mortgagee  in  possession,  when  there  is  equi- 
table ground  for  it;  as,  for  instance,  when  the  mortgagee  is  irrespon- 
sible, and  the  rents  and  profits  are  liable  to  be  lost,  or  he  is  committing 
waste.  But  if  he  be  responsible,  and  anything  remains  due  to  him  on 
the  mortgage  debt,  the  appointment  will  not  be  made  unless  he  is  mis- 
managing the  property;-^  and  his  affidavit  that  there  is  a  balance  due 
him  will  be  sufficient  to  prevent  the  appointment,  for  the  question  of 
indebtedness  will  not  be  tried  on  such  an  application ;  and  when  the 
question  depends  upon  a  settlement  of  the  mortgagee's  account,  it  can 
be  determined  only  upon  a  suit  in  equity  to  redeem.^^ 

A  receiver  will  not  be  appointed  in  a  proceeding  to  enforce  a 
vendor's  implied  lien.  It  is  no  part  of  the  contract  of  sale,  either  ex- 
press or  implied,  that  the  vendor  shall  appropriate  anything  but  the 
land  itself  for  the  satisfaction  of  his  purchase-money ;  and  it  is  a  part 
of  the  implied  contract  that  the  purchaser  is  entitled  to  the  possession 
until  the  land  is  sold  to  enforce  the  lien.-^ 

§  1518.  This  remedy  is  regarded  as  peculiarly  appropriate  in  cases 
of  mortgages  of  leasehold  estates,  inasmuch  as  the  value  of  such  a  se- 
curity consists  chiefly  in  the  right  to  receive  the  rents,  and  the  delay 
of  protracted  litigation  may  wholly  destroy  this  value.^*  In  such  a 
case  there  may  be  urgent  need  of  the  aid  of  a  receiver  by  reason  of  the 
mortgagor's  failure  to  pay  the  rent,  and  the  landlord's  threatening  an 
eviction ;  and  a  receiver  may  consequently  be  appointed  before  answer, 
and  even  before  the  service  of  process  upon  the  defendant  mortgagor.^^ 

8  1519.  The  English  rule,  which  prevailed  before  the  right  was 
made  general  by  a  recent  statute,^^  was  that  a  mortgagee  who  had  a 

'o  St.    Louis,   A.   &   T.    Ry.    Co.   v.  It    enables    the    mortgagee,    in    all 

"Whitaker,  68*  Tex.  630,  5  S.  W.  448.  cases    where    the    payment    of    the 

"Boston  &  Providence   R.   Co.   v.  principal  is   in  arrear  one  year,  or 

N   Y    «&  N.  E.  R.  Co.  12  R.  I.  220.  the    interest    six    months,    or    after 

"Bolles  v.  Duff,  35  How.  Pr.  481;  any  omission  to  pay  any  insurance 

Patten   v.    Accessory   Transit   Co.    4  premium    which,    by    the    terms    of 

Abb.    Pr.    235,    237;    Quinn    v.    Brit-  the  deed,  ought  to  be  paid,   to  ob- 

taini  3  Edw.   314.  tain  the  appointment  of  a  receiver 

-^  Morford    v.   Hamner,    59    Tenn.  of  the  rents  and  profits  of  the  es- 

391  tate.     He    is    deemed    the    agent   of 

"Astor  v.   Turner,  2  Barb.   444.  the    mortgagor,    or    owner    of    the 

"  Barrett  v.  Mitchell,  5  Ir.  Eq.  501.  property,   who  is  solely  responsible 

="23  &  24  Vict.  ch.  145,  §§  11-32.  for  his  acts  or  defaults,  unless 
This  statute  applies  to  all  mort-  otherwise  provided  for  in  the  mort- 
gages, those  containing  powers  of  gage.  The  statute  regulates  his  du- 
sale  as  well  as  those  that  do  not.  ties,     powers,     and     compensation. 


471  WnF,X    A   RECEIVER    WILL    BE   APPOINTED.  [§    1520. 

legal  estate  and  might  enter  after  a  default,  or  recover  possession  at 
la\v,  was  not  entitled  to  a  receiver  of  the  rents.-'  A  subsequent  mort- 
gagee, however,  having  an  equitable  estate  only,  and  being  unable  to 
enter  as  against  the  first  mortgagee,  was  held  to  have  a  better  ground 
for  the  application,  and  was  therefore  generally  entitled  to  a  receiver 
when  proper  occasion  for  the  aj^pointment  was  shown.^^  This  distinc- 
tion was  clearly  established  by  Lord  Eldon,  upon  the  ground  that 
equity  will  not  interfere  when  the  mortgagee  has  an  adequate  remedy 
at  law.-''  When,  under  peculiar  circumstances,  the  reason  for  this  dis- 
tinction fails,  and  the  mortgagee,  although  having  the  legal  estate,  is 
unable  to  take  possession,  he  is  entitled  to  this  relief  in  equity;  as 
where  a  mortgage  was  given  by  a  surety  in  addition  to  one  given  by  the 
principal  debtor,  yet  with  a  proviso  that  the  mortgagee  should  not  have 
recourse  to  the  surety's  estate  or  be  at  liberty  to  sell  it  until  the  estate 
primarily  liable  shall  prove  an  insufficient  security.^" 

§  1520.  In  the  United  States,  courts  of  equity  have  generally  ex- 
ercised their  powers  in  appointing  receivers  with  much  more  freedom ; 
though  the  English  rule  prevails  in  States  where  the  legal  title  vests 
in  the  mortgagee,  and  after  forfeiture  he  can  maintain  an  action  of 
ejectment  to  recover  possession;  and  in  such  States  a  court  of  equity 
will  not  generally  appoint  a  receiver,  but  will  leave  the  mortgagee  who 
has  the  legal  title,  or  the  right  at  law  to  enter  and  take  possession  of 
the  mortgaged  premises,  to  pursue  his  legal  remedy.^^    There  must  be 

This    right   to   obtain    the   appoint-  gaf,ee  can  take  possession  at  once, 

ment   of   a   receiver   is   independent  ihe'-»!  being  no  defense  whatever  to 

of    any    action    to    foreclose.     It    is  his  action  of  ejectment,  still,  if  the 

not  unusual  to  provide  in  the  morh-  mortgagee    cannot    take    possession, 

gage  deed  for  the  appointment  of  a  as  if,  for  instance,  there  is  a  prior 

receiver.      See    Jolly    v.    Arbuthno":,  mortgagee,  who  refuses  to  take  pos- 

4   De   G.    &   J.    224;    Law   v.    Glenn,  session,  then,  at  the  instance  of  the 

L.  R.  2  Ch.  App.  634.  second    mortgagee,    the    court    does 

"  Berney   v.    Sewell,   1  Jac.   &   W.  grant  a  receiver." 

647;    Cox   v.    Champneys,    Jac.    576;  ^^  Ackland    v.    Gravener,    31    Beav. 

Bryan  v.  Cormick,  1  Cox,  422;  Mea-  482. 

den  v.  Sealey,  6  Hare,  620;   Holmes  ="  Oliver  v.    Decatur,   4   Cranch   C. 

V.    Bell,    2    Beav.    298;     Sturch     v.  C.   458;    Williamson  v.   New  Albany 

Young,    5    Beav.    557;     Ackland    v.  R.  Co.  1  Biss.  201;  Union  Trust  Co. 

Gravener,  31  Beav.  482.  v.  St.   Louis,  &c.   R.   R.   Co.  4  Cent. 

'^  Anderson      v.      Kemshead,      16  L.    J.    585;    Frisbie   v.    Bateman,    24 

Eeav.   329;    Dalmer  v.   Dash  wood,   2  N.  J.  Eq.   28;    Best  v.   Schermier,   6 

Co.i,  378;   Greville  v.  Fleming,  2  Jo.  N.  J.  Eq.   154;    Cortleyeu  v.   Hatha- 

&    Lat.    335;    Meaden    v.    Sealey,    6  way,  11   N.   J.   Eq.   39,  64  Am.   Dec. 

Hare,  620.                            ,  478.     In    the    last    named    case    the 

"  Berney  v.    Sewell,   1   Jac.   &  W.  court  appointed  a  receiver  upon  the 

G47.      See,    also,      observations      of  application    of   a    subsequent    mort- 

Lord  Romilly  in  Ackland  v.  Grave-  gagee — showing    the    insolvency    of 

nor,    31    Beav.    482,    where    he    savo  the    mortgagor,    inadequacy    of    the 

thi^.t    "though    the    court    refuses    to  security,    the    sale    of    the    premises 

grant    the    receiver    in    cases    where  to  an  insolvent  purchaser,  who  had 

there  is  no  question,  and  the  mort-  agreed,  as  part  of  the  consideration. 


§    1521.]  THE   APPOINTMENT   OF   A   EECEIVER,  472 

something  more  than  the  inadequacy  of  the  security  and  the  insolvency 
of  the  mortgagor  to  warrant  the  appointment  at  the  instance  of  a 
mortgagee  having  the  legal  estate.  Other  special  circumstances  calling 
for  this  equitable  relief  must  be  shown ;  either  that  the  mortgagee  has 
only  an  equitable  estate  and  cannot  enter  and  take  possession,  or  that, 
by  reason  of  the  fraud  or  negligence  of  the  person  in  possession,  the 
security  is  likely  to  be  impaired ;  as,  for  instance,  by  allowing  the  taxes 
to  go  unpaid,  whereby  a  lien  is  created  superior  to  that  of  the  mort- 
gage, and  which  may,  if  not  extinguished,  extinguish  the  mortgage.^'^ 
The  terms  of  the  mortgage  may,  however,  be  such  that  the  mort- 
gagee will  have  no  right,  as  against  the  mortgagor  and  his  assigns,  to 
take  the  rents  of  the  property  prior  to  a  foreclosure  sale,  or  a  sale 
under  a  power.^^ 

§  1521.  The  prevailing  rule,  in  those  States  in  which  the  legal  title 
is  regarded  as  being  in  the  mortgagor  until  foreclosure,  is  that  a  re- 
ceiver will  be  appointed  upon  the  application  of  a  mortgagee  after  de- 
fault, without  reference  to  his  legal  rights,  whenever  sufficient  equi- 
table grounds  for  this  relief  are  shown,  which  are  in  general  that  the 
premises  are  an  inadequate  security  for  the  debt,  and  the  mortgagor 
or  other  person  in  possession,  who  is  personally  liable  for  the  debt,  is 
unable  to  make  good  the  deficiency;^*  and  it  is  immaterial  whether  a 

to   reduce    the    mortgage    debt,    and  211,    where    a    receiver    was    denied 

upon    obtaining    possession    refused  to  a   mortgagee   after  he   had   him- 

to  l^eep  his  agreement,  and  offered  self,     without    right,     become     pur- 

to  sell  the  property  for  the  amount  chaser  at  a  sale  under  a  power  in 

of    the    incumbrances    after    taking  the      mortgage.     Also      Fifth      Nat. 

off  the  crops.     Mr.  Chancellor  Will-  Bank    v.    Pierce,    117    Mich.    376,    75 

iamson,    remarking    upon    the    gen-  N.  W.  1058. 

eral    rules    governing    the    appoint-  ===  Mahon  v.  Crothers,  28  N.  J.  Eq. 

ment   of    a    receiver,    said    that    the  5G7;   Warwick  v.  Hammell,  32  N.  J. 

courts     of     New     Jersey     had     not  Eq.  427;  Brasted  v.  Sutton,  30  N.  J. 

adopted    the    rule    of    appointing    a  Eq.    462;    Cone   v.    Paute,    12    Heisk. 

receiver    simply    on    the    ground    of  506;     Johnson    v.    Tucker,    2    Tenn. 

the  inadequacy  of  the  security  and  Ch.  398. 

the    insolvency    of    the    mortgagor.  ^^  p^eedman's  Sav.  &  Trust  Co.  v. 

"This     court    has    gone    upon    the  Shepherd,  127  U.   S.  494,  8  Sup.   Ct. 

ground   that  where  a  man  takes  a  1250. 

mortgage  security  for  his  debt,  and  ="*  United    States:      Grant    v.    Phne- 

permits    the    mortgagor    to    remain  nix  Mut.   L.   Ins.   Co.   121  U.   S.  105, 

in  possession,  if  there  is  a  default  7   Sup.   Ct.   841;    Kountze  v.    Omaha 

in    payment,    the    mortgagee    must  Hotel  Co.  107  U.   S.  378.  2  Sup.   Ct. 

appropriate     the     property     in     the  Rep.  911;    Freedman's  Sav.  &  Trust 

usual    way   to    the   payment   of   the  Co.    v.    Shepherd,    127    U.    S.    494,    8 

debt      If    he    is    a    first    mortgagee.  Sup.   Ct.   1250;    Shepherd  v.   Pepper, 

and     wishes     possession,     he     must  133  U.  S.  626,  10  Sup.  Ct.  438;   Hitz 

take  his  legal  remedy  by  ejectment,  v.   Jenks,   123  U.   S.    297,   306:    Cone 

If    he    is    a    second    mortgagee,    he  v.    Combs,   18  Fed.   576,   5   McCrary, 

takes   his   security   with    the   disad-  651;     Cake  v.  Mohun,  164  U.   S.   34, 

vantages    of    a    second    incumbran-  17  S.  Ct.  100. 

cei- "  New  York:     Bank   of  Ogdensburg 

See   McLean   v.    Presley,    56    Ala.  v.  Arnold,  5  Paige,  39:   Shotwell  v. 


473 


WHEN    A   RECEIVER    WILL    BE   APrOINTED. 


[§    1521. 


deficiency  judgment  against  the  parties  liable  for  the  debt  is  collect- 
ible.^^ Additional  grounds  which  are  generally  conclusive  are,  that  the 
mortgagor  is  allowing  the  security  to  diminish  in  value,  or  the  mort- 
gage debt  to  increase,  and  especially  is  allowing  the  interest  on  a  prior 
mortgage  to  accumulate,  and  taxes  to  go  unpaid.^" 

48  Wis.  208,  4  N.  W.  124;  Morris  v. 
Branclaaud,  52  Wis.  187,  8  N.  W. 
883;  Finch  v.  Hougtiton,  19  Wis. 
150;  Winkler  v.  Magdeburg,  100 
Wis.  421,  76  N.  W.  332. 

Nebraska:  Waldron  v.  First  Nat. 
Bank,  60  Neb.  245,  82  N.  W.  856; 
Laune  v.  Hauser,  58  Neb.  663,  79 
N.   W.   555. 

North  Carolina:  Kerchner  v. 
Fairley,  80  N.  C.  24;  Durant  v. 
Crowell,  97  N.  C.  367,  2  S.  E.  541. 

Arkansas:  Price  v.  Dowdy,  34 
Ark.  285. 

Illinois:  'Haas  v.  Chicago  Build- 
ing See.  89  111.  498;  Knickerbocker 
V.  McKindley  Coal  Co.  172  111.  535, 
50  N.  E.  330;  McKeel  v.  Hotchkiss, 
190  111.  311,  60  N.  E.  524;  Cross  n. 
Will  Co.  Nat.  Bank,  177  111.  33,  52 
N.  E.  322;  First  Nat.  Bank  v.  111. 
Steel  Co.  174  111.  140,  51  N.  E.  200. 

New  Jersey:  Leeds  v.  Gifford,  41 
N.  J.  Eq.  464,  5  Atl.  795;  Warwick 
V.  Hammell,  32  N.  J.  Eq.  427. 

Michigan:  Brown  v.  Chase, 
Walker,   43. 

Tennessee:  Henshaw  v.  Wells, 
9  Humph.  568. 

Kentucky:  Woolley  v.  Holt,  14 
Bush,  788;  Taliaferro  v.  Gay,  78  Ky. 
4'96;  Mayfield  v.  Wright,  107  Ky. 
530,  54  S.  W.   864. 

Ohio:  Williamson  v.  Gerlach,  41 
Ohio  St.  682. 

Wyoming:  Anderson  v.  Mat- 
thews, 8  Wyo.  513,  58  Pac.  898. 

In  Indiana  it  is  only  necessary 
to  show  that  the  mortgaged  prop- 
erty is  not  sufficient  to  discharge 
the  mortgage  debt.  It  is  not  nec- 
essary to  allege  or  prove  the  mort- 
gagor's insolvency.  Hursh  v.  Hursh, 
99  Pnd.  500;  Ponder  v.  Tate.  96  Ind. 
3.30;  Main  v.  Ginthert,  92  Ind.  180; 
Merritt  v.  Gibson,  129  Ind.  155,  27 
N.  E.  136. 

''Waldron  v.  First  Nat.  Bank.  60 
Neb.  245,  82  N.  W.  856;  Philadel- 
phia Mortg.  &  T.  Co.  V.  Goos,  47 
Neb.  804.  815.  66  N.  W.  843;  Jacobs 
V.  Gibson,  9  Neb.  380,  2  N.  W.  893. 

•■"' Hausran  v.  Netland  (Minn.),  53 
N.  W.  873:  Lowell  v.  Doe.  44  Minn. 
144,  46  N.  W.  297;  Dunlnp  v. 
Hedges,  35  W.  Va.  287,  13  S.  E.  656. 


Smith,  3  Edw.  588;  Sea  Ins.  Co.  v. 
Stebbins,  8  Paige,  565;  Warner  v. 
Gouverneur,  1  Barb.  36,  38;  Jenk- 
ins V.  Hinman,  5  Paige,  3r09;  Syr- 
acuse City  Bank  v.  Tallman,  31 
Barb.  201;  Patten  v.  Accessory 
Transit  Co.  4  Abb.  Pr.  235,  13  How. 
502;  Bolles  v.  Duff,  35  How.  Pr.  481; 
Smith  v.  Tiffany,  13  Hun,  671;  Hol- 
lenbeck  v.  Donnell,  29  Hun,  94,  94 
N.  Y.  342. 

Georgia:  Hart  v.  Respess,  89  Ga. 
87,  14  S.  E.  910. 

Virginia:  Karn  v.  Rorer  Iron  Co. 
86  Va.  7.54,  11  S.  E.  431. 

West  Virarinia:  Dunlap  v.  Hedges, 
35  W.  Va.  287,  13  S.  E.  656. 

Mississippi:  Myers  v.  Estell,  48 
Miss.  372,  per  Simrall,  J.;  White- 
head V.  Wooten,  43  Miss.  523,  526; 
Phillips  V.  Eiland,  52  Miss.  721; 
Pearson  v.  Kendrick,  74  Miss.  235, 
21  So.  37. 

Iowa:  White  v.  Griggs,  54  Iowa, 
650,  7  N.  W.  125;  Barnett  v.  Nel- 
son, 54  Iowa,  41,  6  N.  W.  49,  37  Am. 
Rep.  183;  Myton  v.  Davenport,  51 
Iowa,  583;  Sleeper  v.  Iselin,  59 
Iowa,  379,  13  N.  W.  341.  The  pres- 
ent rule  is,  that  a  mortgage  which 
does  not,  in  termsi,  give  to  the 
mortgagee  the  right  of  possession 
before  sale  and  the  termination  of 
the  right  of  redemption,  nor  pledge 
the  rents  and  profits,  creates  no 
lien  upon  nor  interest  in  the  right 
of  possession  given  by  the  statute, 
nor  upon  the  revenue  v/hich  ac- 
crues from  it,  and  the  appointment 
of  a  receiver  to  take  possession  of 
property  under  such  a  mortgage,  or 
to  appropriate  the  rents  from  it,  is 
a  violation  of  the  statutory  rights 
of  the  mortgagor.  American  Invest- 
ment Co.  V.  Farrar  (Iowa),  54  N.  W. 
361;  Swan  v.  Mitchell,  82  Iowa,  307, 
47  N.  W.  1042.  In  Paine  v.  McEl- 
roy,  73  Iowa,  81,  34  N,  W.  615,  the 
appointment  of  a  receiver  was  pro- 
vided for. 

Alabama:  Scott  v.  Ware,  65  Ala. 
174;  Lehman  v.  Tallassee  Manufac- 
turing Co.  64  Ala.  567;  Hendrix  v. 
American  Mortgage  Co.  95  Ala.  313, 
11  So.  213;  Beckwith  v.  Carroll,  56 
Ala.  12. 

Wisconsin:     Schreiber    v.     Carey, 


§    1522.]  THE    APPOINTMENT    OF   A   REUEIVER.  474 

If  the  mortgage  provides  for  the  appointment  of  a  receiver  in  case 
of  foreclosure,  a  valid  lien  on  the  rents  and  profits  is  thereby  created, 
so  that  a  receiver  will  be  appointed  without  regard  to  the  mortgagor's 
insolvency.^^ 

It  is  true  that  in  half  or  more  of  the  States  and  Territories  the 
mortgagee  has  no  legal  rights  that  would  aid  him  in  such  case,  and 
resort  to  equity  is  the  only  remedy ;  but  a  resort  to  equity  is  sometimes 
an  appropriate  remedy  in  those  States  in  which  the  mortgagee  has  a 
legal  remedy  for  recovering  possession.  In  several  States  there  is  a 
statutory  provision,  in  substantially  the  same  terms,  that,  in  an  action 
by  a  mortgagee  for  the  foreclosure  of  his  mortgage  and  the  sale  of  the 
mortgaged  property,  a  receiver  may  be  appointed  where  it  appears  that 
the  mortgaged  property  is  in  danger  of  being  lost,  removed,  or  ma- 
terially injured,  or  that  the  condition  of  the  mortgage  has  not  been 
performed,  and  that  the  property  is  probably  insufficient  to  discharge 
the  mortgage  debt.^^  This,  however,  is  merely  an  enactment  of  the 
general  equitable  rule.  , 

§  1522.  The  appointment  as  aifected  by  statutes. — As  already  seen, 
by  the  statutory  provisions  of  many  of  the  States  the  mortgagee  is  not  ■ 
in  any  case  entitled  to  possession  of  the  mortgaged  property  upon  a  de- 
fault, but  the  mortgagor  may  still  retain  possession  until  a  sale  is 
made  under  a  decree  in  a  foreclosure  suit,  and  in  some  States  even 
until  the  lapse  of  a  period  of  redemption  allowed  after  the  sale.  Some 
of  these  statutes  are  interpreted  as  preventing  the  appointment  of  a 
receiver  in  any  case ;  while  others  are  regarded  as  giving  special  occa- 
sion for  it,  because  they  prevent  the  mortgagee's  obtaining  possession 
and  protecting  his  rights,  as  he  might  under  a  mortgage  conveying  the 
legal  title  at  common  law.  Even  statutes  precisely  alike  have  in  differ- 
ent States  been  interpreted  as  operating  in  opposite  ways  upon  the 
generally  received  rules  for  the  appointment  of  receivers  in  foreclosure 
suits;  for  while  generally  the  possession  which  the  law  allows  to  the 
mortgagor  until  a  foreclosure  sale  is  regarded  as  subordinate  to  the 

"First  Nat.  Bank  v.  Illinois  Steel  Nebraska:      Comp.    Stats.    1893,    § 

Co.    174    111.    140,    affirming    72    111.  266  of  Civ.  Code;   Jacobs  v.  Gibson, 

App.  640,  51  N.  E.  200.  9   Neb.    380;    Philadelphia  Mortg.   & 

'« Arkansas:     Dig.    of    Stats.    1884.  T.   Co.   v.   Goos,  47  Neb.   804,  66  N. 

§   5289.  W.  843. 

California:     Codes   &   Stats.    1885,  New  York:    1  Bliss's  Code  of  Civ. 

§    564;    Guy   v.    Ide,   6   Cal.    99,   101,  Pro.  1890,  8  713. 

65  Am.  Dec.  490.  North  and   South  Dakota:     Comp. 

Idaho:    R.  S.  1887,  §  4329.  Laws  1887,  §   5015. 

Kentucky:     Code  of  Practice  1889,  Ohio:    R.  S.  1892,  §  5587. 

§  299  Washington:     2   G.   S.   1891,   §   326. 

Montana:      Comp.    Stats.    1887,    p.  Wyoming:    R.  S.  1887,  §  2935. 
116;  Code  of  Civ.  Pro.  §  229. 


475  WHEN    A    RECEIVER    WILL   BE   AITOINTED.  [§    1523. 

e(niita]jle  rights  of  the  mortgagee  to  the  rents  and  profits  under  the 
condition  of  things  which  ordinarily  authorizes  the  appointment  of  a 
receiver  in  equity,  and  wliile  the  statute  confining  the  mortgagee  to 
one  remedy  in  case  of  default,  which  is  an  equitable  suit  for  foreclos- 
ure and  sale  of  the  property  and  a  judgment  for  any  deficiency,  is  held 
to  be  a  reason  for  adopting  the  practice  of  appointing  a  receiver  wlien 
there  wero  the  usual  grounds  for  the  appointment,'"*^  in  California,  on 
the  other  hand,  it  is  held  that  by  reason  of  the  statute  the  practice  of 
appointing  a  receiver  to  collect  the  rents  ponding  the  suit  is  not  applic- 
able ;  that  the  mortgagor  continues  to  be  the  owner  of  the  estate,  and 
is  entitled  to  the  possession  of  it  until  it  passes  to  some  one  else  under 
a  foreclosure  sale.*"  In  j\Iichigan  and  IMinnesota,  also,  the  mortgagor 
being  entitled  by  statute  to  the  possession,  and  consequently  to  the 
rents  and  profits  of  the  mortgaged  premises,  until  he  is  divested  by 
foreclosure  and  sale,  it  is  held  that  is  is  not  competent  to  cut  short  his 
right  in  this  respect  by  the  appointment  of  a  receiver  in  the  foreclosure 
suit  i*^  at  least  not  until  after  default  ;*-  or  unless  the  right  is  clearly 
given  by  the  contract  of  the  parties/^  In  South  Carolina,  also,  a  mort- 
gagee is  not  entitled  to  the  appointment  of  a  receiver  of  the  rents  and 
profits  of  the  mortgaged  property,  of  which  the  mortgagor  has  posses- 
sion, unless  the  mortgage  expressly  provides  that  the  lien  shall  attach 
to  the  rents  and  profits,  as  well  as  the  land  itself.** 

§  1523.  A  subsequent  mortgagee  cannot  have  a  receiver  appointed 
to  the  prejudice  of  a  prior  mortgagee  to  whom  something  is  due,  if 
the  prior  mortgagee  is  in  actual  possession ;  and  whenever  an  appoint- 
ment is  made,  it  is  without  prejudice  to  the  right  of  any  such  prior  in- 

^^  New  York:  Hollenbeck  v.  Don-  the  mortgage  that  the  mortgagor 
nell.  94  N.  Y.  342,  29  Hun,  94.  may  retain  possession  of  the  prop- 
Minnesota:  Lowell  V.  Doe,  44  erty  until  foreclosure,  prevents  the 
Minn.  144,  46  N.  W.  297.  appointment  of  a  receiver.  Chad- 
Wisconsin:  Schreiber  v.  Carey,  bourn  v.  Henderson,  2  Bax.  460. 
48  Wis.  208,  4  N.  W.  124;  Finch  v.  *"  Guy  v.  Ide,  6  Cal.  99,  65  Am. 
Houghton,  19  Wis.  149.  Dec.  490. 

Florida:    Pasco  v.  Gamble,  15  Fla.  ^' Wagar   v.    Stone,   36   Mich.    364; 

562.  Hazeltine  v.   Granger,  44  Mich.  503, 

Nevada:     Hyman  v.  Kelly,  1  Nev.  7  N.  W.   74;   Marshall,  &c.  Bank  v. 

179.     The  court  say  that  the  legis-  Cady,  76  Minn.  112,  78  N.  W.  978. 

lature  having  forbid  the  mortgagee  "  Beecher  v.   Marquette   &   Pacific 

pursuing   the    common    law    remedy  Rolling  Mill  Co.  40  Mich.  307. 

of  ejectment  is  rather  a  reason  for  ^^  Michigan   Trust   Co.   v.    Lansing 

a  more  liberal  exercise  of  the  chan-  Lumber    Co.    103    Mich.    392,    61    N. 

cellor's    po'  ers    to    protect    the    se-  W.   668. 

curity.  They  expressly  dissent  from  "  Hardin  v.  Hardin,  32  S.   C.   599, 

the    case    in    California    next    cited.  12  S.  B.   936;    Matthews  v.   Preston, 

Guy  V.   Ide,  6  Cal.   99,  65  Am.   Dec.  6  Rich.  Eq.   307;    Seignious  v.  Pate, 

490.     See    statute,    §    1521.     In    like  32  S.  C.  134,  10  S.  E.  880. 
manner    an    express    stipulation    in 


S    1524.]  THE   APPOINTMENT    OF   A   RECEIVER.  476 

cumbrancer  to  take  possession.*^  A  receiver  will  be  appointed  upon 
the  application  of  a  subsequent  mortgagee,  pending  an  action  of  fore- 
closure, when  it  appears  that  the  owner  in  possession  of  the  premises 
receives  the  rents,  but  refuses  to  apply  them  for  the  benefit  of  the  prop- 
erty, and  that  the  interest  on  the  first  mortgage,  as  well  as  the  taxes 
and  assessments  on  the  property,  are  unpaid,  especially  if  the  mort- 
gage contains  a  stipulation  for  the  appointment  of  a  receiver  in  case 
of  default."  The  possession  of  the  prior  mortgagee,  and  his  applica- 
tion of  the  rents  to  the  debt  due  him,  may  be  as  much  to  the  advantage 
of  the  subsequent  mortgagee  as  his  own  Avould  be.  If  the  subsequent 
mortgagee  insists  upon  obtaining  possession  himself,  his  only  course  is 
to  redeem  the  estate  from  the  prior  incumbrance  by  paying  it  off;*^ 
and  this  may  be  rendered  necessary  in  case  the  prior  mortgagee  in  pos- 
session does  not  apply  the  income  of  the  property  to  the  payment  of 
the  interest  and  principal  of  the  mortgage  debt,  but  applies  it  to  other 
debts  of  the  mortgagor,  or  pays  it  over  to  him.  A  receiver  may  even  be 
appointed  on  the  application  of  the  mortgagor,  when  his  grantee  or 
mortgagee  is  in  possession  and  is  insolvent,  and  it  is  probable  that  the 
rents  and  profits  will  be  lost  through  his  management.*^ 

§  1524.  Consent  of  prior  mortgagee.—  It  is  not  necessary,  as  was  at 
first  held  by  Lord  Thurlow,"'  that  the  first  mortgagee's  consent  should 
be  obtained  before  a  receiver  can  be  appointed  on  the  application  of 
an  equitable  mortgagee.^*'  If  he  is  not  in  possession  the  application 
will  be  allowed ;  and  he  cannot  prevent  it  in  any  way  except  Isy  taking 
possession  himself.^^  But,  as  already  stated,  the  appointment  is  made 
without  prejudice  to  those  who  have  prior  rights  in  the  property.^^' 
If  the  prior  mortgagee  has  the  legal  estate  he  may  take  possession  at 


^=1  Fisher's  Law  of  Mortg.  408 
Rowe  V.  Wood,  2  Jac.  &  W.  553 
Berney  v.  Sewell,  1  Jac.  &  W.  627 


to  the  first  mortgagee's  taking  pos- 
session,   and    that    was    afterwards 

^^^^^      ,     ^„    ^  „„„.  „    ...   .-.,  followed  by  Lord  Kenyon." 

ffiies'"'v  '  Moore,  15^  Beav.  175;  Da-  ^^' Keogh  Manuf.  Co.  v.  Whiston, 
vis  V  Marlborough,  2  Swans.  108,  14  N.  Y.  Supp.  344;  Cross  v.  Will 
137-  Dalmer  v.  Dashwood,  2  Cox,  County  Nat.  Bank,  177  111.  33,  52 
378-  Norway  v.  Rowe,  19  Ves.  144,  N.  E.  322,  affirming  71  111.  App.  404. 
153-  Quinn  v.  Brittain,  3  Edw.  314;  *■  Trenton  Banking  Co.  v.  Wood- 
Trenton  Banking  Co.  v.  Woodruff,  ruff,  3  N.  J.  Eq.  210. 
3  N  J  Eq  210;  Wiswall  v.  Samp-  •'^Williams  v.  Robinson,  16  Conn, 
son.' 14  How.  52,  64;  Sales  v.  Lusk,  517,  524;  Bolles  v.  Duff,  35  How. 
60  Wis.  490.  In  Berney  v.  Sewell,  Pr.  481.  See  §  1517.  ^  ^  ^,  „ 
1  Jac.  &  W.  627,  Lord  Eldon  said:  ^°  Phipps  v.  Bishop  of  Bath,  J 
"I    remember   a   case  where   it  was  Dick.   608. 

much    discussed    whether   the   court  ^"  Bryan  v.  Cormick,  1  Cox,  iZZ. 

would    appoint    a   receiver   when    it  ^'Silver    v.    Bishop    of    Norwich, 

appeared  by  the  bill  that  there  was  3  Swans.  112,  note.               ^     „    ^ 

a  prior  mortgagee  who  was  not  in  "    Dalmer    v.    Dashwood,    2    Cos, 

possession.     I   have  a   note  of  that  378;      Davis      v.      Marlborough,      2 

case.     There    Lord  '  Thurlow    made  Swans.    108,    137,    165;     Norway    v. 

the   appointment   without  prejudice  Rowe,  19  Ves.  144,  153. 


477  WHEN  A  RECEIVER  WILL  BE  APPOINTED.      [§  1525, 

any  time;  tod  if  he  has  an  equitable  estate  only,  his  equitable  rights 
are  protected  by  the  court.  The  receiver  appointed  at  the  instance  of 
a  junior  incumbrancer  is  entitled  to  receive  the  rents  and  profits  for 
the  benefit  of  the  latter,  until  the  prior  mortgagee  takes  possession,  or 
has  a  receiver  in  aid  of  his  own  suit  to  foreclose. ^^  But  if  the  prior 
mortgagee  be  made  a  party  to  the  bill,  the  junior  mortgagee  has  no 
exclusive  right  to  the  income  of  the  receivership.^* 

If  a  receiver  of  a  leasehold  estate  be  appointed,  upon  the  application 
of  a  junior  mortgagee,  with  power  "to  pay  the  ground-rent  and  taxes," 
upon  a  subsequent  foreclosure  of  the  prior  mortgage,  the  receiver  is 
not  bound  to  apply  a  balance  of  rents  in  his  hands  to  the  payment  of 
accrued  taxes.  The  order  as  to  rents  and  taxes  is  permissive,  not  man- 
datory ;  and  the  junior  mortgagee,  having  by  diligence  acquired  a  spe- 
cific lien  upon  the  rents  superior  to  the  equities  of  the  prior  mortgagee, 
is  entitled  to  retain  and  apply  them  upon  his  mortgage.^^  It  is  held, 
however,  that  if  the  prior  mo.rtgagee  commences  proceedings  in  a  dif- 
ferent court,  a  receiver  already  appointed  by  another  court,  on  the  ap- 
plication of  a  junior  mortgagee,  will  not  be  interfered  with  while  such' 
mortgagee  is  in  actual  possession,  and  administering  the  property  un- 
der the  directions  of  that  court.^® 

§  1525.  So  long  as  anything  is  due  the  prior  mortgagee,  however 
small  the  amount,  the  possession  will  not  be  taken  from  him."  This 
is  stated  by  Lord  Eldon  very  forcibly :  "If  you  recollect,  in  Mr.  Beck- 
ford's  case  I  went  to  the  very  utmost;  I  said  then  that  if  Mr.  Beck- 
ford  would  swear  that  there  was  sixpence  due  to  him,  I  would  not  take 
away  the  possession  from  him.  If  there  is  anything  due,  I  cannot  sub- 
stitute another  security  for  that  which  the  mortgagee  has  contracted 
for.  I  know  no  case  where  the  court  has  appointed  a  receiver  against 
a  mortgagee  in  possession,  unless  the  parties  making  the  application 

"  Sanders  v.  Lisle,  Ir.  Rep.  4  Eq.  °^  Ranney   v.   Peyser,   83   N.   Y.    1, 

43;     Washington    Life    Ins.    Co.    v.  reversing  20  Hun,  11. 

Fleischauer,    10    Hun,    117;     Howell  ''''  Young   v.    Mont.    &   Eufaula    R. 

V.    Ripley,    10    Paige,    43;     Post    v.  R.   Co.   3  Am.   L.   T.   R.  N.   S.   91,  2 

Dorr.    4    Edw.    Ch.    412;    Dunlap    v.  Woods,  606. 

Hedges,  35  W.  Va.  287,  13  S.  E.  656.  ="  Chambers  v.  Goldwin,  cited  and 

In  Virginia  a  receiver  is  regarded  commented     upon     in     Quarrell     v. 

as  acting  in  the  interest  of  all  par-  Beckford,     13     Ves.     377;     Hiles     v. 

ties,    and    no    one    having    a    right  Moore,  15  Beav.  175;   Codrington  v. 

prior    to    that    of    the    plaintiff    can  Parker,    16   Ves.    469;    Faulkener   v. 

afterwards      tdke      possession.      He  Daniel,  10  L.  J.  N.  S.  Ch.  33;  Tren- 

must    finally    account    according    to  ton  Banking  Co.  v.  Woodruff,  3  N. 

the    priorities    of    the    different    in-  J.    Eq.    210.     In    this    last    case    the 

cumbrancers.    Beverley    v.    Brooke,  priority   of   the    first    mortgagee   in 

4  Graft.  187.  possession  was  contested. 

"  Miltenberger  v.   Logansport  Ry. 
Co.  106  U.  S.  286,  1  Sup.  Ct.  140. 


g    15*^G.]  TPIE   APPOINTMENT    OF   A   EECEIVEK.  478 

will  pay  him  ofl,  and  pay  him  according  to  his  demand  as  he  states  it 
himself.'"^^  If  he  insists  by  his  answer  that  he  has  not  been  fully  paid, 
the  court  will  not  upon  hearing  of  the  motion  try  the  question  whether 
any  balance  is  due.*^^  But  if  he  refuses  to  accept  what  is  due,  or  will 
not  swear  that  something  is  due,  a  receiver  will  be  appointed  f°  and  it 
being  his  business  to  keep  his  accounts,  if  these  be  so  incomplete  that 
he  cannot  determine  whether  anything  is  due,  the  court  may  assume 
that  nothing  is  diie  and  act  accordingly/'^ 

§  1526.  As  a  general  rule,  the  appointment  cannot  be  made  until 
a  bill  has  been  filed  for  foreclosure  and  is  pending,  and  the  merits  of 
the  case  have  been  disclosed  by  the  defendant's  answer  f~  though,  imder 
circumstances  rendering  an  immediate  appointment  necessary  to  pre- 
vent threatened  loss  and  injury  to  the  property,  an  appointment  may 
be  made  before  the  defendant's  appearance,**^  and  even  before  service 
upon  him,"*  and  especially  if  his  residence  be  unknown."^  The  ap- 
pointment may  be  made  at  the  hearing,  though  not  prayed  for  by  the 
bill,  if  the  facts  stated  in  it  are  sufficient  to  authorize  it.*^*^  The  facts 
may  be  shown  by  affidavit.*''^  On  petition  supported  by  the  proper 
proof,  the  appointment  may  be  made  at  any  time  during  the  pendency 
of  the  suit.  It  may  even  be  made  after  judgment;  and  the  fact  that 
the  complaint  does  not  state  facts  authorizing  the  appointment  is  no 
objection. ***  It  is  against  the  policy  of  the  law  that  a  mortgagee  should 
receive  the  appointment,  and  if  he  does  he  is  not  entitled  to  com- 
pensation.'^" 

Notice  of  the  application  for  the  appointment  of  a  receiver  should, 
if  practicable,  be  given  to  the  mortgagor  and  other  parties  in  inter- 
est.^**   The  question  of  notice  cannot  of  course  be  raised  by  a  party  who 

"  Berney   v.    Sewell,   1   Jac.    &   W.  ""  Malcolm  v.  Montgomery,  2  Mol- 

627.  loy,     500;     Osborne     v.     Harvey,     1 

''^  Rowe  V.  Wood,  2  Jac.  &  W.  553.  Young  &  C.  C.  C.  116.     See  Barlow 

""Berney   v.    Sewell,   1  Jac.   &  W.  v.    Gains,    8    Beav.    329;     Adair    v. 

627.  Wright,    16    Iowa,    385;    Connelly   v. 

"    Codrington  v.    Parker,   16  Ves.  Dickson,  76  Ind.   440. 

469;   Hiles  v.  Moore,  15  Beav.  175.  "'Commercial    and    Savings    Bank 

°^  Astor    V.    Turner,    2    Barb.    444,  of   San   Jose   v.   Corbett,    5    Sawyer, 

3  How.  Pr.  225,  11  Paige,  436;  Kat-  172. 

tenstroth    v.    Astor    Bank,    2    Duer,  "*  Schreiber  v.  Carey,  48  Wis.  208, 

632;    Anon.  1  Atk.  578;    Morrison  v.  4  N.  W.  124;  Haas  v.  Chicago  Build- 

Buckner,    Hempst.    442;     Hardy    v.  ing  Soc.  89  111.  498. 

McClellan,  53   Miss.   507.  <">  Langstaffe   v.    Fenwick,    10   Ves. 

«^Ex  parte  Whitfield,  2  Atk.   315;  405;  Scott  v.  Brest,  2  T.  R.  238. 

Maeden  v.  Sealey,  6  Hare,  620;  Call-  '''Jones     on     Corp.     Mortg.     and 

lard   V.   Caillard,  25  Beav.   512;    Mc-  Bonds,    §    454.     Notice    may    be    re- 

Carthy  v.  Peake,  9  Abb.  Pr.  164.  quired   bv   statute,    as   in   Nebraska. 

"Barrett    v.    Mitchell,    5    Ir.    Eq.  Comp.  Stats.  1893,  Code  of  Civ.  Pro. 

501.  §    267;    and    in   such   case   an   order 

"  Bowling    V.    Hudson,    14    Beav.  made  without  notice  is  void.  John- 

423.  son   V.    Powers,   21   Neb.   292,   32   N. 

W.  62. 


479  WHEN    A    KKCEIVEK    WILL    15E    APPOINT KD.     [§§    1527,    1528, 

has  appeared  and  resisted  the  order. '^^  There  are  many  circumstances 
under  which  the  appointment  of  a  receiver  may  be  made  on  an  ex  parte 
application  without  notice.  Sueli  appointment  was  made  where  it  ap- 
peared that  the  mortgagor  had  in  bad  faith  sohl  tlie  mortgaged  prop- 
erty ;  that  the  vendee  refused  to  attorn  and  deliver  up  possession  to  the 
mortgagee ;  that  the  mortgagor  and  vendee  were  both  insolvent ;  that 
the  vendee  had  removed  a  portion  of  the  crops,  and  there  was  danger  of 
further  loss  of  crops ;  and  that  the  security  was  inadequate.'^^ 

§  1527.  Defences  to  the  application.— To  prevent  the  appoint- 
ment of  a  receiver,  the  mortgagor  must  either  make  a  special  affidavit 
of  merits,  or  show  that  the  property  is  sufficient  to  secure  the  mort- 
gage.''^ His  affidavit  that  he  has  a  good  defence,  without  stating  what 
it  is,  or  stating  it  vaguely,  is  no  answer  to  the  application  for  a  re- 
ceiver.^* If  he  has  conveyed  the  land  subject  to  the  mortgage,  he  is 
in  no  position  to  oppose  the  appointment. '^^  Only  those  whose  rights 
would  be  affected  by  the  appointment  can  oppose  it.  Upon  a  bill  to  re- 
strain waste  by  the  mortgagor,  there  is  no  occasion  for  a  receiver ;  the 
injunction  is  sufficient. ^"^ 

After  a  receiver  has  once  been  appointed  without  opposition  made 
at  the  time,  an  objection  raised  at  a  later  stage  of  the  case  that  the  ap- 
plication was  improperly  allowed  will  not  be  regarded.''^ 

§  1528.     The  application  should  show  the  defendant  in  possession, 

and  notice  of  the  application  should  be  given  him  unless  he  has  de- 
faulted in  the  action,''*  inasmuch  as  in  general  the  court  is  warranted 
in  appointing  a  receiver  only  when  the  property  is  in  possession  of  a 
party  to  the  foreclosure  suit,  either  by  himself  or  his  tenant.  If  the 
premises  are  in  possession  of  a  tenant  who  is  not  himself  a  party  to  the 
suit,  he  is  not  disturbed  in  his  possession,  but  is  directed  to  attorn  to 

''Haas    V.    Chicago    Building    Soc.  1    Molloy,    247;     Sliepherd    v.    Mur- 

89  III.  498.     In  Michigan  a  court  of  dock,   2   Molloy,   531;    Leahy  v.    Ar- 

equity    cannot    make    an    ex    parte  thur,    1    Hogan,    92.     Receiver    not 

order    appointing    a    receiver    in    a  appointed    where    the    property    is 

toreclosure   suit,   although   the   par-  mortgagor's      homestead.      Chadron 

ties   agree  thereto  by  the  terms  of  Loan  &  Building  Asso.  v.  Smith,  58 

the    mortgage.     Hazeltine    v.    Gran-  Neb.    469,    78   N.   W.    938;    Laune   v. 

ger,  44  Mich.  503,  7  N.  W.  74.  Hauser,  58  Neb.  663,  79  N.  W.  555. 

'^  Hendrix    v.    Am.    Mortg.    Co.    95  ■*  Sea     Insurance     Co.     v.     Steb- 

Ala.    313,    11    So.    213.       See,    also,  bins,    8    Paige,    565;     MacKellar    v. 

Ashurst  v.    Lehman,   86   Ala.   370,    5  Rogers,  20  J.  &  S.  360. 

So.   731;    Heard   v.   Murray,   93   Ala.  '^Wall  St.   Fire  Ins.  Co.  v.  Loud, 

127,   9   So.    514;    Sims   v.    Adams,   78  20  How.  Pr.  95. 

Ala.    395.     The    case    of    Dollins    v.  ""  Robinson    v.    Preswick,    3    Edw. 

Lindsev,  89  Ala.  217,  7  So.  234.  246. 

"Sea     Ins.     Co.     v.     Stebbins,     8  "Post   v.   Dorr,   4  Edw.    412. 

Paige,    565;    Bancker    v.    Hitchcock,  '» High    on    Receivers,    §    660;    Sea 

1    Ch.    Dec.    88;    Lofsky    v.    Maujer,  Insurance  Co.   v.  Stebbins,  8  Paige, 

3    Sandf.    Ch.    69;    Darcy    v.    Blake,  565. 


§§    1529,    1530.]    THE   APPOINTMENT    OF   A   RECEIVER.  480 

the  receiver.'^^  When  the  tenant  is  before  the  court,  the  receiver  is  ap- 
pointed without  restriction.^** 

There  can  be  no  appointment  of  a  receiver  of  mortgaged  lands  after 
an  assignee  in  bankruptcy  of  the  estate  of  the  owner  of  the  equity  of 
redemption  has  been  appointed  and  has  taken  possession  of  the  mort- 
gaged property.  The  assignee  is  clothed  with  functions  similar  to 
those  of  a  receiver.®^ 

g  1529.     The  plaintiff    must  show  by  affidavit    the  amount  due 

after  the  allowance  of  all  just  credits,  if  decree  has  been  taken  pro 
confesso.  The  statement  in  the  bill  is  not  enough.®^  The  affidavit 
must  also  show  that  the  defendant  is  in  possession.  If  the  amount 
actually  due  is  in  dispute,  and  the  answer  denies  the  allegations  as  to 
the  inadequacy  of  the  security,  the  court  will  not  interfere  with  the 
possession.®^ 

§  1530.  Generally  the  mortgage  debt  must  be  already  due  to  en- 
title the  mortgagee  to  have  a  receiver  appointed;  at  any  rate  there 
must  have  been  such  a  default  as  entitles  him  to  commence  an  action 
to  foreclose  the  mortgage.®*  If  a  mortgage  securing  several  notes  pro- 
vides that  all  the  notes  shall  become  due  on  default  in  the  payment  of 
any  of  them,  on  such  default  the  mortgagee  may  foreclose  for  the  notes 
due,  or  may  declare  them  all  due,  and  foreclose  for  the  entire  debt,  but 
he  cannot  have  a  receiver  appointed  to  take  charge  of  the  property  and 
collect  rents  pending  the  maturity  of  all  the  notes,  and  then  have  fore- 
closure.®^ Yet  a  receiver  has  been  granted  under  peculiar  circum- 
stances, when  the  mortgagee  was  not  entitled  to  a  foreclosure,  and 
merely  to  keep  down  the  interest  on  the  mortgage  f^  as  in  a  case  where 
the  principal  debt  did  not  become  due  until,  after  the  mortgagor's 
death. ®^    If  the  property  consists  of  separate  parcels,  or  can  be  divided 

"  Sea    Insurance    Co.    v.    Stebbins,  in    parcels,    so   that   a   sale   of  part 

8   Paige,    565;    Smith   v.   Tiffany,   13  will  satisfy  the  debt  in  arrear,  are 

Hun,  671.  circumstances    to    be    considered    in 

*°  Keep    V.    Mich.    Lake    Shore    R.  determining  whether  a  receiver  will 

Co.  6  Chicago  Leg.  News,  101.  be  appointed  of  the  entire  property. 

*^  In  re  Bennett,  2  Hughes,  156.  Quincy  v.   Cheeseman,  4  Sandf.  Ch. 

"  Rogers  v.  Newton,  2  Ir.  Eq.  40.  405. 

*^  Callanan  v.  Shaw,  19  Iowa,  183.  Wisconsin:     Morris  v.  Branchaud, 

«*  Alabama:    Phillips  v.  Taylor,  96  52  Wis.  187,  8  N.  W.  883. 

Ala.  426,  11  So.  323,  quoting  text.  "  Phillips   v.    Taylor,   96   Ala.   426, 

New  York:     Bank  of  Ogdensburg  11  So.  323. 

V.    Arnold,    5    Paige,    38;    Lofsky    v.  *"  Buchanan    v.    Berkshire    L.    Ins. 

Maujer,  3  Sandf.  Ch.  69;    Quincy  v.  Co.  96  Ind.  510,  531. 

Cheeseman,  4  Sandf.   Ch.   405;    Hoi-  «' Burrowes    v.    Molloy,    2    Jo.    & 

lenbeck    v.    Donnell,    94    N.    Y.    342.  Lat.   521,   8  Ir.   Eq.   482;    Newman  v. 

That  only  a  part  of  the  debt  is  due,  Newman,    2   Bro.    C.    C.    92,   note   6; 

and  that  the  premises  can  be  sold  Latimer  v.  Moore,  4  McLean,  110. 


481       WHEN  A  RECEIVER  WILL  BE  APPOINTED.  [§§  1531,  1531a. 

without  injury  to  the  parties  interested,  upon  the  maturity  of  a  part 
of  the  debt  a  receivership  of  one  of  the  parcels  may  be  granted. ^^ 

§  1531.  Under  circumstances  showing  an  urgent  occasion  for  it, 
a  receiver  has  been  appointed  after  the  decree  for  foreclosure,  and 

even  after  appeal,  as  where  there  was  danger  that  a  tenant  in  possession 
might  by  further  delay  acquire  rights  by  adverse  possession,**'*  Gener- 
ally the  appointment  does  not  affect  the  rights  of  persons  who  are  not 
parties  to  the  suit,  and  will  not  be  made  unless  the  person  in  possession 
is  either  a  party  to  the  suit  or  his  tenant.^^ 

Where  a  mortgage  provided  that  the  mortgagee  upon  default  might 
take  possession  of  the  property  and  rent  it  without  losing  his  remedy 
by  foreclosure,  and  the  mortgagee  without  taking  possession  obtained 
a  decree  of  foreclosure,  it  was  held  that  it  was  then  too  late  to  apply 
for  the  appointment  of  a  receiver,  the  mortgagor  having  the  right  to 
redeem  within  a  limited  period.  The  mortgagor  by  the  terms  of  the 
mortgage  bargained  away  his  right  of  redemption  only  in  case  tho 
mortgagee  should  take  possession  before  foreclosure.^^  A  provision  in 
a  mortgage  that  the  mortgagee  shall  be  entitled  to  the  appointment  of 
a  receiver  upon  the  commencement  of  a  foreclosure  suit,  to  take  and 
hold  the  rents  and  profits  for  his  benefit,  does  not  entitle  him  to  such 
appointment  at  the  time  he  takes  his  decree.^^ 

A  receiver  appointed  pending  foreclosure  should  be  discharged  after 
sale  of  the  premises  for  the  full  amount  of  the  debt,  interest  and  costs. 
and  the  possession  of  the  property  should  be  restored  to  the  owner  of 
the  equity.  That  a  mortgagor  who-  had  transferred  the  property  agreed  ' 
to  pay  the  mortgagee  the  overdue  interest  and  costs  in  consideration 
of  which  the  mortgagee  bid  the  full  amount  of  the  de1)t,  interest  and 
costs  on  foreclosure  sale,  does  not  entitle  the  mortgagor,  as  against  the 
owner  of  the  equity  of  redemption  to  the  continuation  of  a  receiver- 
ship to  enable  the  mortgagor  to  collect,  out  of  rents  and  profits,  the 
amount  he  had  so  agreed  to  pay.^^ 

§  1531a.  A  receiver  may  be  appointed  after  a  foreclosure  sale  to 
protect  the  rents  and  profits  during  the  time  allowed  for  redemp- 

*'Hollenbeck  v.  Donnell,  94  N.  Y.  demption  is  in  the  nature  of  a  stay 

342.  law,  and  courts  ought  to  require  a 

"^Thomas  v.  Davies,  11  Beav.  29;  very  clear  showing  that  it  has  been 

Hackett   v.    Snow,    10    Ir.    Eq.    220;  bargained     away     before     depriving 

Brinkman  v.  Ritzinger,  82  Ind.  358;  the    debtor    of    the    right    to    retain 

Buck  V.  Stuben,  63  Neb.  273,  88  N.  possession  of  the  property  until  the 

W.  483.  redemption  has  expired.    Per  Roth- 

'■"'  Sea   Insurance    Co.    v.    Stebbins,  rock,  J. 

8    Paige,    565.     And    see    Zeiter    v.  -'-'Paine  v.    McElroy,   73    Iowa,   81, 

Bowman.  6  Barb.  133.  34  N.  W.  615. 

"Swan  v.   Mitchell,  82   Iowa,  307,  "^Bogardus  v.  Moses,  181  111.   554, 

47    N.    W.    1042.     The    right    of   re-  54  N.  E.  984. 


§    1533.]  THE   APPOINTMENT    OF   A   RE'CEIVER.  48.3 

tion.^*  In  Indiana,  where  such  a  period  of  one  year  after  sale  is  al- 
lowed for  redemption,  it  is  provided  by  statute  that  a  receiver  may  be 
appointed  to  protect  or  preserve,  during  this  time,  the  land  sold,  and 
to  secure  to  the  person  entitled  thereto  the  rents  and  profits  thereof  .^^ 
Where,  therefore,  on  foreclosure  of  a  mortgage,  the  land  has  been  sold 
to  the  mortgagee  for  less  than  his  debt,  and  the  security  is  shown  to  be 
inadequate  and  the  debtor  insolvent,  a  receiver  may  be  appointed  to 
collect  and  hold,  during  the  year  allowed  for  redemption,  the  rents  and 
profits  of  such  jjarts  of  the  land  as  are  in  the  possession  of  the  mort- 
gagor's tenants.®^  The  redemption  statute  gives  to  the  debtor  no  new 
additional  title  or  right,  but  simply  extends  for  one  year  his  existing 
rights ;  and  no  incident  attaches  to  the  debtor's  possession  by  reason  of 
the  sale  that  places  it  beyond  the  reach  of  a.  court  of  equity."^ 

A  similar  decision  was  made  in  Wisconsin  under  a  law  allowing  re- 
demption after  a  sale;^^  and  under  the  present  statute  of  that  State, 
which,  instead  of  allowing  a  year  after  sale  for  redemption  before  a 
deed  can  be  made,  allows  a  year  after  the  decree  foreclosing  the  mort- 
gage before  a  sale  can  be  made,  a  receiver  may  be  appointed  to  receive 
the  rents  and  profits  during  that  period. °''  Where,  however,  a  statute 
allows  the  mortgagor  to  remain  in  possession  of  the  land  until  the  ex- 
piration of  the  time  allowed  for  redemption,  although  the  statute  also 
provides  that  the  purchaser,  from  the  time  of  the  sale  until  redemp- 
tion, is  entitled  to  receive  from  the  tenant  in  possession  the  rents  of 
the  propert}'  sold,  or  the  value  of  the- use  and  occupation  thereof;  a  re- 
ceiver will  not  be  appointed  for  the  premises  before  the  expiration  of 
the  period  allowed  for  redemption.^"'' 

§  1532.  To  warrant  an  appointment  of  a  receiver  it  must  bs 
shown  both  that  the  property  itself  is  an  inadequate  security  and  that 
the  debt  or  the  deficiency  after  the  application  of  the  proceeds  of  the 
security  could  not  be  collected  of  the  mortgagor  or  other  person  liable 
for  it.^"^    The  property  may  be  inadequate  security  for  all  the  incum- 

"  First  Nat.  Bank  v.  Illinois  Steel  "»  Schreiber  v.  Carey,  48  Wis.  208, 

Co.    174    111.    140,    51    N.    E.    200,    af-  4  N.  W.  124. 

firming  72  111.  App.  640.  ''"West    v.    Conant,    100    Cal.    231, 

"R.  S.  1881,  §  1222.  34    Pac.    705;    White    v.    Griggs,    54 

°9  World   Build.    L.    &   Inv.    Co.   v.  Iowa,  650,  7  N.  W.  125. 

Marlin,   151  Ind.   630,   52  N.  E.   198;  '"^  United    States:     Keep    v.    Mich. 

Merritt  v.   Gibson,   129   Ind.   155,   27  Lake    Shore    R.    Co.    6    Chicago    L. 

N.   E.   Rep.    136;    Connelly   v.   Dick-  N.     101;      Pullan    v.     Cincinnati    & 

son,    76    Ind.    440.     See,    also,    Davis  Chicago    Air    Line    R.    Co.    4    Biss. 

v.  Newcomb,  72  Ind.  413;   Ridgeway  35;     Morrison   v.   Buckner,   Hempst. 

V.    Bank,    78   Ind.    119;    and    Travel-  442. 

lers'  Ins.  Co.  v.  Brouse,  83  Ind.  62.  New    York:     Astor    v.    Turner.    2 

"Merritt  v.   Gibson,  129   Ind.   155,  Barb.  444;     Quincy  v.  Cheeseman,  4 

27  N.  E.  136,  per  McBride,  J.  Sandf.   Ch.   405;     Sea  Insurance  Co. 

»« Finch  V.  Houghton,  19  Wis.  149.  v.   Stebbins,  8  Paige,  565. 


483  WIIKN    A    RECEIVER    AVILL    lil-    A  I'I'OI  NTKI).     [§§    1533,    1534. 

brances  upon  it,  and  yet  be  siiflicient  for  the  particular  mortgage  which 
is  the  subject  of  the  foreclosure  suit."- 

§  1533.  There  may  be  other  and  additional  grounds  for  the  ap- 
plication; but  these  two  are  the  pnneipai  ones,  whicii  are  essential  in 
every  case;  and  usually  no  others  are  essential  if  these  are  fully  and 
clearly  alleged  and  approved.  Coupled  with  these  there  may  be  strong 
grounds  for  interference  in  the  fact  that  the  taxes  have  been  suffered  to 
remain  un]jaid  and  the  property  to  be  sold  to  satisfy  them,  and  that 
the  insurance  lias  been  neglected;"^  or  that  there  is  a  contest  as  to 
whether  a  large  portion  of  the  property  claimed  under  the  mortgage 
is  really  covered  by  it;"*  or  that  there  is  fraud  or  bad  faith  on  the 
mortgagor's  part  in  the  management  of  the  property,  as  in  appropriat- 
ing the  rents  and  profits  to  other  purposes  than  keeping  down  the  in- 
terest on  the  incumbrances,  or  in  permitting  the  property  to  depreciate 
and  the  buildings  to  go  to  decay."^  The  fact  that  the  parties  have 
agreed  that,  in  case  of  a  default,  a  receiver  shall  be  appointed,  should 
have  weight  when  an  application  for  a  receiver  is  made."** 

Where  a  mortgagor  has  obtained  an  injunction  to  restrain  the  sale 
of  the  mortgaged  property  until  certain  counter-claims  can  be  passed 
upon  and  the  sum  really  due  ascertained,  the  mortgagee  is  entitled  to 
have  a  receiver  appointed  to  take  charge  of  the  property  and  secure  the 
rents  and  profits,  provided  these  are  in  danger  of  being  lost  in  the 
meantime.^"" 

§  1534.     In  determining'  whether  the   security  is   adequate,   the 

proper  criterion  in  respect  to  city  property  is  the  rental  of  it  rather 
than  the  price  it  would  be  likely  to  sell  for.    The  income  of  improved 

Nevada:    Hyman  v.  Kelly,  1  Nev.  them,   the   mortgagor   on   the   other 

179.  hand   avers  that  they  are  sufficient 

Michigan:    Brown  v.  Chase,  Walk,  for   that   amount.     There   is,    there- 

43.  fore,    no    ground    for    the    appoint- 

lowa:  Adair  v.  Wright,  16  Iowa-  ment  of  a  receiver." 
38.5;  Paine  v.  McElroy,  73  Iowa,  '"'Wall  St.  Fire  Ins.  Co.  v.  Loud, 
81,  34  N.  W.  615;  Swan  v.  Mitchell,  20  How.  Pr.  95;  Eslava  v.  Cramp- 
82  Iowa,  307,  47  N.  W.  1042.  ton,  61  Ala.  507;  Stockman  v.  Wall- 
Mississippi:  Myers  v.  Estell,  48  is,  30  N.  J.  Eq.  449;  Chetwood  v. 
Miss.    372,   403.  Coffin,  30  N.  J.  Eq.   450. 

'"■  Warner  v.  Gouverneur,  1  Barb.  ""  Wall  St.  Fire  Ins.  Co.  v.  Loud, 

36,    per   Edmonds,   J.      "The   allega-  20  How.  Pr.  95. 

tion   is   that   they   are   not   an   ade-  '"^  Per  Williamson,   Chancellor,   iir 

quate   security   for   'all   just   incum-  Cortleyeu    v.    Hathaway,    11    N,    J.. 

brances' on  them.  All  of  the  Justin-  Ch.  39,  64  Am.  Dec.  478;    Stockman- 

cumbrances,  it  would  seem,  amount  v.  Wallis,  30  N.J.  Eq.  449:   Chetwood 

to  near  $70,000,  while  the  claim  of  v.  Coffin.  30  N.  J.  Eq.  450. 

the    defendants    is    not    more    than  "'"  Keogh   Manuf.    Co.   v.   Whiston,, 

half  that  sum.     And  while   the  de-  14  N.  Y.  Supp.,  344. 

fendants    do    not    say    whether    the  '"■  Oldham   v.    First  Nat.   Bank  oC 

premises    are    or    are    not    adequate  Wilmington,  84  N.  C.  304. 
security    for     the    amount     due     to 


g    1535.]  THE   APPOINTMENT    OF    A    KECEIVER.  484 

property  in  large  towns  is  considered  a  fair  test  of  its  value  as  an  in- 
vestment."* Of  course  there  may  be  circumstances  which  in  particular 
cases  will  modify  or  make  inapplicable  such  a  test. 


II.     Duties  and  Poivcrs  of  a  Receiver. 

§  1535.     A  receiver  is  the  representative  of  all  parties  in  interest; 

of  the  mortgagee,  the  mortgagor,  and  all  holding  under  them,  and  all 
having  rights  superior  to  theirs.  The  receiver  of  a  bankrupt  corpora- 
tion represents  not  only  the  mortgagees,  but  the  assignees  in  bank- 
ruptcy, the  creditors  and  stockholders  as  well.""  He  is  not  allowed  to 
act  with  reference  to  the  mortgaged  property  in  any  other  relation  in- 
consistent with  his  duties  as  receiver.  If  he  is  also  mortgagee,  he  will 
not  be  permitted  to  deal  with  the  property  in  any  way  inconsistent 
with  his  duty  as  a  receiver  acting  in  the  interest  of  all  parties  con- 
cerned.^^*^  But  a  receiver  of  a  corporation  empowered  to  enforce  a 
mortgage  belonging  to  it  may  bid  off  the  property  to  save  a  sacrifice  of 
it.  He  succeeds  to  the  rights  and  powers  of  the  company  in  this  re- 
spect.^^^ 

He  should  not  involve  the  estate  in  any  expense,  even  for  repairs, 
without  the  authority  of  the  court;  nor,  without  such  sanction,  bring 
suits  or  defend  them.^^^  He  should  always  apply  to  the  court  before 
exercising  unusual  discretion."^  Having  such  authority,  all  debts  in- 
curred by  him  in  carrying  on  the  business  for  which  the  property  is 
used,  such  as  operating  a  mill,  take  precedence  of  the  mortgage  debt."* 

His  possession  is  the  possession  of  the  court,  and  without  its  author- 
ity no  one  can  directly  or  indirectly  interfere  with  the  property."^ 
Like  a  trustee,  he  is  bound  to  exercise  such  care  over  the  property  as  a 
prudent  man  would  take  of  his  own."*^ 

A  receiver  who  acts  in  good  faith,  but  under  a  mistake  as  to  the  ex- 
tent of  his  powers,  is  not,  it  would  seem,  liable  for  his  acts.    But  if  he 

"'Shotwell  v.   Smith,  3  Edw.  588.  cific  R.  Co.,  3  Cent.  L.  J.  380;  Wyck- 

^"^  Sutherland     v.     Lake     Superior  off  v.  Scofield,  103  N.  Y.  630. 

Ship  Canal  R.  &  I.  Co.,  9  N.  Bank.  "^Parker    v.    Browning,    8    Paige, 

R.  298,  307;    Davis  v.  Gray,  16  Wall.  388,  35  Am.  Dec.   717. 

203,  217.  '"  Buster  v.  Mann,  69  Ark.  23,  62 

"''^Bolles  v.  Duff,  54  Barb.  215,  37  S.  W.  588. 

How.   Pr.   162;     Iddings  v.  Bruen,  4  "^Russell  v.  East  Anglian  Ry.  Co. 

Sandf.    Ch.    417.  3  Mac.  &  G.  104;     Ames  v.  Birken- 

>"  Jacobs  v.  Turpin,  83  111.  424.  head  Docks,  20  Beav.  332,  353;    Noe 

"-Vvynn    v.    Newborough,    3    Bi-o.  v.    Gibson,    7    Paige,    513;      Albany 

C.    C.    88;     Ward   v.    Swift,   6   Hare,  City  Bank  v.  Schermerhorn,  9  Paige, 

309,  313;     Swaby  v.   Dickon.  5   Sim.  372,  38  Am.   Dec.  551. 

629,  631;     Cowdrey  v.   Galveston  R.  ""Per  Lord  Eldon,  IJac.  &  W.  247, 

Co.,  93  U.  S.  352;     Ketchum  v.   Pa-  1  Fisher's  Law  of  Mort.  444. 


485  DUTIES   AND   POWERS    OF   A    RECEIVER,  [§    1535. 

wilfully  and  corruptly  exceeds  his  powers,  he  would  be  liable  for  the 
actual  damage  sustained  by  his  conduct.^^'^  The  receiver  of  a  railroad 
may  be  empowered  by  the  court  to  borrow  money  to  complete  unfin- 
ished portions  of  the  road,  to  issue  bonds^  and  to  make  them  a  first  lien 
upon  the  property  of  the  road.^^^  The  receiver  is  entitled  to  his  com- 
missions and  expenses  even  though  it  is  found  that  the  defendant  is 
entitled  to  the  possession  of  the  property."" 

A  receiver  cannot  be  sued  without  leave  of  the  court  which  ap- 
pointed him  first  obtained.  That  court  has  jurisdiction  of  all  matters 
in  controversy  afi^ecting  the  property  in  the  hands  of  the  receiver,  and 
may  draw  to  itself  all  controversies  to  which  the  receiver  can  be  made 
a  party.  This  court  is  not  compelled  to  take  jurisdiction  of  all  such 
matters,  but  may  assert  its  right  to  do  so.  By  acting  upon  the  parties 
it  may  prevent  their  proceeding  in  other  courts  against  the  receivers. 
If  leave  be  not  obtained  upon  motion  to  prosecute  an  independent  suit 
at  law  or  in  equity  against  a  receiver,  the  proper  mode  of  proceeding  is 
to  apply  for  the  appropriate  remedy  against  the  receiver  by  petition  in 
the  cause  in  which  the  receiver  was  appointed,  and  not  by  original  Ijill. 
Thus  a  bill  in  equity  does  not  lie  against  a  receiver  to  restrain  him 
from  foreclosing  a  mortgage  by  sale  imder  a  power  on  the  ground  that 
the  mortgage  was  obtained  by  fraudulent  representations  and  is  void, 
but  relief  should  be  sought  by  petition  in  the  cause  in  which  the  re- 
ceivers were  appointed.^-"  A  mortgagee  who  seeks  relief  against  the 
purchaser  of  property  sold  on  foreclosure  by  a  receiver,  upon  the 
ground  of  collusion  with  the  receiver,  should  proceed  in  the  action 
wherein  the  receiver  was  appointed  and  not  by  an  independent  suit. 
The  suit  must  certainly  be  in  the  court  in  which  the  receiver  was  ap- 
pointed, or  by  leave  of  that  court. ^'^ 

The  beneficiary  in  a  mortgage  deed  made  to  and  foreclosed  by  a  trus- 
tee cannot  avoid  the  sale,  after  confirmation  and  distribution  of  the 
proceeds,  on  the  ground  that  by  the  fraud  of  the  receiver  appointed 
by  the  court  to  make  the  sale  the  property  was  said  for  less  than  it 
was  worth,  and  was  bid  in  by  a  syndicate,  of  which  the  receiver  was  a 
member,  no  neglect,  fraud,  or  collusion  being  charged  against  the  trus- 

"'  Stanton   v.   Ala.  &  Chattanooga  ^-^  Lockwood    v.     Reese,    76    Wis. 

R.    Co.   2   Woods,   506,   518.  404,  45   N.   W.   313;    Noonan   v.    Mc- 

""  Kennedy   v.    St.    Paul  &   Pacific  Nab,    30   Wis.    277;     In    re    Bay,    34 

R.  Co.,  2  Dill.  448.  Wis.    638;     Milwaukee    &    St.    P.    R. 

"">  Harrington  v.   Foley,  108   Iowa,  Co.    v.    Milwaukee   &   M.    R.    Co.    20 

287,  79  N.  W.   64.  Wis.   165. 

'^"Porter   y.    Kingman,    126   Mass. 
141. 


g    153G.J  THE   APPOINTMENT    OF    A    RECEIVER.  486 

tee,  as  the  beneficiary,  in  the  absence  of  fraud  or  neglect  on  the  part 
of  the  trustee  is  bound  by  whatever  would  bind  the  latter.^^- 

§  1536.  Receivers  claim  to  the  rents. — By  the  appointment  of  a 
receiver  the  mortgagee  obtains  an  equitable  claim  not  only  upon  the 
rents  and  profits  actually  due  at  the  time,  but  also  upon  the  rents  to 
accrue  ;^-^  and  his  right  to  them  is  superior  to  that  of  the  mortgagor's 
assignee  in  bankruptcy,^"*  or  to  that  of  any  one  else  claiming  under  the 
mortgagor,  as,  for  instance,  his  grantee  who  has  bought  subject  to  the 
mortgage,  even  when  he  has  taken  a  note  with  personal  security  for 
the  rent.^-°  But  the  receiver  cannot  call  upon  the  mortgagor,  or  a 
junior  mortgagee,  to  refund  rents  collected  before  the  appointment  of 
the  receiver  ;^^^  nor  is  the  receiver  entitled  to  receive  such  rents.^-^  All 
rents  and  profits  that  come  into  the  hands  of  the  receiver  are  dedicated, 
along  with  the  corpus  of  the  funds  brought  within  the  domain  of  the 
court,  to  the  satisfaction  of  the  lien.^-^ 

The  mortgagor  cannot  evade  the  effect  of  such  appointment  by  leas- 
ing the  mortgaged  land  and  taking  the  rent  in  advance.  If  such  lease 
is  made  pending  a  foreclosure  suit,  the  tenant  stands  in  the  position  of 
a  purchaser  or  lessee  pendente  lite  from  the  mortgagor,  with  construc- 
tive notice  of  the  action  to  foreclose  by  the  filing  of  the  notice  of  lis 
pendens,  and  takes  subject  to  whatever  order  or  decree  the  court  may 
lawfully  make  affecting  either  the  title  or  possession.  He  could  not  get 
any  better  right  than  his  lessoi",  the  mortgagor,  had.^-" 

Under  a  statute  giving  the  mortgagor  the  right  to  the  possession  of 
the  premises  until  the  expiration  of  a  year  from  the  time  of  sale  upon 
foreclosure,  the  mortgagee  is  not  entitled  to  a  receiver  during  that 
time  to  take  possession  of  the  crops  upon  the  mortgaged  premises.^^'' 

The  tenants  of  the  premises  may  be  compelled  to  attorn  to  the  re- 

^"  Fletcher  v.   Ann   Arbor   R.   Co.,  '="  Howell  v.  Ripley,  10  Paige,  43; 

116    Fed.    479;     Richter    v.    Jerome,  Post  v.  Dorr,  4  Edw.  412;    Johnston 

123   U.    S.    2.J3,   246,   8   Sup.    Ct.    106,  v.    Riddle,    70    Ala.    219;      Rider    v. 

31  L.  Ed.  132;    Kerrison  v.  Stewart,  Bagley,   84  N.   Y.   461. 

93    U.    S.    155,    160,    23    L.    Ed.    843;  >-' Noyes  v.  Rich,  52  Me.  115;    Ar- 

Corcoran    v.    Canal    Co.,    94    U.    S.  gall  v.  Pitts,  78  N.  Y.  239;    Wyckoff 

741,    745,    24    L.    Ed.    190;     Shaw   v.  v.  Scofield,  98  N.  Y.  475;    Keyser  v. 

Railroad  Co.,  100  U.  S.  605,  611,  25  Hitz,  4  Mackey,  179;    Davis  v.  Dale, 

L.   Ed.   757.  150  111.  239,  37  N.  E.  215. 

'-'  Conover  v.  Grover,  31  N.  J.  Eq.  '-''  Pepper  v.   Shepherd,  4   Mackey, 

539;    Rider  v.  Bagley,  84  N.  Y.  461;  269;    Keyser  v.  Hitz,  4  Mackey,  179; 

Gaynor  v.   Blewett,   82  Wis.   313,   52  Williamson  v.   Gerlach,  41   Ohio  St. 

N.    W.    313;      First    Nat.    Bank    v.  682. 

Illinois   Steel   Co.,   174   111.   140,   149,  '-■'  Gaynor  v.  Blewett,  82  Wis.  313. 

51  N.  E.  200.  52  N.  W.  313. 

^=*  Hayes     v.     Dickinson,     9     Hun,  '-"White  v.   Griggs,   54   Iowa,   650, 

277;    Post  V.  Dorr.  4  Edw.  412.  7   N.   W.    125;     Sheeks   v.    Klotz,   84 

^"Lofsky  v.  Maujer,  3  Sandf.  Ch.  Ind.  471. 
69. 


487  DUTIES    AND   POWERS    OF   A    RECEIVER.  [§    1537. 

ceiver.^''^  So  also  a  purchaser  of  the  premises  from  the  mortgagor 
may  be  directed  to  pay  to  the  receiver  an  occupation  rent."-  If  the 
person  in  possession  refuses  to  attorn,  the  court  may  on  motion  pass 
an  order  directing  him  to  do  so,  although  he  was  not  made  a  party  to 
the  suit  in  the  first  instance.^^^  If  he  disobeys  the  order  of  court,  he 
may  be  proceeded  against  for  contempt."*  The  court  will  not  support 
a  receiver  in  using  forcible  or  violent  means  to  assert  his  rights."^ 

In  an  action  by  a  receiver  to  collect  rents  of  the  mortgaged  premises, 
the  question  of  his  appointment,  made  upon  the  allegation  that  the 
property  was  inadequate  to  pay  the  mortgage  debt,  cannot  be  raised, 
for  the  question  has  already  been  adjudicated  in  making  the  appoint- 
ment."*' A  receiver  appointed  in  a  suit  for  the  foreclosure  of  mort- 
gage upon  a  farm,  with  power  to  let  the  premises,  may  lease  them  for  a 
year  without  special  order,  that  being  the  usual  term  for  such  leases, 
and  such  lease  is  neither  limited  nor  determined  by  the  duration  of  the 
suit."^ 

§  1537.  Payment  discharges.— It  is  the  right  of  the  mortgagor, 
whose  property  has  been  placed  in  the  hands  of  a  receiver  pending  a 
suit  for  foreclosure,  to  pay  the  debt  at  any  time,  and  have  the  property 
restored  to  his  possession.  This  right  does  not  depend  upon  the  dis- 
cretion of  the  court,  but  is  one  which  he  can  claim  and  the  court  can- 
not withhold."^  Payment  destroys  the  plaintiff's  cause  of  action ;  and 
though  in  general  the  receiver  is  appointed  for  the  benefit  of  all  par- 
ties interested,  when  upon  payment  the  plaintiff's  right  of  action  is 
ended,  the  rights  of  the  other  parties  fall  with  it."''  But  while  the 
plaintiff's  action  is  pending,  a  receiver  appointed  at  his  instance  will 
not  generally  be  discharged  on  his  application  without  the  concurrence 
of  all  others  interested  in  the  property."" 

'=1  Henshaw    v.    Wells,   9    Humph.  "°  Goodhue    v.    Daniels,    54    Iowa, 

568.     A  tenant   after   attorning  can  19,  6  N.  W.  129. 

not   surrender   the    premises   to   the  '='  Shreve  v.   Hawkinson,  34  N.   J. 

mortgagor.      Nealis    v.    Bussing,    9  Eq.     413.       See     numerous     English 

Daly,  305.  and  Irish  cases  cited  by  the  report- 

1^-  Aster  v.  Turner,  2  Barb.  444.  er,  in  a  note  to  this  case,  as  to  the 

'"=  Reid    V.    Middleton,    1    Turn.    &  power  of  a  receiver  to  lease  lands. 

R     455;     Sea    Ins.    Co.    v.    Stebbins,  Also  Western  Union  Tel.  Co.  v.  Bos- 

8  Paige,   565;     Parker  v.   Browning,  ton  Safe  Dep.  &  Trust  Co.,  112  Fed. 

8  Paige,  388,  390,  35  Am.  Dec.  717;  37. 

Bowery    Sav.    Bank    v.    Richards,    3  ='«  Milwaukee   &    Minn.    R.    Co.    v. 

Hun,  366.     The  last  named  case  is,  Soutter,  2  Wall.  510;    Woolworth  C. 

however,  overruled.     Merritt  v.>  Gib-  C.  49. 

son    129  Ind    155,  27  N.  E.  136.    See  '"'Davis    v.    Marlborough,    Swans. 

§    1531  168;    Paynter  v.  Carew,  18  Jur.  417. 

'   "*  Henshaw    v.    Wells,    9    Humph.  "^  Bainbrigge    v.    Blair,    3    Beav. 

568.  421. 

^^'  Parker    v.    Browning,    8    Paige, 
388,  390,  35  Am.  Dec.  717. 


§  1537a.] 


THE   APPOINTMENT    OF   A   RECEIVER. 


488 


If  the  foreclosure  suit  is  abandoned  after  a  receiver  has  been  ap- 
pointed, it  no  longer  operates  as  notice  in  intercepting  the  rents  and 
profits.^*^ 

§  1537a.  Whether  a  mortgagee  who  nominates  and  procures  the 
appointment  of  a  receiver  is  responsible  for  his  default  is  a  questioji 
upon  which  there  is  a  conflict  of  authority.  On  the  ground  that  a  re- 
ceiver is  appointed  for  and  on  behalf  of  all  persons  interested,  it  is 
contended  that  any  loss  arising  from  the  default  of  the  receiver  must 
be  borne,  as  between  the  parties,  by  the  estate  in  his  hands.^*^  But  on 
the  other  hand,  in  a  recent  case  in  ISTew  Jersey,  the  Vice- Chancellor 
held  that  in  such  case  the  mortgagee  must  bear  any  loss  caused  by  the 
defalcation  of  the  receiver  so  appointed,  and  the  insufficiency  of  his 
sureties.^*^  The  Vice-Chancellor  reviews  and  comments  upon  the  au- 


"^  Johnston  v.  Riddle,  70  Ala.  219. 

•"-  2  Daniel's  Ch.  Pr.  pp.  740,  741,  2 
Maddock  Ch.  Pr.  p.  235;  Kerr  Re- 
ceivers, p.  164.  These  authorities 
all  rely  upon  the  single  case  of 
Hutchinson  v.  Massareene,  2  Ball 
&  B.  55,  except  that  Mr.  Maddock 
cites  in  addition  the  case  of  Rigge 
V.  Bowater,  3  Brown,  Ch.  365.  The 
American  treatises  follow  the  Eng- 
lish. High.  Rec.  §  270,  Beach  on 
Receivers,  §   303. 

"^Sorchan  v.  Mayo  (N.  J.  Eq.), 
23  Atl.  479.  "The  whole  of  the  case 
of  Rigge  v.  Bowater  is  this:  'The 
lord  chancellor  intimated  his  opin- 
ion (without  deciding  the  case) 
that,  if  a  receiver  be  appointed  by 
the  court  (upon  the  application  of  a 
mortgagee  or  other  incumbrancer), 
and  he  afterwards  embezzle  or 
otherwise  waste  the  rents  and 
profits,  the  loss  must  fall  on  the 
mortgagor.'  But  Mr.  Eden,  in  his 
note  to  that  case,  shows  that  such 
rule  does  not  always  prevail;  and 
it  appears  that  Hutchinson  v.  Mas- 
sareene, instead  of  holding  that  the 
loss  in  that  case  fell  upon  the  es- 
tate, holds  precisely  the  contrary 
....  But  I  do  not  find  it  necessary 
to  decide  the  question  whether, 
where  an  indifferent  person  is  ap- 
pointed by  the  court  upon  the  ap- 
plication of  a  mortgagee  and  be- 
comes a  defaulter,  and  his  sureties 
are  insufficient,  the  resulting  loss 
should  fall  on  the  mortgagee,  and 
have  referred  to  the  authorities 
only  for  the  purpose  of  showing 
that  they  are  not  all  in  accord  with 
the   general   proposition   laid   down 


by  the  text-writers.  It  is  also 
worthy  of  remark  that  the  case  of 
a  mortgagee  who  applies  for  a  re- 
ceiver stands  on  a  footing  decided- 
ly different  from  that  of  a  creditor 
who  is  suing  for  himself  and  other 
creditors,  and  asks  for  a  receiver  to 
hold  the  property  for  the  benefit  of 
all  the  creditors.  The  mortgagee 
asks  for  the  rents  and  profits  to  be 
applied  to  his  mortgage,  on  the 
ground  that  he  holds  the  legal  title 
to  the  premises,  and  is  entitled  of 
right  to  the  possession  and  to  re- 
ceive the  rents;  and  if  he  himself 
were  in  possession  he  would  be 
entitled  to  hold  it.  and  receive  the 
rents  himself,  until  his  debts  were 
paid;  and  it  seems  to  me  that  it 
would  be  no  hardship  upon  him  if 
the  rule  were  established  that  he 
should  take  the  risk  of  the  solv- 
ency of  the  receiver,  and  that  a 
receiver  so  appointed  should  be 
considered  as  the  agent  of  the 
mortgagee.  Such  a  rule  would 
make  complainants  and  their  solic- 
itors applying  for  such  appoint- 
ments careful  as  to  the  character  of 
the  men  whom  they  nominate  to 
the  court,  and  the  responsibility  of 
the  sureties  given  by  the  appointee. 
But  whatever  may  be  the  rule  in 
ordinary  cases,  it  seems  to  me  that 
the  circumstances  of  this  case  ren- 
der the  equity  of  the  exceptants 
quite  plain.  Here  the  complainant 
nominates,  and  procures  to  be  ap- 
pointed, his  own  solicitor  and  agent. 
None  of  the  owners  of  the  equity  of 
redemption  took  any  part  in  the 
proceedings;     they    were    all    con- 


489 


DUTIES    AND   TOWERS    OF    A    RECEIVER. 


[§  1537a. 


thorities,  and  concludes  that  they  do  not  support  the  contention  that 

the  mortgagee  is  not  responsible. 

ducted    under    the    instructions    of  profits;     and    it   seems   to   me   that 

this  very  agent;     and  I   do  not  see  when  they  were  paid  to  the  receiver 

how   the   case   differs   from   that   of  in  this  case  they  were  in  effect  paid 

the     mortgagee     being     himself     in  to  the  complainant,  and  he,  in  my 

possession,  receiving  the  rents  and  judgment,  must  bear  the  loss." 


CHAPTEE  XXXIV. 


DECREE   OF   STRICT    FORECLOSURE. 


I.  Nature  and  use  of  this  remedy, 

1538-1541. 
II.  In  what  States  it  is  used,  1542- 
1556. 


III.  Pleadings     and     practice,     1557- 

1568. 

IV.  Setting    aside    and    opening    the 

foreclosure,  1569,  1570. 


I.     Nature  and  Use  of  tJiis  Remedy. 

§  1538.  Historical. — In  the  progress  of  the  doctrine  of  mortgages 
the  first  advance  was  to  relieve  the  mortgagor  from  the  forfeiture  of 
of  his  estate  through  failure  to  perform  the  condition  within  the 
time  limited  by  the  deed.  "At  length,"  says  Spence,  "in  the  reign 
of  Charles  I.,  it  was  established  that  in  all  cases  of  mortgage,  where  the 
money  was  actually  paid  or  tendered,  though  after  the  day,  the 
mortgage  should  be  considered  as  redeemed  in  equity,  as  it  would 
have  been  at  law  on  payment  before  the  day;  and  from  that  time 
bills  began  to  be  filed  by  mortgagees  for  the  extinction  or  foreclosure 
of  this  equity,  imless  payment  were  made  by  a  short  day,  to  be 
named."^  This  was  the  form  of  foreclosure  first  adopted  by  the 
English  courts  of  equity,  and  rmtil  quite  recent  times  was  the  only 
form.^  Although  this  form  of  foreclosure  has,  through  the  action 
of  the  courts  and  by  statutory  enactments,  gradually  given  way 
Avithin  the  last  hundred  years  to  the  more  equitable  mode  of  fore- 
closure by  sale,  it  is  still  used  by  courts  of  equity  as  the  mode  best 
adapted  for  a  few  special  cases,  and  in  two  of  our  States  is  the  mode 
in  general  use.^ 

This  is  the  foreclosure  spoken  of  in  the  books;  but  since  foreclo- 
sure, in  this  country  at  least,  has  come  to  mean  generally  a  foreclo- 

'  Spence  Eq.  Juris.  603.  '  Lightcap  v.  Bradley,  186  111.  510, 

=  Until  the  Chancery  Improvement     519,  58  N.  E.  221. 
Act,  15  &  16  Vict.  ch.  86,  §  48. 

490 


491  NATURE  AXD  USE  OF  THIS  REMEDY.    [§§    1539,    1540. 

sure  by  sale,  this  form,  by  wliich  the  absolute  ownership  of  the 
property  is  given  to  the  mortgagee  under  a  decree  of  court,  has  of 
late  come  to  be  designated,  for  the  purpose  of  distinguishing  it,  a 
strict  foreclosure. 

The  effect  of  a  strict  foreclosure  is  simply  to  cut  off  the  equity  of 
redemption.  The  mortgagee's  title  after  foreclosure  is  that  conveyed 
by  the  mortgage  discharged  from  the  condition  of  defeasance.  It  is 
the  same  as  if  the  original  mortgage  had  been  an  absolute  deed,  giv- 
ing no  right  of  redemption  at  law  or  in  equity.* 

§  1539.  Nature  of  this  remedy.  A  strict  foreclosure  was  the 
natural  remedy  upon  a  mortgage  when  it  was  regarded  as  a  con- 
ditional sale  of  the  land  rather  than  as  a  mere  security;'  for  the 
mortgagor  having  failed  to  perform  the  condition,  it  was  consistent 
with  this  doctrine  of  the  condition  that  the  courts  should,  after  hav- 
ing relieved  the  mortgagor  from  the  forfeiture  of  his  condition, 
require  him  to  perform  it  within  a  reasonable  time  or  be  forever 
barred  of  his  right  to  redeem.^  But  when  the  mortgage  came  to  be  re- 
garded as  a  mere  security  for  the  payment  of  the  debt,  and  the  breach 
of  the  condition  as  of  no  effect  beyond  giving  the  mortgage  creditor 
the  right  to  resort  to  his  security,  the  natural  remedy  for  the  breach 
Avas  to  sell  the  property  secured  and  apply  the  proceeds  to  the  pay- 
ment of  the  debt ;  as  in  this  w^ay  the  debtor  would  have  the  benefit  of 
the  estate  when  this  was  of  greater  value  than  the  debt,  and  the 
mortgagee  would  have  a  claim  for  the  deficiency  not  paid  by  the  pro- 
ceeds of  sale.  The  advantages  of  a  sale  of  the  property  over  a  foreclo- 
sure were  discussed  in  the  earlier  cases,  before  the  practice  of  ordering  a 
sale  had  become  almost  universal,  as  it  now  is,  except  in  special 
cases.® 

§  1540.  Forelosure  is  proper  in  the  case  of  a  mortgage  given 
for  the  entire  purchase-money,  when  the  value  of  the  premises  is 
not  more  than  the  mortgage  debt,  and  the  mortgagor  does  not  ap- 
pear in  the  suit.'^  It  is  proper  where  a  mortgagee  or  purchaser  is  in 
possession  inider  a  legal  title  from  the  mortgagor,  for  the  purpose 

'Champion  v.  Hinkle,  45  N.  J.  Eq.  sing  v.  Goelet,  9  Cow.  346,  352;   per 

162,  16  Atl.  701.  Kent,  Cliancellor,  in  Mills  v.  Dennis, 

=  Per    Jones,    Chancellor,    in    Lan-  3  Johns.   Ch.  367;    per  Peckham,  J., 

sing  V.  Goelet,  9  Cow.  346,  352;  Jef-  in  Bolles  v.  Duff,  43  N.  Y.  469;  Moul- 

ferson  v.  Coleman.  110  Ind.  515,  11  ton  v.  Cornish,  138  N.  Y.  133,  33  N. 

N.  E.  463;    Moulton  v.  Cornish,  138  E.    842;    per    Bland,    Chancellor,    in 

N.  Y.   133,  33  N.  E.  842.     See  War-  Williams's   case,   3   Bland.   186,   193; 

ner  v.   Freud,   138  Cal.   651,   654,   72  Wilder   v.    Haughey,    21    Minn.    101; 

Pac.  345.  Mussina  v.  Bartlett,  8  Port.  277. 

°  Per   Jones,    Chancellor,    in    Lan-        '  Wilson  v.  Geisler,  19  111.  49. 


SS  1541,  1543.1   DECREE  OF  STRICT  FORECLOSURE.  492 

of  cutting  off  subsequent  liens  or  incumbrances,  as  in  case  one  has 
purchased  in  good  faith  at  a  mortgage  sale  which  is  not  conclusive 
against  some  incumbrancer  not  made  a  party  to  the  suit,  and  the 
purchaser  has  gone  into  possession.^  It  is  proper,  too,  where  the  mort- 
ssise  is  in  the  form  of  an  absolute  deed  without  any  written  defeas- 
ance.^  In  these  cases  the  decree  of  strict  foreclosure  perfects  and 
confirms  the  title.  It  bars  the  interest  of  persons  who  have  a  mere 
lien  upon  the  land." 

§  1541.  Land  contract.  A  judgment  of  strict  foreclosure  may 
properly  be  rendered  upon  a  land  contract  for  failure  of  the  vendee 
to  make  the  payments  stipulated  tor.^\  As  to  the  form  of  the  decree, 
it  should  be  that  the  money  due  on  the  contract  be  paid  within  such 
reasonable  time  as  the  court  shall  direct,  and  that  in  case  of  failure  to 
make  payment  the  vendee  be  foreclosed  of  his  equity  of  redemption. 

A  decree  of  sale  would  be  improper,  because  the  title  to  the  prem- 
ises does  not  pass  by  the  contract,  but  remains  in  the  vendor.  The 
vendor  is  entitled  to  such  decree,  although  he  is  unable  to  give  a 
perfect  title  to  the  property,  unless  the  purchaser  offers  to  rescind.  He 
need  not  first  tender  a  deed.  If  the  purchaser  has  not  tendered 
the  purchase-money,  and  it  appears  that  he  would  not  have  paid  it 
if  a  tender  of  the  deed  had  been  made,  such  tender  is  rendered  un- 
necessary.^^ 

A  mortgagee  who  has  taken  possession  of  premises  mortgaged  for 
his  support,  on  account  of  a  breach  of  the  condition,  and  has  for  sev- 
eral years  supported  himself,  may  have  a  decree  to  quiet  the  title.^^ 


II.     In  what  States  it  is  Used. 

§  1542.  Alabama.  -There  may  be  a  strict  foreclosure  where  the 
parties  have  themselves  agreed  to  this,  or  where  it  is  for  their  in- 
terest;^* and  it  is  a  proper  remedy  in  case  the  mortgagee  has  ob- 

« Kendall    v     Treadwell,    14    How.  "  §§  225-235;   Landon  v.  Burke,  3o 

Pr    165    5  Abb.  Pr.  16;   Benedict  v.  Wis.  378;  Button  v.  Schroyer,  5  Wis. 

Giiman'    4    Paige,    58;    Jefferson    v.  598;    Baker    v.    Beach,    15    Wis.    99; 

Coleman,  110  Ind.  515,  11  N.  E.  463;  Kimball    v.    Darling,    32    Wis.    675; 

Miles  V  'steble,  22  Neb.   740,  36  N.  Buswell    v.    Peterson,    41    Wis.    82; 

W.  142;   Moulton  v.  Cornish,  138  N.  Taylor  v.  Collins,  51  Wis.  123,  8  N. 

Y     133     33    N.    B.    842*    Jackson    v.  W.    22;    Warner   v.    Freud,   138   Cal. 

Weaver,  138  Ind.  539,  38  N.  E.  166.  651,  654,  72  Pac.  345. 

'  Hone  V.  Fisher,  2  Barb.  Ch.  559.  '■  Mclndoe    v.    Morman,    26    Wis. 

'» Jefferson    v.    Coleman.    110    Ind.  588,  7  Am.  Rep.  96. 

515   11  N.  E.  463;  Bresnahan  v.  Bres-  "  Frizzle  v.  Dearth,  28  Vt.  787. 

nahan,    46    Wis.    385,    1    N.    W.    39;  "Hunt  v.  Lewin,  4  St.  &  P.  138. 
Warner  v.   Freud,   138   Cal.   651,   72 
Pac.  345. 


493  IN   WHAT   STATES    IT    IS    USED.  [§§    1543-1545. 

tained  a  release  of  the  equity  of  redemption,  which  is  worth  nothing 
above  the  debt,  in  order  to  cut  off  intermediate  incumbrancers  and 
quiet  the  titled  ^ 

§  1543.  California. — There  may  be  a  strict  foreclosure  when  the 
circumstances  of  the  case  render  this  proper.^"  Under  the  latest  de- 
cision in  this  State  it  would  seem  that  if  a  strict  foreclosure  can  be 
had  in  any  case,  it  is  only  in  favor  of  one  who  already  has  the  legal  title 
against  which  another  asserts  some  equity;  as  where  one  joint  owner 
redeemed  the  joint  property  from  a  foreclosure  sale,  and  thereby  ac- 
quired an  equitable  lien  upon  the  interests  of  the  others  for  reim- 
bursement of  their  proportion  of  the  money  paid  for  redemption  with 
interest,  it  was  held  that  there  could  be  no  strict  foreclosure,  forfeit- 
ing the  interests  of  the  other  joint  owners  for  non-payment  within  a 
time  fixed.  The  holder  of  such  lien  has  no  legal  title;  and  the  only 
proper  decree  is  for  a  'sale  of  such  interests  to  satisfy  the  lien,  if  the 
amount  is  not  i)aid  within  a  reasonable  time  to  be  fixed  by  the  court.^"^ 

^  1543a.  Colorado. — There  can  be  no  foreclosure  without  a  sale 
Tinder  a  decree  of  foreclosure.^^ 

§  1544.  Connecticut. — A  strict  foreclosure  is  the  usual  form.  As 
wall  be  seen  by  reference  to  the  statutes,  no  other  form  was  pro- 
vided for  until  1886.^^  When  foreclosure  is  made  by  an  executor, 
administrator,  or  trustee,  the  premises  foreclosed,  or  the  avails  thereof, 
if  sold  by  him,  are  held  by  him  for  the  benefit  of  the  same  persons 
as  the  money  secured  by  the  mortgage  would  have  been  held  if  col- 
lected without  foreclosure ;  and  in  case  the  premises  are  not  sold,  they 
are  distributed  or  disposed  of  to  the  same  persons  as  would  have  been 
entitled  to  the  inoney  if  collected."" 

§  1544a.  Florida.— There  is  in  this  State  no  method  either  at 
law  or  in  equity  by  which  a  mortgagee  can  be  adjudged  the  absolute 
owner  of  the  mortgaged  property;  or,  in  other  words,  there  is  no 
strict  foreclosure.^^ 

§  1545.  Illinois.— It  is  only  in  rare  cases,  as  where  the  property  is 
of  less  value  than  the  debt  and  the  mortgagor  is  insolvent,  and  the 

1=  Hitchcock  V.  U.  S.  Bank,  7  Ala.  "Code  1883,  §  263;   Lulu  &  White 

386.  Silver  Mining  Co.  v.  Nevin,  10  Colo. 

i-^Goodenow  v.  Ewer,  16  Cal.  461,  357,  15  Pac.  611. 

76  Am.  Dec.  540;  McMillan  v.  Rich-  >'See  §  1326. 

ards,   9   Cal.   365,   70   Am.   Dec.   655;  ="  Gen.  Stats.  1902,  §§  4122-4126. 

Lord    v.    Morrts,    18    Cal.    482.    489;  ^^  Browne  v.  Browne,  17  Fla.  607, 

Calkins  v.  Steinbach,  66  Cal.  117.  623,  per  Westcott,  J.,  35  Am.  Rep.  96. 

^"Warner   v.   Freud,   138   Cal.   651, 
72  Pac.  345. 


§§  1545a,  1546.]  decree  of  strict  foreclosure,  494 

mortgagee  is  v/illing  to  take  the  property  and  discharge  the  debt, 
that  a  strict  foreclosure  is  allowed.--  It  is  not  proper  where  there  are 
other  incumbrances  on  the  i)roperty,  or  creditors,  or  purchasers  of 
the  equity  of  redemption.-^ 

When  the  mortgagor  has  deceased  and  his  estate  is  insolvent,  the 
case  is  assimilated  to  that  where  there  are  other  incumbrances  upon 
the  property;  and  a  sale  should  be  directed  instead  of  a  strict  fore- 
closure.-* 

§  1545a.  Indiana. —It  is  provided  by  statute  that  there  shall  be 
a  sale  of  the  mortgaged  property  \ipon  foreclosure.-^  Though  the 
mortgage  be  by  a  deed  absolute  in  form,  the  court  cannot  decree  a 
foreclosure  and  that  the  deed  be  absolute,  but  must  order  a  sale.^® 
It  is  only  under  special  and  peculiar  circumstances,  as  where  the 
complainant  has  obtained  the  complete  title,  save  the  interest  of  one 
who  was  not  made  a  party  to  the  foreclosure  suit,  that  a  strict  fore- 
closure can  be  had.^'^ 

§  1546,  Iowa.  — '^Vhat  is  known  as  a  strict  foreclosure  has  no 
place  in  our  system  of  procedure."^*  Yet  when  a  junior  lien-holder 
has  not  been  made  a  party  to  a  suit  to  foreclose  a  prior  mortgage, 
the  purchaser  imder  the  foreclosure  proceeding  may  prosecute  an 
action  requiring  the  junior  lien-holder  to  exercise  his  right  of  re- 
demption, and  in  default  thereof  tlie  latter  may  be  foreclosed  of  all 
right  of  redemption.-^ 

"Sheldon  v.  Patterson,  55  111.  507;  ="  Smith  v.  Brand,  64  Ind.  427. 
Horner  v.  Zimmerman,  45  111.  14;  -"In  Jeffersson  v.  Coleman,  110 
Stephens  v.  Bichnell,  27  111.  444,  81  Ind.  515,  11  N.  E.  465,  the  court,  by 
Am.  Dec.  242;  Wilson  v.  Geisler,  19  Mitchell,  J.,  say:  "In  our  State,  as 
111.  49;  Johnson  v.  Donnell,  15  111.  in  all  those  States  where  a  mortgage 
97;  Boyer  v.  Boyer,  89  111.  447,  449;  is  regarded  as  creating  only  an 
Hollis  V.  Smith,  9  Bradw.  100;  Gries-  equitable  lien,  and  not  as  a  convey- 
haum  V.  Baum,  18  111.  App.  614;  Gor-  ance  of  the  legal  estate,  the  remedy 
ham  V.  Farson,  119  111.  425;  Illinois  by  strict  foreclosure  can  only  be  re- 
Starch  Co.  V.  Ottawa  Hydraulic  Co.  sorted  to  under  special  and  peculiar 
125  111.  237,  19  N.  E.  486;  Brahm  v.  circumstances.  At  best  it  is  a  harsh 
Dietsch,  15  111.  App  3*^1;  Ellis  \.  remedy,  and  on  account  of  its  sever- 
Leek,  127  111.  60,  20  N.  E.  218;  Car-  ity,  and  the  anomalous  relation  it 
penter  v.  Plagge,  192  111.  82;  Light-  bears  to  our  conception  of  the  in- 
cap  V.  Bradley,  186  111.  510.  terest  of  a  mortgagee  and  the  stat- 

-^  Farrell    v.    Parlier,    50    111.    274;  utory     method     of     foreclosure,     it 

Horner   v.    Zimmerman,    45    111.    14;  should    be    pursued    only    in    cases 

Warner  v.  Helm,  6  111.  220;   Greene-  where    a    statutory   foreclosure    and 

meyer  v.  Deppe,  6  Bradw.  490;  Mur-  sale  would  be  inappropriate."     Fol- 

phy  V.  Stith,  6  Bradw.  562:  Hollis  v.  lowed  in   Loeb  v.   Tinkler.   124   Ind. 

Smith,  9  Bradw.  109;  Rourke  v.  Coul-  331,  24  N.  E.  235;  Jackson  v.  Weav- 

ton,  4  Bradw.  257;   Boyer  v.  Boyer,  er,  138  Ind.  5.39,  38  N.  E.  166. 

89  111.  447,  449.  -'  §  1335;  Gamut  v.  Gregg,  37  Iowa, 

-•'Boyer  v.  Boyer,  89  111.  447,  449,  573. 

8  Cent.  L.  J.  217.  -■'  Shaw    v.    Heisey,    48    Iowa,   468; 

"  2  R.  S.  1876,  p.  188,  §  379  of  Code  Kramer  v.  Rebman,  9  Iowa,  114. 
of  Practice. 


495  IN  WHAT  STATES   IT  IS   USED.  [§§    1547-1.549. 

§  1547.  Kentucky.— strict  foreclosures  were  formerly  decreed,  but 
now  the  Code  provides  that  there  shall  be  a  sale  in  all  cases. ^*' 

§  1547a.  Massachusetts.— A  strict  foreclosure  may  be  decreed  in 
equity,  altliough  the  mortgage  contains  a  power  of  salc.^^  Such  a 
foreclosure  is,  however,  seldom  resorted  to ;  l)ut  it  is  one  of  the  usual 
remedies  in  equity  which  may  be  resorted  to  unless  the  terms  of  the 
mortgage  by  express  words  or  by  fair  implication  exclude  it.  Thus  a 
mortgage  which  does  not  provide  any  definite  time  for  the  payment  of 
the  mortgage  debt,  nor  in  any  way  limit  the  time  for  redemption,  is 
not  capable  of  a  strict  foreclosure.^^ 

§  1547b.  Michigan.— A  mortgage  can  be  foreclosed  only  in  equity 
or  by  advertisement.^^ 

§  1548.  Minnesota. — The  court  has  power  to  decree  a  strict  fore- 
closure,"* and  by  a  recent  statute  this  power  is  expressly  conferred  in 
eases  where  such  remedy  is  just  and  appropriate;  but  no  final  decree 
of  foreclosure  can  be  rendered  until  the  lapse  of  one  year  after  a 
judgment  fixing  the  amount  due.^"'*  The  courts,  however,  regard  a 
sale  as  the  proper  remedy  in  almost  all  cases. ^"^ 

§  1549.  Missouri. — Strict  foreclosure  ''has  never  prevailed  in  this 
State."^^ 

^'' §   1337;   Caufman  v.  Sayre,  2  B.  the  usual  remedies   (Balfe  v.   Lord, 

Men.  202;  Civ.  Code,  §  375.  2    Dru.    &  War.    480,   489),    in   some 

"'  Shaw    V.    Norfolk   Co.    R.    Co.    5  cases,   where  no  time  was  fixed   by 

Gray,  1(52;   Hall  v.  Sullivan  Ry.  Co.  the    deed    beyond    which    the    mort- 

21  Law  Rep.  138;    Shepard  v.  Rich-  gagor    could    not    defeat    the    mort- 

ardson,  145  Mass.  32,  11  N.  B.  738.  gagee's  estate  by  payment,  the  foun- 

^-  Shepard  v.  Richardson,  145  Mass.  dation     for     foreclosure     has     been 

32,  11  N.  E.  738.     Holmes,  J.,  deliv-  thought   to   be   wanting.     Teulon    v. 

ering   the   judgment,    said:      "Prop-  Curtis,     Younge,     610.''      See,     also, 

erly  speaking,  the  right  to  foreclose  Foster  v.  Boston,  133  Mass.  143. 

means  the  right  to  cut  off  a  right  to  =^  §     1342;  Buck     v.     Sherman,     2 

redeem   given    by    equity,   when,   by  Doug.  176. 

the  condition  of  the  mortgage,  the  "  §  1343;  Hey  ward  v.  Judd,  4  Minn, 
mortgagee's  estate  has  become  ab-  483;  Drew  v.  Smith,  7  Minn.  301. 
solute  at  law.  Sampson  v.  Patti-  =^  G.  S.  1894,  §  6073. 
son,  1  Hare,  533,  536;  Kock  v.  Briggs,  ="=  Wilder  v.  Haughey,  21  Minn.  101. 
14  Cal.  256,  262,  73  Am.  Dec.  651.  '"Davis  v.  Holmes,  55  Mo.  349; 
Where,  by  the  letter  of  the  deed,  the  O'Fallon  v.  Clopton,  89  Mo.  284,  1  S. 
mortgagor  still  has  the  right  to  re-  W.  302.  "That  general  remark," 
deem,  the  mortgagee  cannot  main-  says  Barclay,  J.,  in  Hannah  v.  Da- 
tain  a  bill  to  foreclose.  Newcomb  vis,  112  Mo.  599,  20  S.  W.  686,  688, 
V.  Bonham,  1  Vern.  7,  2  Vent.  364.  "we  think,  was  not  intended,  and 
If,  as  in  Welsh  mortgages,  the  mort-  certainly  should  not  be  held,  to  for- 
gagee's  estate  never  becomes  abso-  bid  the  naming  of  a  date  for  pay- 
lute,  there  never  can  be  a  foreclo-  ment  in  every  instance  where  par- 
sure;  Yates  V.  Hambly,  9  Atk.  360;  ties  seek  the  aid  of  equity  to  redeem 
and  though  the  failure  expressly  to  against  liens  of  various  kinds.  In 
fix  a  limit  to  the  time  for  redemp-  respect  to  ordinary  mortgages,  the 
tion  does  not  necessarily  take  away  statutory    procedure    in    this    State 


1550-1551.]        DECREE   OF    STRICT    FORECLOSURE. 


496 


§  1550.  Nebraska. — Under  the  territorial  statutes  providing  for 
foreclosure  by  a  sale  of  the  premises,  it  was  held  that  the  court  had 
the  same  power  as  the  English  Chancery  Court  to  decree  a  strict  fore- 
closure.^* But  in  a  later  case,  and  under  different  statutes,  it  was  held 
that  a  strict  foreclosure  could  not  be  had ;  that  the  remedy  is  confined 
to  a  sale  of  the  premises.^'' 

§  1550a.  New  Jersey. — A  strict  foreclosure  may  be  had,  especially 
when  the  entire  legal  and  equitable  estate  have  become  vested  in  the 
mortgagee.**'  The  mortgagee  in  such  case  is  entitled  to  a  decree  of 
strict  foreclosure  against  judgment  creditors  of  the  mortgagor  having 
liens  on  such  land,  who  became  such  creditors  while  he  still  o^\Tied  the 
equity  of  redemption.*^ 

§  1551.  New  York. — A  strict  foreclosure  is  rarely  pursued  or  al- 
lowed, except  in  cases  where  a  foreclosure  has  once  been  had,  and  the 
premises  sold  without  making  the  judgment  creditor,  or  some  person 
similarly  situated,  a  party  to  the  suit;  in  which  case  his  right  of  re- 
demption may  properly  be  barred  in  this  way.*^  But  even  in  that 
case  this  remedy  will  not  be  applied  to  relieve  a  party  who  has  bought 
with  full  knowledge  of  the  outstanding  incumbrance  and  subject  to  it.*^ 


contemplates  a  sale  as  the  means  of 
foreclosure.  .  .  .  But  It  cannot  be 
declared  as  an  inflexible  rule  that  a 
sale  is  essential  in  every  case  to  put 
an  end  to  equitable  rights  of  re- 
demption. That  question  must  be 
governed  largely  by  the  circum- 
stances and  equities  of  each  contro- 
versy. Such  is  the  plain  meaning 
of  the  judgment  pronounced  in  Mar- 
tin v.  Ratcliff,  lOi  Mo.  254,  13  S.  W. 
1051.  A  court  of  equity  certainly 
has  the  discretion  to  name  terms 
on  which  it  v/ill  let  in  a  party  to 
redeem.  Cowing  v.  Rogers,  34  Cal. 
648.  This  court  has  frequently  ap- 
plied that  proposition  to  varying 
states  of  facts."  Citing  Giraldin  v. 
Howard,  103  Mo.  40,  15  S.  W.  383; 
Cobb  V.  Day,  106  Mo.  278,  17  S.  W. 
323;  Gooch  v.  Botts,  110  Mo.  419, 
20  S.  W.  192;  Turner  v.  Johnson,  95 
Mo.  431,  7  S.  W.  570;  Martin  v.  Rat- 
cliff,  101  Mo-.  254,  13  S.  W.  1051. 

==§  1347;  Wood  v.  Shelds,  1  Neb. 
453. 

■■■"  Kyger  v.  Ryley,  2  Neb.  20. 

^"Benedict  v.  Mortimer  (N.  J.).  S 
Atl.  515;  Pettingill  v.  Hubbell,  53  N. 
J.  Eq.  584,  32  Atl.  76. 

"  Lockard  v.  Hendrickson  (N.  J. 
Eq.),  25  Atl.  512;  Parker  v.  Child, 
25  N.  J.  Eq.  41. 


^=Bolles  V.  Duff,  43  N.  Y.  469,  10 
Abb.  Pr.  N.  S.  399,  414,  41  How.  Pr. 
355;  Blanco  v.  Foote,  32  Barb.  535; 
Benedict  v.  Oilman,  4  Paige,  58; 
Kendall  v.  Treadwell,  5  Abb.  Pr.  16, 
14  How.  Pr.  165;  Ross  v.  Boardman, 
22  Hun,  527;  House  v.  Lockwood, 
40  Hun,  532;  Robinson  v.  Ryan,  25 
N.  Y.  320;  Denton  v.  Nat.  Bank,  18 
N.  Y.  Supp.  38;  Moulton  v.  Cornisn, 
138  N.  Y.  133,  33  N.  E.  842. 

^^  Denton  v.  Ontario  Co.  Nat. 
Bank,  150  N.  Y.  126,  44  N.  E.  781; 
Moulton  V.  Cornish,  138  N.  Y.  133, 
33  N.  E.  842,  reversing  16  N.  Y. 
Supp.  267.  And  see  Kendall  v. 
Treadwell,  5  Abb.  Pr.  16,  14  How.  Pr. 
165;  Benedict  v.  Oilman,  4  Paige, 
58;  Peabody  v.  Roberts,  47  Barb.  91. 

In  Moulton  v.  Cornish,  138  N.  Y. 
1.33,  33  N.  E.  842,  the  court  said: 
"It  is  not  necessary  to  hold  that  in 
no  case  can  the  right  to  sell  be  held 
in  abeyance,  but  the  right  cannot  be 
denied  or  suppressed  unless  some 
adverse,  dominating  equity  requires 
it.  If  in  this  case  the  plaintiff  had 
purchased  and  taken  possession  in 
ignorance  of  the  existence  of  de- 
fendant's mortgage,  and  the  defend- 
ant, having  knowledge  of  the  prose- 
cution of  the  foreclosure  action,  had 
made   no   disclosure   of  his   incum- 


497  IN    WHAT   STATES    IT    IS    USED.  [§§    1553-1555. 

§  1552.  North  Carolina. — Foreclosure  was  formerly  made  with- 
out sale.  In  a  case  bei'ore  the  court  in  ISS?,**  liuffin,  C.  J.,  said 
that  "of  late  years  a  beneficial  practice  has  gained  favor,  until  it 
may  be  considered  establislied  in  tbis  country,  not  absolutely  to  fore- 
close in  any  case,  but  to  sell  tbe  mortgaged  premises  and  apply  the 
proceeds  in  satisfaction  of  the  debt:  if  the  former  exceed  the  latter, 
the  excess  is  paid  to  the  mortgager;  if  it  fall  short,  the  creditor 
then  proceeds  at  law  on  his  bond  or  other  legal  security  to  recover 
the  balance  of  the  debt."  It  was  then  the  practice  to  direct  a  sale 
upon  the  application  of  either  party;  but  when  no  such  application 
was  made,  to  decree  a  foreclosure.*^ 

§  1553.  Ohio. — The  rule  formerly  was  that  the  mortgagee  was 
entitled  to  foreclosure  instead  of  a  sale  when  two  thirds  of  the  value 
of  the  mortgaged  premises  did  not  exceed  the  debt.  Now  a  sale  is 
provided  for  in  all  cases.*" 

§  1553a.  Pennsylvania. — A  court  of  equity  has  no  power  to  bar  a 
mortgager  of  his  equity  of  redemption.  This  can  only  be  extin- 
guished by  the  mortgagor's  own  agreement,  by  some  act  done  by  him- 
self that  estops  him,  or  by  a  judicial  sale.*'^ 

§  1553b.  Rhode  Island. — There  may  be  a  strict  foreclosure  in 
accordance  with  equity  practice.^ 


,  48 


§  1554.  Tennessee. — The  court,  as  early  as  1805,  refused  a 
prayer  that  the  property  might  be  vested  in  the  complainant,  but 
directed  a  sale,  according  to  the  provision  of  the  statute  relating  to 
sales  under  execution.*^ 

§  1555.  Vermont.— By  reference  to  the  statutory  provisions  in 
respect  to  foreclosure,  it  will  be  seen  that  the  form  of  foreclosure  in 

brance  upon  the  property,  and  the  County  Nat.  Bank,  150  N.  Y.  126, 
purchaser  was  thus  misled  to  his  44  N.  E.  781,  it  is  declared  in  a  sim- 
prejudice,  it  might  well  have  been  ilar  case  that  strict  foreclosure 
held  that  it  would  be  inequitable  to  should  be  resorted  to  only  in  ex- 
permit    the    defendant    to    exercise  treme  cases. 

the  power  of  sale  in  his  mortgage,        "  Fleming  v.  Sitton,  1  Dev.  &  Bat. 

and  it  might  properly  have  been  de-  F,q.  621. 

creed  that,  unless  he  reimbursed  the        ^' See   §    1352;    Green   v.    Crockett, 

plaintiff,   his    interest    in    the   prop-  2  Dev.  &  Bat.  Eq.  390. 
erty  should  be  deemed  extinguished.        '"' §  1353;   Anon.  1  Ohio,  235;   Hig. 

Other     cases     might     be     suggested  gins  v.  West,  5  Ohio,  554. 
where  such  form  of  relief  would  be        '■  S    1355;    Winton's    App.    87    Pa. 

just.      But    in    all    cases    equitable  St.  77. 

grounds  for  such  a  procedure  must        ^^  Bradford  v.  King,  18  R.  I.  743. 
be   shown."     In   Denton   v.   Ontario        ^'  Hord  v.  James,  1  Overt.  201. 


§§    155()-1558.]         DECREE    OF    STRICT    FORECLOSniE.  498 

equity  is  a  decree  of  strict  foreclosure,  although  there  may  be  a  fore- 
closure by  action  of  law  with  a  similar  result. °° 

§  1556.  Wisconsin. — There  may  be  a  decree  of  strict  foreclosure 
when  this  remedy  is  proper. •'^^  It  may  be  entered  by  consent  of 
parties/^  but  is  not  void  if  entered  without  consent.^^  Land  con- 
tracts are  foreclosed  in  this  manner.^*  In  the  foreclosure  of  a 
mortgage  conditioned  to  support  the  mortgagee  and  to  pay  his 
debts,  the  judgment  should  be  in  the  nature  of  a  strict  foreclosure.^^ 


III.     Pleadings  and  Practice. 

§  1557.  Until  the  whole  debt  becomes  due,  a  conclusive  fore- 
closure of  the  whole  estate  mortgaged  will  not  be  decreed.  Some- 
times the  mortgage  contains  an  express  stipulation  that  the  whole 
debt  shall  be  due  and  payable  upon  default  in  the  payment  of  any 
instalment  of  it  or  of  the  interest  accrued.  Of  course,  the  whole 
debt  in  such  case  being  demandable,  a  decree  of  irrevocable  fore- 
closure as  to  the  entire  debt  may  be  made.^*' 

§  1558.  The  rule  as  to  parties  is  in  general  the  same  as  in  an 
action  for  the  ordinary  decree  of  sale.  All  persons  interested  in  the 
mortgage  or  in  the  property"^  should  be  made  parties.  If  the  rights 
of  some  have  been  already  barred  by  a  previous  action  of  fore- 
closure, only  those  who  still  have  claims  against  the  property  should 
be  made  parties.^®  The  owner  of  the  equity  of  redemption  is  a 
necessary  party  defendant,  and  the  only  one  wholly  indispensable. 
The  decree  operates  directly  upon  the  property,  and  its  effect  is  to 
restore  it,  upon  payment,  to  the  mortgager ;  or,  upon  failure  of  pay- 
ment, to  vest  it  in  the  mortgagee ;  unless,  therefore,  the  mortgagor  or 
his  assignee  be  before  the  court,  the  decree  is  without  efficacy.^^ 
If  subsequent  mortgagees  and  others  interested  in  the  property  are 

=»See  §   1361;    Paris  v.  Hulett,  26  Leveridge   v.    Forty,   1   Maule    <&   S. 

Vt.  308.  706;    Caufman   v.    Sayre,   2   B.   Men. 

'^  Sage  v.  McLaughlin,  34  Wis.  550;  202. 

Bean    v.    Wliitcomb,    13    Wis.    431;  •■■  Thougli  the  interest  be  only  tliat 

Kimball  v.  Darling,  32  Wis.  675.  of   an    attaching   creditor.     Lyon    v. 

"  Salisbury  v.  Chadbourne,  45  Wis.  Sanford,   5   Conn.    544.     See   chapter 

74.                  '  XXXI. 

'^^  Salisbury  v.  Chadbourne,  45  Wis.  ^'Benedict  v.  Gilman,  4  Paige,  58; 

74  Pettingill    v.    Hubbell,   53   N.    J.    Eq. 

''  Landon  v.  Burke,  36  Wis.  378.  584,  32  Atl.  76. 

^^  Bresnahan     v.      Bresnahan,     46  '■°  Goodenow  v.  Ewer,  16  Cal.  461, 

Wis.  385,  1  Wis.  Leg.  N.  217.  76  Am.  Dec.  540. 
^"Stanhope  v.  Manners,  2  Eden,  197; 


499  '   PLEADINGS  AND  PRACTICE.  [§  1559. 

uot  made  parties,  they  are  not  concluded  by  the  proceedings.  But 
while  they  are  proper  parties  they  are  not  necessary  parties.*"'  In 
Connecticut,  where  a  strict  foreclosure  is  the  mode  in  use,  it  is 
held  that  the  bill  may  be  maintained  without  making  any  subse- 
quent incumbrancers  parties.''^  But  the  propriety  of  this  practice 
has  been  called  in  question. ''^  For  if  the  mortgagor  alone  be  made 
a  party  when  there  arc  others  having  rights  in  the  equity  of  re- 
demption, the  foreclosure  merely  extinguishes  his  right  of  redemption; 
and  he  may,  by  acquiring  the  right  of  a  subsequent  incumbrancer, 
proceed  to  redeem,  notwithstanding  the  foreclosure."^  When  a 
prior  mortgagee  who  has  foreclosed  his  mortgage,  and  purchased  a 
part  of  the  mortgaged  premises,  seeks  again  to  foreclose  his  mort- 
gage, as  against  a  junior  mortgagee  not  made  a  party  to  the  first 
action,  the  purchasers  on  foreclosure  of  the  other  portions  of  the 
mortgaged  premises  are  necessary  parties,  so  that  the  liens  of  the 
two  mortgages  may  be  determined  and  adjudicated  as  against  their 
respective  portions.*'* 

§  1559.     In  a  bill  in   equity  for  a  strict  foreclosure  after  the 
death  of  the  mortgagee,  his  heirs  at  law  are  necesssary  parties. 

The  decree  in  such  case  vests  the  legal  title  to  the  premises  in 
the  heir  and  not  in  the  executor.*'^  This  is  the  rule  in  England, 
where  formerly  foreclosure  was  generally  without  sale.^*'  When  the 
bill  is  for  a  sale,  and  not  for  foreclosure,  the  heir  of  the  mort- 
gagee need  not  be  joined.  The  personal  representative  alone  may 
bring  it.*'^ 

^^  Brooks  v.  Vt.  Cent.  R.  R.  Co.  U  mortgaged  vests  absolutely,  by  force 

Blatchf.  463,  472;  Weed  v.  Beebe,  21  of   the   conveyance,   in   the   mortga- 

Vt.  495.  gee,  while  living,  or  in  his  heir  at 

"'  Smith  V.  Chapman,  4  Conn.  344,  law  if  he  be  dead.     The  title  relates 

346.  no  longer  to  the  money,  but  to  the 

"-  Goodman  v.  White,  26  Conn.  317,  land.     Equity  will  permit  the  exec- 

320.  utor    to    follow    the    land    into    the 

•^^  Goodman  v.  White,  26  Conn.  317.  hands  of  the  heir,  so  far,  at  least, 

^*  Moulton    V.    Cornish,    138    N.    Y.  as  to  satisfy  the  mortgage  debt,  but 

133,  33  N.  E.  842.  the  foreclosure  fixes  the  title  in  the 

"^  Osborne  v.  Tunis,  25  N.  J.  L.  633,  heir.     And    the   reason    assigned    in 

"True,"     says     the     Chief     Justice,  the  books  why  the  heir  of  the  mort- 

"while     the     mortgage     retains     its  gagee  should  be  made  a  party  to  a 

character  of  a  pledge,  of  a  mere  se-  bill  filed  oy  the  executor  to  redeem 

curity   for   the  debt,   it  may  be  as-  or  be  foreclosed  is,  that  otherwise, 

signed  by  the  executor.     It  will  pass  if    the    mortgagor    should    redeem, 

by  an  assignment  of  the  bond  as  a  there   would   be   no   one   before   the 

mere  incident  of  the  mortgage  debt,  court  from   whom   a  conveyance  of 

It  is  regarded  as  a  chattel  interest,  the  legal  estate  can  be  taken." 

But    when    the    right    to    redeem    is  ""  1  Fisher's  Mortg.  §  1061. 

foreclosed,  its  character  as  a  pledge  ""Dayton  v.  Dayton,  7  Bradw.  136; 

ceases,    and    the    title    to    the    land  §  1387. 


§§  1560,  1561.]  DECREE  OF  STRICT  FORECLOSURE.  500 

§  1560.  The  pleadings  and  practice  are  substantially  the  same 
as  in  the  ordinary  action,  though  the  plaintiff  sometimes  oit'ers  in 
his  complaint  to  take  the  mortgaged  premises  in  full  payment  and 
satisfaction  of  his  debt.*^®  It  is  not  infrequently  a  matter  of  agree- 
ment between  the  "parties  before  the  suit  is  commenced,  that  by  this 
summary  process  the  mortgagee  shall  be  adjudged  the  absolute  owner 
of  the  property,  and  that  the  mortgagor  shall  thereupon  be  freed 
from  his  debt,  and  in  such  case  the  bill  should  be  drawn  with  ref- 
erence to  such  agreement  or  understanding.  In  other  cases  in 
which  there  is  no  such  agreement,  but  where  the  property  is  about 
equal  in  value  to  the  debt,  and  it  is  the  interest  of  the  mortgagee 
to  have  a  speedy  foreclosure  in  this  manner,  his  offer  to  take  the 
property  in  satisfaction  of  the  debt  would  generally  be  essential  in 
preventing  opposition  to  this  form  of  foreclosure,  and  should  there- 
fore be  set  forth  in  the  bill. 

This  specific  remedy  should  be  prayed  for  in  the  bill;  though  if 
in  the  progress  of  the  cause  the  facts  show  that  a  strict  foreclosure 
is  the  proper  remedy,  and  subject  to  no  objection,  a  decree  might 
be  entered  in  this  form  upon  a  bill  drawn  originally  for  a  fore- 
closure sale;  and  although  a  strict  foreclosure  be  prayed  for,  the 
court  may  decree  a  sale."®  On  the  otlier  hand,  where  a  prior  mort- 
gagee has  brought  a  bill  for  a  strict  foreclosure,  which  is  denied  on 
the  ground  that  he  bought  at  the  foreclosure  sale  with  full  knowl- 
edge that  the  junior  mortgagee  had  not  been  made  a  party  to  the 
foreclosure  suit,  the  prior  mortgagee  is  entitled  to  an  ordinary  decree 
foreclosing  hi.s  mortgage  as  against  the  junior  mortgagee,  notwith- 
standing the  prior  defective  foreclosure.'^" 

8  1561.  The  judgment  in  a  strict  foreclosure  bars  the  defendant 
of  all  right  and  title  and  equity  of  redemption,  unless  he  redeems 
or  pays  the  mortgage  within  a  time  certain  therein  fixed,  and  us- 
ually six  months  from  the  date  of  the  judgment.^^  A  shorter  time 
than  six  months  is  frequently  fixed  upon  in  modem  practice."  It 
is  therefore  interlocutory,   and  makes   provision   applicable  in   case 

«*For  a  form  of  complaint  proper  were   conflicting   equities,    see   Ken- 

in  this  action,  see  Kendall  v.  Tread-  dall  v.  Treadwell,  14  How.  Pr.  165, 

well,  5  Abb.  Pr.  16,  14  How.  Pr.  165.  5   Abb.    Pr.    16.     For   decree  against 

"''  Sage    V.     McLaughlin,    34    Wis.  two  defendants,  of  whom  one  stands 

550;  Sage  v.  Central  R.  Co.  99  U.  S.  in  relation  of   surety   to  the   other, 

334  see    Waters    v.    Hubbard,    44    Conn. 

•^'Moulton   V.    Cornish,    138   N.    Y.  340.     See  Sage  v.  Cent.  R.  Co.  99  U. 

133    33  N.  E.  842;  Pettingill  v.  Hub-  S.  334,  13  West.  Jur.  218. 
beli   53  N.  J.  Eq.  584,  32  Atl.  76.  "  Ellis  v.  Leek,  127  111.  60,  20  N. 

•'  Farrell    v.    Parlier,    50    111.    274.  E.  218. 
For  a  form  of  judgment  where  there 


501  PLEADINGS  AND  PRACTICE.      [§§  15G2,  1563. 

of  a  failure  to  redeem.  When  a  day  is  appointed  upon  which  re- 
demption is  to  be  made,  the  plaintiff  should  attend  at  the  time  and 
place  fixed  to  receive  the  amount  and  release  the  property. 

The  decree  that  the  defendant  pay  the  sum  found  due  on  the 
mortgage  within  the  time  fixed  is  a  final  one,  and  vests  the  title  of 
the  mortgagor  in  the  complainant,  without  any  further  order  or 
decree  after  the  time  allowed  for  payment  has  elapsed. '^^ 

Where  a  town  foreclosed  a  purchase-money  mortgage,  but  after- 
wards extended  the  time  of  redemption  so  that  the  decree  did  not 
become  absolute,  and  upon  redemption  by  the  mortgagor  executed 
to  him  a  quitclaim  deed,  the  mortgagor  was  declared  to  hold  title 
under  his  original  deed  from  the  town,  and  might  "maintain  an  action 
against  it  for  a  breach  of  a  covenant  therein.'^* 

§  1562.  Delivery  of  possession. '^^ — Upon  failure  of  the  defend- 
ant to  pay  the  amount  due  within  the  time  stipulated,  it  seems 
that  application  should  be  made  to  the  court,  founded  upon  proof 
of  a  demand  and  refusal  to  pay  the  amount  adjudged  to  be  paid, 
for  the  issuing  of  a  process  in  the  nature  of  a  writ  of  assistance,  to  put 
the  plaintiff  into  possession.'^*' 

Under  the  English  practice,  however,  upon  a  decree  of  strict  fore- 
closure the  court  does  not  order  a  delivery  of  possession  of  the  prem- 
ises to  the  complainant,  but  leaves  him  to  his  legal  remedy  by 
ejectment."  The  complainant  has  the  legal  title,  and  the  court 
only  declares  that  the  equity  of  redemption  is  foreclosed.  The  de- 
livery of  possession  is  not  necessary  to  give  effect  to  the  decree  of 
court,  as  it  is  in  case  of  a  sale.  If  the  mortgagee  be  in  possession, 
the  decree  may  properly  direct  him  to  vacate  and  release  the  premises 
on  payment  to  him  of  the  sum  found  due.''^^ 

§  1563.  On  a  strict  foreclosure  the  time  allowed  for  redemp- 
tion before  the  foreclosure  becomes  absolute  is  within  the  discre- 
tion of  the  court.      Six  months  was  the  usual  time  formerly  al- 

"  Ellis  V.  Leek,  127  111.  60,  20  N.  ^^  In  Connectiout  provision  is  made 

E.   218;    Mulvey  v.   Gibbons,   87   111.  by   statute   for   delivery    of   posses- 

367.  sion.     SeB  §  1326. 

The  English  practice  is,  upon  mo-  '"  Landon  v.   Burke,   36  Wis.   378; 

tion    after    default   in    making   pay-  Buswell    v.    Peterson,    41    Wis.    82; 

ment  within  the  time,  to  order  that  Diggle   v.    Boulden,    48   Wis.    477,    4 

the    defendant    do    from    henceforth  N.  W.  678. 

stand   forecloeed   of  all   right,   title,  "Sutton  v.  Stone,  2  Atk.  101;  Sea- 

and    equity    of    redemption    in    the  ton's  Decrees,  140. 

premises.     1  Smith's  Ch.  Pr.  532.  "^Kendall    v.    Treadwell,    5    Abb. 

■f^  Daggett  v.   Mendx)n,   64  Vt.   323,  Pr.  16,  14  How.  Pr.  165. 
24  Atl.  242. 


§§  1564,  1565.]  DECREE  OF  STKICT  FOKECLOSLUE.  502 

lowed,'"  but  a  shorter  time  is  frequently  allowed  in  recent  prac- 
tice ;^*^  the  time  is  a  matter,  however,  within  the  discretion  of  the 
court,  having  in  view  the  circumstances  of  the  case.*^ 

In  Vermont  the  time  is  by  statute  made  one  year  f^  and  under  the 
chancery  practice  it  was  before  the  statute  a  year  and  a  week.'*''  The 
time  may  be  enlarged,  and  usually  is  on  application,  but  a  satis- 
factory reason  for  it  must  be  shown.*** 

When  a  sale  is  decreed  instead  of  a  foreclosure,  it  is  not  the  prac- 
tice ordinarily  to  fix  a  day  for  payment  in  failure  of  which  the 
sale  shall  take  place,»=  though  this  course  has  sometimes  been  taken.^° 
The  reason  for  enlarging  the  time  of  redeeming  does  not  apply  in 
case  a  sale  is  ordered  according  to  the  usual  practice;  for  the  mort- 
gagor in  the  case  of  a  sale  is  supposed  to  receive  the  full  value  of 
the  property  by  the  payment  of  the  debt  and  receipt  of  the  surplus, 
and  therefore  applications  for  the  postponement  of  sales  are  not 
ordinarily  allowed. 

§  1564.  When  a  strict  foreclosure  is  had  against  an  infant  heir 
of  the  mortgagor,  he  is  usually  entitled  to  a  day  in  court  after  he 
comes  of  age.  Tlie  former  practice  was  to  allow  him  six  months 
after  coming  of  age,  not  to  go  into  the  accounts  or  to  redeem,  but 
to  show  error  in  the  decree.  A  decree  of  sale,  however,  is  binding 
upon  the  infant.*^ 

§  1565.  As  already  noticed,  a  time  for  redemption  is  always 
allowed  in  a  decree  for  a  strict  foreclosure.     A  decree  which  does 

"  Chicago    &    Vincennes    Railroad  ing  to  the  terms  of  the  decree."     See 

Co.    V.    Fosdick,   96   U.    S.    47.     Mat-  2  Daniell  Ch.  Pr.  997. 

thews,   J.,   said.     "According  to   the  ^"  Ellis  v.   Leek,  127  111.   60,  20  N. 

practice  of  the  English  chancery,  a  E.  218.                                  n   x..  ,,     o-,o 

decree  of  this  nature  in  a  foreclo-  »' Clark  v.   Reyburn,   8   Wall.    318, 

sure  suit,  after  directing  an  account  323;    M'Kinstry  v.  Mervm,  3  Johns 

to  be  taken  of  the  principal  and  in-  Ch.    466,    note;    Ferine    v.    Dunn,    4 

terest  due  to  the  complainant  upon  Johns.    Ch.    140;     Harkins    v.    For- 

the  mortgage,  orders  that,  upon  the  syth,  11  Leigh,  294;   Barnes  v.  Lee, 

aefendant's  paying  the  amount   as-  1  Bibb,  526;    Murphy  v.   N.  H.  Sav. 

certained  and  certified   or  found  to  Bank,  63  N.  H.  362. 

be  due,  within  six  months,  at  such  --See  §  1361. 

time    and    place    as    are    appointed,  *^  Langdon  v.  Stiles,  2  Aik.  184. 

the  complainant  shall  reconvey  the  "*  Monkhouse    v.     Corporation     17 

mortgaged    premises;    but    that,    in  Ves.  380;  Renvoize  v.  Cooper,  1  S.  & 

default    of    such    payment,    the    de-  S.   365;    Quarles  v.   Knight,  8  Pnce, 

fendant   shall   thenceforth   be   abso-  630;   Downing  v.  Palmateer,  1  Mon. 

lutelv  debarred  and  foreclosed  of  his  64,  66.                           ,  .x    o  t^     *.    ott 

equity  of   redemption.     It   is   neces-  '^^  Mussina  v.  Bartlett,  8  Port,  lit, 

sary,  however,  for  the  complainant,  288.                                        „„  ^t   /-,   -no 

in    order    to    complete    his    title,    to  ''  Nimrock  v.  Scanlm.  87  N^  C.  11 J ; 

procure     an     order     confirming     it;  Caphart  v.  Biggs,  77  N.  C.  261,  267. 

otherwise  the  decree  of  foreclosure  Three  months  is  the  usual  time  m 

will  not  be  pleadable.     This  order  of  North  Carolina. 

confirmation    is    procured    on    proof  "  Mills  v.  Dennis,  3  Johns.  Ch.  ob7. 
to  the  court  of  non-payment  accord- 


503  PLEADINGS  AND  PRACTICE,      [§§  1566,  1567. 

not  find  the  amount  due,  nor  allow  any  time  for  the  payment  of 
the  debt  and  the  redemption  of  the  estate,  and  wliieh  is  final  and 
conclusive  in  the  first  instance,  can  not  be  sustained  unless  author- 
ized by  statute.  Although  the  usual  time  of  redemption  allowed  is 
six  months,  yet  it  is  really  within  the  discretion  of  the  court  as  to  • 
the  length  of  it;  but  the  discretion  does  not  extend  to  withholding 
it  entirely.®^ 

Where  the  operation  of  a  decree  of  foreclosure  is  suspended  by  an 
injunction,  the  time  of  redemption  does  not  run  pending  the  in- 
junction. If  the  mortgagor  is  in  possession  and  remains  in  possession 
after  such  decree,  the  rents  and  profits  belong  to  him ;  and  the 
mortgagee  cannot  recover,  upon  the  injunction  bond,  for  timber 
sold,  or  for  the  use  of  the  mortgaged  premises,  before  the  decree 
becomes  absolute,  where  the  value  of  the  premises  is  greater  than 
the  mortgage  debt.  If  the  mortgaged  premises  are  not  redeemed, 
and  are  insufficdent  to  pay  the  debt  in  full,  the  mortgagee's  remedy 
is  by  suit  for  the-  balance  of  the  debt.®^ 

§  1566.  A  foreclosure  in  equity  may  result  from  the  dismissal 
of  a  bill  to  redeem.  In  New  York  it  is,  held  that  after  the  mort- 
gagor's failure  to  pay  within  the  time  limited,  a  final  order  that  the 
bill  be  dismissed  should  be  obtained,  and  thai>  until  this  is  done  no 
title  passes  to  the  mortgagee.^*^  In  Massachusetts  it  is  held  that, 
even  without  a  formal  order  of  dismissal,  a  mortgage  is  foreclosed 
upon  the  mortgagee's  obtaining  a  judgment  for  costs  after  the 
mortgagor  has  failed  to.  pay  the  amount  found  due  in  his  suit  for 
redemption  within  the  time  ordered.  The  judgment  for  costs  sub- 
stantially terminates  the  suit  upon  its  merits. ^^ 

§  1567.  The  effect  of  a  strict  foreclosure  is  not  to  extinguish  the 
debt,  unless  the  premises  are  of  sufficient  value  to  pay  it.  When  this 
is  sufficient  the  debt  is  satisfied.  The-  value  of  the  property  may  be 
ascertained  in  a  suit  at  law  upon  the  mortgage  debt  to  recover  the 
difference.^"     Sometimes,  by  agreement  of  the  parties  or  by  the  offer 

^^  Clark  V.   Reyburn,   8  Wall.   318;  43  111.  464,  470;   Vansant  v.  Allmon, 

Johnson  v.  Donnell,  15  111.  97;  Blan-  23    111.    30;     Spencer    v.    Harford,    4 

CO  V.  Foote,  32  Barb.  535.  Wend.    381;     Morgan    v.    Plumb,    9 

s^  Hill  v.  Hill,  59  Vt.  125,  7  All.  468.  Wend.    287;    De    Grant   v.    Graham, 

°»See    §    1108;    Wood    v.    Surr,    19  1  N.  Y.  Leg.  Obs.  75;  Bassett  v.  Ma- 

Beav.    551;    Hansard    v.    Hardy,    18  son,  18  Conn.  131,  136;    New  Haven 

Ves.  455,  460;   Bolles  v.  Duff,  43  N.  Pipe  Co.  v.  Work,  44  Conn.  230.     In 

Y.    469;    Beach    v.    Cooke,    28   N.    Y.  Connecticut  prior  to   1833  the  fore- 

508,  535,  86  Am.  Dec.  260;   Perine  v.  closure  extinguished  the  debt,  what- 

Dunn,  4  Johns.  Ch.  140.  ever  may  have  been  the  value  of  the 

'^  Stevens  v.  Miner,  110  Mass.  57.  property.     Derby    Bank    v.    Landon. 

^=See   §    950;    Edgerton  v.    Young,  3    Conn.    62,   63;    Swift  v.    Edson,    5 


§§  1568,  1569.]  DECREE  OF  STRICT  FORECLOSURE.  504 

of  the  plaintiff,  the  decree  transferring  the  absolute  title  to  him  is  ex- 
pressly taken  in  full  satisfaction  of  the  debt  and  the  dscree  should 
then  so  provide.'*^  A  debt  not  included  in  the  decree  is  not  satisfied 
by  the  foreclosure;  and  it  may  be  shown  by  parol  whether  a  par- 
ticular debt  was  included  in  the  decree.^*  But  the  decree  does  not 
operate  to  satisfy  the  debt,  or  any  part  of  it,  until  it  has  become 
absolute  by  the  expiration  of  the  tinie  limited  in  it  within  which  the 
mortgagor  may  pay  the  debt  arid  redeem  the  estate.^^ 

There  is  no  judgment  for  a  deficiency  in  this  form  of  foreclo- 
sure.^^ The  statutes  providing  for  such  a  judgment  relate  wholly 
to  foreclosures  by  sale.  Very  frequently  the  plaintiff  releases  the 
mortgagor  from  personal  liability.  He  can  enforce  it  only  by  suit  at 
law. 

§  1568.  Costs.  Ordinarily  costs  will  be  allowed  as  upon  a  de- 
cree for  sale.  If,  however,  as  is  common  where  this  form  of  fore- 
closure is  used  only  in  special  cases,  the  mortgagee  has  proposed 
to  take  the  property  and  discharge  the  debt,  no  costs  are  allowed. 
In  all  cases  the  court  has  discretionary  power  in  this  matter.  When 
a  purchaser  at  a  foreclosure  sale  brings  a  bill  for  a  strict  foreclosure 
against  a  prior  judgment  creditor  who  was  not  a  party  to  the  former 
foreclosure  suit,  if  he  wishes  to  redeem  he  must  pay  the  costs  of  suit, 
but  not  the  costs  of  the  suit  on  which  the  sale  was  made." 


IV.     Setting  aside  and  opening  the  Foreclosure. 

§  1569.     A  strict  foreclosure  may  be  set  aside  for  many  of  the 
same  causes  for  which  a  foreclosure  sale  is  set  aside.^^    As  the  effect 

Conn.  531;  M'Ewen  V.  Welles,  1  Root,  property     upon     proper     evidence. 

202    1  Am    Dec.  39;  Fitch  v.  Coit,  1  Windham  Co.   Sav.  Bank  v.   Himes, 

Root,  266.     An  act  of  that  year  (G.  55   Conn.   433,   12   Atl.   517.     In  Ver- 

S.   1875,   p.   358,   §   2)    provided   that  mont    the    decree,    whether    upon    a 

the  foreclosure  should  not  preclude  bill  in  chancery  or  in  an  action  of 

the  mortgage  creditor  from  recover-  ejectment,    after    the    expiration    of 

ing  the  difference  between  the  value  the  time  of  redemption,  operates  as 

of  the  property  estimated  at  the  e'.i-  satisfaction  in  whole  or  pro  tanto, 

piration  of  the  time  limited  for  re-  as  the  case  may  be.     Paris  v.  Hulett, 

demption    and    the    mortgage    debt.  26  Vt.  308. 

Laws  1878,  ch.  129,  §  2,  provided  for  »^  Wait's  Prac.  248,  249. 

the  appointment  of  appraisers  to  de-  °*  Goddard  v.  Selden,  7  Conn.  515, 

termine  the  value  of  the   property.  520. 

It  was  held  that  the  two  statutes  to-  »^  Peck's  Appeal.  31  Conn.  215. 

gether   left   it   optional   with    either  ^<=  Bean  v.  Whitcomb.  13  Wis.  431. 

of  the  parties  whether  there  should  "'  Benedict  v.  Gilman.  4  Paige,  58; 

be  an  appraisal,  or  whether  the  court  Vroom  v.  Ditmas,  4  Paige,  526. 

should  determine   the   value  of   the  "''See  §§  1668-1681. 


505  SETTING   ASIDE   AND    OPENING.  [§    1569. 

of  the  decree  is  to  vest  an  absolute  title  in  the  holder  of  the  mort- 
gage, so  long  as  he  retains  the  title  he  stands  very  much  in  the  same 
relation  to  the  property  and  to  the  mortgagor  as  does  a  mortgagee 
who  has  bought  the  property  at  a  foreclosure  sale,  and  against  whom 
the  court  would  more  readily  set  aside  the  foreclosure  sale  than  against 
a  stranger  who  had  in  good  faith  made  the  purchase,^''  After  the  fore- 
closure the  relations  of  the  parties  are  also  very  much  the  same  as  they 
would  be  if  the  mortgage  had  been  foreclosed  by  entry  and  possession 
in  the  manner  in  use  in  Massachusetts;  and  the  foreclosure  will  be 
waived  or  opened  by  the  subsequent  dealings  of  the  parties  between 
themselves  in  the  same  manner  ;^°^  as,  for  instance,  by  the  payment  of 
part  of  the  amount  due  ;^°^  by  their  treating  the  debt  as  still  due  ;'^'^^  or 
by  their  agreeing  in  any  way  that  the  foreclosure  shall  have  no  effect,^"^ 
or  by  the  mortgagee's  treating  the  foreclosure  as  of  no  effect."* 

The  opening  of  a  decree  of  foreclosure  does  not  depend  upon  the 
inquiry  whether  the  proceedings  in  the  case  were  regular,  but  may 
depend  wholly  upon  equitable  considerations  in  any  way  affecting 
the  rights  of  parties."^  Where  the  failure  of  the  mortgagor  to  pay 
according  to  the  decree  was  not  through  his  own  negligence,  but  in 
consequence  of  propositions  for  settlement  and  payment  which  were 
to  be  carried  into  effect  after  the  time  of  payment  had  expired, 
and  the  failure  to  perform  this  was  on  the  part  of  the  mortgagee, 
the  decree  of  foreclosure  was  opened.""  The  mortgagee's  promise  to 
give  the  mortgagor  further  time  for  redemption  after  the  expiration 
of  the  decree  does  not  entitle  the  mortgagor  to  claim  that  the  de- 
cree be  opened,  if  he  has  made  no  offer  to  perform  his  part  of  the 
agreement."^  A  promise  by  the  holder  of  a  mortgage  or  decree  of 
foreclosure  to  allow  a  redemption  after  the  expiration  of  the  decree  is 
equally  binding  upon  one  who  purchases  the  decree  with  knowledge 
of  such  promise."^  A  decree  was  opened  after  the  expiration  of  the 
time  limited  for  redemption,  for  the  reason  that  the  mortgagor, 
having  paid  part  of  the  debt,  fell  sick  on  a  journey  undertaken  for 
the  purpose  of  obtaining  the  balance  of  the  money,  and  was  unable 
to  get  back  until  ten  days  after  the  time  limited,  when  he  tendered  the 
amount."'^  It  was  opened,  also,  in  a  case  where  the  mortgagor  sup- 
s'" See  §  1671  .  i^^Coler  v.  Barth,  24  Colo.  31. 
""See  S§  1265-1275.  "'^Bridgeport  Savings  Bank  v.  El- 
"1  Converse  v.  Cook,  -S  Vt.  164,  dredge,  28  Conn.  556,  73  Am.  Dec. 
Smallev  v.  Hickok,  12  Vt.  153;  Gil-  688. 
son  V.  Whitney,  51  Vt.  552.  ""'■  Pierson  v.  Clayes,  15  Vt.  93. 

"=  Bissell   V.    Bozman,   2    Dev.    Eq.         """  Blodgett  v.  Hobart,  18  Vt.  414. 
154.  '"*•  Woodward    v.    Cowdery,    41    Vt. 

"=•  Griswold    v.    Mather,    5    Conn.    496. 
435.  »"» Doty  v.  Whittlesey,  1  Root,  310. 


g  1569.]         DECREE  OF  STRICT  FORECLOSURE.  50G 

posed  he  had  made  a  valid  tender  within  the  time  limited,  though  by 
informality  in  was  not  good.^^" 

If  the  mortgagor  against  whom  a  decree  of  foreclosure  has  been 
entered  limiting  the  time  of  redemption  to  a  particular  day  is  pre- 
vented from  paying  the  debt  and  redeeming,  by  the  happening  of 
an  unforeseen  event  over  which  he  had  no  control,  a  court  of  equity  will 
open  the  foreclosure.  This  was  done  in  a  case  where  the  foreclo- 
sure was  to  become  absolute  on  the  fifth  day  of  August.  The  property 
was  worth  more  than  eight  thousand  dollars,  and  was  nearly  all  the 
mortgagor  had,  and  the  debt  was  less  than  four  thousand  dollars.  The 
mortgagor  had  relied  upon  receiving  the  money  from  an  uncle  who 
had  ample  means,  and  had  promised  to  furnish  it  on  the  third  day  of 
August,  but  unexpectedly  failed  to  do  so.  On  the  evening  of  the  fifth 
day  of  August  the  mortgagor  procured  a  person  who  had  the  neces- 
sary amount  in  United  States  bonds,  but  not  in  money,  to  go  to  the 
mortgagee's  house  that  evening.  This  person,  finding  that  the  mort- 
gagee had  gone  to  bed,  sent  him  word  by  his  wife  that  he  had  come  to 
redeem  the  mortgaged  property ;  to  which  the  mortgagee  replied  that  he 
was  sick,  and  so  nothing  further  was  done.  The  mortgagor  was  al- 
lowed to  redeem. ^^^ 

If  the  mortgagee,  after  a  decree  of  foreclosure  and  before  the 
expiration  of  the  time  limited  for  redemption,  says  to  the  mortgagor 
that  he  may  pay  the  debt  after  the  time  limited,  and  that  no  ad- 
vantage should  be  taken  of  the  decree,  and  the  mortgagor  in  con- 
sequence allows  the  time  to  expire  without  paying  the  debt,  the 
foreclosure  will  be  opened.  The  mortgagor  is  also  entitled  to  equitable 
relief  if  the  decree  has  been  obtained  by  fraud,  or  if  after  it  is  ob- 
tained he  is  deceived  in  relation  to  the  time  limited  for  redemp- 
tion, and  he  consequently  fails  to  redeem  ;^^-  or  if  no  service  of  the 
summons  was  made  upon  him,  and  he  had  no  actual  knowledge  of 
the  pendency  of  the  suit  until  after  the  time  of  redemption  had  ex- 
pired, though  tlie  decree  found  that  service  had  been  made.^^^ 

Where  the  parties  to  a  foreclosure  suit  agreed  upon  a  time  for 
redemption  to  be  limited  by  the  decree,  but  by  mistake  the  time 
was  not  inserted  in  the  decree,  the  mortgagor  at  the  end  of  three 
years  after  the  time  so  limited  by  agreement  was  not  allowed  to  open 
the  foreclosure  and  redeem.  The  mortgagor  could  equitably  ask  for 
nothing  more  than  the  correction  of  the  mistake,   and  this   would 

"°  Crane  v.  Hanks,  1  Root,  468.  "'  Bridgeport  Savings  Banlc  v.  EI- 

"1  Bostwick  v.  Stiles,  35  Conn.  195.     dredge,  28  Conn.  556,  561. 
'^- Weiss  v.  Ailing,  34  Conn.  60. 


507  SETTING   ASIDE   AND   OPENING.  [§    1570, 

avail  him  nothing."^     This  relief  may  be  had  on  an  ordinary  bill  to 
redeem,  taking  no  notice  of  the  decree  of  foreclosure.^^^ 

8  1570.  In  any  case  where  proper  service  has  not  been  made 
on  a  defendant,  the  foreclosure  will  be  opened,  or  he  will  be  al- 
lowed on  application  to  have  the  judgment  set  aside  and  to  appear  in 
the  suit.^^*^  In  his  application  for  such  relief  he  must  tender  pay- 
ment of  the  mortgage  debt,  or  show  his  readiness  to  do  so.^^^  Where 
notice  of  a  bill  for  foreclosure  was  ordered  by  the  court  to  be  given 
by  mailing  an  attested  copy  of  the  lull  to  the  parties  interested  in 
the  property,  and  a  subsequent  mortgagee  did  not  receive  the  notice, 
and  had  no  knowledge  of  the  suit  until  after  a  decree  had  been 
passed  and  tlie  time  limited  for  redemption  had  expired,  the  fore- 
closure was  opened  and  further  time  for  redemption  allowed.^" 

"^Colwell  v.  Warner,  36  Conn.  224.  kinson  v.  Chilson,  71  Wis.  131,  36  N... 

"^  Bridgeport  Savings  Bank  v.  El-  W.  836. 

dredge,  28  Conn.  556,  73  Am.  Dec.  688.  '"  Hatch  v.  Garza,  7  Tex.  60. 

I"' Fall     V.     Evans,     20     Ind.     210;  •'«  Bank    v.    Norwich    Savings    So- 

Mitchell  V.  Gray,  18  lad.  123;   Wil-  ciety,  37  Conn.  444. 


CHAPTER  XXXV. 

DECREE  OF  SALE. 


I.  A     substitute     for     foreclosure, 
1571-1573. 

II.  The  form  and  requisites  of  the 

decree,  1574-1586. 

III.  The    conclusiveness    of    the    de- 

cree, 1587-1589. 


IV.  The  amount  of  the  decree,  1590- 

1601. 
V.  Costs  and  Attorney's  fees,  1602- 
1607. 


I.     A  Substitute  for  Foreclosure. 

§  1571.  Generally.— As  already  noticed,  the  earliest  remedy 
sought  in  chancery  in  the  foreclosure  of  mortgages  was  a  decree 
wholly  cutting  off  the  debtor's  right  to  redeem,  and  vesting  the 
estate  absolutely  in  the  mortgagee.  This  procedure,  when  the  prop- 
erty exceeded  in  value  the  debt,  sometimes  operated  harshly  upon  the 
debtor.  It  operated  unjustly  to  the  creditor  as  well  when  the  property 
was  insufficient  to  pay  the  debt,  because  no  convenient  remedy  was  af- 
forded him  to  collect  the  deficiency.  A  more  equitable  system  was 
early  adopted  by  the  courts  in  this  country,  under  which  the  property 
.  was  sold  for  the  benefit  of  the  parties  interested,  and  the  proceeds  ap- 
plied first  to  the  payment  of  the  mortgage  debt,  and  the  surplus,  if 
any,  paid  to  the  debtor  or  his  assigns.  If  a  balance  of  the  debt 
remained  unpaid  after  applying  the  proceeds  of  the  property,  an  ac- 
tion at  law  might  be  had  against  the  debtor  to  recover. 

Now  in  many  States,  under  the  new  codes  of  civil  practice,  the 
formal  distinction  between  suits  in  equity  and  suits  at  law  has  been 
done  away  with,  and,  though  foreclosure  remains  of  course  an  equi- 
table procedure;  provision  is  made  for  a  decree  or  judgment  in  this 
proceeding,  not  only  for  a  sale  of  the  property,  but  also  for  a  re- 
covery of  any  balance  of  the  debt  remaining  after  the  sale,  thus 
avoiding  the  necessity  of  a  separate  action  at  law. 

508 


509  SUBSTITUTE  FOR  FORECLOSURE.  [§  1572. 

§  1572.  In  England  the  usual  practice  formerly  was  to  decree  a 
strict  foreclosure  though  the  Court  of  Chancery  had  the  power, 
without  the  aid  of  any  statute,  to  order  a  sale  of  the  property/ 
jSTow  it  is  provided  by  the  Chancery  Improvement  Act,^  that  upon 
the  request  of  the  mortgagee,  or  of  any  subsequent  incumbrancer, 
or  of  the  mortgagor,  or  of  any  person  claiming  under  them  respec- 
tively, the  court  may,  instead  of  a  foreclosure,  direct  a  sale  of  the 
property  upon  such  terms  as  it  may  deem  proper.  The  consent  of 
the  mortgagee,  or  those  claiming  under  him,  is  requisite  to  a  sale, 
when  the  request  for  it  is  made  by  any  other  person,  unless  the  party 
making  the  request  deposits  a  reasonable  sum  of  money  for  the  pur- 
pose of  securing  the  performance  of  such  terms  as  the  court  may 
impose  upon  him.^  Under  this  statute  the  parties  have  no  absolute 
right  to  require  a  sale,  but  the  court  has  power  in  its  discretion  to 
grant  it;  and  this  is  now  the  usual  course.  A  sale  may  be  directed 
against  the  wish  of  the  mortgagor.*  Where  the  security  has  been 
scanty,  it  has  always  been  deemed  proper  to  direct  a  sale;^  as  also 
when  the  property  was  unproductive.*^ 

An  equitable  mortgagee  by  deposit  of  title  deeds  is  entitled  to  a 
decree  of  foreclosure  instead  of  sale."^  The  usual  practice  in  grant- 
ing a  sale  of  the  property  was  to  give  a  limited  time,  varying  from 
one  month*  to  six  months,^  within  which  the  mortgagor  might 
redeem  before  the  sale.  Sometimes,  however,  an  immediate  sale 
was  ordered,  as  where  the  property  was  unproductive,^"  or  where  for 
any  reason  this  seemed  to  be  for  the  benefit  of  all  the  parties. ^^  It 
was  also  the  practice,  in  case  the  equity  of  redemption  belonged  to 
an  infant  heir  or  devisee,  to  direct  a  sale  with  the  consent  of  the 
mortgagee,  because  a  sale  would  bind  the  infant,  but  he  would  be 
entitled  to  a  day  after  coming  of  age  to  show  cause  against  a  decree  of 
foreclosure.^^ 

But  in  this  country  a  sale,  with  rare  exception,  being  made  in  all 
cases,  the  only  inquiry  where  infants   are  concerned  is,   whether   a 

•2    Story's    Eq.    §§    1024-1026.     In  ^  James  v.  James,  L.  R.  16  Eq.  153. 

Ireland  the  decree   is  always  for  a  *  Smith  v.  Robinson,  1  Sm.  &  Gift. 

sale.     Hutton  v.  Mayne,  3  Jo.  &  Lat.  140;  Staines  v.  Riidlin,  16  Jur.  965. 

586.  » Bellamy  v.    Cockle,   18  Jur.   465; 

M5  &  16  Vict.  ch.  86,  §  48.  Daniell's  Ch.  p.  1152. 

^  The  deposit  must  be  sufficient  to  '"  Foster  v.  Harvey,  11  Weekly  R. 

cover    an    unsuccessful    attempt    to  899. 

sell.     Bellamy  v.  Cockle,  18  Jur.  465  "  Hewitt  v.  Nanson,  28  L.  J.  (Ch.) 

^Newman   v.    Selfe,   33   Beav.    522.  49. 

*And  see  Woodford  V.  Brooking,  L.  R.  '-Fisher's    Mortg.    pp.    526,    1018; 

17  Eq.  425.  Scholefield   v.   Heafield,   7  Sim.   667; 

^  Dashwood   v.    Bithazey,   Moseley,  Davis    v.    Dowding,    2    Keen,    245; 

196.  Booth  V.  Rich,  1  Vern.  295. 

"  How  V.  Vigures,  1  Ch.  R.  18. 


g  1573.]  .      DECREE  OF  SALE.  510 

sale  of  the  whole  or  of  a  part  of  the  premises  will  be  most  for  the 
infant's  benefit,  and  a  reference  should  be  made  to  ascertain  this  fact, 
and  what  part  sluill  be  sold  if  less  than  the  whole.^^ 

§  1573.  Independently  of  all  statutory  provisions  a  court  of 
equity  has  jurisdiction  to  order  a  sale  and  provide  for  carrying  it 
out/*  although  in  most  of  the  States  where  foreclosure  is  effected  by 
a  judicial  sale  there  are  statutes  providing  for  this,  and  regulating  it. 
No  sale  can  be  made  without  a  decree  of  court  for  that  purpose  first 
obtained. ^^  Although  the  practice  of  foreclosure  and  sale  of  the  mort- 
gaged property  in  equity  is  traced  to  the  civil  law,"  where  the  remedy 
was  generally  by  a  proceeding  in  rem  for  a  sale  of  the  property,  yet 
under  that  law  it  was  not  indispensable  that  the  mortgagee  should  ob- 
tain a  judicial  decree  for  such  sale ;  the  mortgagee  might  also  by  his 
own  act,  after  giving  a  certain  prescribed  notice  to  the  debtor,  sell 
the  property  and  reimburse  himself  from  the  proceeds  of  the  sale.^'' 
If  the  debtor  could  not  be  found  so  as  to  serve  the  notice  upon  him, 
an  order  of  court  was  necessary.  This  right  to  sell  was  not  confined  to 
cases  where  the  parties  had  expressly  provided  for  it,  but  might  be  ex- 
ercised as  well  when  the  mortgage  itself  was  silent  upon  the  matter.^'' 
But  under  the  common  law  practice  the  mortgagee  is  never  allowed  to 
sell  by  his  own  voluntary  act  without  a  judicial  decree,  except  when 
a  power  of  sale  is  expressly  given  him;  and,  even  when  he  has  such 
special  authority,  in  some  States  it  is  required  by  statute  that  a  decree 
for  the  sale  shall  first  be  obtained,  and  the  sale  thus  becomes  a  judicial 
sale  rather  than  a  sale  under  the  power. 

A  court  of  equity  after  having  made  a  decree  ordering  a  foreclo- 
sure sale  and  appointing  a  special  master  to  conduct  it,  may  make  an 
order  postponing  the  sale  at  the  request  of  a  large  part  of  the  bondhold- 
ers secured  by  the  mortgage  who  are  not  parties  to  the  suit  without 
notice  to  the  mortgagor  or  other  parties  interested.    The  rights  of  all 

"  Mills  v.  Dennis,  3  Johns.  Ch.  367.  the    mortgaged    property    prevailed 

"  Lansing   v.    Goelet,    9    Cow.    346,  under  the  colonial  government. 

352,  where  Chancellor  Jones,  in  an  ^'  Hart  v.  Ten  Eyck,  2  Johns.  Ch. 

elaborate  opinion,  justifies  the  prac-  62,    100.     "There    never   was   an    m- 

tice  of  courts  of  equity  in  ordering  stance,"   says   Chancellor   Kent,   "in 

sales;   Mills  v.  Dennis,  3  Johns.  Ch.  which  the  creditor  holding  land   Ui 

367;    Williams's  case,   3   Bland,   186,  pledge   was    allowed    to    sell    at   his 

193;    Belloc   v.    Rogers,    9    Cal.    123;  own  will  and  pleasure." 

Green  v.  Crockett,  2  Dev.  &  B.  Eq.  ''  Story's  Eq.  Juris.     §§  1008,  1011. 

390,  393.  "  Story's  Eq.  Juris.     §§  1008,  1024. 

The  earliest  statute  in  New  York  ^^'  Story's  Eq.  Juris.  §  1009.     "Evea 

recognizing  a  foreclosure  sale  is  that  an    agreement    between    them,    that* 

of  April  3,  1801;  Laws  of  N.  Y.  (Web-  there  should  be  no  sale,  was  so  far 

ster  &  Skinner's  ed.)  443;  though  it  invalid  that  a  decretal  order  of  sale 

is  said  that  the  practice  of  selling  might  be  ootained  upon  the  applica- 
tion of  the  creditor." 


511  FORM    AND   REQUISITES    OF    DECREE.  [§    1574. 

parties  are  protected  sufHciently  Ijy  iiotico  of  the  time  to  which  the 
sale  is  adjourned.^''' 

There  is  no  rule  in  equity  which  prevents  a  mortgage  cretlilor 
from  taking  a  general  decree  of  foreclosure  on  the  mortgage  for  the 
reason  that  he  has  already  obtained  a  judgment  lien  on  other  real 
estate  of  the  mortgage  debtor  for  the  same  debt.^" 

A  decree  for  the  foreclosure  of  a  mortgage  is  not  a  lien  on  any  real 
estate  of  the  defendant  other  than  that  embraced  in  the  mortgage, 
although  the  decree  be  in  form  that  the  complainant  recover  of  the 
defendant  a  specific  sum  of  nioney.-^ 


•  II.     The  Form  and  Requisites  of  the  Decree.  • 

§  1574.  In  general.  The  decree  for  the  sale  of  the  premises  should 
contain  a  description  of  the  property  to  be  sold;  a  statement  of  the 
amount  of  the  debt ;  a  direction  that  the  premises,  or  so  much  of  them 
as  may  be  necessary,  shall  be  sold  by  an  officer  designated,  who  shall 
execute  a  deed  to  the  purchaser;  and  that  out  of  the  proceeds  of  the 
sale  he  pay  to  the  plaintiff  the  amount  of  his  debt,  interest,  and  costs, 
together  with  the  expenses  of  the  sale.  It  is  usual  to  provide  that  the 
plaintiff  may  purchase  at  the  sale,  and  that  the  purchaser  shall  be  let 
into  possession  on  the  production  of  the  deed.  If  a  personal  judg- 
ment is  asked  for  and  is  proper,  the  defendants,  who  axe  personally 
liable  for  the  debt,  must  be  designated.^-  A  personal  judgment  against 
the  defendant,  followed  by  the  usual  order  of  sale,  may  be  regarded  as 
a  finding  of  the  amount  due,  and  is  in  effect  a  judgment  of  foreclosure 
and  sale.-^  If  redemption  is  allowed  after  sale,  this  right  should  be 
provided  for  in  the  decree,  although  it  will  not  be  considered  as  denied 
if  not  provided  for.-* 

Where  there  is  no  one  before  the  court  who  is  personally  liable 
on  the  mortgage  debt,  the  decree  is  in  rem,  and  the  proper  form  is  to 
find  the  amount  due  on  the  mortgage  and  order  the  premises  sold  un- 
less the  amount  is  paid  within  the  time  fixed  by  the  decree. ^^ 

As  regards  the  description,  an  order  for  the  sale  of  the  "mort- 
is Old    Colony   Trust   Co.    v.    Great    Wait's  Prac.  218;    Ailing  v.   Nelson, 
White   Spirit   Co.   181   Mass.   413,  63    55  Neb.  161,  75  N.  W.  581. 
N.  E.  945.  =■'  Boynton  v.   Sisson,  56  Wis.  401, 

="  Gushee    v.    Union    Knife    Co.    54    14  N.  W.  373. 
Conn.  101.  ^^Boester    v.    Byrne,    72    111.    466; 

=^  Scott  V.  Russ,  21  Fla.  260;  Clapp  Charter  Oak  L.  Ins.  Co.  v.  Stephens 
V.  Maxwell,  13  Neb.  542.  CITtah),  15  Pac.  253. 

"Leviston  v.  Swan,  33  Cal.  480,  5        -'Crawford    v.    Nimmons,    180    111. 

143,  54  N.  E.  209. 


§  1575.]  DECREE  OF  SALE.  513 

gaged  premises  mentioned  in  complainant's  bill"  is  not  void  be- 
cause followed  by  an  erroneous  description,  if  the  premises  are 
correctly  described  in  the  bill  in  the  master's  report  of  sale,  which 
is  confirmed  by  the  final  decree,  and  in  the  master's  deed  of  the 
property.  The  grantee  in  such  deed  acquires  a  valid  title  to  the 
property.^®  A  decree  which  designates  an  entire  tract  of  land  by  name, 
giving  the  number  of  acres,  the  county  in  which  it  is  situated,  the  ad- 
joining survey,  and  the  beginning  corner,  is  not  void  for  want  of  de- 
scription.'^ 

§  1575.  The  decree  and  order  of  sale  may  properly  follow  the 
terms  of  the  mortgage,  when  this  upon  its  face  appears  to  convey  the 
entire  estate,  and  the  officer  must  sell  accordingly;  but  the  purchaser 
will  take  only  the  interest  the  mortgagor  had  in  the  premises,  and 
it  is  no  ground  for  reversal  that  the  mortgagor  had  only  an  equitable 
interest.^^  If  the  mortgagor  had  no  title  to  a  portion  of  the  premises 
embraced  in  the  mortgage,  this  portion  may  properly  be  omitted  from 
the  order  of  sale.^^  When  the  terms  of  the  mortgage  are  followed  in 
the  direction  of  sale,  and  the  sheriff  or  referee  sells  a  less  estate  than 
that  expressed  in  the  mortgage,  as,  for  instance,  a  leasehold  estate 
when  the  mortgage  erroneously  described  an  estate  in  fee,  the  sale 
transfers  all  the  title  the  mortgagor  had  in  the  premises,  and  it  does  not 
lie  with  the  mortgagor,  nor  with  a  purchaser  who  has  full  knowledge  of 
the  facts,  to  object.^" 

It  is  usual  to  embody  in  the  order  of  sale  a  full  description  of 
the  property  to  be  sold,  with  the  particular  boundaries  of  it,  so  far 
at  least  as  they  can  be  ascertained  from  the  mortgage.  But  this 
is  not  essential.  The  decree  of  sale,  instead  of  describing  the  mort- 
gaged property  at  length,  may  direct  a  sale  of  the  premises  as  described 
in  the  complainant's  bill;  and  if  the  premises  are  properly  described 
in  the  bill  or  in  the  mortgage,  and  this  is  made  part  of  the  bill  as  an  ex- 

=' Thompson  v.  Crocker  (Colo.),  32  sufficient.    Wilson  v.  Smith,  50  Tex. 

Pac.  831.  366.     In  the  present  case,   however, 

"  Thompson  v.  Jones,  77  Tex.  626,  ...  it  cannot  be  said  from  the  face 

12  S.  W.  77,  per  Hobby,  J.   "It  is  true  of  the  judgment  and  order  of  sale 

that  less  indulgence  is  shown  in  fa-  that  they  are  void  for  want  of  de- 

vor  of  descriptions  of  property  con-  scription.     Knowles    v.    Torbitt,    53 

tained    in    deeds    based    on    compul-  Tex.  557;  Steinbeck  v.  Stone,  53  Tex. 

sory    sales    under    judicial    process  382.'' 

than  in  those  contained  in  deeds  be-  "Jones  v.  Lapham,  15  Kans.  540; 

tween    private    parties.     Mitchell    v.  Norris   v.   'Luther,   101   N.    C.   196,   8 

Ireland,  54  Tex.  301.     And  where  the  S.  E.  95;   Schwartz  v.  Palm,  65  Cal. 

description  is  of  a  part  of  a  tract  or  54. 

survey,  leaving  an  undesignated  por-  -"  Castro  v.   lilies,  22  Tex.   479,  73 

tion  unsold,  and  there  is  no  means  Am.  Dec.  277. 

of  distinguishing  it  from  the  portion  ""'  Graham  v.  Bleakie,  2  Daly,  55. 
sold,   the   description   would   be   in- 


513  FORM    AND  .REQUISITES    OF    DECREE.  [§    1576. 

hibit  no  formal  description  is  necessary  in  the  decree.^^  But  if  it 
cannot  be  ascertained  to  what  land  the  decree  refers,  it  will  be  void 
for  indefiniteness.^^  If  the  original  mortgage  contains  in  the  descrip- 
tion of  the  premises  a  latent  ambiguity  which  renders  it  uncertain  what 
are  the  boundaries,  the  court  may  by  its  judgment  fix  the  boundaries 
of  the  land  with  reference  to  the  foreclosure  sale.^^ 

If  by  mistake  lands  not  included  in  the  complaint  are  included  in  the 
judgment  the  foreclosure  sale  does  not  give  title  to  such  lands.    The 
decree  relates  to  the  land  described  in  the  complaint,  and  properly  con- 
strued does  not  direct  a  sale  of  any  other  lands.^* 

If  the  decree  makes  unnecessary  and  erroneous  recitals  in  regard 
to  the  note  and  mortgage,  the  errors  should  be  regarded  as  clerical 
errors,  it  appearing  from  the  whole  record,  with  reasonable  certainty, 
that  the  decree  was  rendered  in  the  cause  of  action  set  up  in  the  fore- 
closure suit.^^ 

§  1576.  Order  of  sale. — If  portions  of  the  premises  have  been  sold 
subsequent  to  the  mortgage,  the  decree  should  provide  that  the  por- 
tion still  owned  by  the  mortgagor,  or  the  person  equitably  bound  to 
pay  the  debt,  shall  be  first  sold,  and  then  the  portions  previously 
alienated  in  the  inverse  order  of  their  alienation.^"  If  a  party  to  the 
suit  desires  to  have  the  premises  sold  in  a  particular  order,  he  should 
see  that  the  decree  so  provides;  or  after  the  entry  of  the  decree  he 
may  move  for  an  order  to  the  referee  directing  the  manner  in  which 
the  premises  are  to  be  sold.^^  In  order  to  ascertain  the  respective 
equities  of  different  owners,  the  court  may  order  a  reference.^'*  If 
the  owner  of  the  land  makes  no  request  as  to  the  order  in  which 
several  tracts  of  land  included  in  the  mortgage  shall  be  sold,  he  caji- 
not  upon  appeal  object  to  a  decree  of  court  definitely  fixing  the  order 
of  sale.^** 

Where  a  mortgage  covers  several  parcels  of  land,  and  the  court 

»i  Logan  V.  Williams,  76  111.  175.  ="  New  York  Life  Ins.  &  Trust  Co. 

As  to  omission  of  name  of  county  v.  Milnor,   1  Barb.   Ch.   353;    Knick- 

and  State  in  which  the  property  is  erbacker   v.    Eggleston,   3   How.    Pr. 

situated,  see  Burton  v.  Ferguson,  69  130;  Rathbone  v.  Clark,  9  Paige,  648; 

Ind.  486.  Worth  v.  Hill,  14  Wis.  559;   State  v. 

As  to  sufficiency  of  description,  see  Titus,  17  Wis.  241;  Ogden  v.  Glidden, 

Thompson  v.  Jones,  77  Tex.  626,  12  9  Wis.   46;    Warren  v.   Foreman,   19 

S.  W.  77.  Wis.  35;Cheever  v.  Fair,  5  Cal.  337. 

^^  Kibbe  v.  Thompson,  5  BIss.  226.  "  Vandercook  v.  Cohoes  Sav.  Inst. 

«  Doe  V.  Vallejo,  29  Cal.  385.  5  Hun,  64L 

=*Clapp  V.  McCabe,  155  N.  Y.  525,  •^'' Bard  v.  Steele,  3  How.  Pr.  110; 

50  N.  E.  274;  Hasten  v.  Olcott,  101  N.  New  York  Life  Ins.  &  Trust  Co.  v. 

Y.  152,  4  N.  E.  274;  Laverty  v.  Moore,  Cutler,  3  Sandf.  Ch.  176. 

33  N.  Y.  658.  s-*  Price  v.  Lauve,  49  Tex.  74. 

^'  Hague  V.   Jackson,   71   Tex.    761, 
12  S.  W.  63. 


§  1577.]  DECREE  OF  SALE.  514 

finds  that  the  mortgagee  is  entitled  to  a  sale  thereof,  it  has  no  au- 
thority to  except  any  part  of  the  land  from  the  decree  of  sale,  though 
the  value  of  the  remainder  is  greater  than  the  amount  of  the  debt. 
The  creditor  has  a  right  to  resort  to  his  entire  security  in  a  legal 
manner.*** 

§  1577.  Where  only  part  of  the  debt  or  an  instalment  of  in- 
terest is  due,  and  the  premises  can  be  sold  in  parcels,  the  decree 
should  be  for  the  absolute  sale  of  so  much  as  will  raise  the  amount 
actually  due."  If  the  premises  cannot  be  sold  in  parcels,  the  judg- 
ment should  direct  the  sale  of  the  whole,  and  the  payment  to  the  plain- 
tiff of  the  amount  actually  due,  and  that  the  surplus  be  brought  into 
court  to  await  further  order.--  In  such  case  it  should  appear  of 
record  that  the  court  had  first  inquired  whether  the  land  could  be 
sold  in  parcels.*-"^  A  decree  directing  a  sale  "according  to  law"  has 
been  held  sufficient,  although  a  statute  required  the  court  to  direct 
a  sale  of  the  premises,  "or  so  much  thereof  as  is  necessary."**  When 
part  of  the  mortgaged  property  has  been  sold  for  the  payment  of 
one  instalment,  a  further  decree  of  sale  may  be  had  for  an  instal- 
ment subsequently  falling  due.*^  When  only  one  of  several  notes 
is  due,  the  foreclosure  suit  is  on  that  note  alone,  though  all  the  notes 
are  casually  mentioned  in  the  bill  in  stating  the  nature  of  the  mort- 
gage.*® Although  the  suit  was  commenced  when  only  a  part  of  the 
debt  or  one  instalment  of  it  was  due,  if  the  whole  debt  becomes  due 
before  the  decree  is  entered,  this  should  be  in  the  ordinary  form  for 
a  sale  of  the  property  to  satisfy  the  whole  debt.*^ 

Where  a  decree  directs  a  sale  subject  to  the  mortgage  for  tlie  part 
of  the  debt  not  due,  and  the  officer  announces  that  the  sale  will  be 
made  in  this  manner,  his  failure  to  state  this  fact  in  his  certificate 
of  purchase  and  in  his  report  of  the  sale,  and  the  omission  of  this 
fact  in  the  confirmation  of  the  sale,  do  not  affect  or  modify  the  orig- 
inal decree,  or  release  the  lien  reserved  for  the  unforeclosed  part  of 

^o  Baker  v.  Marsh,  1  N.  Dak.  20,  44  Wainscott    v.    Silvers,    13    Ind.    497; 

N.  W.  662.  Stewart  v.  Nettleton,  13  Wis.  465. 

"James  v.   Fisk,  17  Miss.  144,  47  « Treiber  v.   Shaffer,   18  Iowa,  29. 

Am.  Dec.  Ill;    Roe  v.  Nicholson,  13  And  see  Kirby  v.  Chllds,  10  Kans. 

Wis.    373;     Hunt   v.    Dohrs,    39    Cal.  639. 

304;     Harris  v.    Makepeace,  13    Ind.  « Fleming  v.  Soutter,  6  Wall.  747; 

560;    Denny  v.   Graeter,  20  Ind.  20;  McDougal   v.   Downey,   45   Cal.   165. 

Beauchamp  v.  Leagan,  li  Ind.  401;  ^"Anderson    v.    Pilgram,    30    S.    C. 

Probasco  v.  Van  Eppes    (N.   J.),   13  499,  9  S.  E.  587. 

Atl    598;    Omaha  L.  &  T.  Co.  v.  Kit-  ^' Smalley    v.    Martin,    Clarke    (N. 

ton,  58  Neb.  113,  78  N.  W.  374.     See  Y.),    293;     Manning   v.    McClurg,    14 

§§  1478,  1619,  1700.  Wis.  350;    Buchanan  v.  Berkshire  L 

^=  Walker  v.' Jarvis,  16  Wis.  28.  Ins.  Co.,  96  Ind.  510,  524. 

^Cubberly  v.   Wine,   13   Ind.   353; 


515  FORM   AND   REQUISITES    OF    DECREE.      [§§    1577a,    1578. 

the  debt.  Under  a  decree  Tor  a  sale  subject  to  a  lien  specified,  parol 
testimony  is  admissible  to  show  that  the  property  was  offered  for  sale 
subject  to  such  lien.''** 

A  foreclosure  for  an  instalment  due  before  the  principal  amount, 
and  a  sale  of  the  entire  property, .  pass  the  interest  of  both  mort- 
gagor and  mortgagee  in  the  property,  and  a  clear  title  to  the  pur- 
chaser.*" The  court  may  order  payment  of  the  instalment  due;  but 
if  the  property  be  indivisible  so  that  a  larger  amount  is  received  than 
is  needed  for  that  purpose,  the  court  may  retain  custody  of  the  surplus 
and  jurisdiction  of  the  case  until  the  whole  debt  falls  due.^° 

The  power  to  foreclose  and  sell  for  the  principal  sum  secured  by 
a  mortgage,  on  account  of  the  non-payment  of  an  instalment  due, 
or  of  interest  accrued,  or  taxes,  exists  when  it  is  stipulated  in  the 
mortgage  that  in  case  of  such  non-payment  the  mortgagee  may  sell 
the  premises  and  pay  the  debt  from  the  proceeds.^^ 

§  1577a.  A  decree  of  sale  in  an  action  to  foreclose  several 
mortgages  upon  the  same  property  may  include  a  mortgage  not 
due  when  the  action  was  commenced,  provided  it  became  due  and 
was  unpaid  at  the  time  of  entry  of  the  decree.^^  "If,  however,  there 
had  been  no  foreclosure  as  to  either  mortgage  that  was  due  when 
the  action  was  commenced,  there  could  have  been  none  as  to  the 
mortgage  that  was  not  due  at  that  time,  because  there  would  have 
been  no  foundation  for  a  decree  when  the  defendants  were  first 
brought  into  court  and  no  reason  for  the  commencement  of  the 
suit."^3 

§  1578.  The  decree  should  not  attempt  to  give  any  relief  not 
sought  for  in  the  pleadings;^*  if  it  does,  it  will  be  vacated  on  mo- 

'« Hughes  V.  Frisby,  81  111.  188.  '^^  Sherman    v.    Foster,    supra,    per 

^^  Escher    v.     Simmons,    54    Iowa,  Van,    J.,    citing    Pond    v.    Harwood 

269,  6  N.  W.  274;    Poweshiek  Co.  v.  139  N.  Y.  Ill,  120,  34  N.  E.  768,  in 

Dennison,  36  Iowa,  244,  14  Am.  Rep.  which   the   court   said,    in   equitable 

521;      Harms    v.    Palmer,    73    Iowa,  actions,    "the   right   to   judgment   is 

446,   35   N.   W.   515,   5   Am.   St.   Rep.  not  limited  to  the  facts  as  they  ex- 

691;    Grattan  v.  Wiggins,  23  Cal.  16.  isted   at   the   commencement  of  the 

'^"McDowell  V.  Lloyd,  22  Iowa,  448;  action,    but    the   relief   administered 

Burroughs    v.    Ellis,    76    Iowa,    649,  is   such   as   the   nature   of   the   case 

38   N.   W.    141;     Clark  v.    Abbott,   1  and  the  facts,  as  they  exist  at  the 

Madd.  Ch.  474;    Mussina  v.  Bartlett,  close    of    the    litigation,    demand'," 

8  Port.  277,  284;    Smalley  v.  Martin,  citing   Peck   v.    Goodberlett,    109    N. 

Clarke,    293;      Adams    v.    Essex,    1  Y.   180,   16  N.  E.   350;     Madison  Av. 

Bibb,    149,   4   Am.    Dec.    623.  Bap.    Ch.    v.    Oliver    St.    Bap.    Ch., 

='Pope   v.    Durant,    26    Iowa,    233;  73   N.    Y.   82;    Worrall   v.    Munn,   38 

Kramer  v.  Rebman,  9  Iowa,  114.  N.    Y.    137;     Gay   v.    Gay,    10   Paige, 

"  Sherman    v.    Foster,    158    N.    Y.  369. 

587,  53  N.  E.  504,  affirming  91  Hun,  "  Knowles  v.  Rablin,  20  Iowa,  101. 
637. 


§  1579.]  DECREE  OF  SALE.  516 

tion.'^^  But  sometimes,  under  the  general  prayer  for  relief,  the  court 
may  grant  relief  not  specifically  asked  for.  Thus  where  a  railroad 
mortgage  contained  a  j^rovision  that  in  case  of  a  foreclosure  sale  the 
holders  of  a  majority  of  the  bonds  secured  by  the  mortgage  should 
in  writing  request  the  trustee  to  purchase  the  premises  for  the  use 
and  benefit  of  the  bondholders,  he  should  be  authorized  to  do  so, 
and  the  deed  of  trust  was  made  a  part  of  the  bill,  it  was  held  to  be 
proper  to  grant  the  relief  specifically  which  the  provisions  of  the 
deed  of  trust  contemplated.^^ 

§  1579.  The  decree  should  not  attempt  to  interfere  with  the 
rights  of  any  who  are  interested  in  the  property,  but  are  not  made 
parties  to  the  suit;  and  it  is  ineffectual  so  far  as  it  does  this.^'  It 
should  protect  the  rights  of  a  defendant  whose  title  to  a  part  of 
the  premises  is  paramount,  although  he  could  not  be  dispossessed  of 
such  part  under  the  decree,  even  if  no  reservation  is  made  in  respect 
to  it.^®  Only  the  rights  and  interests  possessed  by  the  mortgagor 
at  the  date  of  the  mortgage  can  be  sold.  A  judgment  which  forecloses 
a  prior  mortgage  is  irregular,  and  may  be  opened  on  motion  of  the 
prior  mortgagee.^^  The  rights  of  subsequent  mortgagees  who  are 
made  parties  to  the  suit  are  generally  sufficiently  protected  by  the 
general  direction  in  the  decree  for  the  payment  of  the  surplus  money 
into  court,  and  by  the  subsequent  proceedings  for  its  distribution; 
though  the  practice  in  some  courts  has  been  to  determine  the  rights 
of  junior  mortgagees  in  the  first  place,  and  direct  the  payment  of  the 
surplus  towards  the  satisfaction  of  them.*"' 

But  the  rights  of  subsequent  incumbrancers  may  be  protected  by 
the  court  in  the  sale  of  the  property,  where  a  portion  of  it  is 
sufficient  to  satisfy  the  mortgage,  by  ordering  the  sale  of  enough, 
so  that  the  other  incumbrancers  may  be  paid.'^^  And  where  after 
the  decease  of  the  mortgagor  it  appeared  to  be  for  the  benefit  of  his 
children  that  the  entire  mortgaged  premises  should  be  sold,  though 
the  mortgage  might  have  been  satisfied  by  a  sale  of  a  part,  the 
court  ordered  the  sale  of  the  whole.^^ 

"  Simonson  v.  Blake,  12  Abb.  Pr.  Am.    Dec.    552;      San    Francisco    v. 

331,  20  How.  Pr.  484.  Lawton,    21    Cal.    589,    79    Am.    Dec. 

^''Sage  v.  Cent.  R.  R.  Co.,  of  Iowa,  187;     Elias  v.  Verdugo,  27  Cal.  418. 

99  U.  S.  334,  13  West.  Jnr.  218.  ^''' McReynolds  v.  Munns,  2  Keyes, 

"Watson  v.  Spence,  20  Wend.  260;  214. 

Montgomery    v.    Tutt,    11    Cal.    307;  ""Union    Water    Co.    v.    Murphy's 

Lumpkin  v.  Williams.   (Tex.),  21  S.  Flat  Fluming  Co.,  22  Cal.  620. 

W.    967.     And    see   Tutten   v.    Stuy-  "'  Livingston  v.  Mildrum,  19  N.  Y. 

vesant,  3  Edw.  500.  440. 

"  Wicke  v.  Lake,  21  Wis.  410,  94  "-  Brevoort  v.  Jackson,  1  Edw.  447. 


517  POEM   AND   REQUISITES    OF   DECREE.      [g§    1580,    1581. 

§  1580.  When  a  junior  mortgagee  forecloses  his  mortgage  by 
bill  in  equity,  in  case  the  prior  mortgage  is  not  }et  due,  he  may 
have  a  decree  for  a  sale  of  the  equity  of  redemption  subject  to  the 
prior  mortgage,  leaving  the  purchaser  to  pay  that  when  it  becomes 
due.  If  the  prior  mortgage  be  due,  the  junior  mortgagee  may  re- 
deem and  sell  the  whole  estate  to  obtain  the  redemption  money  as 
well  as  his  own  claim.'^^  It  has  been  held  in  a  few  cases  that  with- 
out redeeming  he  may  make  the  prior  mortgagee  a  party  to  the 
bill,  and  ask  for  a  sale  of  the  whole  estate,  and  tlie  payment  of 
all  incumbrances  out  of  the  proceeds;*^*  but  tliis  is  not  generally  the 
law.  Though  the  prior  mortgagee  be  made  a  party  and  is  defaulted, 
the  decree  only  bars  the  equity  of  redemption  of  the  complainant's 
mortgage,  .without  affecting  in  any  way  that  which  is  superior  to 
it."^  A  junior  mortgagee  is  entitled  to  proceed  with  his  bill  to  fore- 
close, although  the  senior  mortgagee  has  obtained  a  judgment  of 
foreclosure,  and  the  junior  mortgagee  may  seek  his  remedy  against 
the  surplus  moneys  on  the  first  mortgage.*'*'  He  is  entitled  to  have 
the  issues  raised  in  his  action  tried  when  his  action  is  reached. 

§  1581.  After-acquired  title. — Ordinarily  the  title  ordered  to  be 
sold  is  only  that  which  the  mortgagor  held  at  the  date  of  the  mort- 
gage. If  in  any  case  there  are  facts  of  an  equitable  character,  such 
that  a  title  acquired  afterwards  by  the  mortgagor  or  his  vendee 
should  be  subjected  to  the  lien  of  the  mortgage,  these  should  be  set 
out  in  the  complaint,  and  such  after-acquired  title  should  be  in- 
cluded in  the  decree  of  sale;  otherwise  this  will  not  include  or  affect 
the  after-acquired  title.*'^  It  must  be  first  subjected  to  the  lien  of 
the  mortgage  by  the  foreclosure  decree,  which  then  operates  upon 
this  title  to  the  same  extent  as  if  it  had  been  included  in  the  mort- 
gage.*'^ 

"'  Western   Ins.    Co.   v.   Eagle  Fire  portion  thereof  shall  remain  in  full 

Ins.    Co.    1    Paige,    284.       And     see  force,   is  valid  as  against  one  who, 

Trayser  v.    Indiana  Asbury  Univer-  with     notice     of     such     agreement, 

sity,  39  Ind.   556;     New  England  L.  aferwards    takes    a    mortgage    from 

&   T.    Co.   V.    Robinson,   56   Neb.   50,  the    holder    of   the    later    lien,    who 

76  N.  W.  415,  71  Am.  St.  657.  has  purchased  the  property  in  pur- 

"*  Vanderkemp      v.      Shelton,      11  suance  of  said  agreement.     Ryan  v. 

Paige,    28.      When    decrees    of   fore-  West,  63  Neb.  894,  89  N.  W.  416. 

closure    are    entered    upon    several  "' McCormick  v.  Wilcox,  25  111.  274; 

mortgages  in  the  same  action,  and  Harshaw    v.    McKesson,    66    N.    C. 

an  order  of  sale  is   issued  thereon,  266. 

an    agreement    between    the    several  "'"'  Dailv  v.  Kingon,  41  How.  Pr.  22. 

mortgagees    that    the    one    holding  "^  Kreichbaum    v.    Melton,    49    Cal. 

the  later  lien  shall  buy  the  property  50.     See   SS    679-683. 

at  the  sheriff's  sale  under  said  order  '■*  San  Francisco  v.  Lawton,  18  Cal. 

and  pay  the  matured  portion  of  the  465,  79  Am.  Dec.  187. 
first   mortgage,   and   the   unmatured 


§§  1582-1584.]  DECREE  OF  SALE.  518 

§  1582.  When  several  persons  have  acquired  undivided  inter- 
ests in  tlie  land  subsequent  to  the  mortgage  as  co-tenants,  the  de- 
cree will  not  apportion  the  debt  among  theni.'^^ 

§  1583.  One  decree  for  entire  debt. — If  a  mortgage  securing 
several  notes  covers  two  separate  lots,  and  provides  that  one  lot  is 
pledged  only  as  security  for  the  note  first  falling  due,  upon  default 
in  payment  of  all  the  notes,  a  judgment  for  the  sale  of  both  lots 
for  the  payment  of  the  entire  debt  is  not  proper  as  against  a  pur- 
chaser of  the  lot  pledged  for  the  payment  of  such  first  maturing 
note.  The  liability  of  that  lot  should  be  limited  according  to  the 
terms  of  the  mortgage.'^''  If  the  complainant  holds  two  mortgages 
covering  in  part  the  same  premises,  but  securing  different  debts, 
one  decree  will  be  made  for  both  debts  instead  of  a  separate  decree 
for  each;^^  but  if  a  subsequent  purchaser  or  mortgagee  has  become 
interested  in  the  property  covered  by  one  and  not  by  the  other, 
separate  decrees  should  properly  be  made.'^^ 

§  1584.  Death  of  mortgagor. — A  judgment  for  foreclosure  and 
sale  without  any  provision  as  to  a  deficiency  may  be  executed  not- 
withstanding the  death  of  the  mortgagor.  It  is  to  be  enforced 
against  the  property  and  not  against  the  person.  There  is  no  occa- 
sion to  revive  it  or  to  bring  in  new  parties. '^•^  The  sale  can  be  made, 
and  the  purchaser  let  into  possession  on  producing  the  deed  of  the 
referee  or  other  officer  making  the  sale.''*  So  far  as  this  part  of  the 
decree  is  concerned,  it  is  in  the  nature  of  a  proceeding  in  rem  and 
the  death  of  the  mortgagor  after  the  entry  of  the  decree  is  no  groimd 
for  staying  its  execution.''^ 

The  statutes  which  provide  that  no  suits  shall  be  brought  against 
the  estate  of  a  deceased  person  for  a  year,  or  other  specified  time, 
after  administration  is  taken  upon  his-  estate,  do  not  suspend  the  right 
to  prosecute   a  suit   for   foreclosure,   when   no   judg^nent   for   a  de- 

**  Perre  v.   Castro,  14   Cal.   519,  76  enforced  through  the  probate  court 

Am.  Dec.  444.  in    the    manner    prescribed    for    the 

'"  Mickley   v.   Tomlinson,  79   Iowa,     settlement   of   the   estates, 

383,  41  N.  W.  311,  44  N.  W.  684.  and  not  by  execution.    But  the  judg- 

"  Phelps  V.  Ellsworth,  3  Day,  .>97.  ment  can  not  be  avoided  in  a  col- 

■-Enright    v.    Hubbard,    34    Conn,  lateral   proceeding  where   there   has 

197.  been  no  administration  on  the  estate. 

"  Hays  V.  Thomae,  56  N.  Y.  521;  Thompson  v.  Jones,  77  Tex.  626,  12 

Harrison    v.    Simons,    3    Edw.    394;  S.-  W.  77. 

Cowell    V.    Buckelew,    14    Cal.    640;  '^  Lynde  v.  O'Donnell,  12  Abb.  Pr. 

Trenholm   v.    Wilson,    13    S.    C.    174.  286. 

In  Texas,  if  a  defendant  in  a  fore-  "  Nagle  v.  Macy,  9  Cal.  426.     See 

closure    suit    dies    before   the    satis-  Hunt  v.  Acre,  28  Ala.  580;    Trenholm 

faction  of  the  decree,  the  statue  re-  v.  Wilson,  13  S.  C.  174. 
quires    that    its    payment    must    be 


519  FORM  AND  REQUISITES  OF  DECREE.   [§§  1585,  1586. 

ficiency  is  sought.'"  The  mortgagee  may  prove  his  chiim  and  have  it 
allowed  against  the  estate  of  the  mortgagor,  and  still  proceed  directly 
to  foreclose." 

Upon  the  mortgagor's  death  after  entry  of  a  decree  of  foreclo- 
sure, but  before  sale,  his  interest  in  the  land  descends  as  real  estate 
to  his  widow  and  heirs.  The  court  may  thereupon,  on  the  petition 
of  the  widow,  modify  the  decree  after  the  mortgagor's  death  so  as 
to  give  the  widow  dower  in  the  surplus  over  the  mortgage  debt." 

§  1585.  Death  of  plaintiff. — Neither  does  the  death  of  the  plain- 
tiff after  judgment  and  before  the  sale  give  occasion  to  stay  the 
sale  or  to  revive  the  action.'^'*  Where,  however,  the  plaintiff  dies 
before  judgment,  this  cannot  be  perfected  in  his  name,  but  his  rep- 
resentatives must  be  substituted  in  his  place.®" 

§  1586.  A  day  for  payment,  before  the  sale,  is  allowed  by  some 
courts  by  virtue  of  their  equity  juisdiction."  The  mortgagor  can- 
not object  to  a  decree  giving  him  this  right,  although  it  be  unau- 
thorized by  law.®^  A  time  for  redemption  after  the  sale  is  in  some 
States  provided  for,  and  in  such  case  the  decree  must  not  direct  the 
delivery  of  the  deed  untih  this  time  has  passed.®^  As  regards  re- 
demption, the  decree  should  make  the  same  provisions  for  it  whether 
the  mortgage  be  in  the  usual  form,  or  be  merely  an  absolute  deed 
without  a  formal  defeasance  or  any  defeasance  at  all.***  Where  re- 
demption is  allowed  after  sale,  the  officer  is  directed  in  the  first 
place  to  execute  a  certificate  to  the  purchaser,  and,  in  case  there  is 
no  redemption  within  the  time  allowed  by  law,  to  execute  a  deed.®' 
In  the  meantime  the  mortgagor  remains  in  possession,  with  no  lia- 
bility for  rents  and  profits,  or  for  use  and  occupation.®*' 

"» Willis  V.  Farley,  24  Cal.  490.  Detroit   Sav.   Bank  v.   Truesdail,   38 

"  Moores    v.    Ellsworth,    22    Iowa,  Mich.    430.     The   sale   can   not   take 

299.     Contra,   Falkner  v.   Folsom,   6  place  within  less  than  a  year  from 

Cal.  412.  the    time    all    the    defendants    have 

'»Holden  v.  Dunn   (111.),  33  N.   E.  been   properly  brought  in.     Burt  v. 

413.  Thomas,  49  Mich.  462,  12  N.  W.  911, 

"  Lynde  v.  O'Donnell,  21  How.  Pr.  13  N.  W.  818. 

34,  12  Abb.  Pr.  2SG;    Brand  v.  Smith,  **=  Smith  v.  Hoyt,  14  Wis.  252. 

99  Mich.  395,  58  N.  W.  363.  ^' Jones    v.    Oilman,    14    Wis.    450; 

""Gerry  v.  Post,  13  How,  Pr.  118.  Rhinehart  v.  Stevenson,  23  111.  524; 

«' Clark  V.   Reyburn,   8  Wall.   318;  Warner   v.    DeWitt   Co.    Nat.    Bank, 

Capehart    v.   Biggs,  77    N.    C.    261;  4  Eradw.  305. 

Mebane    v.    Mebane,    80    N.    C.     34;  «' Briggs  v.  Seymour,  17  Wis.  255 

Vail   V.    Arkell    (111.),   34  N.   B.   937.  ^^  Boester    v.    Byrne,    72     111.    466 

This  was  the  practice  in  Kentucky.  Rosseel     v.     Jarvis,     15     Wis.     571 

Durrett   v.    Whiting,    7    T.    B.    Mon.  Walker    v.    Jarvis,    16    Wis.    28.    A 

547;     Woodard   v.    Fitzpatrick,   2   B.  direction  to  execute  "a  certificate  as 

Mon.    61:     Richardson  v.   Parrott,   7  required   by  law"   is  sufficient. 

B.  Mon.  379.  «' Whitney  v.  Allen,  21  Cal.  233. 

This  is  the  practice  in  Michigan. 


§  1587.]  DECREE  OF  SALE.  520 

In  the  absence  of  sj^ecial  provisions  of  statute,  courts  of  equity 
may  allow  a  period  for  redemption  before  a  sale  of  the  property, 
according  to  the  circumstances  of  the  case.  This  is  always  done 
in  cases  of  strict  foreclosure  where  the  decree  vests  the  complete 
title  in  the  mortgagee.'*'^  The  practice  does  not  generally  apply  to 
cases  of  decrees  for  the  sale  of  the  property,  because  the  debtor 
is  then  protected  by  his  right  to  receive  the  surplus  arising  from 
the  sale;  but  it  has  been  extended  by  some  courts  to  such  cases.^^ 
Even  if  it  be  the  better  practice  to  include  such  a  provision  in  the 
decree,  this  is  a  matter  within  the  discretion  of  the  chancellor,  and 
a  failure  so  to  provide  is  not  reversible  error.****  As  will  be  seen  by 
reference  to  the  statutes  regulating  foreclosvire,  it  is  in  several 
States  provided  that  there  shall  be  a  period  of  redemption  after 
the  sale,  during  which  time  the  purchaser  holds  only  a  certificate 
of  the  sale  entitling  him  to  a  deed  at  the  close  of  the  period  if  no 
redemption  is  made.  In  such  case  a  decree  that  the  sheriff  shall 
execute  a  deed  to  the  purchaser  without  waiting  for  the  expiration 
of  the  time  limited  for  redemption  is  erroneous,  but  may  be  amend- 
ed.^" The  decree  should  embody  the  statutory  provision  for 
redemption;  but  an  objection  that  the  decree  does  not  do  this  can- 
not be  urged  by  creditors  of  the  mortgagor  or  by  his  assignee  in 
bankruptcy,  except  in  connection  with  an  offer  to  redeem.^^ 


III.     The  Conclusiveness  of  the  Decree. 

§  1587.  The  validity  of  the  decree  cannot  be  attacked  collater- 
ally for  mere  irregularities,  or  for  matters  of  defence  which  do  not 
go  to  the  jurisdiction;''-  and  jurisdiction  is  presumed  from  the  de- 

8^  Ferine  v.  Dunn,  4  Johns.  Ch.  140.  Hicks,  32  Mich.  307;    Ogden  v.  Wal- 

'^Harkins    v.    Forsyth,    11    Leigh,  ters,  12  Kans.  282;    Haseltine  v.Gil- 

294;    Stockton  v.  Dundee  Manuf.  Co.  liland,  2  Kan.  App.  456,  43  Pac.  88; 

22  N.  J.  Eq.  56.  Reynolds  v.   Harris,  14  Cal.   667,  76 

«"  Gardner  v.  Cohn,  191  111.  553,  61  Am.   Dec.   459;     Miller  v.   Sharp,   49 

N.  E.  492,  affirming  95  111.  App.  26.  Cal.    233;     Trope    v.    Kerns     (Cal.), 

»» Harlan    v.    Smith,    6    Cal.    173;  20  Pac.  82;    White  v.  Patton,  87  Cal. 

Board  of  Education  v.  Franklin,  61  151,  25  Pac.  270;  Hansen,  v.  Wagner, 

Ga.  303.  133   Cal.   69,  65   Pac.   142;     Berry   v. 

"^  Hards  v.  Conn.  Mut.  L.  Ins.  Co.,  King,    15    Oreg.    165,    13    Pac.    772; 

8  Biss.  234;    Barley  v.  Flint,  9  Biso.  Woolery  v.  Grayson,  110  Ind.  149,  10 

204.  N.   E.  935;     Goltra  v.  Green,  98  111. 

"'Gray    v.    Brignardello,    1    Wall.  317;    Lenfesty  v.  Coe,  26  Fla.  49,    / 

627,  634;  National  Nickel  Co.  v.  Ne-  So.    Rep.    2;     Mann   v.    Jennings    25 

vada     Nickel     Syndicate.     112     Fed.  Fla.    730,    6    So.    771;     Thompson    v. 

44;     Ruggles    v.    First    Nat.    Bank,  Jones,    77    Tex.    626,    12    S.    W.    77; 

Phillips,    40    Mich.    264;     Adams    v.  Watson  v.   Camper.   119   Ind.   50,   21 

Cameron,  40  Mich.  506;     Torrans  v.  N.   E.  323;    Windett  v.   Connecticut. 


521  CONCLUSIVEXESS    OF    DECREE.  [§    158T. 

crec."^  Jt  must  be  attacked,  if  at  all,  by  direct  application  to  the 
court  that  made  it,  or  in  due  course  of  appellate  procedure.'" 
Though  the  decree  be  erroneous,  the  title  of  oi\e  who  has  in  good 
faith  purchased  under  it  is  not  affected  by  the  error;  and  this  is  so 
even  though  tlie  decree  should  afterwards  be  reversed  or  set  aside 
for  error  or  irregularity.^^  So  long  as  the  decree  remains  in  force 
the  mortgagor,  or  any  other  person  who  was  a  party  to  the  pro- 
ceedings, is  estopped  from  asserting  any  anterior  right  or  title  to 
the  mortgaged  lands.'"'  The  judgment  is  conclusive  as  to  the  title 
held  by  the  defendants  after  it  was  rendered."  Parties  who  have 
been  personally  served  with  summons,  and  have  made  an  appear- 
ance in  the  suit,  cannot  afterwards,  to  defeat  confirmation,  assail 
the  decree  for  a  mere  irregularity.^^" 

After  a  decree  is  rendered,  any  right  asserted  in  the  proceedings 
can  only  be  enforced  through  the  decree.  This  rule  is  illustrated  in 
the  following  case:  The  owner  of  mortgaged  premises  conveyed 
them  to  a  third  party,  who  did  not  at  once  record  his  deed.  There- 
after the  mortgage  was  foreclosed  and  the  property  sold  under  the 
decree,  and  in  this  suit  the  owner  of  a  judgment  appeared  as  a  de- 
fendant and  procured  an  adjudication  that  the  proceeds  of  the  sale, 
after  satisfying  prior  liens,  should  be  applied  to  the  payment  of 
his  judgment.  Afterwards  the  purchaser  of  the  land  recorded  his 
deed  and  redeemed  the  premises.  Subsequently  the  judgment  lien 
creditor,  the  property  not  having  sold  for  enough  to  satisfy  his 
claim,  obtained  execution  and  levied  it  on  the  land.  It  was  held  that 
the  purchaser  is  to  be  considered  as  such  only  from  the  time  that 

Mut.  L.  Ins.  Co.  130  111.  621,  22  N.  E.  has   acquired   such   title.     Adams    v. 

474;    Reagan  v.  Hodges,  70  Ark.  563,  Odom,  74  Tex.  206,  12  S.  W.  34,  cit- 

69  S.  W.  581.  ing   Marks   v.    Cowles,    61   Ala.   299; 

'^Markel    v.    Evans,    47    Ind.    326;  Delano  v.  Wilde,  11  Gray,  17;    Gott 

Keller  v.  Miller,  17  Ind.  206;    Eddy  v.  Powell,  41  Mo.   416;    Reynolds  v. 

V.   Kimerer,   61   Neb.   498,   85  N.    VV.  Harris,     14     Cal.     667;     Hubbell     v. 

540  Broadwell,    8    Ohio,    120;    Bryant   v. 

""Cannon  v.  Wright,    (N.  J.   Eq.),  Fairfield',     51    Me.     149;     Galpin     v. 

23  Atl.  285.  Page,   18  Wall.   350,   373;    Stroud    v. 

">=  Horner    v.    Zimmerman,    45    111.  Casey,  25  Tex.  740;  Reynolds  v.  Hos- 

14;   Lambert  v.  Livingston  (111.),  1^3  mer,  45  Cal.  616. 

N     E     352;    Graham    v.    Bleakie,    i  '"■Hefner  v.  Ins.  Co.  123  U.  S.  747, 

Daly    55;    Burford  v.   Rosenfleld,  37  8    Sup.    Ct.    337;    Adair   v.    Merge.x- 

Tex.  42.  theim,   114   Ind.    303,   16   N.   E.   60.^, 

If  upon   appeal   the   decree   is  re-  Ruff  v.   Doty,  26  S.   C.   173,  1   S.   E. 

versed  in  so  far  as  it  directs  a  sale  707;    Barton   v.    Anderson,    104    Ind. 

of  a  portion  of  the  land  included  in  578. 

the  decree,  the  effect  of  such  a  re-  ""  Newcome    v.    Wiggins,    78    Ind. 

versal    upon    a    sale    already    made  306;  Ulrich  v.  Drischell,  88  Ind.  354; 

under    process    directing    a    sale    of  Gaylord  v.  La  Fayette,  115  Ind.  423, 

the   land   covered   by   the   mortgage  17  N.  E.  899.                           ,  ,  ^,  ,    ^o 

is   to   destroy   the  title   to  the   land  '■"  Stratton  v.  Reisdorph  (Neb.),  53 

in    question,    where    the    mortgagee  N.  W.  136. 


g  1587.]  DECREE  OF  SALE.  '  523 

he  recorded  his  deed,  and  that  the  judgment  creditor's  rights  under 
his  original  judgment  become  merged  into  the  foreclosure  decree, 
and  were  exhausted' by  the  sale  thereunder  as  to  puperty  sold,  and 
that  the  execution  should  be  recalled.'-^^ 

If  the  mortgage  was  invalid  in  its  origin,  a  decree  of  foreclo- 
sure has  no  effect  whatever  upon  the  property  or  its  owners.  Such 
was  the  case  of  a  mortgage  given  by  persons  who  claimed  to  be 
the  trustees  of  a  corporation  and  foreclosed;  and  afterwards  it  was 
established  by  decree  of  the  court  that  the  mortgagors  had  usurped 
the  powers  of  the  corporation,  and  had  no  authority  to  bind  it.^*"^ 

A  decree  of  foreclosure  entered  before  the  debt  has  become  due, 
or  after  the  mortgage  has  been  satisfied  of  record,  is  erroneous;  and 
the  decree  should  be  set  aside,  unless  in  the  latter  case  the  entry  of 
satisfaction  be  cancelled."^ 

The  interests  of  the  parties  become  barred  and  foreclosed  not  upon 
the  entry  of  the  judgment,  but  upon  the  sale  and  conveyance  of  the 
land.  "A  judgment  entered  in  a  foreclosure  action  is  final  for  all 
purposes  of  review,  but  in  other  respects  it  is  interlocutory.  All  of 
the  proceedings  for  the  sale,  including  the  advertising  of  the  no- 
tice and  the  confirmation  of  the  sale,  take  place  thereafter.  The 
provision  barring  others  of  their  interest  in,  or  of  their  rights  of 
equity  of  redemption  in  the  mortgaged  premises,  of  necessity  re- 
lates to  the  final  concluding  act,  that  of  a  sale  of  the  premises. 
Until  that  time  the  mortgagee  or  the  owner  of  the  equity  of  redemp- 
tion may  redeem,  and  persons  having  judgment  liens  thereon  may 
sell  upon  execution,  notwithstanding  the  judgment;  but  as  soon  as 
tlie  sale  is  made,  confirmed  and  conveyance  delivered,  that  provis- 
ion of  the  judgment  becomes  operative  and  of  full  force,  and  the 
parties  to  the  action  are  forever  thereafter  barred  and  foreclosed 
of  all  their  right,  title,  interest  and  equity  of  redemption.""^ 

Where  a  Federal  Court  has  rendered  a  decree  foreclosing  a  mort- 
gage, in  suit  wherein  it  had  jurisdiction  of  the  parties  and  the  subject- 
matter,  the  fact  that  the  provision  of  such  decree  directing  the  manner 
in  which  the  property  should  be  sold,  and  the  order  of  sale  subse- 
quently issued  thereon,  inadvertently  followed  the  state  statute,  and 
did  not  conform  to  the  requirements  of  the  United  States  Statute"^ 

"^  Williams    v.    Wilson,    42    Oreg.  151,   42   N.   W.    900.     When   nothing 

299,  70  Pac.  1031.  was    due    on    mortgage    at    time    of 

>""  Brindernagle     v.     German     Re-  foreclosvxre.     Bowen   v.   Brogan,   119 

formed  Church,  1  Barb.  Ch.  15.  Mich.  218,  77  N.  W.  942 

1"  Russell    V     Mixer,    39    Cal.    504.  i"=  Nutt  v.  Cuming,  155  N.  Y.  309, 

When    the    decree    includes   part   ot  313,  40  N.  B.  880,  per  Haight,  J. 

debt  not   due  when   suit  was  com-  "=  Act  March  3,  1903.  27  Stat.  751. 
menced.     Likes  v.  Wildish,  27  Neb. 


533  CONCLUSIVENESS    OF    DECREE.  [§    1588. 

as  to  the  notice  of  sale,  does  2iot  render  the  sale  made  thereon  void, 
but  merely  voidable;  and  where  the  defendant,  with  knowledge  of 
the  facts,  and  due  notice  of  the  application  for  confirmation  makes 
no  objection  thereto,  and  does  not  appeal  from  either  the  original 
decree  or  the  order  of  confirmation,  he  will  be  deemed  to  have  waived 
the  defect,  and  he  cannot  attack  the  validity  of  the  title  acquired  by 
the  purchaser  collaterally,  by  an  action  to  recover  the  property.^*** 
A  decree  of  foreclosure  is  not  final,  so  far  as  relates  to  the  pro- 
visions therein  for  its  own  enforcement,  directing  the  manner  in 
which  the  mortgaged  property  shall  be  sold,  etc,  and  in  such  respects 
it  may  be  amended  at  any  subsequent  term.^*'^ 

§  1588.  A  judgement  directing  a  sale  of  the  mortgaged  premises 
is  conclusive  as  to  all  parties  to  the  suit  so  long  as  it  remains  un- 
reversed.^'^^  It  does  not  matter  that  the  plaintiff  held  the  mortgage 
by  assignment  from  the  mortgagor  as  collateral  security  for  a  debt 
of  his,  and  that  he  in  this  way  had  an  interest  in  the  mortgage;  if 
the  plaintiff,  knowing  this,  makes  him  a  party  to  the  suit,  and  he 
does  not  answer,  he  cannot,  after  a  judgment  and  sale  of  the  prop- 
erty under  it  for  a  sum  less  than  the  debt  for  which  the  mortgage 
was  held  as  collateral,  maintain  a  bill  to  redeem.  The  interest  of 
the  mortgagor  is  not  one  prior  to  the  mortgage,  but  one  under  the 
mortgage,  and  this  is  the  ground  upon  which  he  is  made  a  party  to 
the  foreclosure  suit.^"^ 

Where  a  defendant  has  set  up  a  claim  under  a  title  paramount 

'"*  National  Nickel  Co.  v.  Nevada  he  was  deprived  of  his  property 
Nickel  Syndicate,  106  Fed.  110,  114.  without  'due  process  of  law'?  In 
Hawley,  J.,  said:  "If  a  party  who  the  foreclosure  suit,  and  under  the 
is  regularly  brought  before  a  court  proceedings  had  therein,  the  court 
having  full  jurisdiction  in  the  prem-  acquired  complete  jurisdiction  of  the 
ises  in  a  pending  suit,  with  knowl-  parties  and  of  the  subject-mattsr 
edge  of  all  the  proceedings  therein,  thereof.  The  court,  having  legally 
without  any  fraud  or  undue  induce-  acquired  jurisdiction,  had  the  un- 
ments,  consents  to  a  sale  of  his  doubted  right  to  decide  all  questions 
property  in  a  different  mode  from  which  might  properly  arise  therein; 
that  provided  for  by  the  statute,  can  and  its  judgment,  orders,  and  de- 
it  be  said  that  such  a  sale  is  abso-  crees,  however  erroneous  they  may 
lutey  null  and  void?  If,  without  have  been,  cannot  De  collaterally 
consenting  by  word  of  mouth  or  assailed."  See  Cornett  v.  Williams, 
written  stipulation,  he  stands  by  20  Wall.  226,  249. 
with  his  mouth  closed  and  allows  '""'  Royal  Trust  Co.  v.  Washburii 
the  sale  to  proceed,  having  knowl-  B.  &  I.  R.  Co.  113  Fed.  531. 
edge  of  all  the  facts,  and  thereafter  "'"  McCracken  v.  Valentine,  9  N. 
declines  to  come  into  court  on  the  Y.  42;  Manigault  v.  Deas,  Bailey  (S. 
day  set  for  the  confirmation  to  C.)  Eq.  283;  Murrell  v.  Smith,  51 
either  protest,  object,  or  except  to  Ala.  301;  Felino  v.  Newcomb  Lum- 
the  order  of  confirmation,  and  re-  ber  Co.  64  Neb.  335,  89  N.  W.  755. 
fuses  to  take  an  appeal  from  said  ^'''  Bloomer  v.  Sturges,  58  N.  Y. 
order  v/ithin  the  statutory  period  168. 
allowed  therefor,  can  it  be  said  that 


§  1588.]  DECREE  OF  SALE.  524 

to  the  mortgage,  and  the  same  has  been  litigated  with  the  consent 
or  acquiescence  of  both  parties,  both  parties  are  bound  by  the  judg- 
ment."^ Where  one  defendant  had  set  up  a  paramount  title  to  a 
portion  of  the  mortgaged  premises,  and  by  agreement  of  all  the 
ether  parties  a  decree  was  entered  that  this  defendant's  land  was 
not  subject  to  the  mortgage,  and  more  than  a  year  afterwards  the 
parties,  excepting  this  defendant,  agreed  that  the  decree  might  be 
vacated,  and  subsequently,  without  notice  to  this  defendant,  a  new 
decree  was  rendered  by  which  the  land  of  this  defendant  was  declared 
to  be  subject  to  the  mortgage  and  was  ordered  to  be  sold,  it  was 
held  that  the  last  decree  was  void  as  to  this  defendant."''  A  judg- 
ment which  the  defendant  has  allowed  to  be  entered  upon  default, 
under  the  belief  that  the  judgment  could  not  affect  a  right  of  home- 
stead in  a  portion  of  the  mortgaged  land  which  had  been  released 
from  the  mortgage  by  a  release  recorded  before  the  assignment  to 
the  complainant  in  the  foreclosure  suit,  may  be  set  aside  in  a  pro- 
ceeding instituted  for  that  purpose.^" 

Where  a  decree  of  sale  provides  that  the  sale  shall  be  made  sub- 
ject to  certain  liens  established  or  to  be  established  by  a  reference 
to  a  master,  as  prior  and  superior  liens,  the  purchaser  cannot  dis- 
pute the  validity  of  the  liens  thus  established,  even  on  the  ground 
of  fraud  alleged  to  have  been  discovered  after  confirmation  of  the 
master's  report  fixing  the  amount  of  such  liens. ^^^ 

The  decree  is  of  course  conclusive  upon  the  defendant  in  the 
bill,  and  upon  any  purchaser  from  him  who  has  purchased  after 
the  decree  was  rendered.  In  a  contest  with  either  by  a  purchaser 
at  a  judicial  sale  under  the  decree,  the  complainant's  title  to  tlie 
mortgage  is  not  an  open  question.  His  title  to  the  mortgage  was 
essential  to  the  decree  rendered,  and  was  necessarily  adjudicated  as 
a  part  of  the  case  then  before  the  court.^^- 

After  a  long  lapse  of  time  since  the  decree  was  made,  the  court 
will  presume,  as  against  parties  calling  the  decree  in  question,  that 
every  act  and  thing  was  done,  necessary  to  give  jurisdiction  and 
authority  to  the  court  pronouncing  the  decree,  which  the  record 
does   not   show   was   not    done,    particularly   when   the   record    pro- 

'"'Helck  V.  Reinheimer,  105  N.  Y.  21   S.    W.    967;    Wicke   v.    Lake,   ?1 

470;  Bundy  v.  Cunningham,  107  Ind.  Wis.  410. 

360.  ^"  Swann  v.  Wright,  110  U.  S.  590, 

^"^  Blake  v.  McMurtry,  25  Neb.  29J  4  Sup.  Ct.  235. 

41  N.  W.  172.  "'  §§    1440.    1445,    1474;     Gunn    v 

""Lumpkin    v.    Williams    (Tex.),  Wades,  62  Ga.  20. 


535  CONCLUSIVENESS    OF    DECREE.  [§    1589. 

duced  shows  that  all  of  the  record  and  proceedings  have  not  been 
produced. ^^^ 

§  1589.  Prior  and  adverse  rights. — Where  a  party  has  a  right 
under  the  mortgage,  and  also  a  riglit  prior  to  it,  he  is  not  pre- 
cluded in  respect  to  the  prior  right  by  a  judgment  of  foreclosure, 
though  the  terms  of  it  are  broad  enough  to  cover  both  rights.  Only 
the  rights  and  interests  under  the  mortgage  and  subsequent  to  it  can 
properly  be  litigated  upon  a  bill  of  foreclosure.^^'*  One  claiming  ad- 
versely to  the  title  of  the  mortgagor  cannot  be  made  a  party  to  the  suit 
for  the  purpose  of  trying  his  adverse  claim.  If  he  has  a  claim  under 
the  mortgage  also,  his  claim  prior  to  it  cannot  be  divested  by  the  decree. 
This  prior  claim  is  not  a  subject  matter  of  litigation  in  the  fore- 
closure suit,  and  remains  unaffected  by  it.  The  decree  is  final  only 
within  the  proper  scope  of  the  suit,  which  is  to  bar  interests  in  the 
equity  of  redemption. ^^^  Therefore,  where  land  was  devised  to  one  in 
trust  to  receive  rents  and  profits,  and  apply  to  the  benefit  of  another  for 
life,  remainder  to  the  trustee  in  fee  for  his  own  benefit,  and  the  remain- 
der-man and  the  tenant  for  life  made  a  mortgage  in  which  no  allusion 
was  made  to  the  trust,  it  was  held,  upon  a  foreclosure  of  the  mortgage, 
that  the  trust  estate  was  not  affected  by  the  mortgage,  or  by  the  judg- 
ment of  foreclosure,  although  the  person  named  as  trustee  was  in  his 
individual  capacity  a  party  to  the  suit.  The  prior  estate  for  life  in  trust 
not  being  subject  to  the  mortgage,  or  within  the  power  of  the  trustee 
to  dispose  of,  remains  unafi^ected.^^''  In  like  manner,  if  there  be  an 
outstanding  right  of  dower  in  the  wife  of  the  mortgagor,  the  making 
of  her  a  party  to  an  action  of  foreclosure,  and  the  rendering  of  a 
judgment  foreclosing  the  rights  of  the  defendants  in  the  premises,  do 
not  affect  this  right.  This  remains  the  same  as  if  she  had  not  been 
made  a  party  to  the  action. ^^'^     If,  however,  the  mortgage  be  given 

"'Kibbe    v.    Dunn,    5    Biss.    233;  29  Pac.  220;  Ord  v.  Bartlett,  83  Cal. 

Chesebro    v.    Powers,    70    Mich.    370,  428,   23   Pac.    705;    San   Francisco   v. 

38  N.  W.  283.  Lawton,  18  Cal.  465;   Cody  v.  Bean, 

'"Wade  V.  Miller,  32  N.  J.  L.  296;  93    Cal.    578,    29    Pac.    223;    Payn    v. 

Elliott  V.   Pell,   1  Paige,  263;    Eagle  Grant,  23  Hun,  134;   Frost  v.  Koon, 

Fire  Co.  v.  Lent,  6  Paige,  635;   Hoi-  30  N.   Y.   428;    Emigrant  Sav.   BanK 

comb  V.  Holcomb,  2  Barb.  20;  Frost  v.  Goldman,  75  N.  Y.  127;   Smith  v. 

V.    Koon,    30    N.    Y.    428;    Lewis    v.  Roberts.  91  N.  Y.  470,  477;  California 

Smith,  11  Barb.  152,  9  N.  Y.  502,  61  Safe  Deposit  Co.  v.  Cheney  Electric 

Am.   Dec.   706;    Corning  v.   Smith,  6  Light  Co.  56  Fed.  257.  quoting  text; 

N.   Y.    82;    Lee   v.   Parker,   43   Barb.  Bozarth  v.  Landers,  113  111.  181. 
611;    Lansing    v.    Hadsall,    26    Hun,        ""  Rathbone  v.   Hooney,   58   N.    Y. 

619.  463. 

1"  Lewis  V.  Smith,  9  N.  Y.  502,  61        "'Wade  v.  Miller,  32  N.  J.  L.  296; 

Am.  Dec.  706;   McComb  v.  Spangler,  Merchants'  Bank  v.  Thomson.  55  N. 

71    Cal.    418,    12    Pac.    347,    quotmg  Y.  7. 
text;    Sichler   v.    Look,   93   Cal.    600, 


^  1589a.]  DECREE  OF  SALE,  526 

to  secure  the  purchase-money,  the  wife's  dower  is  then  subordinate 
to  the  mortgage,  and  is  barred  if  she  be  made  a  party."''  Moreover, 
the  decree  is  final  and  conclusive  only  against  the  owner  and  sub- 
sequent parties  in  interest  when  they  have  been  made  parties  to  the 
suit;  and  is  unavailing  against  any  one  interested  in  the  premises 
who  was  not  made  a  party,""  and  in  such  case  the  decree  is  no  bar  to 
another  foreclosure  suit.^'° 

It  is  held,  however,  that  if  a  party  like  a  contingent  remainder-man 
having  a  prior  interest  is  made  a  party  to  the  foreclosure  suit,  and, 
without  demurring,  answering  or  asserting  his  prior  title,  allows  judg- 
ment to  be  taken,  and  the  facts  stated  in  the  bill  are  such  that,  if  ad- 
mitted, his  title  is  subject  to  the  mortgage  and  to  the  foreclosure,  he 
is  estopped  from  afterwards  setting  up  his  interest  as  against  the 
judgment.^^^ 

A  controversy  between  defendants  to  a  foreclosure  suit,  as  to  which 
of  them  is  the  principal  debtor  and  which  is  surety,  cannot  be  de- 
termined in  such  suit,  and  a  decree  which  attempts  to  do  so  is  of  no 
effect."^ 

§  1589a.  A  decree  for  closing  a  junior  mortgage  cannot  affect 
the  lien  of  a  senior  mortgage,  where  its  priority  is  not  attacked  by 
the  petition  for  foreclosure.  If  the  holder  of  the  senior  mortgage 
has  also  acquired  a  third  mortgage,  or  the  equity  of  redemption,  a 
foreclosure  decree  upon  the  second  mortgage  relates  only  to  the  third 
mortgage  or  the  equity  of  redemption.  "The  clause  in  such  decree, 
that  the  defendant  and  all  persons  claiming  under  him  'shall  be  fore- 
closed and  forever  barred  from  all  equity  of  redemption  in  the 
premises,'  relates  only  to  such  rights  and  interests  as  are  inferior  to 
the  mortgage  that  is  foreclosed,  and  not  to  such  as  are  superior."i23 

"''Brackett  v.   Baum.   50  N.   Y.   8.  Onderdonk,  98  N.  Y.  1.58;  Boiling  v. 

This  decision  relates  to  a  power  ot  Pace,  99  Ala.  607,  12  So.  796. 

sale  mortgage  foreclosed  under  the  '--  Hovenden    v.    Knott,    12    Oreg. 

statute,    but    the    reasoning    applies  267.  7  Pac.  30. 

here.  '^^  Biizzell   v.    Still,   62   Vt.   490,   22 

""  Shores    v.    Scott    River    Co.    ^1  Atl.  619,  per  Rowell,  J.,  citing  Bmi- 

Cal.  135;  Goodenow  v.  Ewer,  16  Cal.  grant  Sav.  Bank  v.  Goldman,  75  N. 

461,  76  Am.  Dec    .540.  Y.  127;  Lewis  v.  Smith,  9  N.  Y.  502, 

""  Curtis  V.  Gooding,  99  Ind.  45.  Strobe  v.  Downer,  13  Wis.  10,  80  Am 

'-'  Goebel  v.  IfTla,  111  N.  Y.  170,  19  Dec.  709  and  note;  Shaw  v.  Chamber- 

St.  Rep.  105,  18  N.  E.  649;  Jordan  v.  lin,    45   Vt.    512;    Bowne   v.    Page,  2 

Van  Epps,  85  N.  Y.  427;  Barnard  v.  Tyler,  392. 


527  AMOUNT    OF    UECKHE.  [§    1590. 

IV.     The  Amount  of  the  Decree. 

§  1590.  The  decree  directing  a  sale  of  the  premises  should  find 
the  exact  amount  due  on  the  mortgage,  and  not  leave  this  to  be 
calculated  by  the  officer.^-*  A  decree  which  simply  orders  the  payment 
of  the  sum  due  on  the  mortgage  debt,  without  finding  the  amount,  is 
erroneous. ^-°  AVhcre  several  mortgages  upon  separate  parcels  of  land 
are  foreclosed  together,  the  decree  must  find  the  amount  due  upon 
each,  and  not  the  aggregate  amount  secured  by  all.^-"  The  parties 
themselves  may  fix  the  amount  by  agreement,  and  this  will  be  adopted 
by  the  court  in  entering  the  decree. ^^^  The  decree  cannot  be  for  a 
larger  sum  than  that  stated  in  the  mortgage.^^^  If  the  mortgagee  has 
received  payments  upon  collateral  securities  or  rents  and  profits  from 
the  mortgaged  premises,  an-  accounting  to  ascertain  the  sum  due 
should  precede  the  decree. ^-^  If  the  mortgage  was  drawn  for  a 
larger  sum  tlian  the  actual  debt  secured,  the  decree  should  be  for  the 
correct  amount  of  the  debt.^'"**  The  amount  due  may  be  determined 
by  the  court,^'^^  or  for  its  convenience  reference  may  be  made  to  a 
master  or  clerk  of  court,  or  other  officer,  to  ascertain  the  amount.^^^ 
If  a  master  or  referee  is  appointed  to  compute  the  amount  due,  the 
court  cannot  in  advance  of  the  report  direct  that,  upon  its  coming  in, 
the  same  be  affirmed  and  judgment  entered  thereupon. ^^^  A  part  of 
the  debt  not  due'cannot  be  included. ^^*  But  an  instalment  falling  due 
before  the  hearing,  although  not  due  when  the  suit  was  brought,  may 
be  included. ^'^^ 

A  judgment  by  default  cannot  be  entered  for  a  larger  amount  than 
the  complaint  shows  to  be  due.^^'' 

121-VVernwag    v.    Brown,    3    BlacKf.  "'^  Pari  in  v.  Stone,  1  McCrary,  443; 

457,  26  Am.   Dec.  433;    Champlin   v.  Stanley    v.    Chicago    Trust    &    Sav 

Foster,    7   B.    Mon.    104;    Warner   v.  Bank,  165  111.  295,  46  N.  E.  273. 

De   Witt   Co.    Nat.   Bank,   4   Bradw.  ""  Laylin  v.   Knox,  41  Mich.   40. 

305.     As  to  certainty  in  the  amount  "'Vaughn  v.  Nims,  36  Mich.  29/, 

of   the   decree,    see    Mulvey   v.    Gib-  Rollins  v.  Forbes,  10  Cal.  299.     And 

bons,  87  111.  367;    Keck  v.  Allender,  see  Davis  v.  Alvord,  94  U.  S.  545. 

37  W.  Va.  201,  16  S.  E.  520.  ^'^-  Ireland    v.    Woolman,    15    Mich. 

"^  Tompkins  v.  Wiltberger,  56  111.  253. 

385;   Wilson  Sewing  Machine  Co.  v.  "^Citizens'    Sav.    Bank    v.    Bauer, 

Rutledge,  60  Iowa,  39,  14  N.  W.  92;  14    N.    Y.    Civ.    Pro.    310,    1    N.    Y. 

Vermont  Loan  &  T.   Co.   v.  McGre-  Supp.  450. 

gor  (Idaho),  51  Pac.  102.  '"King    v.     Longworth,     7     Ohio, 

'""Rader    v.    Ervin,    1    Mont.    632;  585. 

Collier  v.  Ervin.  2  Mont.  335;  Hiber-  "'Manning    v.    McClurg,    14    Wis. 

nia  Sav.  &  L.  Soc.  v.  Kain,  117  Cal.  350;  Carr  v.  Watkins  (Ky.),  9  S.  W. 

478,  49  Pac.  578.  218;  Fields  v.  Drennen,  115  Ala.  553, 

'"Kelly  V.  Searing,  4  Abb.  Pr.  354;  22   So.    114;    Fulgham  v.   Morris,   76 

Nosier  v.  Haynes,  2  Nev.  53;  Clarke  Ala.  245. 

V.  Bancroft,  13  Iowa,  320.  '"  Savings    &    Loan    Soc.    v.    Hor- 

'=''  Home  Fire  Ins.  Co.  v.  Fitch,  52  ton,  63  Cal.  105. 
Neb.  88,  71  N.  W.  940. 


g  1591.]  DECREE  OF  SALE.  528 

Though  the  debt  secured  by  the  mortgage  be  made  up  of  several 
amounts,  as  where  the  mortgagee  has  paid  taxes  or  other  liens  upon 
the  property  for  his  own  protection,  the  whole  amount  due  and  pay- 
able at  the  time  of  the  foreclosure  should  be  included  in  the  decree. 
The  different  items  of  the  debt  cannot  be  separated  and  collected 
by  several  actions. ^^'^ 

Though  the  mortgagee  did  not  actually  pay  the  money  secured 
by  the  mortgage  at  the  time  of  its  execution,  but  as  a  matter  of 
convenience  indorsed  certain  promissory  notes,  and  delivered  them 
to  the  mortgagor  for  negotiation,  and  paid  the  notes  at  maturity, 
the  transaction  being  treated  as  if  the  money  had  been  paid  at  the 
date  of  execution,  interest  is  properly  computed  from  that  time.^^* 
Where  a  mortgage  secures  all  sums  due  or  thereafter  to  become  due 
from  the  mortgagor  to  the  mortgagee,,  the  latter  is  entitled  to  be 
allowed,  as  part  of  the  sum  due,  a  note  of  the  mortgagor  made  pay- 
able to  a  firm  of  which  the  mortgagee  is  the  surviving  member,  or 
to  bearer,  even  though  recovery  on  the  note  itself  is  barred  by  the 
statute  of  limitations."^ 

If  the  mortgagor  desires  an  account  taken  of  the  amount  of 
profits  received  by  the  mortgagee  in  possession,  he  should  ask  the 
action  of  the  court  in  session,  and,  upon  a  hearing  by  the  court  or 
before  a  master,  should  offer  his  proof."°  The  question  of  the  mort- 
gagee's liability  to  account  for  rents  and  profits  should  be  raised  by 
the  pleadings;  otherwise  the  master,  under  an  order  of  reference, 
will  not  without  special  directions  entertain  it.^*^ 

The  full  amount  of  the  mortgage  debt  may  be  recovered  as  against 
a  junior  incumbrancer,  though  the  mortgagee  has  agreed  to  sell  the 
mortgage  to  the  wife  of  the  mortgagor  at  a  discount.'"*^ 

§  1591.  Ordinarily  the  decree  cannot  include  any  instalment  of 
the  mortg-age  debt  not  due  at  the  time  ;^*^  and  it  cannot  be  amended 
so  as  to  include  subsequent  instalments  when  they  become  due,^** 
though  if  an  instalment  not  due  when  the  suit  was  commenced  falls  due 
before  the  decree  is  entered,  the  amount  of  it  is  properly  included."^ 

"^Jolinson  v.  Payne.  11  Neb.  269,  "^  King    v.     Longworth,     7     Ohio, 

9  N.  W.  81.  585.     See  §   1478. 

"« Baxter  v.   Blodgett    63  Vt.   629,  "*  Byrne   v.    Hoag,    116    Cal.    1,   ii- 

22  Atl.  625.  Pac.  775. 

""Gleason     v.     Kinney     (Vt.),     27  ^^  Union     Trust     Co.     v.     Detroit 

Atl.  208.  Motor  Co.   117  Micli.   631,  76  N.  W. 

""Hards  v.  Barton,  79  111.  504.   And  112;  Jehle  v.  Brooks,  112  Mich.  131, 

see  Roberts  v.  Pierce,  79  111.  378.  70  N.  W.   440;    Howe  v.   Lemon.   37 

"^Wycoff  V.   Combs,  28  N.  J.   Eq.  Mich.  164;   Vaughn  v.  Nims,  36  Mich. 

40.  297;  Johnson  v.  Van  Velsor,  43  Mich. 

"^Knox    V.    Moser,    69    Iowa,    34^,  ?"H.    5    N.    W.    265;    Malcolm   v.    Al- 

28  N.  W.  629.  I'sn,  49  N.  Y.  448;   Ferguson  v.  Fer- 


539  AMOUNT   OF    DECREE.  [§    1592. 

When  only  a  portion  of  the  debt  is  due,  the  judgment,  besides  finding 
the  amount  actually  due  at  the  time  it  is  entered,  should  find,  also,  the 
amount  secured  by  the  mortgage  not  then  due,  and  should  provide  for 
a  stay  of  proceedings,  if,  before  the  day  of  sale,  the  mortgagor  pay 
the  amount  with  costs.^^"  But  whether  the  amount  not  due  should 
be  stated  or  not  depends  upon  the  statutes  and  practice  of  the  differ- 
ent States.^" 

When  by  the  terms  of  the  mortgage  ihe  entire  mortgage  debt  be- 
comes due  on  any  default,  the  mortgagee  may  elect  to  consider  the 
entire  amount  of  the  mortgage  debt  as  due,  and  if  he  notifies  the 
mortgagor  of  his  election  so  to  consider  it,  a  decree  may  be  entered  for 
the  full  amount,  although  only  a  part  of  the  debt  is  due;^*^  but  there 
should  be  a  proper  rebatement  of  the  interest  on  the  notes  not  due.^** 

§  1592.  Collateral  mortgage. — If  a  mortgage  made  without  con- 
sideration paid  by  the  mortgagee  be  assigned  by  the  latter  as  in- 
demnity against  the  assignee's  liability  as  indorser  for  the  mortgagor, 
it  is  of  course  security  only  for  the  amount  the  indorser  has  been 
obliged  to  pay,  and  on  foreclosure  the  decree  should  be  for  that 
amount  only.^'"'"  When  a  mortgage  given  to  indemnify  sureties  is 
foreclosed  while  suit  is  pending  on  the  claim  indemnified  against, 
the  decree  may  properly  direct  payment  of  the  proceeds  of  sale  into 
court,  to  await  further  order  of  court. ^^^ 

If  the  complainant  holds  the  mortgage  assigned  to  him  as  collat- 
eral security  for  a  specific  debt  of  less  amount  than  the  mortgage, 
he  can  only  have  a  decree  fo-r  that  debt,  although  pending  the  suit 
the  mortgage  is  assigned  to  him  absolutely.  His  remedy  for  the 
residue  is  by  a  supplemental  bill ;  or,  in  case  the  whole  premises  are 
sold  upon  the  decree  in  the  original  suit,  he  might  have  remedy  by 
petition  for  the  surplus.^'^^ 

And  so  if  one  holding  a  mortgage  as  collateral  security  at  the 
request  of  the  mortgagor,  who  owes  the  principal  debt,  assigns  the 

guson,  2  N.  Y.  360,  364;  Asendorf  v  cases,  Walker  v.  Hallett,  1  Ala.  379; 

Mever,    8    Daly,    278;     Manning    v.  Taggart  v.  San  Antonio  Ridge  Ditch 

McClurg,    14   Wis.    350;    Hanford    v.  &  Mining  Co.  18  Cal.  480. 

Robertson,   47  Mich.   100,   10   N.   W.  "'  Hoffman  on  Referees,  p.   229. 

125;     Cooke  v.  Pennington,  15  S.  C.  "' Noonan    v.    Lee,    2    Black,    499; 

185.     In   a   mortgage   to   a   loan   as-  Noyes    v.    Cl-ark,    7    Paige,    180,    32 

sociation  whose  by-laws  provide  for  Am.  Dec.  620. 

the    payment    of    the    premium    in  "'' Gillmour  v.   Ford    (Tex.),   19   b 

monthly    installments,    it    is    proper  W.  442. 

to  include  in  the  decree  the  amount  '■"'  Van   Deventer   v.    Stiger,    25    N. 

of  premiums  due  from  time  of  de-  J.  Eq.  224;  Handy  v.  Sibley,  46  Ohio 

fault    to    the    date    of    the    decree.  St.  9,  17  N.  B.  329. 

Cantwell   v.   Welch,   187  111.   275,  58  '''  Hunter  v.  Levan,  11  Cal.  11. 

N.  E.  414.  ''-  Underbill   v.   Atwater,  22   N.   J. 

'*'  Rice  v.  Cribb,  12  Wis.  179.    See,  Eq.  16. 
also,    as    to    the    practice    in    such 


8  1593.]  DECREE  OF  SALE.  530 

mortgage  to  a  third  person  for  a  sum  less  than  the  face  of  the  mort- 
gage, which  sum  is  credited  on  the  principal  debt,  and  the  mort- 
gagor subsequently  pays  the  balance  of  this  debt,  the  mortgage  in  the 
hands  of  the  assignee  can  be  enforced  for  only  the  amount  he  paid 
for  it  either  as  against  the  mortgagor  or  against  subsequent  incum- 
brancers at  the  time  of  the  assignment,  for  in  such  case  that  amount 
is  the  only  part  of  the  mortgage  remaining  unpaid. ^^^ 

§  1593.  If  the  mortgage  secures  a  bond  the  decree  may  be  entered 
for  the  full  amount  of  principal  and  interest  due  upon  the  bond, 
though  it  exceeds  the  amount  of  the  penalty.^"*  Even  when  the  suic 
is  founded  on  the  bond  alone,  the  plaintiff  may  recover  the  full  amount 
of  the  penalty  as  a  debt,  and  interest  in  addition  as  damages  for  the 
detention  of  the  debt.^^^  When  the  suit  is  not  upon  the  bond,  but  is  a 
proceeding  in  equity  upon  the  mortgage  given  to  secure  the  bond,  it 
has  been  considered  that  the  lien  upon  the  land  is  for  the  whole  debt, 
both  principal  and  interest,  according  to  the  condition  of  the  mort- 
gage. "The  mortgage,"  says  Sir  William  Grant,^^^  "is  to  secure  pay- 
ment, not  of  a  bond,  but  of  the  sum  for  which  the  bond  was  given, 
together  with  all  interest  that  may  grow  due  thereon.  The  same  sum, 
therefore,  is  differently  secured  by  different  instruments;  by  a  pen- 
alty and  by  a  specific  lien.  The  creditor  may  resort  to  either,  and  if 
he  resorts  to  the  mortgage  the  penalty  is  out  of  the  question." 

The  American  cases  go  further  than  this,  and  hold  that  the  real 
debt  is  the  sum  specified  in  the  condition  of  the  bond,  with  interest, 
and  that  the  penalty  is  a  mere  matter  of  form  in  the  instrument 
declaring  the  debt.  This  is  the  view  taken  by  Chancellor  Wal- 
worth, and  followed  in  other  cases.  "The  amount  secured  by  the  con- 
dition of  the  bond  is  the  real  del)t,  which  he  was  both  legally  and 
equitably  bound  to  pay.  And  if  he  neglects  to  pay  the  money  when 
it  becomes  due,  there  is  no  rule  of  justice  or  common  sense  which 

'"Hoy  V.   Bramhall,  19  N.  J.  Eq.  mitted  to  recover  a  larger  amount 

74,  97  Am.  Dec.  687.  upon     the    mortgage,     which     is     a 

'"  Long  V.   Long,  16  N.  J.  Eq.  59.  mere    security    for    the    bond,    than 

But  see   Harper  v.   Barsh,   10  Rich,  he  is  permitted  to  recover  upon  the 

Eq.  149;   Mower  v.  Kip,  6  Paige,  88,  bond  itself." 

reversing  2  Edw.   165,  29   Am.   Dec.  In  Cruger  v.  Daniel,  1  McMull  Eq.. 

748.  57,     the     Chancellor,     referring     to 

'"Long  v.  Long,  16  N.  J.  Eq.  59,  Clarke  v.  Abingdon,  very  justly  re- 

and  cases  cited  there.  marks  that  the  mortgage  there  did 

''^  Clarke  v.  Abingdon,  17  Ves.  106.  not  secure  the  bond,  nor  did  it  se- 

Mr.    Chancellor    Green,    in    Long    v.  cure  or  refer  to  the  penalty;    and  he 

Long,  16  N.  J.  Eq.  59,  says,  in  ref-  holds   that  when   the   mortgage  ex- 

erence   to   this   distinction:     "Look-  pressly  refers  to  the  bond  and  states 

ing  at  the  question  as  a  mere  ques-  the  penalty,  this  is  the  entire  debt 

tion  of  equity,  it  will  be  found  very  secured,    and    the    judgment   cannot 

difficut  to  assign  a  satisfactory  rea-  go  beyond  it. 
son  why  the  obligee  should  be  per- 


531  AMOUNT    OF    DECREE.  [§    1594. 

should  excuse  him  from  tlie  payment  of  the  whok'  amount  of  the 
principal  and  interest,  whether  it  be  more  or  less  than  the  former 
j^enalty  of  tlie  bond."^'"'' 

A  decree  for  the  amount  of  the  face  of  a  bond  with  interest,  when 
the  bond  is  in  double  the  true  amount  of  the  debt,  is  erroneous,  and 
a  sale  under  it  will  be  enjoined. ^^^ 

§  1594.  Interest. — The  decree  should  be  for  the  amount  of  the 
debt,  with  interest  thereon  if  it  bears  interest.^^"  If  the  interest  has 
been  paid  by  a  note  of  the  mortgagor,  and  this  remains  outstand- 
ing, the  amount  of  such  note  should  be  included  in  the  decree,  not 
only  as  against  the  mortgagor,  but  as  well  against  subsequent  in- 
cumbrancers, although  the  interest  is  indorsed  on  the  mortgage  note 
as  paid."''  If  the  debt  does  not  bear  interest  the  decree  should  not 
include  interest.^*'^ 

Upon  the  foreclosure  of  a  mortgage  against  a  subsequent  grantee  of 
the  mortgaged  premises  who  has  not  assumed  and  agreed  to  pay  the 
debt,  the  mortgagee  is  entitled  to  only  such  rate  of  interest  as  is 
specified  in  the  mortgage  as  recorded,  although  the  notes  themselves 
specify  a  greater  rate."- 

He  luay  be  allowed  interest  upon  amounts  paid  for  taxes  and 
other  claims  upon  the  property;  but  he  should  not  be  allowed  more 
than  the  legal  or  usual  rate  of  interest  as  against  a  junior  incum- 
brancer, thougii  he  may  have  an  agreement  with  the  mortgagor  for 
a  higher  rate  of  interest.^^^ 

Interest  upon  a  purchase-money  mortgage,  upon  land  to  which  the 
mortgagee  had  no  title  till  long  after  -his  conveyance  to  the  mort- 
gagor, should  only  be  allowed  from  the  time  the  mortgagee  made' 
the  title  valid  and  effectual,  unless  the  mortgagor  has  derived  a 
profit  from  the  possession  and  use  of  the  property;  and  not  even 
in  that  case  if  it  appears  that  the  use  of  the  land  was  of  value  to 
the  mortgagor  by  reason  of  improvements  made  by  him  upon  the 
land."* 

Under   a   provision   of   the    Constitution    of    California    declaring 

'"  Mower   v.    Kip,   6   Paige,   88,   ^9  i"  Heydle    v.    Hazleliurst,    4    Bibb. 

Am.  Dec.   748,  approved  in  Long  v.  19. 

Long.  16  N.  J.  Eq.  59,  in  wliich  case  '»=  George  v.  Butler,  26  Wash.  456, 

Chancellor  Green  fully  reviews   the  67  Pac.  263;    Whittacre  v.  Fuller,  5 

decisions.     Anderson    v.    Smith,    108  Minn.  508;    Gardner  v.  Emerson,  40 

Mich.  69,  65  N.  W.  615;    Shelden  v.  111.  296;   Gilchrist  v.  Gough,  63  Ind. 

Barlow,  108  Mich.  375,  66  N.  W.  338.  576,  30  Am.  Rep.  250. 

^'"Scriven  v.  Hursh,  39  Mich.  98.  '»=  Butterfield     v..     Hungerforfl,     68; 

'■'"  Stickney   v.    Stickney,   77    Iowa,  Iowa,  249,  26  N.  W.  136. 

699,  42  N.  W.  518.  "'^  Toms    v.    Boyes,    59    Mich.    380. 

^•^"See  §  925;    Frink  v.  Branch,   16  26  N.  W.  646. 
Conn.  260. 


§§  1595,  1596.]  DECREE  OF  SALE.  533 

that  any  contract  obliging  the  debtor  to  pay  the  tax  on  the  money 
loaned  shall  be  void  as  to  any  interest  specified  therein  and  as  to 
such  tax,  a  provision  in  a  mortgage  that,  in  case  of  foreclosure,  the 
mortgagee  may  include  therein  all  payments  made  by  him  for 
"ta^xes  of  this  mortgage,  or  the  money  hereby  secured,"  is  void. 
But  this  provision  is  for  the  benefit  of  the  borrower,  and  he  may 
waive  it  if  he  sees  fit.  If  he  voluntarily  fulfils  his  promise  to  pay 
interest,  it  is  through  a  mistake  of  law  on  his  part,  or  a  waiver 
of  a  known  right.  In  either  case  he  is  bound  by  his  own  act,  and 
cannot  recover  it,  or  have  it  credited  on  the  principal  of  the  loan.^^'^ 

§  1595.  Exchange. — No  allowance  can  be  made  for  the  difference 
of  exchange,  though  the  mortgage  loan  was  negotiated  in  a  foreign 
country  where  the  mortgagee  resides.^"** 

§  1596.  Insurance. — Premiums  paid  by  the  mortgagee  for  insur- 
ance against  fire  are  a  charge  upon  the  premises  if  the  mortgagor 
has  expressly  made  them  such ;  but  if  paid  without  such  agreement, 
they  cannot  be  allowed  in  the  judgment.^®^  They  are,  in  such  case, 
paid  merely  for  the  mortgagee's  own  security.  Premiums  for  insur- 
ance paid  after  the  commencement  of  the  action  will  not  be  allowed 
except  upon  a  supplemental  complaint.^'^^ 

Doubtless  provision  might  be  made  in  the  decree  for  reimbursing 
the  mortgagee  for  money  paid  by  him  for  insurance  during  the  year 
allowed  by  statute  for  redemption  before  sale,  where  the  mortgage 
contains  covenants  that  the  mortgagor  would  keep  the  premises  in- 
.sured,  or  that,  in  case  of  his  failure  to  insure,  the  mortgagee  might 
do  so,  and  that  the  premiums  should  become  part  of  the  mortgage 
debt.  But  if  no  provision  be  inserted  in  the  decree  authorizing  the 
sheriff  to  pay,  out  of  the  proceeds  of  the  sale,  any  sums  which  the 
mortgagee  might  be  compelled  to  pay  thereafter  to  keep  the  prop- 
erty so  insured  during  the  year  allowed  by  the  statute  for  redemp- 
tion before  sale,  the  court  has  no  authority,  after  a  sale  of  the  land 
for  the  exact  amount  specified  in  the  judgment,  to  enter  further  judg- 
ment or  order  for  the  amount  so  paid  by  the  mortgagee  for  insurance 

"■^  Harralson  v.  Barrett   (Cal.),  34  One    bondholder    paying    the    pre- 

Pac.  342.  miums     to     preserve     the     security, 

'"« Chapman  v.  Robertson,  6  Paige,  though    without    the    knowledge    of 

627,  31  Am.  Dec.  264.     See  §  637.  the    other    bondholders,    has    a   lien 

"•'  See    §    414;     Faure    v.    Winans,  for    the    amount    paid.     McLean    v. 

Hopk."   Ch.    283,    14    Am.    Dec.    545;  Burr,  16  Mo.  App.  240. 

Burgess   v.    Southbridge   Sav.   Bank,  "^Washburn  v.  Wilkinson,  59  Cal. 

2    Fed.    500;     Loughridge   v.    North-  538. 
western    Mut.    L.    Ins.    Co.    180    111. 
267,  54  N.  E.   153. 


533  AMOUNT   OF   DECREE.  [§    1597. 

against   tlie   parties   personally   liable   for   the    mortgage    debt,    and 
award  execution  therefor/*^" 

If  the  mortgage  be  of  a  leasehold  estate,  the  decree  may  include  rent 
paid  by  the  mortgagee  for  the  protection  of  the  estate.^'^ 

§  1597.  Taxes. — A  mortgagee  cannot  charge  to  the  mortgagor,  or 
have  included  in  a  decree  in  a  foreclosure  suit,  the  amount  he  has 
paid  as  taxes  on  his  mortgage  as  for  money  at  interest.  He  is  as 
much  bound  to  pay  the  tax  upon  this  as  upon  his  other  property.^^^ 
But  he  may  be  allowed  for  payments  made  upon  taxes  assessed  upon 
the  land,  and  which  are  a  charge  upon  it,  properly  payable  by  the 
mortgagor,^^^  including  taxes  he  has  paid  pending  the  foreclosure  suit 
before  the  rendering  of  the  decree.^^'^  The  bill  should  contain  a  proper 
allegation  and  prayer  in  regard  to  taxes,  otherwise  the  decree  cannot 
properly  direct  an  application  of  the  proceeds  of  a  sale  to  the  payment 
of  the  delinquent  taxes.^^''  An  allowance  for  taxes  cannot  be  made 
under  a  general  prayer  for  relief .^^^  When  the  taxes  remain  outstand- 
ing and  unpaid,  the  decree  may,  upon  the  application  of  the  plaintiff, 
properly  direct  that  the  taxes  due  on  the  property  be  first  paid  out  of 
the  proceeds  of  the  sale.^"  In  rendering  judgment  for  a  deficiency 
against  a  purchaser  who  has  assumed  the  payment  of  a  mortgage, 
it  is  proper  that  the  taxes  due  upon  the  property  should  be  deducted 
from  the  proceeds  of  the  sale  before  ascertaining  the  deficiency,  for 
it  is  the  duty  of  the  purchaser  to  see  that  the  taxes  are  paid.^^^  But 
after  trial  in  the  foreclosure  suit,  and  without  notice  to  the  mort- 
gagors, it  is  error  to  include  the  taxes  in  a  judgment  entered  merely 
upon  the  production  of  the  tax  receipt.^'^* 

"» Northwestern     Mut      Life     Ins.  Omohundro,  69  Md.  424,  16  Atl.  120; 

Co.  V.  Drown,  15  Wis.  419.  Neale    v.    Hagthorpe,    3    Bland,    551, 

"0  Robinson  v.  Ryan,  25  N.  Y.  32J.  590;    Farwell  v.   Bigelow,  112   Mich. 

"'  Pond  V.   Causdell,  23  N.  J.  Eq.  285,  70  N.  W.  579. 

181.  ^"Jehle  v.  BrooliS,  112  Mich.  131, 

^"-See    §§     1134,     1683;     Faure    v.  70  N.  W.  440. 

Winans,    Hoplv.    283,    14    Am.    Dec.  ^'^  De  Leuw  v.   Neely,  71   111.  473; 

545;    Silver  Lake  Bank  v.   North,   4  Brown  v.  Miner,  128  111.  148,  21  N. 

Johns.   Ch.   370;    Rapelve  v.   Prince,  E.  223. 

4  Hill,   119,  40  Am.  Dec.   267;    Burr  ^'^Brown  v.  Miner,  21  111.  App.  60, 

V.  Veeder,  3  Wend.  412;  De  Leuw  v.  21  N.  B.  223. 

Neely,    71    111.    473;     Loughridge    ■■^  >'»  Poughkeepsie      Sav.      Bank      v. 

Northwestern   Mut.    F.    Ins.    Co.    180  Winn,  56  How.   Pr.   368;    Opdyke  v. 

111.    267,    54    N.    E.    153;    Abbott    v.  Crawford,   19   Kans.   604;    Easton   v. 

Stone,  172  111.  434,  50  N.  B.  328,  af-  Pickersgill,    55    N.    Y.    310;    Tuck    /. 

firming  70  111.  App.  671;   Vaughn  v.  Calvert,  33  Md.  209,  224;  Ketcham  v. 

Nims,     .36    Mich.     297;     Johnson    v.  Fitch,    13    Ohio    St.    201;    Harris    v. 

Payne,    11    Neb.    269,    9    N.    W.    81;  McCrossen,  31  Kans.  402. 

Southard     v.     Dorrington,     10    Neb.  ^"  Fleishhauer      v.      Doellner,      60 

119,  4  N.  W.  935:     Seaman  v.   Huf-  How.  Pr.  438. 

faker,  21  Kans.  254;  Boone  v.  Clark,  i''*  Northwestern     Mut.     Life     Ins. 

129  111.  466,  21  N.  E.  850;   Young  v.  Co.  v.  Allis,  23  Minn.  337. 


g  1597.]  DECREE  OF  SALE,  534 

If  the  taxes  were  illegally  assessed  and  the  payment  thereof  might 
have  been  successfully  resisted,  the  mortgagee  will  not  be  allowed 
to  recover  them.^"'' 

If  money  has  been  paid  under  a  foreclosure  judgment  upon  an 
assessment  which  is  afterward  vacated,  the  payment  being  out  of 
money  to  which  the  mortgagor  would  be  entitled,  as  surplus  money 
after  sale,  he  is  entitled  to  recover  the  money  so  paid.^**^ 

If  the  mortgagee  has  taken  a  tax  title  for  the  purpose  of  protecting 
the  mortgage,  the  decree  may  properly  provide  that  on  payment  of  the 
cost  of  the  tax  title  with  interest  the  mortgagee  shall  assign  the  tax 
title.^" 

If  a  mortgagee  has  paid  the  taxes  to  protect  his  security,  and 
afterwards  forecloses  his  mortgage  without  including  the  amount  so 
paid  in  his  complaint,  he  cannot  thereafter  maintain  an  action  to 
recover  such  amount,  for  the  reason  that  the  claim  for  taxes  became 
merged  in  the  mortgage,  and  constitutes  but  a  single  and  indivisible 
demand,  and  could  not  be  separated  and  collected  by  several  actions.^^^ 
The  result  is  similar  in  case  the  mortgagee  pays  the  taxes  to  enable  him 
to  negotiate  the  mortgage,  and  he  afterwards  sells  the  mortgage  to 
the  mortgagors,  and  executes  and  delivers  an  unconditional  release  of 
the  mortgage  and  the  debt  secured  thereby.  The  mortgagee  cannot 
afterwards  maintain  an  action  against  the  mortgagors  for  the  amount 
of  the  taxes  so  paid.^*^ 

Where  a  judgment  entered  upon  the  foreclosure  of  a  second  mort- 
gage provided  that  out  of  the  moneys  arising  from  the  sale  there  should 
be  deducted  any  liens  on  the  premises  for  taxes,  but  the  whole  amount 
realized  at  the  sale  was  paid  to  the  mortgagee  without  deducting  or 
paying  the  taxes,  in  an  action  by  the  first  mortgagee,  after  fore- 
closing his  mortgage  against  the  second  mortgagee  who  had  purchased 
at  the  previous  sale,  to  recover  the  amount  paid  for  taxes  upon  the 
premises,  it  was  held  that  he  was  not  entitled  to  recover.  The  first 
mortgagee  not  having  been  a  party  to  the  judgment  upon  the  second 
mortgage,  he  was  not  entitled  to  enforce  its  provisions.^^* 

The  purchaser  of  the  property  at  the  foreclosure  sale  has  the  right 
to  insist  upon  the  payment  of  the  taxes  in  accordance  with  the  judg- 
ment.^^^ 

'■»  Atwater  v.   West,   28  N.   J.   Eq.  '^-  Johnson  v.  Payne,  11  Neb.  269, 

361  9  N.  W.  81. 

'»"Brehm  v    New  York,  104  N.  Y.  '"^  Kersenbrock    v.    Muff,    29    Neb. 

186,  10  N.  E.  158.  530,  45  N.  W.  778. 

^*'  Baker  v.  Clark,  52  Mich.  22,  17  ^"^  Mut.    Life   Ins.    Co.   v.    Sage,   28 

N    W    225.  Hun,  595,  41  Hun,  535. 

1**' People  V.  Bergen,  53  N.   Y.  404. 


535  AMOUNT    OF   DECREE.  [§§    1598-1600. 

§  1598.  Costs  incurred  in  a  previous  action  at  law  upon  the  note, 
and  the  expenses  of  a  suit  prosecuted  in  good  faitli  to  collect  the  debt 
out  of  personal  property  assigned  as  collateral  security  for  the  same 
debt,  should  be  allowed  in  the  decree  as  a  part  of  the  mortgage  debt.^*"® 

§  1599.  The  disbursements  made  by  the  plaintiff  in  the  proceed- 
ings for  foreclosure,  if  legally  and  properly  made,  are  always  allowed 
to  him,  though  not  strictly  costs.^" 

Payments  made  by  the  plaintiff,  to  protect  his  interest  by  redeem- 
ing from  prior  incumbrances,  may  be  tacked  to  his  own  mortgage 
debt.^**^  Inasmuch  as  the  junior  mortgagee  is  thus  subrogated  to  the 
prior  mortgage,  his  decree  should  include  interest  on  that  mortgage  at 
the  rate  borne  by  it  to  the  date  of  the  decree.^®'' 

If  the  mortgagee  in  possession  has  made  repairs  or  improvements 
for  which  he  is  entitled  to  compensation,  or  if  a  purchaser  under  an 
imperfect  foreclosure,  who  is  in  effect  a  mortgagee  in  possession, 
makes  such  repairs  or  improvements,  he  should  ask  to  have  them 
allowed  for  in  the  decree.  If  the  decree  is  entered  without  including 
any  claim  for  repairs,  another  bill  cannot  be  l)rought  to  make  them 
a  charge  upon  the  property.  The  decree  as  entered  is  conclusive  of 
the  amount  due  on  the  mortgage.^^'' 

§  1600.  Final  judgment. — A  judgment  which  settles  all  the  rights 
of  the  parties  and  directs  a  sale  of  the  premises,  and  that  the 
defendant  pay  any  deficiency  which  may  arise  after  such  sale,  is  a 
final  decree  from  which  an  appeal  may  be  taken;  though  in  a 
limited  sense  it  is  interlocutory,  inasmuch  as  further  proceedings  are 
necessary  to  carry  it  into  effect.^''^  It  leaves  nothing  further  to  bo 
adjudicated.^^-    All  prior  decrees  are  interlocutory."^    It  is  no  objec- 

'^^  See    §    1084;    Pettibone   v.    Ste-  within  a  prescribed  time,  gives  the 

vens,  15  Conn.  19,  38  Am.  Dec.  57.  prior  mortgagee  notice  of  his  desire 

'»'  Benedict  v.   Warriner,   14   How.  and   intention   to   redeem   the   lands 

Pr.  568.  purchased    by    the    latter   at    a   for- 

>'»  Hosier   v.    Norton,    83    111.    519;  mer  foreclosure  sale,   he  is  forever 

Kellv    V.    Longshore,    78    Ala.    203;  barred   and  foreclosed   of  and  from 

Dimick    v.    Grand    Island    Banking  all  right,  title,  interest,  and  equity 

Co.  (Neb.),  55  N.  W.  1066.  of  redemption  therein,  and  the  lien 

''">  Hosier  v.   Norton,  83  111.   519.  of  his  mortgage  thereon  cut  off  anJ 

™  Dewey  v.  Brownell,  54  Vt.  441,  foreclosed,    and    that    the    plaintiff 

41  Am.  Rep.  852.  shall    hold    the    title    thereto    free 

"'  Grant    v.    Phoenix    Ins.    Co.    106  from  such  lien,  is  a  final  judgment 

U.   S.  429,  431,  1  Sup.  Ct.   414;    Ma-  and  appealable.     If  the  notice  is  not 

lone  v.  Marriott,  64  Ala.  486;  Dodge  given,  no  further  judgment  need  be 

v.  Allis,  27  Minn.  376,  7  N.  W.  732.  entered  but  this  decree,  by  the  force 

"-  Morris    v.    Morange,    38    N.    Y.  of  its  own  provisions,  effectually  de- 

172,  4  Abb.  Pr.  N.  S.  447;   Bolles  v.  stroys    the    lien    of   the    defendant's 

Duff    43  N.   Y.   469,  10   Abb.   Pr.   N.  mortgage.     Houlton  v.   Cornish,  138 

S.    399,    41    How.    Pr.    355;    Hipp    v.  N.  Y.  133,  33  N.  E.  842. 

Huchett,  4  Tex.  20;   Dodge  v.  Allis,  '■«  Kimbrell  v.  Rogers,  90  Ala.  339, 

27    Hinn.    376.     A    decree    in    effect  7  So.  241. 
that    unless     a    junior     mortgagee. 


§  1600.]  DECREE  OF  SALE.  530 

tion  to  such  judgment  that  it  was  not  rendered  by  a  court  composed  of 
the  same  judges  who  rendered  the  preliminary  judgment,  ascertain- 
ing and  settling  the  rights  of  the  parties  and  ordering  judgment.^®* 
The  judgment  for  a  deficiency  is  entered  upon  the  coming  in,  and  con- 
firmation of,  the  report  of  the  sale  without  any  further  application 
to  the  court.  The  execution  issues  by  virtue  of  the  judgment  of  fore- 
closure.^"^ Nothing  remains  to  be  judicially  determined,  and  an  appeal 
may  be  taken  at  once.^"®  An  action  may  be  brought  on  a  decree  which 
ascertains  the  indebtedness  of  the  defendant,  though  a  sale  of  the  land 
is  ordered  to  satisfy  the  decree.^"^ 

A  decree  determining  the  amount  of  the  mortgage  debt,  and 
ordering  a  sale  unless  the  same  is  paid  by  a  day  named,  but  also 
making  a  reference  to  a  master  to  report  the  amount  of  prior  liens, 
a  detailed  statement  of  the  several  properties  covered  by  the  mort- 
gage, and  a  statement  as  to  the  order  of  sale  and  as  to  the  form  of 
the  advertisement,  is  not  a  final  decree  from  which  an  appeal  may 
be  taken.^"*  An  order  adjudging  that  plaintiff  has  a  lien  on  the 
premises  described  in  the  complaint  to  secure  his  debt,  and  directing 
that  an  account  be  taken  to  ascertain  the  amount  thereof,  and  re- 
taining the  case  for  further  action,  is  not  appealable.  It  is  merely 
an  interlocutory  order.^^" 

An  appeal  is  the  proper  remedy  for  any  errors  in  substance  of  the 
decree,  or  in  the  directions  for  carrying  it  into  execution  ;^°'^  but  the 
trial  court  has  control  of  the  judgment,  though  final,  and  may,  on 
proper  application,  seasonably  made,  change  the  provisions  of  it,  or 
insert  other  provisions  for  the  benefit  of  any  of  the  parties  to  the 
action.^"^  The  court,  pending  an  appeal  without  supersedeas  from  a 
final  decree  settling  the  priority  of  liens  and  fixing  a  day  of  sale, 
has  power  to  postpone  the  sale,  if  a  sale  on  the  day  fixed  would  be 
oppressive  or  unjust.-"^ 

"*  Chamberlain  v.  Dempsey,  36  N.  Y.    440;     Russell    v.    Blakeman,    40 

Y.  144,  reversing  9  Bosw.  540.  Minn.  463,  42  N.  W.  391;    Fuller  v. 

^^=Bicknell  v.  Byrnes,  23  How.  486.  Brown,  35  Hun,  162;  Brown  v.  Frost 

""Belles    V.    Duff,    43    N.    Y.    469,  10  Paige,  243;  Farmers'  L.  &  T.  Co. 

Morris  v.  Morange,  38  N.  Y.  172.  v.   Oregon  Pac.   R.   Co.   28  Oreg.   41, 

"^Rowe  V.    Blake    (Cal.),   33   Pac.  40    Pac.    1089.     If,    after    a    decree 

864.  has    been    rendered    this    has    been 

"*  Parsons  v.  Robinson,  122  U.  S.  fully  paid,  and  the  errors  released, 

112,    7    Sup.    Ct.    1153;    Railroad   Co.  the  only  mode   in  which   the  ques- 

V.  Swasey,  23  Wall.  405,  409;   Bost-  tion   can   be   brought   to   the   atten- 

wick  V.   Brinkerhoff,  106  U.  S.   3,  1  tion  of  the  appellate  court  is  by  a 

Sup.  Ct.  15.  plea  of  the  release  of  errors.    Moore 

1"°  Williams  v.   Walker,   107  N.   C.  v.   Williams,   132   111.    591,   24   N.    E. 

334,  12   S.   E.   43;    Blackwell  v.   Mc-  617;    Crosby   v.    Kiest,    135    111.    458, 

Caine,  105  N.  C.  460,  11  S.  E.  360.  26  N.  E.  589. 

=•">  Barnard  v.  Bruce,  21  How.   Pr.  ="=  Bound    v.    South    Carolina    Ry. 

360.  Co.  55  Fed.  186. 

'"'■  Livingston    v.    Mildrum,    19    N. 


537  AMOUNT   OF   DECREE.  [§    IGOl. 

After  a  decree  from  which  no  appeal  is  taken,  and  after  a  sale 
under  such  decree,  a  mortgagor,  who  was  a  party  to  the  foreclosure 
suit,  is  estopped  by  the  decree  from  maintaining  a  suit  to  recover 
possession  of  the  property  on  the  ground  that  the  mortgage  was 
invalid.  The  question  of  the  validity  of  the  mortgage  is  res  adju- 
dicata.^**^ 

A  judgment  of  foreclosure  and  a  judgment  for  a  deficiency  are 
each  appealable,  but  both  judgments  cannot  be  included  in  one  ap- 
peal.2«* 

If  upon  an  appeal  the  judgment  for  a  deficiency  is  modified  so 
that  no  personal  judgment  shall  be  entered  against  one  of  the  de- 
fendants, but  in  other  respects  the  judgment  is  afilimed,  the  former 
judgment  is  not  vacated,  and  a  sale  of  the  mortgaged  premises 
under  it,  pending  the  appeal,  is  not  rendered  void.^'^^  A  decree  of 
foreclosure  cannot  be  changed  to  the  detriment  of  the  mortgagor 
without  notice  to  him.^"*'  The  decree  is  a  final  judgment,  upon  which 
the  parties  to  the  suit  may  rely;  and  any  modification  of  it  with- 
out lawful  notice,  particularly  after  the  term  at  which  it  was  ren- 
dered, is  null  and  void.^'*'^  But  a  mere  mistake  in  the  record  entry  of 
a  decree  may  be  corrected  by  the  court  at  the  term  at  which  it  was 
rendered,  or  by  virtue  of  a  statute  at  a  subsequent  term,  so  as  to 
make  the  same  correspond  with  the  decree  actually  pronounced  by  the 
court,  and  to  conform  to  the  pleadings  in  the  case.'°® 

§  1601.  No  stay  of  proceedings  can  be  had  on  account  of  a  con- 
troversy between  subsequent  incumbrancers.  In  case  of  an  appeal 
from  a  decree  of  sale  on  a  bill  to  foreclose  a  mortgage,  the  amount  of 
which  and  of  other  mortgages  upon  the  property  are  not  disputed, 
though  there  is  a  controversy  about  the  validity  of  certain  judgments 
subsequent  to  the  mortgages,  the  court  will  not  stay  proceedings  under 
the  decree,  but  will  order  the  surplus  money  to  be  brought  into  court  to 
abide  its  decision ;  for  in  such  case,  if  the  decree  should  be  reversed,  the 
mortgagor  cannot  be  prejudiced,  while  the  mortgage  creditors  would 
be  prejudiced  by  a  delay  in  recovering  their  claims.^"" 

■"^  Robinson  v.  Walker,  81  Ala.  404,  ""'  Homan  v.  Helman,  35  Neb.  414, 

1  So.  347.  53  N.  W.  369;     Blake  v.   McMurtry, 

=»*  Ballon  v.  Chicago  &  N.  W.  Ry.  25  Neb.  290,  41  N.  W.  172. 

Co.  53  Wis.  150,  10  N.  W.  87;  dinger  =''^Hoagland  v.  Way,  35  Neb.   38  T,' 

V.  Liddle,  55  Wis.  621,  13  N.  W.  703.  53  N.  W.  207. 

=»'  Batchelder   v.   Brickell,   75   Cal.  -""  Schenck  v.  Conover,  13  N.  J.  Eg. 

373,  17  Pac.  441.  31. 

="^Symns   v.   Noxon,   29   Neb.   404, 
45  N.  W.  680. 


§§  1002,  1603.]  DECREE  OF  SALE.  538 

V.     Costs. 

§  1602.  In  general. — The  mortgagee  in  a  foreclosure  suit  as  in 
other  cases  is  ordinarily  entitled  to  his  costs  of  suit,  when  he  pre- 
vails and  obtains  a  decree,  whether  he  be  complainant  or  defendant.^^" 
If,  however,  he  has  acted  oppressively  in  demanding  a  larger  sum 
than  was  due  on  his  mortgage,  and  the  mortgagor  has  been  diligent 
in  endeavoring  to  ascertain  from  him  the  amount  of  the  incum- 
brance in  order  to  pay  it,  costs  will  be  denied  to  him,  or  possibly,  in 
some  cases,  awarded  against  him  ;-^^  but  merely  claiming  in  good  faith 
a  larger  sum  than  the  court  finally  decides  that  he  is  entitled  to  is  no 
ground  for  refusing  him  his  costs.^^^  He  may  be  made  to  pay  costs 
if  he  has  rejected  a  tender  of  the  full  amount  due  him,^^^  or  if  the 
litigation  has  in  any  way  been  occasioned  by  his  misconduct.  A 
solicitor  may  make  himself  liable  for  costs  incurred  by  a  sale  made  by 
his  direction  when  he  knows  that  all  the  parties  in  interest  have  made 
a  complete  settlement  of  all  the  matters  in  controversy.^^* 

In  case  of  a  partial  reversal  of  the  decree  of  a  lower  court  the  ap- 
portionment of  the  costs  is  within  the  discretion  of  the  court.^^^ 

§  1603.  The  matter  of  costs  depends  very  much  upon  the  statutes 
and  practice  of  the  several  States,  which  are  quite  unlike.  The  fore- 
closure suit  being  an  equitable  one,  the  costs  are  generally  within  the 
discretion  of  the  court.^^''  But  although  there  is  no  fixed  rule  for  giv- 
ing costs  as  in  courts  of  law,  the  courts  rarely,  if  ever,  refuse  costs.^" 
The  disbursements  made  for  carrying  on  the  suit  are  not  strictly  costs ; 
but  if  they  are  legally  made  and  are  of  a  reasonable  amount  they  are 

""Loftus  v.  Swift,  2  Sch.  &  Lef.  the  amount  of  the  costs.  Bartow 
642;  Bartle  v.  Wilkin,  8  Sim.  238;  v.  Cleveland,  16  How.  Pr.  364,  7  Abb. 
Witherell  v.  Collins,  3  Madd.  255;  Pr.  339;  Pratt  v.  Ramsdell,  16  How. 
Concklin  v.  Coddington,  12  N.  J.  Eq.  Pr.  59,  62,  7  Abb.  Pr.  340,  n.;  Steph- 
250,  72  Am.  Dec.  393;  Benedict  v.  ens  v.  Veriane,  2  Lans.  90.  But 
Oilman,  4  Paige,  58.  And  without  these  cases  are  overruled  in  Bath- 
reference  to  his  success.  Slee  v.  gate  v.  Haskin,  63  N.  Y.  261. 
Manhattan  Co.,  1  Paige,  48;  Vroom  '"  Hobbs  v.  Lippincott  (N.  J.  Eq.), 
v.  Ditmas,  4  Paige,  526.  23  Atl.  955. 

="  Detillin    v.    Gale,    7    Ves.    583;         "''•Romberg  v.  McCormick,  194  111. 

Large  v.   Van  Doren,   14  N.    J.   Eq.  205,  62  N.  E.  537. 
208;      Vroom    v.    Ditmas,    4    Paige,        ='=  Garr  v.  Bright,  1  Barb.  Ch.  157; 

526;  Van  Buren  v.  Olmstead,  5  Paige,  O'Hara  v.  Brophy,  24  How.  Pr.  379; 

9.  Bartow   v.    Cleveland,    16    How.    Pr. 

=i=Loftus  v.   Swift,  2   Sch.   &  Lef.  364;    Pratt  v.  Ramsdell,  16  How.  Pr. 

642.  59,  62;    Gallagher  v.  Egan,  2  Sandf. 

='^  Pratt  V.   Stiles,  9  Abb.   Pr.  150,  742;    Lossee  v.  Ellis,  13  Hun,  655. 
17  How.   Pr.   211;     Castle  v.   Castle,        -''Stevens  v.  Veriane,  2  Lans.  90; 

78  Mich.  298,  44  N.  W.  378.  Eastburn  v.  Kirk,  2  Johns.  Ch.  317; 

In  New  York  it  was  formerly  held  Garr  v.  Bright,  1  Barb.  Ch.  157. 
that  a  tender  made  no  difference  in 


539  COSTS.  [§  1604. 

allowed  to  the  party  making  them.-^**  Provision  is  sometimes  made 
that  a  plaintiff  may  serve  upon  a  defendant  a  notice  that  no  personal 
claim  is  made  upon  him ;  and  that  in  such  c-ase  no  service  of  the  com- 
plaint by  copy  need  be  made  on  such  defendant;  and  then,  in  case  he 
unnecessarily  defends,  he  is  liable  in  costs  to  the  plaintiff.^^^  If  a  copy 
of  the  complaint  be  served,  no  notice  for  this  purpose  is  required.^^" 
Where  a  mortgage  secures  debts  to  two  persons  and  one  of  them 
claims  a  foreclosure  decree  and  sale  at  his  own  expense,  he  is  entitled 
to  costs  out  of  the  fund,  or  by  contribution  from  the  other  who  ac- 
cepted the  benefit  of  his  efforts.^^^ 

§  1604.  If  subsequent  incumbrancers  unnecessarily  appear  and 
answer,  they  are  not  entitled  to  costs  imtil  after  the  plaintiff's  debt 
and  costs  are  satisfied  ;^^-  and  it  is  not  necessary  that  they  should 
appear  to  a  foreclosure  suit  if  their  claims  are  correctly  set  forth  in 
the  bill,  as  their  rights  will  be  fully  protected  under  the  decree. 
Where  the  court  has  discretionary  powers  in  regard  to  costs,  and  the 
appearance  of  such  inciimbrancers  though  proper  is  not  necessary, 
the  plaintiff,  upon  receiving  the  amount  due  him  after  he  has  brought 
suit,  may  discontinue  against  subsequent  incumbrancers  who  have 
appeared,  without  costs  to  them.^^^  Ordinarily,  however,  a  subsequent 
mortgagee  would  be  entitled  to  costs  in  such  case.--*  If  a  second 
mortgagee,  after  being  made  a  party  to  a  suit  to  foreclose  a  prior  mort- 
gage, receives  payment  and  offers  to  disclaim,  he  is  entitled  to  his 
costs.^^^ 

A  subsequent  purchaser  of  the  premises  may  make  himself  per- 
sonally liable  for  costs,  though  not  liable  for  the  debt,  if  he  makes 
an  unreasonable  and  unfounded  defence  to  the  suit,  and  the  property 
is  not  of  sufficient  value  to  pay  the  incumbrances.^^® 

If  a  second  mortgagee,  upon  a  bill  to  foreclose  his  mortgage  upon 
several  lots,  makes  the  holders  of  the  prior  mortgages  upon  these 
lots  parties,  and  they  appear  and  prove  their  claims,  the  costs  of 
obtaining  the  decree,  as  well  as  the  costs  of  sale,  should  be  borne  by 
all  the  parties  who  accept  the  benefit  of  the  proceedings,  in  propor- 

"« Benedict  v.  Warriner,  14  How.  1  Paige,  557;    Barnard  v.  Bruce,  21 

Pr.  568.  How.  Pr.  360. 

='''Code  of  N.  Y.     §§  131,  157.  ^-''Gallagher    v.     Egan,     2     Sandf. 

""O'Hara  v.  Brophy,  24  How.  Pr.  742. 

379.  "'  Young  v.    Young,   17   N.   J.   Eq. 

"•Carrie   v.    Bittenbinder    (N.    J.),  161. 

7  Atl.   872;     Trustees  v.   Greenough,  -'Day    v.    Gudgen,    L.    R.    2    Ch. 

105  U.  S.  527,  532.  per  Bradley,  J.  Div.    209. 

"=  Merchants'   Ins.   Co.   v.   Marvin,  --"  Danbury  v.  Robinson,  14  N.  J. 

Eq.  324. 


§§  1605,  1606.] 


DECREE   OF    SALE. 


540 


tion  to  the  respective  amounts  received  by  them,  although  not  enough 
be  received  to  pay  the  prior  mortgages  in  full.^-^ 

§  1605.  Defendants  who  properly  appear  and  answer  and  make 
a  valid  defence  are  entitled  to  costs  as  a  general  rule.  But  several 
defendants  having  the  same  defence  and  employing  the  same  solici- 
tor are  not  allowed  to  swell  the  costs  by  filing  separate  answers.^^^ 
A  prior  mortgagee,  whether  properly  made  a  party  for  the  purpose 
of  having  the  amount  of  his  claim  ascertained,^-**  or  whether  improp- 
erly joined,  is  entitled  to  costs,  to  be  paid  out  of  the  fund  in  the 
one  case,  or  in  the  other  by  the  plaintiff  personally.^  ^° 

§  1606.  Attorney's  fees.-'^^ — A  reasonable  fee  for  the  expense  of 
foreclosing  beyond  the  costs  allowed  by  law  may  be  contracted  for 


"'Scott  v.  Somers  (N.  J.),  9  Atl. 
718. 

"^Danbury  v.  Robinson,  14  N.  J. 
Eq.  324. 

""  Chamberlain  v.  Dempsey,  36 
N.  Y.  144,  147;  Boyd  v.  Dodge,  10 
Paige,  42;  Berlin  Building  &.  Loan 
Asso.  V.  Clifford,  30  N.  J.  Eq.  482. 

""  Millandon  v.  Brugiere,  11  Paige, 
163. 

"^  A  stipulation  for  attorneys'  fees 
is  valid  in:  — 

Alabama:  Munter  v.  Lynn,  61  Ala. 
492;  Speakman  v.  Oaks  (Ala.),  11 
So.  836;  Lehman  v.  Comer,  89  Ala. 
579;  8  So.  241;  Bynum  v.  Frederick, 
81  Ala.  489,  8  So.  198;  Wells  v.  Amer- 
ican Mortg.  Co.,  109  Ala.  430,  20  So. 
136. 

California:  Hewitt  v.  Dean,  91  Cal. 
5617,  25  Pac.  753.  Counsel  fees  stip- 
ulated to  be  paid  are,  like  the  costs, 
a  mere  incident  to  the  cause  of  ac- 
tion, and  may  be  fixed  by  the  chan- 
cellor at  his  discretion,  not  exceed- 
ing the  amount  stipulated.  Carriere 
v.  Minturn,  5  Cal.  435;  Monroe  v. 
Fohl,  72  Cal.  568,  14  Pac.  514;  Rapp 
v.  Gold  Co.,  74  Cal.  532,  16  Pac.  325; 
Grangers'  Asso.  v.  Clark,  84  Cal. 
201,  23  Pac.  1081;  White  v.  Allatt, 
87  Cal.  245,  25  Pac.  420;  Avery  v. 
Mande,  112  Cal.  565,  44  Pac.  1020; 
O'Neal  V.  Hart,  116  Cal.  69,  47  Pac. 
926.  Attorneys'  fees  are  fixed  by  the 
court  without  regard  to  any  stipu- 
lations of  the  parties.  Code  Civ. 
Pro.  1903;  App.  780,  Act,  March  27, 
1874. 

Attorneys'  fees,  not  in  terms 
made  a  lien  upon  the  property,  are 
limited      to     a    personal      recovery 


against  the  mortgagor.  Cortleyeu 
V.  Jones,  132  Cal.  131,  64  Pac.  119; 
Klokke  V.  Escailler,  124  Cal.  297,  56 
Pac.  1113;  Latimer  v.  Capay  Valley 
Land  Co.,  137  Cal.  286,  70  Pac.  82; 
Irvine  v.  Perry,  119  Cal.  352,  51  Pac. 
544. 

Florida:  L'Engle  v.  L'Engle,  21 
Fla.  131;  Kellogg  v.  Singer  Manuf. 
Co.,  35  Fla.  991,  17  So.  68. 

Georgia:  National  Bank  v.  Dan- 
forth,  80  Ga.  55,  7  S.  E.  546;  Merck 
V.  Mortgage  Co.,  7  S.  E.  546;  Fech- 
heimer  v.  Baum,  43  Fed.  719; 
Georgia  R.  Co.  v.  Pendleton,  87  Ga. 
751,  13  S.  E.  822. 

Idaho:  Broadbent  v.  Brumback, 
16   Pac.   555. 

Illinois:  Clawson  v.  Munson,  55 
111.  394;  Barry  v.  Guild,  126  111. 
439,  18  N.  E.  759;  Casler  v.  Byers, 
129  111.  657,  22  N.  E.  507;  Baker  v. 
Jacobson,  183  111.  171,  55  N.  E.  724; 
Shaffner  v.  Appleman,  170  111.  281, 
48  N.  E.  978;  Fuller  v.  Brown, 
167  111.  293,  47  N.  E.  202. 

Indiana:  Johnson  v.  Hosford,  10 
N.  E.  407;  Billingsley  v.  Dean,  11 
Ind.  331;  Barry  v.  Snowden,  106 
Fed.  571. 

Iowa:  Sperry  v.  Horr,  32  Iowa, 
184;  Weatherby  v.  Smith.  30  Iowa, 
131,  6  Am.  Rep.  663;  Livermore  v. 
Maxwell  (Iowa),  55  N.  W.  37;  Guar- 
anty S.  &  L.  Asso.  V.  Ascherman, 
108  Iowa.  150,  78  N.  W.  823.  By 
statute,  18  Gen.  Assembly,  ch.  185, 
§  3,  an  affidavit  to  certain  facts  is 
to  be  filed  before  the  attorney's  fee 
is  allowed.  See  Fletcher  v.  Kelly 
(Iowa),  55  N.  W.  474. 

Kansas:  Seaton  v.  Scovill,  18  Kans. 


541 


COSTS. 


[§  1G06. 


in  the  mortgage;  and  the  court  will  consider  tlie  araorait  stipulated 
for  by  the  parties  to  be  reasonable,  unless  it  be  extravagantly  large 


433,  435,  26  Am.  Rep.  779;  Tholen  v. 
Duffy,  7  Kans.  405;  Howenslein  v. 
Barnes,  5  Dill.  482,  29  Am.  Rep.  406. 

Louisiana:  Dietrick  v.  Bayhi,  23 
La.  Ann.  767;  MuUan  v.  His  Cred- 
itors, 2  So.  45;  Levy  v.  Beasley,  41 
La.  Ann.  832,  6  So.  630;  Succession 
of  Duhe,  41  La.  Ann.  209,  6  So.  502; 
Hansen  v.  Creditors,  49  La.  Ann. 
1731,  22  So.  923. 

Minnesota:  G.  S.  1891,  §  5398- 
5400;  G.  S.  1894,  §§  6051,  6074-5; 
Jones  V.  Radatz,  27  Minn.  240,  6  N. 
W.  800;  Griswold  v.  Taylor,  8  Minn. 
342;  Murray  v.  Chamberlain,  67 
Minn.  12,  69  N.  W.  474;  Eliason 
V.  Sidle,  61  Minn.  285,  63  N.  W.  730; 
Brown  v.  Baker,  65  Minn.  133,  67  N. 
W.  793;  Larocque  v.  Chapel,  63 
Minn.  517,  65  N.  W.  941.  As  to 
affidavit  under  the  statute,  see  John- 
son V.  Northwestern  L.  &  B.  Asso., 
60  Minn.  393,  62  N.  W.  381;  Brown 
V.  Scandia  Bldg.  &  L.  Asso.  61  Minn. 
527,  63  N.  W.  1040;  Morse  v.  Home 
Sav.  &  L.  Asso.  60  Minn.  316,  62  N. 
W.  112;  Brown  v.  Baker,  65  Minn. 
133.  67  N.  W.  793. 

Missouri:    Bank  v.  Gay,  63  Mo.  33. 

Nevada:  Cox  v.  Smith,  1  Nev.  161, 
90  Am.  Dec.  476. 

New  York:  An  extra  allowance  of 
costs,  under  Code  Civil  Proc.  § 
3253,  may  be  made  in  foreclosure 
proceedings  in  a  sum  not  exceeding 
214  per  cent,  of  the  amount  due  on 
the  mortgage,  nor  the  aggregate 
sum  of  $200,  "in  the  discretion"  of 
the  court.  Such  discretion  will  not 
be  reviewed  on  appeal,  unless  there 
has  been  a  clear  abuse  of  discretion. 
Mut.  Life  Ins.  Co.  v.  Cranwell,  10 
N.  Y.  Supp.  404;  Morss  v.  Has- 
brouck,  13  Weekly  Dig.  393;  Ham- 
ilton V.  Railway  Co.,  8  N.  Y.  Supp. 
546. 

Such  stipulation  Is  void  in  the  fol- 
lowing States: — 

Michigan:  It  is  regarded  as  a  pen- 
alty. Bullock  V.  Taylor,  39  Mich. 
137.  33  Am.  Rep.  356;  Van  Marter 
V.  McMillan,  39  Mich.  304;  Myer  v. 
Hart,  40  Mich.  517,  29  Am.  Rep.  719; 
Vosburgh  v.  Lay,  45  Mich.  455,  8  N. 
W.  99;  Botsford  v.  Botsford,  49 
Mich.  29,  12  N.  W.  897;  Bendey  v. 
Townsend,  109  U.  S.  665,  3  Sup.  Ct. 
Rep.  482;  Kittermaster  v.  Brossard, 
105  Mich.  219,  63  N.  W.  75. 


Arkansas:  Jarvis  v.  Southern  Gro- 
cery Co.,  63  Ark.  225,  38  S.  W.  148; 
Boozer  v.   Anderson,  42   Ark.   167. 

Kansas:  Void  since  laws  1876,  ch. 
77  §  1. 

Ohio:  Void  also,  Leavans  v.  Ohio 
Nat.  Bank  (Ohio),  34  N.  E.  1089; 
State  V.  Taylor,  10  Ohio,  378;  Shel- 
ton  V.  Gill,  11  Ohio,  417;  Spalding  v. 
Bank,  12  Ohio,  544;  Martin  v.  Bank, 
13  Ohio,  250. 

Kentucky:  Void,  Thomasson  v. 
Townsend,  10  Bush,  114;  Rilling  v. 
Thompson,  12  Bush,  310. 

Nebraska:  Void  also,  since  statute 
of  1879;  Gray  v.  Havemeyer,  53  Fed. 
174;  Vitrified  Pavnig  Co.  v.  Snead 
Iron  Works,  56  Fed.  64;  Dodge  v. 
Tulleys,  144  U.  S.  451,  13  Sup.  Ct. 
728;  Dow  v.  Updike,  11  Neb.  95.,  7  N. 
W.  857;  Hardy  v.  Miller,  11  Neb. 
395,  9  N.  W.  475;  Security  Co.  v. 
Eyer  (Neb.),  54  N.  W.  838. 

North  Carolina:  Void,  Williams 
V.  Rich.  117  N.  C.  235,  23  S.  E.  257. 

North  Carolina:  The  court  will 
not  allow  fees  to  counsel  directly  for 
services  rendered  to  commissioners 
appointed  to  sell  land  under  fore- 
closure. Gav  V.  Davis,  107  N.  C. 
269.  12  S.  E.  194. 

North  Dakota  and  South  Dakota: 
Comp.  Laws,  §  5429;  Farmers'  Nat. 
Bank  v.  Rasmussen,  1  Dak.  60;  Dan- 
forth  V.  Charles,  1  Dak.  285,  46  N.  W. 
576;  Johnson  v.  Day  (N.  D.),  50  N. 
W.  701;  Laws  Dak.  1889,  p.  31. 

Oklahoma:  Cooper  v.  Bank  of  In- 
dian Territory,  4  Okl.  632,  46  Pac. 
475. 

Pennsylvania:  Woods  v.  North,  84 
Pa.  St.  407,  410,  24  Am.  Rep.  201; 
Johnston  v.  Speer,  92  Pa  St.  227. 
37  Am.  Rep.  675;  Huling  v.  Drexell, 
7  Watts,  126:  Warwick  Iron  Co.  v. 
Morton,  148  Pa.  St.  72.  23  Atl.  1065. 

South  Carolina-.  Branyan  v.  Kay, 
33  S.  C.  283,  11  S.  E.  970;  Aultman 
V.  Gibert.  28  S.  C.  303,  5  S.  E.  806. 

Washington:  Vermont  L.  &  T.  Co. 
V.  Greer,  19  Wash.  611.  53  Pac.  1103; 
Ames  V.  Bigelow,  15  Wash.  532,  46 
Pac.  1046;  Haywood  v.  Miller,  14 
Wash.  660.  45  Pac.  307 . 

Wisconsin:  Morgan  v.  Edwards, 
53  Wis.  599. 11  N.  W.  21.  40  Am.  Rep. 
781:  Spengler  v.  Hahn,  95  Wis.  472, 
70  N.  W.  466. 


§  1606.] 


DECREE   OF    SALE. 


542 


and  extortionate  or  was  inserted  as  a  cover  for  usury.-^^  A  percentage 
may  be  allowed  instead  of  a  fixed  sum  as  a  fee.-'^^  Bvit  no  allowance 
will  be  made  in  the  decree  for  such  fees  after  default,  even  when 
provided  for  in  the  mortgage,  unless  claim  is  made  for  them  in  the 
bill."^*  The  allowance  of  a  larger  sum  than  that  stipulated  for  in 
the  mortgage  is  erroneous.^^^  If  in  the  provision  for  attorney's 
fees  the  amount  is  left  blank,  a  reasonable  fee  may  be  allowed  by 
the  court.^^" 

A  stipulation  in  a  mortgage  allowing  counsel  fees  for  a  foreclosure 
does  not  entitle  the  plaintiff  to  counsel  fees  unless  he  has  paid  them 
or  become  liable  for  them.;^^^  he  cannot  recover  such  fees  for  per- 
sonally prosecuting  his  foreclosure.^^^  It  is  not  necessary  that  there 
should  be  any  averment  that  the  amount  of  fees  stipulated  for  in 
the  deed  is  reasonable,  as  they  are  a  mere  incident  to  the  cause  of 
action,  and  may  be  fixed  by  the  court  at  its  discretion. -^^  If  there 
be  no  stipulation  in  the  mortgage  for  counsel  fees  they  cannot  be 
recovered. ^*°  This  is  wholly  a  matter  of  contract,  unless  provided 
for  by  statute.^" 

^^=  Baker  v.  Jacobson,  183  111.  71. 
55  N.  E.  724;  Heffron  v.  Gage,  149 
111.  182,  36  N.  E.  569;  Vermont  L.  & 
T.  Co.  v.  Greer,  19  Wash.  611,  53  Pac. 
1103;  Scholey  v.  De  Mattes,  18  Wash. 
504,  52  Pac.  242;  Ames  v.  Bigelow,  15 
Wash.  532,  46  Pac.  1046. 

==^See  §§  359.  635,  1923;  Cox  v. 
Smith,  1  Nev.  161,  90  Am.  Dec.  476; 
McLane  v.  Abrams,  2  Nev.  199.  In 
this  case  a  stipulation  for  ten  per 
cent,  on  the  amount  of  the  mort- 
gage, $6,000,  was  not  regarded  as  un- 
reasonable. In  Daly  v.  Maitland,  88 
Pa.  St.,  384, 13  West.  Jur.  204,  32  Am. 
Rep.  457,  a  stipulation  for  a  com- 
mission of  five  per  cent,  on  a  mort- 
gage of  $14,000  was  considered  to 
be  unreasonable.  See  Balfour  v.  Da- 
vis, 14  Oreg.  47.  If  the  court  allows 
as  attorney's  fees  a  sum  greater 
than  that  stipulated  in  the  mort- 
gage, the  plaintiff  may  remit  the 
excess  before  appeal,  giving  notice 
to  the  defendant.  Killops  v.  Ste- 
phens, 73  Wis.  Ill,  40  N.  W.  652. 

-''■  Augustine  v.  Doud,  1  Bradw. 
588. 

=2^Palmeter  v.  Carey,  63  Wis.  426, 
21  N.  W.  793,  23  N.  W.  586. 

=="  Alden  v.  Pryal,  60  Cal.  215.  Tes- 
timony may  be  taken  by  the  court, 
or  a  master,  to  ascertain  what  a  rea- 
sonable fee  in  the  case  is;  but  it  is 
error  to  allow  the  fee  without  tak- 


ing    such     testimony.     The     record 
should  show  that  the  allowance  was 
made  upon  proper  testimony.     Long 
V.    Herrick,    28    Fla.    755,    8    So.    50 
Nelson    v.    Everett,    29    Iowa,    184 
Williams   v.   Meeker,   29   Iowa,   292 
McGill  V.  Griffin,  32  Iowa,  445;  Jones 
V.  Schulmeyer,  39  Ind.   119;    Tholen 
V.    Duffy,    7    Kans.    405;    Kellogg   v. 
Singer  Manuf.  Co.  35  Fla.  99,  17  So. 
68. 

^"Reed  v.  Catlin,  49  Wis.  686,  6 
N.  W.  326;  Bank  v.  Treadwell,  55 
Cal.  379;  Broadbent  v.  Brumback,  2 
Ida.  336,  16  Pac.  555. 

"*  Patterson  v.  Donner,  48  Cal. 
369;  Reed  v.  Catlin,  49  Wis.  686,  6 
N.  W.  326. 

=''' Carriere  v.  Minturn,  5  Cal.  435; 
First  Nat.  Bank  v.  Holt,  87  Cal.  158, 
25  Pac.  272. 

""Sichel  V.  Carrillo,  42  Cal.  493; 
Stover  V.  Johnnycake,  9  Kan.  367; 
Hamlin  v.  Rogers,  78  Ga.  631,  5  So. 
125;  Howell  v.  Pool,  92  N.  C.  450; 
Wylie  V.  Karner,  54  Wis.  591,  12  N. 
W.  57. 

In    California,    when    a    mortgage 

="  As  in  New  York:  Code  of  Civ. 
Pro.  §  3253.  And  see  Hunt  v.  Chap- 
man, 62  N.  Y.  333.  See  Bockes  v 
Hathorn,  17  Hun,  87;  O'Neil  v.  Gray, 
39   Hun,  566. 

For    circumstances    under    which 


543  COSTS.  [§  IGOG. 

Indorsers  of  the  mortgage  note  may  waive  objection  to  a  stipula- 
tion in  the  mortgage  as  to  attorney's  fees,  and  their  waiver  is  a  rat- 
ification of  the  maker's  act  in  making  the  stipulation,  and  they 
cannot  object  to  a  judgment  which  includes  the  payment  of  such 
fees.242 

In  Pennsylvania,  however,  a  stipulation  for  the  payment  of  at- 
torney's commissions  upon  mortgages  is  valid  and  not  controlled 
by  statute,  but  it  is  nevertheless  regarded  as  in  the  nature  of  a 
penalty  rather  than  as  liquidated  damages,  and  is  subject  to  the 
equitable  control  of  the  court,  and  will  be  enforced  only  to  the 
extent  of  compensating  the  mortgagee  for  reasonaljle  and  neces- 
sary expenses  of  collection.-"  A  stipulation  allowing,  in  case  of 
suit,  five  per  cent,  attorney's  commissions  on  the  $15,000  involved, 
was  held  to  be  unreasonable,  an  allowance  of  two  per  cent,  being 
sufficient.*  Under  a  stipulation  for  the  payment  of  attorney's  fees 
in  case  a  suit  for  foreclosure  is  brought,  payment  or  tender  of 
payment  of  the  mortgage  debt  after  the  bringing  of  suit  but  before 
judgment  does  not  relieve  the  mortgagor  from  his  agreement.^** 
But  if  it  appears  that  no  demand  of  payment  was  made,  before 
entry  of  judgment,  and  that  the  debtor  promptly  paid  or  offered  to 
pay  the  debt,  interest,  and  costs  at  maturity,  the  creditor  cannot 

provides  for  an  attorney's  fee,   the  Where  the  trustee  in  a  deed  secur- 

court   can   not   allow   more   than   is  ing  a  loan  refuses  to  act,   and  the 

stipulated   for.     Monroe  v.  Fohl,  72  creditor    forecloses,    he    is    not    en- 

Cal.  568,  14  Pac.  514.  titled  to  the  attorney's  fee  provided 

An  allowance  in  excess  of  the  sum  in  the  deed  to  be  paid  to  the  trustee 

stipulated  for  in  the  mortgage  may  on   foreclosure.      Kinney   v.    Colum- 

be   remitted,   either  before   or   after  bia  Sav.  &  L.   Assoc,  113  Fed.  359. 

judgment,  and  the  error  cured.     Kil-  '"  Georgia  R.  Co.  v.  Pendleton,  87 

lops    V.    Stephens,    73    Wis.    Ill,    40  Ga.  751,  13  S.  E.  Rep.  822.   One  ot  the 

N.   W.    652.  indorsers  being  the  president  of  the 

A    provision    in    a    mortgage    for  corporation      which      executed     the 

reasonable     attorney's     fees     to    be  mortgage,  and  he  signing  the  sama 

taxed  by  the  court  and  included  in  as  president,  his  assent  to  the  stipu- 

the   bill   of   costs   without   any   pro-  lation  as  to  attorney's  fees  was  given 

vision  that  there  shall  be  a  lien  upon  thereby,   and   no   further  waiver  as 

the    mortgaged    property    does    not  to  him  was  necessary, 

authorize    a    decree    that    such    fees  ="  Wilson  v.    Ott,   173   Pa.   253,   34 

shall  be  a  lien  under  the  mortgage.  Atl.    23,    51    Am.    St.   767;     Lewis   v. 

Orange    Growers'    Bank   v.    Duncan,  Germania    Sav.    Bank,    96    Pa.    86; 

133  Cal.  254,  65  Pac.  469;    Russell  v  Daly  v.  Maitland,  88  Pa.  384,  32  Am. 

Findley,   122    Cal.    478,    55   Pac.    143.  Rep.  457,  overruling  to  the  contrary 

. Rol)lnsori  V.  Loomis    51  Pa.  78. 

the   stipulated    attorney's   fees   will  *  Warwick    Iron    Co.    v.    Morton, 

not  be  allowed,  see  Parks  v.  Allen,  148    Pa.    72.    23    Atl.    1065;     Daly    v. 

42  Mich.  482,  4  N.  W.  227;    Soles  v.  Maitland,    88   Pa.    384;     Franklin   v. 

Sheppard,   99   111.   616.  Kurtz.  3  Del.   Co.    (Pa.)   Rep.  590. 

When     attornev's     fees     may     be  ="  Warwick    Iron    Co.    v.    Morton, 

allowed  on  a  cross-bill.     See  Town  148  Pa.   72,   23    Atl.    1065;     Imler  v. 

v.   Alexander,  185  111.  254,  56  N.   E.  Imler,  94  Pa.  372;    M.iones  v.  Bank, 

1111.  45  Minn.  335,  47  N.  W.  1072. 


§  1606.]  DECREE  OF  SALE.  544 

recover  attorney's  commissions.  In  such  case  the  necessity  of  re- 
sorting to  the  services  of  an  attorney  does  not  appear.^*^ 

Under  a  stipulation  in  a  power  of  sale  mortgage  for  the  payment 
of  attorney's  fees  in  the  event  it  becomes  necessary  to  employ  an 
attorney  to  collect  any  part  of  the  mortgage  debt  or  to  foreclose  the 
mortgage,  if  foreclosure  is  made  by  bill  in  equity,  the  bill  should  allege 
sufficient  facts  to  show  that  this  form  of  foreclosure  was  necessary; 
and  an  averment  that  such  a  foreclosure  was  necessary,  because  the 
mortgagee  could  not  purchase  at  his  own  sale  under  the  power 
contained  in  the  mortgage,  and  without  the  power  to  so  do  the 
property  would  not  bring  its  full  value,  sufficiently  shows  the  ne- 
cessity of  a  foreclosure  in  equity.^*® 

Under  a  stipulation  in  the  mortgage  that  an  attorney's  fee  shall 
be  allowed  if  the  mortgage  is  "collected  by  suit,"  if  the  mortgagee 
is  made  a  defendant  in  an  action  for  partition,  and  has  judgment 
for  his  note,  the  note  is  "collected  by  suit,"  and  the  mortgagee  is 
entitled  to  the  attorney's  fee.^*^  Where  a  mortgage  provided  that 
out  of  the  money  arising  from  a  sale  there  might  be  retained  the 
principal  and  interest,  together  with  costs  of  sale  and  foreclosure, 
including  counsel  fees  at  a  stipulated  rate,  on  the  amount  found  by 
the  decree,  it  was  held  that,  in  case  of  payment  after  suit  but  before 
decree,  the  mortgagee  was  not  entitled  to  recover  fees.^*^ 

A  stipulation  for  attorney's  fees  in  case  "it  shall  become  necessary 
to  employ  an  attorney  to  foreclose  the  mortgage,  or  collect  any  part 
of  the  debt,"  does  not  entitle  the  mortgagee  to  attorney's  fees  in- 
curred in  the  prosecution  of  a  suit  to  compel  the  mortgagor  to 
affirm  or  disaJfirm  a  sale  under  a  power  in  the  mortgage,  at  which 
the  mortgagee  became  the  purchaser,  withorut  being  authorized 
thereto  in  the  mortgage.^*® 

A  stipulation  for  reasonable  attorney's  fees  where  a  tender  of  the 
amount  of  the  mortgage  is  made  after  a  foreclosure  has  been  com- 

"°  Lindley    v.    Ross,    137    Pa.    629,  the    prior    mortgagee    answers    and 

20  Atl.  944;  Moore's  Appeal,  110  Pa.  files  a  cross-bill  and  obtains  fore- 
433,  1  Atl.   593;     Johnson  v.  Marsh,  closure   of   his    mortgage.      Shaffner 

21  W.  N.  C.  570.  If  the  mortgage  v.  Appleman,  170  111.  281,  48  N.  E. 
Is  overdue,  a  previous  demand  is  not  978. 

necessary.     Walker  v.   Dickson,  175  =^' Lammon  v.  Austin   (Wash  St.), 

Pa.  204,  34  Atl.  646.  33  Pac.  355.  citing  Stov-er  v.  Johnny- 

=*"  Wells    v.    Am.    Mortg.    Co.    109  cake,  9  Kans.  367;    Wylie  v.  Karner, 

Ala.  430,  20  So.  136.  54  Wis.  591,  12  N.  W.  57;    Monroe  v. 

="Branyon   v.    Kay,   33   S.    C.   283,  Fohl,     72     Cal.     568,     14    Pac.     514; 

11  S.  E.  ,970.    Attorney's  fees  may  be  Schmidt  v.  Potter,  35  Iowa,  426. 

allowed  to  a  prior  mortgagee  who  is  =*"  Pollard    v.    American    Freehold 

not  made  a  party  to  a  foreclosure  Land    Mortg.    Co.,    103    Ala.    289,    16 

suit  by  a  subsequent  mortgagee,  and  So.  801. 


545  COSTS.  [§  1606a. 

menced,  is  satisfied  by  a  tender  of  a  reasonable  compensation  for 
the  attorney  down  to  the  time  of  tlie  tender.^'^" 

The  statute  of  anotlier  State  allowing  an  attorney's  fee  will  not 
be  enforced  in  a  State  where  such  a  fee  is  not  allowed,  though  the 
mortgage  and  mortgage  note  both  expressly  provide  that  they  are  to 
be  construed  by  the  laws  of  such  other  State.  The  laws  of  the  place 
of  the  forum  govern  the  application  of  the  remedy,  such  as  the  re- 
covery of  costs  and  the  like.^^^ 

A  trustee  in  a  trust  deed,  who  is  also  an  attorney  at  law,  is  not 
entitled  to  an  allowance  for  professional  services  rendered  in  fore- 
closing the  deed  in  his  own  behalf  and  for  his  co-complainant,  the 
holder  of  the  note,  although  the  deed  provides  for  the  allowance 
of  a  reasonable  sum  for  complainant's  solicitor's  fee.  A  trustee  in 
a  trust  deed  is  the  representative  and  trustee  of  both  parties  to  the 
instrument,  and  he  must  act  fairly  and  impartially,  and  not  in  the 
exclusive  interest  of  either.^^^ 

§  1606a.  A  stipulation  to  pay  a  reasonable  attorney's  fee  for 
foreclosure,  to  be  taxed  in  the  judgment,  is  not  usurious  and  will 
be  enforced.^^^  The  debtor,  by  neclecting  or  refusing  to  pay,  im- 
poses upon  the  mortgagee  the  expense  of  resorting  to  law  to  en- 
force his  rights,  and  it  is  only  just  that  the  expenses  of  foreclosure 
should  be  borne  by  the  party  whose  own  wrong  has  made  it  neces- 
sary to  incur  them.  A  stipulation  for  the  payment  of  an  attorney's 
fee  of  $35  on  the  foreclosure  of  a  mortgage  of  $11,000  is  not  un- 
reasonable. Nor  is  a  stipulation  for  $250  in  a  mortgage  for  $9,000.^^* 
It  is  presumed  that  such  stipulations  are  made  in  reference  to  the 
costs  and  expenses  otherwise  chargeable,   and  that  such  fee  is  an 

="»  Smith   V.   Jackson,   153   111.   399,  50  N.  E.  328.    In  Williams  v.  Meeker, 

39  N.  E.  130.  29    Iowa,   292,    an    attorney's    fee   of 

"'Security  Co.  v.  Eyer   (Neb.),  54  $75  was  allowed.     National  Bank  v. 

N.  W.  838.  Danforth,    80    Ga.    55,    7    S.    E.    546; 

"'Gray  v.  Robertson,  174  111.  242,  Merck  v.  Mortgage  Co.,  79  Ga.  213, 

51  N.  E.  248.  7  S.  E.  265.     Farwell  v.  Bigelow,  112 

"^§§     635,     1923;      Weatherby    v.  Mich.  285,  70  N.  W.  579. 

Smith,  30  Iowa,  131;    Gower  v.  Car-  "^Telford  v.   Garrels,  132  111.  55Q. 

ter,    3    Iowa,    244,    66   Am.    Dec.    71;  24  N.  E.  573.   As  to  reasonable  allow- 

Gilmore  v.  Ferguson,  28  Iowa,  220;  ance,  see  also  Mclntire  v.  Yates,  104 

Conrad    v.    Gibbon,    29    Iowa,    120,  111.    491.     An    allowance   of    $781    in 

McGill  V.  Griffin,  32  Iowa,  445;    Nel-  foreclosing   a    mortgage   for    $15,000 

son  V.  Everett,  29  Iowa,  184;    Mills  was    not    regarded    as    unreasonable 

Co.  Nat.  Bank  v.  Perry,  72  Iowa,  15  In  Cohn  v.   N.  W.  Mut.  L.  Ins.  Co. 

33  N.  W.   341,  2  Am.   St.   Rep.  228;  185   111.   340,   57  N.   E.   38.     And   see 

Broadbent  v.  Brumback,  16  Pac.  555;  Casler  v.  Byers,  129  111.  657,  22  N.  E. 

Griswold    v.    Taylor,    8    Minn.    342;  507;      Thornton    v.    Commonwealth 

Tallman    v.    Truesdell,    3   Wis.    443;  Loan    Asso.    181    111.    456,    54    N.    E. 

Machine   Co.    v.    Moreno,    6   Sawyer,  1037;    Mclntire  v.  Yates,  104  111.  491. 
35,    Abbott    V.    Stone,    172    111.    634, 


§  1606a.]  DECREE  OF  SALE.  54C 

allowance  additional  to  these.-^^  A  stipulation  of  five  per  cent,  oi' 
the  amount  of  the  mortgage  for  counsel  fees  is  additional  to  the 
costs  recoverable  by  statute.-"''^  A  provision  in  the  mortgage  that  tlie 
mortgagor  shall  in  case  of  foreclosure  pay  the  costs,  "and  fifty  dol- 
lars as  liquidated  damages  for  the  foreclosure  of  the  mortgage/' 
was  held  to  be  void,  because  so  indefinite  that  the  court  could  not  tell 
whether  the  payment  was  intended  to  be  for  something  legal  or  il- 
legal. A  judgment  rendered  under  such  a  stipulation  for  fifty  dol- 
lars as  attorney's  fees  was  declared  erroneous.^ ^'^  But  a  stipulation 
that  the  mortgagee  shall  be  entitled  "to  a  judgment  for  the  pos- 
session of  said  premises,  and  costs,  expenses,  and  attorney's  fees  of 
ten  per  cent,  of  the  amount  due  for  foreclosing  said  mortgage,"  is 
valid;  and  on  a  mortgage  debt  of  $-1,000  or  less,  the  amount  is  not 
so  excessive  that  a  court  of  equity  will  refuse  to  enforce  it.^^^  Under 
a  proTision  in  a  powder  of  sale  for  an  attorney's  fee  in  case  of  fore- 
closure, no  allowance  can  be  made  if  the  mortgage  is  foreclosed  in 
chancery  instead.^^^  A  stipulation  that  "an  attorney's  fe"e  of  fifty 
dollars  for  foreclosure,  witli  costs  of  suit  and  accruing  costs,"  shall 
be  taxed  against  the  mortgagor,  does  not  authorize  such  a  fee  in  case 
there  be  a  decree  for  foreclosure,  and  the  mortgagor  pays  the  debt 
after  suit  is  commenced,  put  before  a  decree  of  sale  is  entered. ^^^ 

A  stipulation  for  attorney's  fees  in  case  of  a  foreclosure  in  equity 
or  by  sale  under  the  power  of  sale  does  not  authorize  such  fees 
incurred  in  an  action  to  compel  the  mortgagor  to  elect  to  affirm  or 
avoid  a  sale  unrder  the  power  to  the  mortgagee. ^''^ 

A  stipulation  for  an  attorney's  fee  in  a  mortgage,  made  w^hile  a 
statute  allowing  such  a  fee  was  in  force,  is  not  affected  by  a  repeal 
of  that  act.2«2 

A  mortgagee  in  whose  favor  there  is  a  stipulation  that  he  shall 
be  entitled  to  an  attorney's  fee  in  any  action  that  he  may  bring 

="  Hitchcock    V.    Merrick,    15   Wis.  Kurtz    v.     Sponable,     6     Kan.     395; 

522;     Rice    v.    Cribb,    12    Wis.    179;  Tholen  v.  Duffy,  7  Kans.  405;  Stover 

Boyd  v.   Sumner.  10  Wis.  41;     Tall-  v.  Johnnycake,  9  Kan.  367. 

man    v.    Truesdell,    3    Wis.    443.      In  ^'^ Sharp  v.  Barker,  11  Kan.  381. 

Remington  v.  Willard,  15  Wis.  583,  =="  Sage  v.  Riggs,  12  Mich.  313;  Van 

the    mortgage    stipulated    for    a   fee  Marter   v.   McMillan,   39   Mich.    304; 

of  $75,  and  the  court  allowed  under  Hardwick    v.    Bassett,    29    Mich.    17. 

the    Code    five     per    cent,     on    the  In  this  ca-se  the  court  below  thought 

amount    due,   being    a    very    much  a  fee  of  $75  "a  reasonable  number 

larger  sum.     A  stipulation  for  $100  of  dollars,"  according  to  the  terms 

solicitor's   fees,    in    a   mortgage  for  of  the  mortgage. 

$10,000,    was    enforced    in    Pierce   v.  =""  Jennings    v.    McKay,    19    Kans. 

Kneeland,  16  Wis.  672,  84  Am.  Dec.  120.    distinguished    from    Life    Asso. 

726.  V.  Dale,  17  Kans.  185. 

^'"' Gronfier  v.  Minturn,  5  Cal.  492;  =''^  Pollard    v.    American    Freehold 

Carriere  v.  Minturn,  5  Cal.  435.  L.  &  M.  Co.  103  Ala.  289,  16  So.  801. 

="Foote  V.  Sprague,  13  Kans.  155;  '"White  x.  Rourke,  11  Neb.  519. 


547  COSTS.  [§§  IGOGb,  IGOr. 

on  the  mortgage  may  claim  such  Tee  when,  as  a  defendant  in  a  fore- 
closure suit,  he  sets  up  his  cause  of  action;  for  this  is  in  effect 
bringing  an  action  on  the  mortgage. -'^•'^ 

Under  a  stipulation  that  a  trustee  in  a  deed  of  trust  shall  be 
paid  his  fees  and  charges  in  executing  his  trust,  including  attorney's 
fees  for  foreclosure,  an  allowance  of  $3,250  was  made  where  the 
mortgage  debt  was  $43,000.''«* 

§  1606b.  An  allowance  may  be  made  to  a  mortg^ag^ee  for  ex- 
penses incurred  in  a  foreclosure  suit  aside  from  an  allowance  for 
attorney's  fees,  where  the  mortgage  so  provides.-'^^  But  a  trust  deed 
which  allows  the  payment  of  solicitor's  fees,  "and  all  other  ex- 
penses of  the  trust,"  does  not  warrant  the  payment  of  the  cost  of 
an  abstract  of  title,  and  expenses  incurred  in  procuring  information 
preparatory  to  bringing  suit  for  foreclosure.^^^ 

An  allowance  cannot  be  made  to  the  mortgagor  for  counsel  fees 
when  the  property  is  insufficient  to  pay  the  mortgage  debt.^^^ 

No  allowance  for  attorney's  fees  provided  for  in  tlie  mortgage 
note  can  be  made  when  the  mortgage  expressly  declares  that  it  is  given 
to  secure  the  payment  of  the  principal  and  interest  of  the  note.^"* 

Courts  of  equity  may  allows  a  mortgagee  counsel  fees  incurred  in 
defending  his  title,  without  any  express  contract;^"®  but  fees  paid  to 
counsel,  for  resisting  an  application  by  the  assignee  in  bankruptcy 
of  the  mortgagor  to  enjoin  a  sale  under  a  power  in  the  mortgage, 
do  not  constitute  a  payment  in  defence  of  the  mortgage  title.-'" 

A  stipulation  in  a  mortgage  that  the  mortgagor  shall  pay  the 
"expensevs  incurred  in  procuring  and  continuing  abstracts  of  title 
for  the  purposes  of  the  foreclosure  suit  has  been  regarded  as  not  al- 
lowable, but  obnoxious  to  public  policy.^^^ 

§  1607.  An  irre^lar  attempt  at  foreclosure,  abandoned  after  a 
single  publication  of  the  notice  on  account  of  a  defect  in  this,  does 
not  entitle  the  mortgagee  to  any  attorney's  fee  provided  for  in  the 

."'  Lanoue   v.    McKinnon,    19    Kan.  is    not   required   to   pay   more   than 

408.  the    statutory    allowance.      First    M. 

'"Guignon    v.    Union    Trust    Co.,  E.  Church  v.  Fadden,  8  N.  D.  162,  77 

156  111.  135,  40  N.  E.  556,  47  Am.  St.  N.  W.  615. 

186.  -"  Mercantile    Trust    Co.    v.    Mis- 

=^*  Mercantile    Trust    Co.    v.    Mis-  souri  K.  &  T.  Ry.  Co.  41  Fed.  8. 

souri,  K.  &  T.  Ry.  Co.  41  Fed.  8.  -''^^  Rafferty     v.     High     (Cal.),     41 

=•*  Cheltenham  Imp.  Co.  v.  White-  Pac.  489. 

head,    128    111.    279,    21    N.    E.    569;  -"''^  Lomax    v.    Hide,    2    Vern.    185; 

Equitable  L.  Assur.  Soc.  v.  Olyphant,  Hunt  v.  Fownes,  9  Ves.  70. 

10  N.  Y.  Supp.  659.     If  the  fee  speci-  =™  Maus  v.   McKellip,  38  Md.  23t, 

tied    in    the    mortgage    exceeds    that  "'  Northwestern   Mut.    L.    Ins.   Co. 

allowed  by  law,  one  who   has  pur-  v.  Butler,  57  Neb.  198,  77  N.  W.  667. 
chased,    subject    to    the    mortgage, 


§  1607.]  DECREE  OF  SALE.  548 

mortgage  upon  a  foreclosure  of  it.  By  declining  a  tender  of  the  full 
amount  due,  because  such  fee  is  not  paid  in  addition,  he  renders 
himself  liable  to  a  statutory  penalty  for  refusing  to  discharge  a 
mortgage.^^^  A  mortgagee  is  not  generally  entitled  to  costs  of  a 
foreclosure  defective  through  an  error  of  his  own  in  the  proceedings, 
whereby  a  new  foreclosure  is  rendered  necessary.^'^^ 

Where  a  mortgage  provided  that  "in  the  event  of  foreclosure 
sixty  dollars  attorney's  fee  shall  be  by  the  court  also  taxed,  and 
included  in  the  decree  of  foreclosure,"  it  was  held  that  a  tender 
before  decree  not  including  this  fee  was  good,  and  that  this  fee 
could  not  be  collected  except  by  having  it  taxed  in  the  decree.^^* 

But  where  a  mortgage  provided  that,  in  case  a  settlement  was 
made  after  a  suit  to  foreclose  was  instituted,  there  should  be  taxed 
as  costs  and  included  in  the  judgment  the  sum  of  $250  for  attor- 
ney's fees,  and  the  defendant  without  answering  paid  into  court  the 
mortgage  debt  and  the  ordinary  costs,  which  the  plaintiff  accepted 
and  the  suit  on  motion  of  the  defendants  was  dismissed,  the  accept- 
ance of  the  amoimt  deposited  was  held  not  to  estop  the  plaintiff 
from  claiming  the  stipulated  attorney's  fees,  and  the  order  dismiss- 
ing the  suit  was  vacated. ^'^^ 

="  Collar  v.  Harrison,  30  Mich.  66.        ^^  Hoyt  v.  Smith,  4  Wash.  St.  640, 
=''  Clark  V.  Stilson,  36  Mich.  482.        30  Pac.  665. 
2^^  Schmidt  v.  Potter,  35  Iowa,  426 


CHAPTER  XXXVI. 


FORECLOSURE  SALES   UNDER  DECREE  OF   COURT. 


I.  Mode  and  terms  of  sale,  1608- 

1615. 
II.  Sale   in   parcels,   1616-1619. 

III.  Order   of   sale,   1620-1632. 

IV.  Conduct  of  sale,  1633-1636. 

V.  Conflrmation  of  sale,  1637-1641. 


VI.  Enforcement    of    sale    against 

the  purchaser,   1642-1651. 
VII.  The  deed,  and  passing  of  title, 

1652-1662. 
VIII.  The  delivery  of  possession  to 
purchaser,   1663-1667. 
IX.  Setting  aside  of  sale,  1668-1681. 


I.    Mode  and  Terms  of  Sale. 


§  1608.    A  sale  under  a  decree  of  court  is  in  contemplation  of 

law  the  act  of  the  court.  It  is  made  through  the  instrumentality 
of  some  officer  designated  by  statute  or  appointed  by  the  court. 
Whatever  name  be  given  to  this  officer,  whether  master  in  chancery, 
referee,  trustee,  commissioner,  or  sheriff,^  in  making  the  sale  he 
acts  as  the  agent  of  the  court,  and  must  report  to  it  his  doings  in 
the  execution  of  its  order.  This  report  should  set  out  all  the  pro- 
ceedings incident  to  the  sale,  the  manner  and  particulars  of  it,  the 
conveyance  to  the  purchaser,  and  the  payment  of  the  proceeds.^ 
When  the  sale  is  confirmed  it  becomes  the  act  of  the  court,  or,  in 
other  words,  a  judicial  sale;  but,  until  confirmed,  no  title  passes  to 
the  purchaser.  In  this  respect  the  sale  is-  unlike  a  sheriff's  sale, 
which  is  a  ministerial  act,  and  the  officer,  and  not  the  court,  is  regarded 


^  Heyer  v.  Deaves,  2  Johns.  Ch. 
154  Mayer  v.  Wick,  15  Ohio  St.  548. 
In  the  federal  courts  the  sale  is 
usually  made  by  the  marshal  of  the 
district,  or  by  a  master  specially 
appointed.  Blossom  v.  Railroad  Co., 
3  Wall,  196,  205.  The  Sheriff  or 
other  officer  to  whom  the  order  is 
given  may  sell,  though  his  term  of 
office  afterwards  expires  before  the 
sale.    Cord  v.  Hirsch,  17  Wis.  403. 


That  the  person  appointed  to 
make  the  sale  is  styled  in  the  decree 
a  "commissioner"  instead  of  "mas- 
ter," is  no  ground  for  setting  aside 
the  sale,  when  the  authority  and 
duties  prescribed  are  the  same. 
Mann  v.  Jennings,  25  Fla.  730,  6  So. 
771. 

-  For  form  of  report  used  in  New 
York,  see  5  Wait's  Practice,  228. 


549 


g    1609.]  UNDER    DECKEE   OF    COUET.  550 

as  the  vendor;  and  which,  if  made  conformably  to  law,  is  final  and 
valid,  and  passes  the  title/* 

A  decree  of  foreclosure  and  sale  is  not  outlawed  by  the  expira- 
tion of  twenty  years,  or  of  any  number  of  years,  and  the  question 
whether  the  decree  will  be  enforced  by  sale  after  a  long  lapse  of 
time  is  one  for  the  court  to  decide,  upon  a  consideration  of  all  the 
facts,*  and  its  decision  upon  such  a  question  is  not  generally  appeal- 
able/ 

After  the  death  of  the  defendant  mortgagor  the  court  may  make 
an  order  providing  for  carrying  out  a  decree  of  foreclosure  without 
reviving  the  action  against  his  heirs  or  representatives.® 

§  1609.  What  may  be  sold. — Mortgages  of  estates  for  years,  as 
well  as  those  in  fee,  may  be  foreclosed  by  sale.'^ 

Generally  no  other  or  greater  interest  than  that  covered  by  the 
mortgage  can  be  sold  except  by  consent,  or  in  case  of  an  after- 
acquired  title  of  the  mortgagor.**  On  a  bill  by  a  junior  mortgagee 
nothing  more  than  the  equity  of  redemption  mortgaged  to  him  can 
be  decreed  to  be  sold,  unless  the  prior  mortgagee  consents  that  the 
decree  may  be  made  for  the  sale  of  the  property  and  the  payment 
of  his  mortgage  also."  When,  however,  all  the  incumbrances  are 
due,  and  all  the  incumbrancers  are  parties  to  the  suit,  and  the  cir- 
cumstances of  the  case  show  that  the  interests  of  the  mortgagor 
and  of  the  incumbrancers  require  it,  the  court  will  order  a  sale  of 
the  entire  incumbered  property.^" 

Furthermore,  the  order  of   sale  cannot  embrace   other   lands   not 

^Rorer's  Jud.  Sales,  §S  1-68;    Har-  juriously    the    rights    of    any    one. 

rison   v.    Harrison,    1   Md.    Ch.    Dec.  Wing  v.   Rionda,   125  N.   Y.   678,  25 

331,  335;  Williamson  v.  Berry,  8  How.  N.   E.  1064. 

495,  546;    Mebane  v.  Mebane,  80  N.C.  "Wing  v.   Rionda,   125  N.   Y.   678, 

34.  25  N.  E.  1064;    Harrison  v.  Simons, 

*Van    Rensselaer    v.    Wright,    121  3  Edw.   Ch.   394;     Hays  v.   Thomae, 

N.  Y.  626.  56  N.  Y.  521. 

=  Fifteen  years  after  judgment  of  'Johnson    v.    Donnell,    15    111.    97; 

foreclosure,   this    not    having    been  Lansing  v.   Albany  Ins.   Co.,   Hopk. 

executed  and  the  referee  appointed  102. 

having    died,    an    order    was    made,  "*  See  §  1581. 

upon    application    by    the    plaintiff,  "Roll  v.  Smalley,  6  N.  J.  Eq.  464; 

notice  of  which  was  served  only  on  Hynds  Manuf.  Co.  v.  Oglesby  &  M. 

the    attorneys    who    had     appeared  Grocery  Co.  93  Ga.  542,  21  S.  E.  63. 

for   the    mortgagor,    appointing   an-  '"  Shepherd   v.    Pepper,    133    U.    S. 

other  referee  to  sell,   and   directing  626,    10    Sup.    Ct.    438;      Hefner    v. 

a    sale    in    the    city    in    which    the  Northwestern  L.  Ins.  Co.,  123  U.  S. 

premises    were   situated,    instead    of  747,   754;     Woodworth  v.   Blair.   112 

in  another  city,   as  directed  by  the  U.  S.  8,  5  S.  Ct.  6;    Hill  v.  National 

judgment.     It  was  held  that  it  was  Bank,  97  U.  S.  450,  453;    Jerome  v. 

within    the   discretion   of   the   court  McCarter,   94   U.    S.    734;     Hagan  v. 

to   make   such    order,    and   that  the  Walker,   14  How.   29,  37;     Finley  v. 

modification    of    the    judgment    was  Bank,  11  Wheat.  304. 
not  material,  and  did  not  affect  in- 


551  MODE   AND   TERMS    OF   SALE.  [§§    1610,    1611. 

described  iu  the  mortgage;^^  though  when  through  mistake  the 
description  in  a  mortgage  did  not  embrace  a  portion  of  the  land  in- 
tended to  be  conveyed,  but  the  purchaser  supposed  he  was  buying 
the  whole  estate  intended  to  be  mortgaged,  he  was  protected  in 
his  claim  under  the  sale  to  the  whole.  ^- 

If  two  tracts  of  land  are  embraced  in  the  mortgage  when  only 
one  of  them  was  intended  to  be  mortgaged,  that  may  be  foreclosed 
alone  without  a  reformation  of  the  deed,  which  would  be  necessary 
in  case  of  a  misdescription  of  the  land." 

§  1610.  Subsequent  incumbrances. — When  a  junior  mortgagee 
whose  debt  is  due  is  a  party  to  a  suit  to  foreclose  a  prior  mortgage, 
the  court  may  decree  a  sale  of  so  much  of  the  property  as  will  be 
sufficient  to  satisfy  both  mortgages  and  all  intermediate  liens  ;^* 
and  the  master  may  be  directed  to  ascertain  the  amount  of  such 
liens  previous  to  the  sale.  But  the  junior  mortgagee  cannot  be 
paid  until  the  master's  report  is  filed  and  the  surplus  money  brought 
into  court,  so  that  other  persons  may  have  an  opportunity  to  present 
their  claims.^''  Ordinarily,  however,  the  amounts  of  subsequent 
incumbrances  will  not  be  determined  until  the  question  arises  in 
its  proper  course  upon  application  made  for  the  surplus.  The  mort- 
gagee cannot  be  compelled  to  suspend  proceedings  to  allow  subse- 
quent parties  to  contest  their  rights  as  between  themselves.  These 
must  be  settled  upon  a  reference  to  a  master  of  their  respective 
claims  to  the  surplus  money.^® 

Though  the  judgment  does  not  provide  for  the  payment  of  sub- 
sequent incumbrances,  but  the  mortgagee  has  prepared  the  terms 
of  sale  which  provide  for  the  sale  of  the  entire  property  in  two 
parcels,  subject  to  a  prior  mortgage  held  by  himself,  and  there  are 
also  mortgages  sul)sequent  to  the  mortgage  under  foreclosure,  the 
mortgagee  cannot  object  that  the  sale  of  the  entire  property  for  the 
payment  of  all  the  incumbrances  was  irregular.^'^ 

§  1611.  Questions  of  priority  of  right  to  the  proceeds  of  sale 
or  of  equities  as  to  the  order  of  sale  cannot  be  liqiiidated  between 
the  defendants  before  judgment  is  entered  for  the  plaintiff  against 

"  Wilkerson  v.   Daniels,  1   Greene  "^  Beekman  v.  Gibbs,  8  Paige.  511; 

(Iowa),  179.  Barnes  v.  Stoughton,  10  Hun.  14. 

^=See  85  97,  1464.  "'Miller  v.    Case,   Clarke    (N.   Y.), 

^'Conklin     v.     Bowman,     11     Ind.  395;     Heath  v.   Blake,  28  S.   C.   406, 

254;    Walker  v.  Sellers.  11  Ind.  376;  5  S.  E.  842. 

Miller  v.  Kolb,  47  Ind.  220.  '■  Andrews  v.  O'Mahoney,  112  N.  Y. 

"  Andrews  v.  O'Mahoney,  112  N.  Y.  567,  20  N.  B.  374. 
567,  20  N.  E.  374;    Shepherd  v.  Pep- 
per, 133  U.  S.  626,  10  Slip.  Ct.  438. 


§    1612.]  UNDEK   DECREE   OF    COURT.  553 

whom  they  set  up  no  equities  or  defence.^^  But  questions  as  to 
priority  of  claims  upon  different  portions  of  the  premises  should  bo 
settled  by  the  court  before  a  sale  is  made,  rather  than  after  the 
sale,  as  the  parties  interested  are  then  able  to  act  intelligibly  as  to 
the  bidding  at  the  sale,  and  the  officer  selling  can  directly  after- 
wards go  on  with  the  distribution  of  the  proceeds.^"  If,  however, 
these  questions  relate  merely  to  the  distribution  of  the  surplus,  and 
do  not  aifect  the  order  of  sale,  they  are  properly  settled  upon  appli- 
cation for  the  surplus  after  sale.^" 

It  is  often  important  to  settle  the  rights  of  the  mortgagee  under 
the  mortgage  before  a  foreclosure  sale.  Thus  on  a  foreclosure  of 
a  mortgage  given  by  a  riparian  owner,  covering  the  shore,  and  in- 
cluding the  land  lying  under  water  in  front  of  the  upland,  which 
was  afterwards  filled  in  and  reclaimed  by  the  mortgagor,  before  the 
sale  was  ordered,  the  rights  of  the  mortgagee  in  the  land'  that  was 
submerged  at  the  time  of  the  mortgage,  were  directed  to  be  defined.^^ 

§  1612.  The  notice  of  sale. — The  time  and  place  of  the  sale, 
and  the  terms  and  conditions  of  it,  may  be  prescribed  by  the  court,^^ 
though  it  generally  leaves  all  these  details  to  the  master  or  other 
officer  charged  with  the  conduct  of  it ;  but  all .  his  acts  in  relation 
to  it  are  subject  to  the  direction  of  the  court  at  all  times,  and  to 
its  sanction  when  the  sale  is  reported  for  confirmation.  It  is  the  duty 
of  the  officer,  thus  appointed,  to  conduct  all  the  proceedings  leading 
up  to  the  sale  and  the  sale  itself  in  a  fair,  impartial  manner,  so 
that  the  property  may  be  sold  for  the  best  price  possible.  It  is  the 
duty  of  the  court  to  see  that  the  advertisement  of  sale  is  published 
in  a  paper  that  will  give  it  general  publicity,  so  as  to  invite  competi- 
tion, and  that  the  sale  in  other  respects  is  fairly  conducted.^^  The 
notice  of  the  sale,  when. not  regulated  by  statute,  may  be  prescribed 
by  the  decree,  or  left  to  the  officer  intrusted  with  the  execution  of 
the  decree.  It  should  fix  the  time  of  sale,  and  the  hour  of  the  day 
at  which  the  sale  is  to  be  made  should  be  designated;  otherwise,  if 
a  reasonable  price  is  not  obtained  for  the  property,  thQ  sale  will 
be  set  aside.^*     It  is  proper  to   state  the  amount  of  the   decree, 

'**  Smart   v.    Bement,    4    Abb.    Dec.  ="  Schenck  v.  Conover,  13  N.  J.  Eq. 

253.  31;     Union    Ins.    Co.    v.    Van    Rens- 

'■' Snyder  v.  Stafford,  11  Paige,  71;  selaer,  4  Paige,  85. 
Johnson    v.    Badger   Mill    &   Mining  -^  Point  Breeze  Ferry  Co.   v.   Bra- 
Co.,    13    Nev.    351;     Marling   v.    Ro-  gaw,  47  N.  J.  Eq.  298,  20  Atl.  967. 
brecht,  13  W.  Va.  440.  =-  Sessions  v.  Peay,  23  Ark.  39. 

In  Virginia  a  decree  of  sale  before  -"  State   v.    Holliday,   35   Neb.    327, 

taking  an  account  of  existing  liens  53  N.  W.  142. 

is  erroneous.    Alexander  v.  Howe,  85  "*  Trustess  v.  Snell,  19  111.  156.   The 

Va.  198,  7  S.  E.  248.  decree   directed   the   master   to   sell 


553  MODE   AND   TERMS   OF    SALE.  [§    1612. 

but  such  statement  is  not  essential  to  the  validity  of  the  notice.  If 
the  notice  refers  to  the  decree  and  the  order  of  sale  this  is  suhicient." 

Where  a  decree  directed  notice  of  a  sale  to  be  published  in  a 
certain  paper,  which  was  after  the  decree  and  before  the  notice 
merged  in  another  paper  and  its  name  changed,  and  on  applica- 
tion to  the  judge  at  chambers  he  directed  the  sale  to  be  advertised 
in  the  paper  called  by  its  new  name,  the  publication  of  the  notice 
in  that  paper,  in  accordance  with  such  order,  was  held  valid  and 
sufficient.-**  Even  a  change  of  place  of  publication  and  of  the 
name  of  the  paper  does  not  destroy  the  identity  of  the  paper,  so  long 
as  it  is  the  same  in  substance;  and  the  notice  may  be  published 
in  the  paper  after  such  change  without  any  further  order  of  court, 
and  the  foreclosure  will  not  be  invalidated.^^  If  the  manner  of 
advertising  is  fair,  objection  to  it  on  the  ground  that  the  property 
did  not  sell  for  so  much  as  the  mortgagor  valued  it  is  without  force.^* 

The  notice  must  be  given  in  the  manner  provided  by  statute  or 
prescribed  by  the  order  of  court.  The  officer  making  the  sale  derives 
his  authority  from  the  decree,  and  he  must  pursue  it  substantially 
or  his  acts  will  be  set  aside.^^ 

Generally  when  a  notice  is  required  to  be  published  once  in  each 
week  for  a  certain  number  of  weeks,  as,  for  instance,  three  weeks, 
it  is  not  necessary  that  the  time  between  the  first  and  last  publica- 
tions should  be  three  full  wrecks,  but  only  that  one  publication 
should  be  made  on  some  day  of  each  week.='°     Though  the  mortgage 

upon  four  weeks'  notice  of  the  time,  ders,  and  during  the  ordinary  busi- 

terms,   and   place  of  sale.     The  no-  ness  hours  of  the  day.     The  notice 

tice   stated   that  the   sale   would  be  should  have  stated  the  hour  of  sale, 

made    on    the    2d    day    of    January,  or  that  the  sale  would  be  made  be- 

"The   proof   showed   that  the   prop-  tween   certain   named   hours   of  the 

erty  was  sold  at  an  enormous  sac-  b^-isiness  portion  of  the  day." 

rifice.     The  notice  as  to  the  time  of  -'^  Stratton    v.    Reisdorph,    35    Neb. 

sale  was  insufficient.     The  2d  day  of  314,  53  N.  W.  136. 

January    included    the    astronomical  ^'^  Sage  v.  Cent.  R.  Co.  99  U.  S.  334, 

period  of  a  revolution  of  the  earth  13  West.  Jur.  218. 

upon    its    axis,    twenty-four    hours.  "  Perkins   v.    Keller,   43   Mich.   53, 

2  Black.   Com.   141   and  notes.     The  4  N.  W.  559. 

sale,    therefore,    might,    consistently  "Barlow  v.  McClintock   (Ky.),  11 

with    the    notice,    have    been    made  S.  W.  29. 

immediately  before  midnight  of  that  ^  Augustine  v.  Doud,  1  Bradw.  588. 
day.  and  if  it  was  so  made,  it  is  ^"Sheldon  v.  Wright,  5  N.  Y.  497; 
voidable.  The  object  of  a  public  Olcott  v.  Robinson.  21  N.  Y.  150, 
sale  is,  by  fairness  and  competi-  reversing  20  Barb.  148.  78  Am.  Dec. 
tion,  to  evolve  the  full  value  of  the  126;  Wood  v.  Morehouse,  45  N.  Y. 
property  exposed,  and  produce  that  368,  affirming  1  Lans.  405;  Cham- 
value  in  the  form  of  money.  This  berlain  v.  Dempsey,  22  How.  Pr.  356, 
can,  as  a  general  rule,  only  be  done  13  Abb.  Pr.  421;  Alexander  v.  Mes- 
by  making  the  sale  at  a  convenient  servey,  35  S.  C.  409, 14  S.  E.  Rep.  854. 
or   public   place,    accessible   to   bid- 


§  1G13.]  UNDER  DECREE  OF  COURT.  554 

contains  a  power  of  sale  which  provides  for  thirty  days'  notice,  the 
court  may  decree  a  sale  upon  a  shorter  notice.^^ 

The  notice  need  not  be  published  in  all  the  editions  of  the  paper 
issued  on  the  days  on  which  the  notice  was  jjublished.^- 

The  notice  in  its  contents  should  be  drawn  in  fairness  both  to 
those  who  are  interested  in  the  property  and  to  those  who  may 
purchase  it,  and  should  neither  contain  uncalled-for  statements  cal- 
culated to  depreciate  the  price  unduly,^^  nor,  on  the  other  hand, 
should  it  contain  statements  which  might  unduly  enhance  the  price 
or  mislead  the  purchaser.^* 

A  notice  of  sale  which  describes  the  property  as  it  is  described 
in  the  mortgage  and  decree  is  sufficient.^^ 

A  personal  notice  of  the  sale  need  not  be  given  to  the  defendant. 
The  notice  of  sale  prescribed  by  statute  or  by  the  decree  is  suffi- 
cient.^'' The  notice  required  by  the  decree  will  be  held  sufficient 
unless  it  is  clearly  unreasonable.^' 

§  1613.  Terms  of  sale. — The  officer  making  the  sale  should  pre- 
pare the  terms  of  sale,  a  copy  of  which,  wdth  a  description  of  the 
premises,  should  be  signed  by  the  purchaser,  though  it  is  held  that 
sales  made  imder  decrees  of  court  are  not  within  the  statute  of 
frauds.^^  The  auctioneer,  moreover,  being  the  agent  of  both  par- 
ties, his  memorandum  of  the  sale  is  binding  upon  the  purchaser  ;^^ 
but  his  memorandum  must  have  his  signature.*"  This  contract, 
however,  is  not  regarded  as  complete  until  the  officer's  report  of  the 
sale  has  been  confirmed.  The  terms  of  sale,  according  to  the  usual 
practice,  provide  that  a  deposit  shall  be  paid  down  at  the  time  of 
sale.  The  amount  of  this  varies  according  to  the  circumstances  of 
the  case,  but  is  generally  about  ten  per  cent,  of  the  purchase-money. 
It  is  proper  to  keep  the  biddings  open  till  the  deposit  is  made, 
and  to  resume  the  sale  if  the  purchaser  refuses  or  neglects  to  make 

"Johnson  v.   Meyer,   54  Ark.   437,  "Crosby  v.  Kiest,  135  111.  458,  26 

16  S.  W.  121.  N.  E.  599. 

^- Everson  v.  Johnson,  22  Hun,  115.  '' Sugden's    Vendors,    148;     Attor- 

^=  Marsh  v.   Ridgway,   18  Abb.   Pr.  ney-General  v.  Day,  1  Ves.  Sen.  221; 

262.  Fulton  v.  Moore,  25  Pa.  St.  468;  Hal- 
It  need   not  state   that   the  prop-  leek  v.  Guy,  9  Cal.  181,  70  Am.  Dec. 

erty  will  be  sold  in  parcels  when  a  643.     See  §  1866. 

sale    in    parcels    has    been    ordered.  '"  McComb  v.  Wright,  4  Johns.  Ch. 

Hoffman  v.  Burke,  21  Hun,  58.  659;   Hegeman  v.  Johnson,  35  Barb. 

=*Veeder  v.  Fonda,  3  Paige,  94.  200;  National  Fire  Ins.  Co.  v.  Loom- 

^'^  German    Loan    Soc.   v.    Kern;   38  is,  11  Paige,  431. 

Oreg.  232.  62  Pac.  788,  63  Pac.  1052.  *"  Bicknell  v.  Byrnes,  23  How.  Pr. 

^"Sanford  v.  Haines,  71  Mich.  116,  486. 

38  N.  W.  777. 


555  MODE   AND   TERMS    OF    SALE.  [§    1613. 

it.*^  Under  special  circumstances  the  sale  may  be  adjourned  to  an- 
other day,  and  resumed  if  the  deposit  is  not  made  in  the  mean  time.*" 

A  statute  which  provides  that  if  the  Ijidder  neglects  or  refuses  to 
make  immediate  payment  of  the  sum  bid,  the  officer  conducting  the 
sale  may  immediately,  or  upon  some  other  day  to  which  he  may  in 
his  discretion  adjourn  such  sale,  proceed  to  sell  such  land,  does  not  con- 
template that  each  bid,  whether  the  highest  or  not,  shall  be  accom- 
panied with  the  amount  thereof,  and  it  is  not  unusual  to  allow  time 
within  which  to  produce  the  amount  of  the  bid..  "A  party  attend- 
ing such  a  sale  cannot  know  that  he  will  be  the  successful  bidder, 
and  therefore  should  not  be  expected  to  be  ready  at  the  time  of  the 
bid  with  the  money,  the  amount  of  which  cannot  be  ascertained 
until  the  bidding  is  concluded."  Therefore,  if  upon  the  failure  of  a 
bidder  to  produce  the  money  upon  the  spot,  the  officer  sells  the  land 
to  another,  though  the  first  bidder  soon  after  such  sale  tenders  the 
amount  of  his  bid,  a  resale  may  be  ordered.*^ 

Where  a  purchaser  in  good  faith  left  the  place  of  sale  without 
complying  with  the  conditions  of  sale,  under  the  supposition  that 
he  had  until  the  next  day  to  do  this,  and  the  referee  then  and 
there  sold  the  premises  again  for  a  less  price,  the  court  ordered  a 
resale  upon  the  first  purchaser's  giving  security  to  bid  the  same 
amount  again. ^'^ 

At  a  sale  by  a  mortgage  trustee  late  in  the  afternoon  of  Saturday, 
the  terms  of  which  were  announced  to  be  cash,  the  holder  of 
the  mortgage  notes  bid  $10,070,  and  exhibited  his  certified  check 
upon  a  bank  for  $10,000,  and  the  property  was  struck  off  to  him, 
although  another  person  bid  $3,938  and  tendered  the  money  for 
his  bid.  On  Monday  the  highest  bidder  paid  over  the  money  bid,  and 
a  confirmation  of  the  sale  was  asked  for.  The  other  bidder  con- 
tested the  confirmation,  but  the  court  held  that  there  had  been  a  sub- 
stantial compliance  with  the  terms  of  the  sale,  and  confirmed  it.*^ 
Besides,  the  holder  of  the  mortgage  notes  may,  it  seems,  comply  with 
the  terms  of  the  sale  by  merely  indorsing  the  amount  ^of  the  bid 
on  the  notes.  The  formality  of  paying  over  the  money  to  the  trus- 
tee and  receiving  it  back  from  him  is  unnecessary.^" 

"  Lents  V.   Craig,  13  How.  Pr.  72,  ister,  within  ten  days,  a  sum  equal 

2  Abb.  Pr.  294;   Sherwood  v.  Reade,  to    the    amount    of    his    bid,    and    a 

8  Paige,  633.     See  Converse  v.  Clay,  bond  conditioned  that  the  premises 

86  Mich.  375,  49  N.  W.  473.  should     on     the     resale     bring     the 

"  Hoffman's  Referees.  236.  amount  of  the   prior  sale,   together 

"  Converse  v.   Clay,   86  Mich.   375,  with  all  the  costs  of  the  cause  and 

49  N.  W.  473.     In  such  case  it  was  of  the  resale. 

not   improper  to  impose,  as  a  con-  •"  Lents  v.  Craig,  13  How.  Pr.  72. 

dition  of  such  resale,  that  the.  first  *^  Jacobs  v.  Turpin,  83  111.  424. 

bidder  should  deposit  with  the  reg-  '^  Jacobs  v.  Turpin,  83  111.  424. 


§§  1614,  1615.]         UNDER  DECREE  OF  COURT.  556 

§  1614.  Deposit  required. — The  trustee  or  commissioner  appointed 
to  conduct  the  sale  may  properly  require  that  the  purchaser  shall  de- 
posit or  pay  some  portion  of  the  price  in  cash  at  the  time  of  sale ;  and, 
if  the  sum  be  not  so  large  as  reasonably  to  deter  persons  from  bidding, 
this  requirement  will  not  prevent  a  ratification  of  the  sale.*^  But  a 
requirement  of  the  immediate  payment  in  cash  of  the  whole  purchase- 
money  at  the  time  of  sale  is  an  oppressive  and  unjust  act  towards 
the  mortgagor,  and  a  court  of  equity  would  set  the  sale  aside.*®  If  the 
mortgagee  without  leave  purchases  at  such  sale,  he  will  be  considered 
merely  a  mortgagee  in  possession  of  a  redeemable  estate. 

It  is  proper  to  provide  in  a  decree  that,  in  case  any  other  person 
than  the  mortgagee  becomes  purchaser  at  the  sale,  he  shall  be  required 
to  pay  at  once,  in  cash,  a  part  of  the  bid  as  earnest  money ;  and  no  ob- 
jection can  be  taken  that  the  same  requirement  is  not  made  of  the 
mortgagee.*'' 

The  trustee  is  not  obliged  to  accept  the  highest  bidder  if  he  has 
reason  to  apprehend  that  he  has  not  the  ability  or  intention  to  comply 
with  the  terms  of  sale.  The  requirement  of  a  deposit  is  a  reasonable 
precaution  in  order  to  insure  the  completion  of  the  sale,  or  to  cover  the 
costs  and  expenses  of  it  should  it  fail  by  the  purchaser's  default.^" 

§  1615.  Sale  on  credit. — Ordinarily,  except  with  the  consent  of 
both  parties,  the  sale  is  for  cash.  The  sheriff  has  no  authority  to  sell 
on  credit  in  the  absence  of  any  authority  given  in  the  deed.^^  But 
the  mortgagee  may  allow  time  to  the  purchaser,  and,  whether  this  ar- 
rangement be  made  before  or  after  the  sale,  it  does  not  injure  the 
mortgagor,  and  is  no  ground  for  setting  aside  the  sale,  if  the  credit  is 
only  for  the  amount  due  to  him.^^  But  he  cannot  allow  credit  beyond 
this,  except  with  the  consent  of  the  other  incumbrancers  entitled  to  the 
proceeds  of  sale.^^  A  court  of  equity  may  order  the  sale  to  be  made  on 
credit  without  violating  the  obligation  of  the  mortgage  contract,^* 
unless  the  mortgage  deed  expressly  provides  that  the  sale  shall  be  for 
cash,  in  which  case  the  requirement  is  obligatory  and  cannot  be  disre- 

*'  Maryland  Land  &  Building  Soc.  ="  Gray  v.  Veirs,  33  Md.  18. 

V.   Smith,  41   Md.   516.     The  deposit  "  Sauer  v.  Steinbauer,  14  Wis.  70; 

required  was  $300,  the  property  sell-  Sedgwick  v.  Fish,  Hopk.  594. 

ing  for  $5,600.     The  requirement  of  "  Mahone  v.  Williams,  39  Ala.  202; 

a  deposit  of  one-third  of  the  bid  is  Rhodes  v.  Butcher,  6  Hun,  453. 

not  unreasonable.     Tyer  v.  Charles-  ''  Chaffraix     y.     Packard,     26     La. 

ton  Rice  Milling  Co.  32  S.  C.  598,  10  Ann.  172. 

S.  E.  1067.  ''  Stoney  v.  Shultz,  1  Hill  Ch.  465, 

« Goldsmith    v.    Osborne,    1    Edw.  550,   27   Am.    Dec.    429;    Lowndes   v. 

560.  Chisholm,  2  McCord  Ch.  455,  16  Am. 

"  Sage  V.  Cent.  R.  Co.  99  U.  S.  334,  Dec.  667. 
13  West.  Jur.  218. 


557  SALE  IN  PARCELS.  [§  1616. 

garded  by  the  court.^^  If  a  referee,  with  the  consent  of  the  parties  in 
interest,  sells  the  premises  on  time,  and  the  sale  is  reported  and  con- 
firmed, it  will  not  be  set  aside  on  the  motion  of  a  creditor  of  the 
deceased  mortgagor.^'^ 

Where,  upon  a  foreclosure  sale  by  order  of  court,  a  lien  is  reserved 
in  the  deed  to  secure  the  impaid  instalments,  the  court  may,  before  the 
final  decree  of  distribution,  proceed  to  a  resale  of  the  property  by  a 
supplementary  proceeding  without  resorting  to  an  original  bill.  If 
innocent  purcliasers  have  in  the  mean  time  acquired  any  rights,  these 
must  be  protected. ^'^ 

When  the  terms  of  sale  are  cash,  the  purchaser  must  pay  cash,  and 
cannot  comply  with  such  terms  by  a  tender  of  the  note  of  the  person  en- 
titled to  the  proceeds  of  the  sale.^^  But  where  the  terms  of  sale  pro- 
vided for  payment  in  cash,  the  acceptance  by  the  sheriff  of  a  certified 
check  which  is  afterward  paid,  is  not  sufficient  to  defeat  the  sale.^^ 


II.     Sale  in  Parcels. 

§  1616.     A  sale  in  parcels  may  be  required  by  statute  or  by  the 

court.'^'^  In  regulating  foreclosure  sales  in  equity,  several  States  have  by 
statute  provided  that  the  property  shall  be  sold  in  parcels  when  practi- 
cable, but  that,  where  a  sale  of  the  whole  will  be  more  beneficial  to  the 
parties,  the  decree  shall  be  made  accordingly.  But  courts  of  equity 
without  statutory  provisions,  apply  the  same  rules ;  these  provisions  in 
fact  being  only  confirmatory  of  principles  l)y  which  courts  of  equity 
are  necessarily  governed  in  suits  of  foreclosure."^  AVhen  the  decree  has 
directed  the  sale  of  the  whole  premises  for  the  payment  of  an  in- 
stalment then  due,  the  court  may  in  its  discretion  afterwards  reg- 

"  Crenshaw  v.  Seigfried,  24  Gratt.  Gregory  v.  Purdue,  32  Ind.  453;  Ma- 

272.     See,   to  the  contrary,  Mitchell  gruder   v.   Eggleston,    41   Miss.    248; 

V.  McKinny,  6  Heisk.  83.  Am.    Life  &   Fire   Ins.   &   Trust  Co. 

='' Rhodes  V.  Diitcher,  a  Hun,  453.  v.   Ryerson,  6  N.  J.  Eq.   9;    Wilmer 

"  Stuart  V.   Gay,   127   U.   S.   518,   8  v.  Atlanta  &  Richmond  Air  Line  R. 

Sup.  Ct.  1279.  R.    Co.    2   Woods,   447;    Schreiber  v. 

^' Purslev  V.  Forth,  82  111.  327.    See  Carey,    48   Wis.    208,    4    N.    W.    124; 

Sage  V.   Cent.   R.   Co.   99  U.   S.   334,  Sherwood  v.   Landon,  57  Mich.   219, 

13  West.  Jur.  218.  23  N.  W.  778;    Kane  v.  Jonasen,  55 

="  Sheldon  v.   Pruessner,  52   Kans.  Neb.  757,  76  N.  W.  441;   Macomb  v. 

593,  35  Pac.  204;  Hanscom  v.  Meyer,  Prentis,  57  Mich.  225,  23  N.  W.  788; 

57  Neb.  786,  78  N.  W.  367.  Montague  v.  Raleigh  Sav.  Bank,  118 

°»As    to    sales    in    parcels    under  N.   C.   283,  24  S.  E.   6;    Mclntyre  v. 

powers     in     mortgages     and     trust  Wyckoff,    119    Mich.    557,   78    N.    W. 

deeds,  see  chapter  xi..  division  9.  654;    Bernhard    v.    Hovey,    9    Kans. 

•"Livingston  v.  Mildrum,  19  N.  Y.  App.   25,  57  Pac.   245;    Hutchison  v. 

440,  443,  per  Selden,  J.;  Campbell  v.  Yahn,  9  Kans.  App.  837,  61  Pac.  458. 
Macomb,  4  Johns.  Ch.  534.    See,  also. 


g    1616. J  UNDER   DECREE   OF    COURT.  558 

ulate  the  execution  of  the  decree  by  directing  a  sale  of  a  part  only, 
if  the  premises  are  divisible,  and  may,  upon  the  maturity  of  other 
instalments,  direct  further  sales.''^  In  determining  whether  the 
premises  shall  be  sold  together  or  in  parcels,  the  court  should  di- 
rect the  sale  to  be  made  in  such  manner  as  that  the  parties  having 
equities  subject  to  the  mortgage  shall  not  be  prejudiced.*^" 

It  may  sometimes  happen  that,  even  when  the  mortgage  describes 
the  property  in  separate  parcels,  and  the  amount  due  on  the  mort- 
gage may  be  raised  by  a  sale  of  a  portion  of  them,  it  may  be  neces- 
sary for  the  proper  protection  of  the  rights  of  subsequent  incum- 
brancers that  the  property  should  be  sold  together  f*  and  in  such 
case  the  court  will  so  order  although  the  statute  provides  that 
the  decree  shall  be  for  the  sale  of  such  part  as  may  be  sufficient 
to  pay  the  mortgage  debt  and  costs  ;*'^  and  even  after  a  sale  of  a 
part,  the  court,  still  having  jurisdiction  of  the  parties  and  the  sub- 
ject, may,  for  the  protection  of  the  parties,  make  a  supplementary 
order  for  the  sale  of  the  remainder.''^ 

If  an  order  to  sell  in  parcels  be  erroneous,  a  party  aggrieved 
should  apply  to  have  the  order  amended;  it  is  not  a  defense  to 
the  suit  which  can  be  taken  advantage  of  by  plea,  answer,  or  de- 
murrer.*^^ 

A  statutory  provision  that,  in  sales  of  real  property  consisting  of 
several  lots  or  parcels,  the  lots  shall  be  sold  separately,  and  that  the 
debtor  may  direct  the  order  in  which  the  lots  shall  be  sold  does  not 
apply  where  each  parcel  is  first  offered  for  sale  separately,  and  no  bids 
are  received.  In  such  case  the  property  may  then  be  offered  and  sold  as 
a  whole,  and  the  sale  will  be  upheld  unless  other  reasons  appear  for 
setting  it  aside."^ 

Even  a  sale  in  disregard  of  the  statiite  is  not  absolutely  void.  It 
is  only  voidable,  and  will  ordinarily  be  set  aside  on  timely  application.^* 
"Where  the  mortgage  itself  provides  in  what  parcels  the  property  shall 

"Am.    Life   &   Fire    Ins.    &   Trust  413;    Livingston  v.    Mildrum,   19   N. 

Co.  V.  Ryerson,  6  N.  J.  Eq.  9.  Y.  440. 

«^  De    Forest   v.    Farley,    62    N.    Y.  '■^  Livingston  v.  Mildrum,  19  N.  Y. 

628;    Livingston   v.    Mildrum,    19   N.  440;  De  Forest  v.  Farley,  4  Hun,  640. 

Y.  440;   Beekman  v.  Gibbs.  8  Paige,  "'Horner  v.  Corning,  28  N.  J.  Eq. 

511;  Malcolm  v.  Allen,  49  N.  Y.  448;  254. 

Blazey  v.  Delius,  74  111.  299;  Boteler  "» Marston  v.  White,  91  Cal.  37,  27 

v.  Brookes,  7  G.  &  J.  143.  Pac.  588. 

"Gregory    v.    Campbell,    16    How.  "^^  San  Francisco  v.  Pixley,  21  Cal. 

Pr.   417;    Johnson  v.   Hambleton,  52  56;  Blood  v.  Light,  38  Cal.  649,  654; 

Md.  378.  Browne  v.   Ferrea,  51  Cal.   552;    Vi- 

»^  Dobbs  V.  Niebuhr,  3  N.  Y.  Supp.  goureux  v.  Murpny,  54  Cal.  346. 


559  SALE  IN  PARCELS.         [§§  1G17,  1618. 

be  sold,  the  court  may  properly  follow  such  provision  in  decreeing 
the  sale."'' 

^  1617.  The  wishes  of  the  mortgagor  in  respect  to  the  mode  and 
order  of  sale  should  be  followed,  if  this  can  be  done  with  safety  to  the 
mortgagee,  and  without  injury  to  other  parties  in  interest.  If  there  be 
no  question  that  the  property  is  ample  to  satisfy  the  debt,  whether  sold 
together  or  in  parcels,  and  there  are  no  subsequent  equities  to  be  con- 
sidered, the  mortgagee  in  such  case  has  no  right  to  direct  whether  the 
sale  shall  be  in  one  way  or  the  other.^^  Under  some  circumstances, 
the  property  being  of  sufficient  value,  it  seems  that  a  mortgagee  would 
be  required  to  sell  the  land  in  such  a  manner  that  the  mortgagor  might 
have  a  homestead  alloted  to  him  in  the  residue. '^- 

If  the  mortgagor  does  not  ask  to  have  the  property  sold  in  parcels, 
though  he  lias  asked  for  and  had  adjournments  of  the  sale,  the  sale 
will  not  be  set  aside  because  all  the  premises  are  sold  as  one  parcel." 
But  in  a  case  where  the  security  was  doubtful,  and  the  property  con- 
sisted of  one  parcel,  which,  after  the  making  of  the  mortgage,  was  laid 
out  in  streets  and  building  lots,  the  mortgagee  objected  to  a  sale  in 
parcels,  unless  security  should  be  given  him,  because  that  portion  of 
the  land  laid  out  for  streets  would  not  be  included,  and  a  sale  in  one 
parcel  was  held  proper.^*  A  mortgagee  who  holds  a  mortgage  upon  the 
entire  interest  in  a  lot  of  land  cannot  be  called  upon  to  allow  a  sale  of 
an  undivided  interest,  even  if  the  mortgage  be  made  by  joint  tenants 
who  desire  a  separate  sale  of  undivided  interests  to  enable  them  more 
easily  to  adjust  their  rights  as  between  themselves.'^^ 

§  1618.     Whether  the  property  shall  be  sold  entire  or  in  parcels 

is  in  some  States  determined  by  the  court,  generally  through  a  refer- 
ence, and  in  others  is  left  to  the  discretion  of  the  officer  making  the 
sale.''^  When  determined  by  the  court,  the  order  of  sale  sometimes  di- 
rects the  form  and  manner  of  the  division,  and  designates  the  part  first 
to  be  sold,^^  or  more  properly  to  be  offered  for  sale.'^*    Objections  to  the 

■"Bank  v.  Charles,  86  CaL  322,  24  135;  Lane  v.  Conger,  10  Hun,  1,  and 

Pac.  1019;  Hopkins  v.  Wiard,  72  CaL  cases    cited.     And    see   Ellsworth    v. 

259,  13  Pac.  687;     Mickle  v.  Maxfield,  Lockwood,  9  Hun,  548,  42  N.  Y.  89. 

42  Mich.  304,  3  N.  W.  961.  -  Frost    v.    Bevins,    3    Sandf.    Ch. 

"Walworth    v.    Farmers'    Loan    &  188;      Schoenewald     v.      Dieden,      8 

Trust  Co.  4  Sa/idf.  Ch.  51;  Brown  v.  Bradw.  389. 

Frost,  Hoffm.  41.     And  see  King  v.  ""  See  statutory  regu  ations  of  the 

Piatt,    37    N.    Y.    155;     Caufman    v.  different  States. 

Sayre,  2  B.  Mon.  202.     And  see  Wol-  "  Brngh  v.  Darst,  16  Ind.  79;  Bard 

cott  V.  Schenck,  23  How.  Pr.  385.  v.  Steele,  3  How.  Pr.  110. 

'=  Weil  V.  Uzzell,  92  N.  C.  515.  ■«  Cissna    v.    Haines,    18    Ind.    496. 

"  Guarantee  Trust  <fe  Safe  Deposit  This    order    may    be    based    on    the 

Co.  V.  Jenkins,  40  N.  J.  Eq.  451.  facts  shown  at  the  hearing,  or  upon 

'"  Griswold    v.    Fowler,    24    Barb,  the  consent  of  the  parties,  although 


§    1618.]  UNDER    DECREE   OF    COURT.  560 

manner  of  dividing  the  land  should  be  called  to  the  attention  of  the 
court  immediately  and  before  the  sale.'^  An  order  once  made  will  not 
be  disturbed  without  good  cause.-^'*  When  by  statute  or  rule  of  court  the 
officer  determines  upon  these  matters,  he  must  sell  in  parcels  in  just  the 
same  cases  in  which  the  statute  or  the  general  principles  of  equity 
would  make  this  course  obligatory  upon  the  court;  and  if  he  makes  it 
otherwise,  the  court  will  set  it  aside.^^  A  statutory  provision  directing 
the  sale  of  only  so  much  as  will  pay  the  amount  due  with  costs,  if  a  di- 
vision can  be  made,  is  peremptory  upon  the  court,*-  leaving  only  the  de- 
termination of  the  question  whether  such  division  can  be  made  without 
injury  to  the  whole.  A  sale,  however,  made  without  regard  to  this  pro- 
vision, is  only  voidable,  and  not  void.*^ 

Without  any  statutory  requirement,  a  court  of  equity  will  order  a 
sale  in  parcels  wdien  the  property  consists  of  distinct  tracts,  together 
worth  much  more  than  the  debt  secured.^*  The  mere  fact  that  the 
premises  are  a  meagre  security  and  are  going  to  ruin  and  decay  does  not 
justify  a  sale  of  the  entire  premises  for  a  debt  only  partly  due.®^  A 
decree  for  such  a  sale  should  rest  upon  an  allegation  and  finding  that 
the. premises  cannot  be  divided  without  manifest  injury  to  all  par- 
ties concerned. '^^  A  sale  of  the  property  as  an  entirety  is  proper  where 
it  appears  that  a  division  of  it  into  parcels  would  lessen  its  selling 
value.*^ 

there  be  no  foundation  for  it  in  the  court  may,  unless  a  sale  in  parcels 

pleadings.      Cord    v.    Southwell,    15  is  asked  for,  decree  a  sale  without 

Wis.    211;     Macomb    v.    Prentis,    57  first   ascertaining   whether   the   sale 

Mich.  225.  23  N.  W.  788;  Hopkins  v.  will  be  for  the  interest  of  such  de- 

Wiard,  72  Cal.  259,  262,  13  Pac.  687;  fendants.     Ticknor     v.     Leavens,     2 

Bank  of  Ukiah  v.  Reed,  131  Cal.  597,  Ala.   149;    Gladden  v.   Mortgage   Co. 

601,  63  Pac.  921.  80  Ala.  270;  Homer  v.  Schonfeld,  84 

""Miller    v.    Kendrick    (N.    J.),    15  Ala.    313,    4    So.    105.     In    Kentucky 

Atl.  259.  the    court,    before    ordering    a    sale, 

^"Vaughn  v.   Nims,   36  Mich.   297;  must    be    satisfied    whether    or    not 

Von  Hemert  v.  Taylor,  76  Minn.  386,  the  property  can  be  divided  without 

79  N.  W.  319.  impairing    its    value.     Civ.    Code,    § 

''^  Waldo  V.  Williams,  3  111.  470;  694.  The  court  may  satisfy  itself 
White  V.  Watts,  18  Iowa,  74;  Benton  in  any  way  as  to  the  divisibility  of 
V.  Wood,  17  Ind.  260;  Meriwether  v.  the  property.  Sears  v.  Henry,  13 
Craig,  118  Ind.  301,  20  N.  E.  769.  Bush,  413,  415;  McFarland  v.  Gar- 
See,  also,  Lay  v.  Gibbons,  14  Iowa,  nett,  8  S.  W.  17. 
877,  81  Am.  Dec.  487.  In  Alabama,  »=  Bank  v.  Arnold,  5  Paige,  38. 
when  the  lands  are  susceptible  of  ^^3  Wait's.  Prac.  376;  Bozarth  v. 
division,  and  there  are  infant  de-  Largent,  128  111.  95,  21  N.  E.  218; 
fendants  whose  titles  will  be  affect-  Meriwether  v.  Craig,  118  Ind.  301, 
ed,   the  court  should   decree   a   sale  20  N.  E.  769. 

ony    after    ascertaining   whether    or  **  Ryerson    v.    Boorman,    7    N.    J. 

not  the  interest  of  the  infants  will  Eq.  167,  640. 

probably  be  promoted  by  a  sale  in  *'  Blazey  v.  Delius,  74  111.  299. 

parcels.     Walker   v.    Hallett,   1   Ala.  «"  Blazey  v.  Delius,  74  111.  299. 

379;  Fry  v.  Ins.  Co.  15  Ala.  810.    But  ^^  Central  Trust  Co.  v.  U.  S.  Roll- 

if    the    defendants    are    adults,    the  ing  Stock  Co.  56  Fed.  5. 


561  SALE  IN  PARCELS.  [§  1G19, 

Where  no  request  is  made  by  the  debtor  to  have  the  lands  offered  in 
separate  parcels,  and  where  the  order  of  sale  directs  that  all  of  the 
parcels  be  sold  subject  to  a  prior  mortgage  covering  all  of  them,  a  sale 
of  the  whole  property  together  should  be  confirmed.**^ 

If  the  decree  of  sale  describes  a  quarter  section  as  a  single  tract, 
it  is  not  the  duty  of  the  master  or  other  officer  to  divide  the  land 
into  parcels  in  making  the  sale.  If  the  decree  describes  several 
distinct  parcels,  then  it  is  the  duty  of  the  officer  to  sell  each  parcel 
separately.^'' 

The  court  having  ordered  that  the  property  shall  be  sold  either 
in  one  lot  or  in  separate  parcels,  the  parties  to  the  suit  cannot  by 
agreement  disregard  the  order,  and  make  a  valid  sale  in  any  other 
manner.""  A  subsequent  party  in  interest  has  a  right  to  insist  upon  'i 
strict  compliance  with  the  decree  and  the  statute  in  the  manner  of  the 
sale.^^ 

The  fact  that  several  parcels  mortgaged  together  had  previously 
been  held,  used,  and  conveyed  together  as  one  farm,  is  a  sufficient 
reason  for  selling  the  whole  in  one  parcel ;''-  and,  on  the  other  hand, 
the  fact  that  separate  parcels  have  previously  been  held  and  used 
by  themselves,  and  are  evidently  capable  of  being  so  used  to  advantage 
in  the  future,  affords  a  presumption  that  they  should  be  sold 
separately.^^ 

Under  a  mortgage  of  real  property,  together  with  machinery  and 
fixtures  thereon,  a  provision  of  the  mortgage,  that  in  case  of  fore- 
closure the  personal  property  shall  be  sold  with  the  realty,  will  be 
followed  in  the  decree."*  Generally  land  and  buildings  used  as  a 
mill,  with  the  machinery  therein  and  the  water  power  connected 
with  the  same,  constitute  a  unit,  and,  under  a  mortgage  covering 
such  property,  the  whole  should  be  sold  together  without  any  special 
provision  therefor,  because  the  parts  could  not  be  sold  separately  with- 
out a  large  depreciation."^ 

§  1619.  Sale  on  subsequent  default. — The  statutes  of  several 
States  provide  that,  when  a  portion  only  of  the  mortgage  debt  is  due, 

8^Gueda    Springs    Town    &   Water  Md.  378;  Yale  v.  Stevenson,  58  Mich. 

Co.    v.    Lombard,    57    Kans.    625,    47  537,  25  N.  W.  488. 

Pac.   532;    Bell   v.   Taylor,  14   Kans.  "' Whitbeck  v.  Rowe,  25  How.  Pr. 

277.  403;   Hubbard  v.  Jarrell,  23  Md.  66; 

*"  Patton  v.  Smith,  113  111.  499.  Clark  v.  Kraker,  51  Minn.  444,  53  N. 

'°  Babcock  v.  Perry,  8  Wis.  277.  W.  706. 

"  Farmers'  &  Millers'  Bank  v.  Lu-  "*  Wood  v.  Whelen,  93  111.  153. 

ther,  14  Wis.  96.  »=  Hill  v.  National  Bank,  97  U.  S. 

»=  Anderson    v.    Austin,    34    Barb.  450;  Barlow  v.  McClintock  (Ky.),  11 

319;    Whitbeck    v.    Rowe,    25    How.  S.  W.  29. 
Pr.  403;    Johnson  v.   Hambleton,  52 


§    1620.]  UNDER   DECREE   OF    COURT.  562 

a  portion  of  the  mortgaged  premises  may  be  sold  in  satisfaction  of 
such  part,  and  that  the  judgment  may  stand  as  security  for  any  subse- 
quent default;  and  that  upon  the  happening  of  such  default  the  court 
shall  order  a  second  sale  to  satisfy  such  default;  and  that  the  same 
proceeding  may  be  had  as  often  as  a  default  shall  happen.  The  subse- 
quent sale  is  made  by  order  of  court  upon  the  plaintiff's  petition,  which 
should  state  all  the  essential  facts  upon  which  the  order  is  to  be 
founded.  Notice  of  the  application  must  be  given  to  all  persons  inter- 
ested who  have  appeared  in  the  action.  The  order  for  sale  is  issued  as 
in  other  cases,  and  the  sale  is  made  in  the  same  manner. ^^ 

If  part  of  the  debt  be  not  due,  the  court  should  decree  a  sale  of 
so  much  of  the  premises  as  will  be  sufficient  to  pay  the  amount  due, 
and  a  further  order  of  sale  should  be  obtained  on  the  maturing  of 
the  unpaid  instalment  of  the  debt,  if  the  premises  can  be  divided ; 
and  before  rendering  a  judgment  for  a  sale  the  court  should  deter- 
mine whether  the  premises  can  be  sold  in  parcels  without  injury. ^^ 
If  the  premises  cannot  be  divided,  the  decree  should  provide  for 
the  payment  of  the  money  to  the  mortgagee  in  extinction  of  the  debt, 
unless  some  safe  course  more  beneficial  to  the  mortgagor  exists. '^^ 
Generall}',  a  sale  of  the  whole  estate,  when  there  is  no  order  for  a 
sale  in  parcels  for  an  instalment  due  before  the  principal  amount, 
exhausts  the  remedy  of  the  creditor,  and  passes  a  clear  title  to  the  pur- 
chaser.®^ 


III.     Order  of  Sale. 

§  1620.  When  the  mortgagor  has  made  successive  sales  of  distinct 
parcels  of  the  mortgaged  land  to  different  persons  by  warranty  deeds, 
it  is  generally  regarded  as  only  equitable  that  the  mortgagee,  when  he 
afterwards  proceeds  to  foreclose  his  mortgage,  should  be  required  to  sell 
in  the  first  place  such  part,  if  any,  as  the  mortgagor  still  retains,  and 
then  the  parts  that  have  been  sold  in  the  same  subdivisions,  but  be- 
ginning with  the  parcel  last  sold  by  the  mortgagor.^*'**    This  rule  rests 

"'' Bank    of    Napa    v.    Godfrey,    77  cases   there   cited;    Escher   v.    Sim- 

Cal.  612,  20  Pac.  142.  mens,   54    Iowa,   269,   6   N.    W.    274; 

"Griffin  v.  Reis,  68  Ind.  9;    Han-  Clayton  v.  Ellis,  50  Iowa,  590;  Todd 

nah  V.  Dorrell,  73  Ind.  465.  v.  Davey,  60  Iowa,  532,  15  N.  W.  421. 

"«§  1577;  Walker  v.  Hallett,  1  Ala.  ' '^  See  Contribution  to  redeem,   §§ 

379;   Levert  v.  Redwood,  9  Port.  79;  1080-1092;    Gantz  v.  Toles,  40  Mich. 

Knapp  V.   Burnham,   11  Paige,  330;  725;   Meecham  v.  Steele,  23  111.  135; 

Firestone  v.  Klick,  67  Ind.  309.  Hahn  v.  Behrman,  73  Ind.  120;  Fos- 

='^  Poweshiek    Co.    v.    Dennison,    36  ter  v.  Union  Bank,  34  N.  J.  Eq.  48; 

Iowa,    244,    14    Am.    Rep.    521,    and  Farmers'    Sav.    &    Build.    Asso.    v. 


5G3  ORDER  OF  SALE.  [g  1G20, 

upon  the  reason  that,  where  the  mortgagor  sells  a  part  of  the  mortgaged 
premises  without  reference  to  the  incumbrance,  it  is  right  between  him 
and  the  purchaser  that  the  part  still  held  by  the  mortgagor  shall  first  be 
applied  to  the  payment  of  the  debt;^"i  and  this  part  is  regarded  as 
equitahly  charged  with  the  payment  of  the  debt;  thei'efore,  when  he 
afterward  sells  another  portion  of  that  remaining  in  his  possession,  the 
second  purchaser  simply  steps  into  the  shoes  of  the  mortgagor  as  re- 
gards this  land,  and  takes  it  charged  with  the  payment  of  the  mortgage 
debt  as  between  him  and  the  purchaser  of  the  first  lot;  but  still,  as 
between  the  second  purchaser  and  the  mortgagor,  it  is  equitable  that 
the  land  still  held  by  the  latter  should  pay  the  incumbrance.  In  this 
manner  the  equities  apply  to  successive  purchasers.  This  order  of 
equities  proceeds  upon  the  supposition  that  each  subsequent  purchaser 
has  actual  or  constructive  notice,  by  the  record  of  the  deed  or  other- 
wise, of  each  prior  conveyance,  by  the  mortgagor  of  portions  of  the 
premises.^°- 

This  rule  is  applicable  where  a  part  of  the  residue  of  land  not 
sold  is  situated  in  another  State.^°^ 

A  provision  in  a  mortgage  covering  several  distinct  lots  that  lots  may 
be  released  upon  the  payment  of  not  less  than  a  specified  sum,  does  not 
constitute  it,  in  legal  effect,  a  separate  mortgage  upon  each  lot,  se- 
curing distinct  sums  of  money;  and  after  the  release  of  lots  in  accord- 
ance with  such  provision  upon  foreclosure  of  the  mortgage  upon  the  re- 
maining lots  the  amount  due  is  not  to  be  apportioned  among  the 
several  lots.     The  mortgage  in  such  case  is  one  transaction,  and  the 

Kent,  117  Ala.  624,  23  So.  757,  quot-  dreas    v.    Hubbard,    50    Conn.    351; 

ing  text;    Northwestern  Land  Assa.  Georgia    Pacific    R.    Co.    v.    Wallver, 

V.  Harris,  114  Ala.  468,  21  So.  999;  61   Miss.   481;    Millsaps  v.   Bond,   64 

Burton  v.  Henry,  90  Ala.  281,  7  So.  Miss.  453,  1  So.  506. 
925;  Alderholt  v.  Henry.  87  Ala.  415,        This  equity  is  recognized  even  in 

6  So.  625;  Prickett  v.  Sibert,  75  Ala.  Kentucky,  where  it  is  held  that  there 

315;    Morey   v.    Duluth,   69   Minn.   5,  is  no  equity  of  one  purchaser  over 

71  N.  W.  694.  another.     Blight  v.   Banks,   6   T.   B. 

"^Hoy  V.   Bramhall,   19  N.  J.  Eq.  Mon.  192,  197.  17  Am.  Dec.  136;  Dick- 

563,  97  Am.  Dec.  687;  Gaskill  v.  Sine,  ey  v.  Thompson,  8  B.  Mon.  312,  314. 
13  N.  J.  Eq.  400,  78  Am.   Dec.   105;         ^^^  §    743.      For    cases    giving    the 

Messervey  v.  Barelli,  2  Hill  Ch.  567;  reason  for  the  rule,  see  Weatherby 

Lock  V.   Fulford,  52   111.  166;   Boone  v.   Slack,   16   N.   J.   Eq.   491;    Wikoff 

V.  Clark,  129  111.  466,  21  N.  E.  850;  v.  Davis,  4  N.  J.  Eq.  224;  Ingalls  v. 

Massie    v.    Wilson,    IG    Iowa,    390;  Morgan,  10  N.  Y.  178;   Lock  v.  Ful- 

Bates  v.  Rudick,  2  Iowa,  423;  Mick-  ford,  52  111.  166;  Matteson  v.  Thom- 

ley  V.   Tomlinson,   79   Iowa,   383,   44  as,  41  111.  110;   Iglehart  v.  Crane,  42 

N.  W.   684;    Schrack  v.  Shriner,  100  111.    261;     Tompkins    v.    Wiltberger, 

Pa.  St.  45;  Mevey's  Appeal,  4  Pa.  St.  56  111.  385;   Stanly  v.  Stocks,  1  Dev. 

80;    Hodgdon  v.  Naglee,  5  Watts  &  Eq.  313. 

S.  217;  Blackledge  v.  Nelson,  2  Dev.         '"^Welling    v.    Ryerson,    94    N.    Y.' 

Eq.  65;   Mahagan  v.  Mead,  63  N.  H.  98. 
570;  Hall  v.  Morgan,  79  Mo.  47;  An- 


1621.] 


UNDER   DECREE   OF    COURT. 


564 


provision  as  to  the  release  of  the  mortgage  on  distinct  lots  is  con- 
ditional upon  payment."* 

§  1621.  Rule  of  inverse  order. — These  equitable  considerations 
have  led  to  the  adoption  of  the  rule  that  the  mortgagee  in  such  case 
shall  sell  the  mortgaged  land  in  the  inverse  order  of  its  alienation  by 
the  mortgagor;  and  it  will  be  seen  by  the  cases  cited  that  this  rule 
has  been  generally  adopted.^"^ 


"*  Domestic  Building  Asso.  v.  Nel- 
son, 172  111.  386,  E.0  N.  E.  194,  affirm- 
ing 66  111.  App.  601. 

'■"'  This  rule  is  adopted  in — 
United    States:     National    Savings 
Bank  v.   Creswell,   100   U.   S.    630,   8 
Am.  L.  Rec.  673. 

Alabama:  Howser  v.  Cruikshank, 
122  Ala.  256,  25  So.  206;  Farmers' 
Sav.  &  B.  &  L.  Asso.  v.  Kent,  117 
Ala.  620,  624,  23  So.  757;  Burton  v. 
Henry,  90  Ala.  281,  7  So.  925;  Ader- 
holt  V.  Henry,  87  Ala.  415,  6  So.  625; 
Prickett  v.  Sibert,  75  Ala.  315;  Mo- 
bile, &c.  Co.  V.  Huder,  35  Ala.  713; 
Farmers'  Sav.  &  Build.  &  Loan 
Asso.  V.  Kent,  117  Ala.  620,  624,  23 
So.  757,  131  Ala.  246,  30  So.  874. 

Colorado:  Fassett  v.  Mulock,  5 
Colo.  466;  Stephens  v.  Clay,  17  Colo. 
489,  30  Pac.  43,  45. 

Connecticut:  Sanford  v.  Hill,  46 
Conn.  42,  53,  per  Pardee,  J.;  An- 
dreas V.  Hubbard,  50  Conn.  351. 

Florida:  Ritch  v.  Eichelberger,  13 
Fla.  169. 

Georgia:  Gumming  v.  Camming, 
3  Ga.  460. 

Illinois:  Niles  v.  Harmon,  80  111. 
396;  Hosmer  v.  Campbell,  98  111.  572; 
Tompkins  v.  Wiltberger,  56  111.  385; 
Iglehart  v.  Crane,  42  111.  261;  Sum- 
ner V.  Waugh,  56  111.  531;  Layman 
v.  Willard,  7  Bradw.  183;  Alexan- 
der V.  Welch,  10  111.  App.  181; 
Dodds  V.  Snyder,  44  111.  53;  Lock  v. 
Fulford,  52  111.  166;  Matteson  v. 
Thomas,  41  111.  110;  Marshall  v. 
Moore,  36  111.  321;  Moore  v.  Shurt- 
leff,  128  111.  370,  21  N.  E.  775;  Boone 
V.  Clark,  129  111.  466,  21  N.  E.  850, 
853;  Domestic  Build.  Asso.  v.  Nel- 
son, 172  111.  386,  50  N.  E.  194. 

Indiana:  Hahn  v.  Behrman,  73 
Ind.  120;  Alsop  v.  Hutchings,  25  Ind. 
347;  McCullum  v.  Turpie,  32  Ind. 
146;  Day  v.  Patterson,  18  Ind.  114; 
Aiken  v.  Bruen,  21  Ind.  137;  Cissna 
v.  Haines,  18  Ind.  496;  Williams  v. 
Perry,  20  Ind.  437,  83  Am.  Dec.  327; 


McShirley  v.  Birt,  44  Ind.  382;  Hous- 
ton v.  Houston,  67  Ind.  276. 

Maine:  Sheperd  v.  Adams,  32  Me. 
63;   Holden  v.  Pike,  24  Me.  427. 

Massachusetts:  George  v.  Wood, 
9  Allen,  SO,  85  Am.  Dec.  741;  George 
V.  Kent,  7  Allen,  16;  Kilborn  v.  Rob- 
bins,  8  Allen,  466;  Chase  v.  Wood- 
bury, 6  Cush.  143;  Allen  v.  Clark, 
17  Pick.  47.  See  Parkman  v.  Welch, 
19  Pick.  231;  Beard  v.  Fitzgerald, 
105  Mass.  134. 

Michigan:  Sager  v.  Tupper,  35 
Mich.  134;  Cooper  v.  Bigly,  13  Mich. 
463;  Mason  v.  Payne,  Walk.  459; 
McKinney  v.  Miller,  19  Mich.  142; 
Ireland  v.  Woolman,  15  Mich.  253; 
Briggs  V.  Kaufman,  2  Brown  N.  P. 
160;  Gilbert  v.  Haire,  43  Mich.  283, 
5  N.  W.  321;  McVeigh  v.  Sherwood, 
47  Mich.  545,  11  N.  W.  379;  Case 
Threshing  Machine  Co.  v.  Mitchell, 
74  Mich.  679,  42  N.  W.  151;  Gray  v. 
Loud  Lumber  Co.  128  Mich.  427,  87 
N.  W.  376. 

Minnesota:  Johnson  v.  Williams, 
4  Minn.  260,  268;  Clark  v.  Kraker, 
51  Minn.  444,  53  N.  W.  706;  Howard 
V.  Burns,  73  Minn.  356,  76  N.  W.  202. 
Missouri:  Crosbv  v.  Farmers' 
Bank,  107  Mo.  436,  17  S.  W.  1004. 

Nebraska:  Lausman  v.  Drahos,  8 
Neb.  457. 

New  Hampshire:  Brown  v.  Si- 
mons, 44  N.  H.  475;  Mahagan  v. 
Mead,  63  N.  H.  570;  Gage  v.  Mc- 
Gregor, 61  N.  H.  47. 

New  Jersey:  Hill  v.  McCarter,  27 
N.  J.  Eq.  41:  Mount  v.  Potts,  23  N. 
J.  Eq.  188;  Shannon  v.  Marselis,  1 
N.  J.  Eq.  413;  Britton  v.  Updike,  3 
N.  J.  Eq.  125;  Wikoff  v.  Davis,  4 
N.  J.  Eq.  224;  Winters  v.  Hender- 
son, 6  N.  J.  Eq.  31;  Gaskill  v.  Sine, 
13  N.  J.  Eq.  400,  78  Am.  Dec.  105; 
Weatherby  v.  Slack,  16  N.  J.  Eq. 
491;  Keene  v.  Munn,  16  N.  J.  Eq. 
398;  Mutual  Life  Ins.  Co.  v.  Bough- 
rum,  24  N.  J.  Eq.  44:  Dawes  v. 
Cammus,  32  N.  J.  Eq.  456;   Hiles  v. 


565 


ORDER  OF  SALE. 


[§  1631. 


For  the  reason  that  this  rule,  whether  established  by  statute  or 
by  decisions  of  state  courts,  is  a  rule  of  property,  the  courts  of  the 
United  States  sitting  in  any  State  in  which  this  rule  is  established 
will  follow  it.^"" 

This  rule  and  the  question  of  its  adoption  has  been  very  frequently 
before  the  American  courts;  and  the  principle  of  the  rule  has  also 
been  frequently  stated  by  the  English  and  Irish  courts.  "If  after- 
wards the  mortgagor,"  says  Lord  Plunket,  "sells  a  portion  of  his 
equity  of  redemption  for  valuable  or  good  consideration,  the  entire 
residue  undisposed  of  by  him  is  applicable,  in  the  first  instance,  to 
the  discharge  of  the  mortgage,  and  in  case  of  the  bona  fide  pur- 
chaser; and  it  is  contrary  to  any  principle  of  justice  to  say  that  a 
person  afterward  purchasing  from  that  mortgagor  shall  be  in  a 
better  situation  than  the  mortgagor  himself  in  respect  to  any  of  his 
rights.""^    In  the  same  case,  when  it  was  previously  before  the  court, 

Coult,  30  N.  J.  Eq.  40;  Acquackanonk 
Water    Co.    v.    Mutual    L.    Ins.    Co. 

36  N.  J.  Eq.  586;   Powles  v.  Griffith, 

37  N.  J.  Eq.  384. 
New  York:     Clowes  v.  Dickenson, 

5  Johns.  Ch.  235,  240;  James  v. 
Hubbard,  1  Paige,  228,  234;  Jenkins 
v.  Freyer,  4  Paige,  47,  53;  Guion  v. 
Knapp,  6  Paige,  35,  29  Am.  Dec. 
741;  Patty  v.  Pease,  8  Paige,  277, 
35  Am.  Dec.   683;    Skeel  v.   Spraker, 

8  Paige,  182;  Kellogg  v.  Rand,  11 
Paige,  59;  Ferguson  v.  Kimball,  3 
Barb.  Ch.  616;  Weaver  v.  Toogood, 
1  Barb.  238;  Howard  Ins.  Co.  v.  Hal- 
sey,  4  Sandf.  565;  Rathbone  v.  Clark, 

9  Paige,  648;  Stuyvesant  v.  Hall,  2 
Barb.  Ch.  151;  Farmers'  Loan  & 
Trust  Co.  V.  Maltby,  8  Paige,  361; 
La  Farge  Fire  Ins.  Co.  v.  Bell,  22 
Barb.  54;  Ex  parte  Merrian,  4  Den. 
254;  McDonald  v.  Whitney,  9  N.  Y. 
Weekly  Dig.  529;  Crafts  v.  Aspin- 
wall,  2  N.  Y.  289;  Howard  Ins.  Co. 
V.  Halsey,  8  N.  Y.  271,  59  Am.  Dec. 
478;  Kendall  v.  Niebuhr,  58  How. 
Pr.  156;  Hopkins  v.  Wolley,  81  N. 
Y.  77;  Bernhardt  v.  Lymburner,  85 
N.  Y.  172;  Van  Slyke  v.  Van  Loan, 
26  Hun,  344;  Thomas  v.  Moravia 
Machine  Co.  43  Hun,  487;  Libby  v. 
Tufts,  121  N.  Y.   172,  24  N.  E.   12. 

Ohio:  Commercial  Bank  v.  W. 
R.  Bank,  11  Ohio,  444,  38  Am. 
Dec.  739;  Cary  v.  Folsom,  14  Ohio, 
365;  Green  v.  Ramage,  18  Ohio,  428, 
51  Am.  Dec.  458;  Sternberger  v. 
Hanna,  42  Ohio  St.  305. 

Pennsylvania:  The  doctrine  of 
contribution  pro  rata  adopted  in  the 


earlier  decisions  in  Pennsylvania. 
Nailer  v.  Stanley,  10  S.  &  R.  450,  13 
Am.  Dec.  691;  Presbyterian  Corpo- 
ration V.  Wallace,  3  Rawle,  109; 
Donley  v.  Hays,  17  S.  &  R.  400,  has 
been  overruled  in  later  cases  of  Cow- 
den's  Estate,  1  Pa.  St.  267;  Carpen- 
ter V.  Koons,  20  Pa.  St.  222;  Milli- 
gan's  App.  104  Pa.  St.  503. 

South  Carolina:  Lynch  v.  Han- 
cock, 14  S.  C.  66;  Norton  v.  Lewis, 
3  S.  C.  25;  Stoney  v.  Shultz,  1  Hill, 
465,  27  Am.  Dec.  429;  Meng  v. 
Houser,  13  Rich.  Eq.  210;  Watson 
V.  Neal,  35  S.  C.  595,  16  S.  E.  833. 

Texas:  Miller  v.  Rogers,  49  Tex. 
398;  Rippetoe  v.  Dwyer,  49  Tex.  498. 

Vermont:  Root  v.  Collins,  34  Vt. 
173;  Lyman  v.  Lyman,  32  Vt.  79; 
Deavitt  v.  Judevine,  60  Vt.  695,  17 
Atl.  Rep.  410. 

Virginia:  Henkle  v.  Allstadt,  4 
Gratt.  284;  Jones  v.  Myrick,  8  Gratt. 
179;  Conrad  v.  Harrison,  3  Leigh, 
532. 

West  Virginia:  Jones  v.  Phelaa, 
15  W.  Va.  194;  Gracey  v.  Meyers, 
15  W.  Va.  194. 

Wisconsin:  Worth  v.  Hill,  14  Wis. 
559;  State  v.  Titus,  17  Wis.  241;  Og- 
den  V.  Glidden,  9  Wis.  46;  Aiken 
V.  Milwaukee  &  St.  Paul  R.  Co.  37 
Wis.  469. 

'""Orvis  V.  Powell,  98  U.  S.  176,  8 
Cent.  L.  J.  74. 

"'"  In  Hartley  v.  O'Flaherty,  Lloyd 
&  Goold  Cases  temp.  Plunket,  208, 
216.  See,  also,  for  illustrations  of 
this  rul^,  Hamilton  v.  Royse,  2  Sch. 
&   Lef.   315,   326;    Averall   &   Wade, 


§    1631.]  UNDER   DECREE   OF    COURT.  56(i 

Lord  Chancellor  Hart  said  that,  between  the  mortgagor  "and  the 
persons  purchasing  from  him,  the  conlributory  fund  jnust  be  bO  mar- 
shalled as  to  make  his  remaining  property  first  applicable;  and  if 
that  is  insiiilicient,  I  think  the  portion  of  the  last  purchaser  must 
be  applicable  before  that  of  any  prior  purchaser."^"^ 

The  rule  applies  where  the  mortgagor  has  conveyed  the  premises 
in  different  parcels,  and  the  grantees  of  these  parcels  again  convey 
them  in  parcels,  the  grantees  of  the  latter  parcels  being  liable 
under  this  rule  for  the  share  of  the  mortgage  chargeable  upon  their 
grantor's  share  of  the  premises,  in  the  inverse  order  of  conveyance 
to  them.^°'*  It  applies  wdiere  a  grantee  subject  to  incumbrances  re- 
conveys  a  part  of  the  premises  to  his  grantor  without  mentioning  the 
incumbrances .  ^ "° 

The  rule  is  one  of  equity,  and  will  not  be  applied  in  any  case 
where  its  application  would  work  injustice;^"  it  is  not  applied  where 
the  mortgage  does  not  rest  alike  upon  the  whole  of  the  land,^^-  nor 
does  it  apply  to  a  sale  of  the  equity  of  redemption  upon  execution 
for  a  debt  otlier  than  that  secured  liy  the  mortgage.^^"  The  rule  does 
not  apply  where  tenants  in  common  jointly  mortgage  the  joint  property 
for  a  joint  debt  and  one  of  them  subsequently  sells  and  conveys  his 
entire  interest  to  another  person  subject  to  the  incumbrance.  In  such 
case  the  whole  property  is  still  liable  for  the  entire  deljt  and  one  tenant 
in  common  cannot  charge  the  whole  joint  debt  primarily  upon  the 

Lloyd  &  Goold,  temp.   Sugden,  252;  or   lien    ought   to   be   borne   ratably 

Harbert's  case,  3  Coke,  11.  between  them,  according  to  the  rel- 

Mr.   Justice   Story   questioned   the  ative  value  of  the  estates."     2  Sto- 

correctness  of  the  doctrine  that,  in  ry's  Eq.  Juris.  §  1233. 

case    of    successive    sales    of    prop-  He   claimed   the   authority   of   the 

erty  subject  to  mortgage,  the  parcel  English    cases    in    support    of    this 

last   sold    is   liable   for   the   debt   in  view.      The    question    was    consid- 

exoneration  of  that  sold  next  before  ered  in  Barnes  v.  Racster,  1  Y.  &  C. 

it;  or,  in  other  words,  that  the  par-  C.   C.   401,  where  the  Vice-Chancel- 

cels    are    to    be   charged    in    the   re-  lor,  Sir  L.  Shadwell,  in  a  case  where 

verse  order  of  the  transfers:  the  par-  there  were  several  successive  mort- 

cels  last  sold  being  first  charged  to  gages,  instead  of  throwing  the  whole 

their  full   value,   and   so  backwards  burden    of    the    prior    incumbrances 

until    the    debt    is    fully    paid.     He  upon  the  land  conveyed  to  the  last 

says:     "But  there  seems  great  rea-  mortgagee,  made  it  a  ratable  charge 

son  to  doubt  whether  this  last  posi-  on  the  whole  estate. 

tion  is  maintainable  upon  principle;  '"*  Beatty,  61,  79. 

for  as  between  the  subsequent  pur-  '"''  Hiles  v.  Coult,  30  N.  J.  Eq.  40, 

chasers      or      incumbrancers,      each  18  Am.  L.  Reg.  203. 

trusting   to   his   own   security   upon  ""  Hopkins  v.  Wolley,  81  N.  Y.  77. 

the    separate    estate    mortgaged    to  "'■  Hill   v.   McCarter,   27  N.   J.   Eq. 

him,  it  is  difficult     to  perceive  that  41;   Bernhardt  v.  Lymburner,  85  N. 

either  has,   in   consequence  thereof,  Y.  172. 

any   superiority   of   right   or   equity  "-  Evansville     Gas     Light     Co.     v. 

over    the    other;     on    the    contrary,  State,  73  Ind.  219,  38  Am.  Rep.  129. 

there  seems  strong  ground  to  con-  "^  Erlinger  v.  Boal,  7  Bradw.  40. 
tend  that  the  original  incumbrance 


567  ORDER  OF  SALE,  [§  1622. 

interest  of  the  other  tenant  in  common  by  selling  and  conveying  his 
own  interest.^  ^* 

Any  one  having  a  substantial  and  valuable  interest  in  any  of  the 
parcels  may  demand  the  enforcement  of  this  equity.  The  wife  of  a 
grantee  of  one  of  the  parcels  has  such  an  interest  by  virtue  of  her  in- 
choate right  of  dower.^^'^  The  mortgage  making  foreclosure  sale  is  not 
bound  to  regard  this  equity  unless  notice  of  it  is  given  him.^^° 

§  1622.  This  rule  is  g^enerally  held  to  apply  to  subsequent  mort- 
gages of  the  equity  of  redemption  as  well  as  to  absolute  conveyances  of 
it.^^^  In  jSFew  Jersey,  however,it  is  held  that,  as  between  the  holders  of 
mortgages  of  different  and  distinct  parts  of  the  incumbered  land,  each 
is  bound  to  bear  his  proportion  according  to  the  value  of  the  parts; 
and  that  the  rule  does  not  apply,  as  between  them.^^*  The  entii-e 
premises  may  be  decreed  to  be  sold  and  the  proceeds  applied  to  the  pay- 
ment of  the  mortgages  and  other  incumbrances,  according  to  their 
priority,  although  sufficient  to  satisfy  the  first  mortgage  be  obtained 
by  a  sale  of  part  of  the  premises. ^^^ 

'When,  however,  a  portion  of  the  mortgaged  premises  has  been 
mortgaged  again,  and  subsequently  the  balance  has  been  conveyed  abso- 
lutely, inasmuch  as  the  mortgage  is  only  a  qualified  alienation,  and 
the  mortgagor  still  has  an  interest  in  the  property,  that  part  is 
first  sold;  and  if  there  is  any  surplus  beyond  the  amount  required 
to  satisfy  the  second  mortgage,  that  is,  if  the  equity  of  redemption 
is  of  any  value,  that  is  applied  in  payment  of  the  first  mortgage 
before  resorting  to  the  portion  of  the  premises  conveyed  absolutely.^^** 
But  after  this,  if  the  property  is  not  of  sufficient  value  to  pay  both 
mortgages,  as  between  the  second  mortgagee  and  the  subsequent 
purchaser,  it  would  seem  that  in  the  distribution  of  proceeds  the 
former  should  be  entitled  to  any  surplus  remaining  after  the  payment 
of  the  first  mortgage. 

If  the  mortgagor  alienates  a  portion  of  the  mortgaged  premises 
and  afterwards  mortgages  another  portion,  the  second  mortgagee  cannot 
claim  that  the  part  alienated  before  the  giving  of  his  mortgage  shall  be 

"*  Walker  v.   Sarven,  41   Fla.   210,  hardt  v.   Lymburner,   85  N.  Y.   172; 

25  So.  885.  Burchell  v.  Osborne,  5  N.  Y.   Supp. 

"=  Crosby    v.    Farmers'    Bank,    107  404,  6  N.   Y.   Supp.   863;    Schupanitz 

Mo.  436,  17  S.  W.  1004.  v.  Parwick,  115  Iowa,  451,  88  N.  W. 

"'^Threefoot  v.   Hillman,   130  Ala.  951. 
244,  30  So.  513.  ^'«  Pancoast  v.  Duval,  26  N.  J.  Eq. 

"'Dodds    V.    Snyder,    44    111.    53;  445. 
Boone  v.    Clark,   129   111.   466,   21  N.        i'"  Ely  v.  Perrine.  2  N.  J.  Eq.  396; 

E.   850,  per   Shope,   C.  J.;    Steere  v.  Vogel  v.  Brown,  120  111.   338,  11  N. 

Childs,  15  Hun,  511;  Milligan's  App.  E.  327. 

104  Pa.  St.  503;  Thomas  v.  Moravia        '-''Kellogg  v.  Rand,  11  Paige,  59. 
Machine    Co.    43    Hun,    487;    Bern- 


88  1623,  1634.]  under  decree  of  court.  '        568 

first  sold ;  but  the  rule  of  inverse  order  of  alienation  will  apply  against 
him.i-i 

g  1623.  When  portions  of  the  property  have  been  sold  under  judg- 
ment, those  portions  stand  in  the  order  of  sale  in  a  foreclosure  suit  as 
of  the  times  when  the  judgments  respectively  become  liens,  and 
not  as  of  the  times  when  the  conveyances  under  such  sales  were 
executed  by  the  sheriff.^-^  In  Pennsylvania,  however,  it  is  held  that 
the  rule  does  not  apply  at  all  to  sales  under  judgments;  the  pur- 
chaser at  such  sales  having  no  claim  upon  the  mortgagor,  or  any  one 
else,  to  pay  off  the  mortgage  for  their' relief .^-'' 

§  1624.  The  record  of  a  subsequent  deed  is  not,  however,  notice  to 
the  prior  mortgagee.  He  is  not  required  to  search  the  records  from 
time  to  time  to  see  whether  other  incumbrances  have  been  put  upon 
it.^-*  A  distinct  and  actual  notice  is  necessary  to  affect  tlie  rights  of 
the  mortgagee  in  this  respect,  and  oblige  him  to  foreclose  with  reference 
to  the  subsequent  order  of  alienation.  The  record  is  not  even  con- 
structive notice  to  him.  Only  subsequent  purchasers  and  incum- 
brancers are  within  the  purview  of  the  registry  laws.  A  person  inter- 
ested in  the  equity  wishing  to  protect  himself  must  bring  home  to  the 
mortgagee  actual  notice  of  his  equities.'^^  If  he  is  not  a  party  to  the 
foreclosure  suit,  and  has  no  opportunity  to  present  his  claims  there,  he 
may  file  a  bill  against  the  mortgagee  and  the  other  subsequent  pur- 

^"  Sager  v.  Tupper,  35  Mich.  134.  In  James  v.   Brown,  11  Mich.  25, 

^"  Woods  v.  Spalding,  45  Barb.  602.  the  court  say:     "It  is   the   duty  of 

1=3  Carpenter  v.   Koons,  20  Pa.   St.  a   subsequent   mortgagee,    if   he   in- 

222.  tends   to   claim   any   rights   through 

"'*§   723;    Greswold  v.  Marshan,  2  the  first  mortgage,  or  that  may  af- 

Ch.   Cas.  170;   Cheesebrough  v.  Mil-  feet  the  rights  of  the  mortgagee  un- 

lard,   1  Johns.   Ch.  409,   7  Am.   Dec.  der    it,    to   give   the    holder    thereof 

494;'  Stuyvesant   v.    Hone,    1    Sandf.  notice  of  his  mortgage,  that  the  first 

Ch.'419;  Howard  Ins.  Co.  v.  Halsey,  mortgagee  may  act  with  his  own  un- 

8  N.  Y.  271,  59  Am.  Dec.  478;   Ken-  derstandingly.     If  he  does  not,  and 

dall    V.    Niebuhr,    58   How.    Pr.    156;  the    first    mortgagee    does    with    his 

Shannon    v.    Marselis,    1    N.    J.    Eq.  mortgage    what    it    was    lawful    for 

413;    Birnie   v.    Main,   29    Ark.    591;  him  to  do  before  the  second  mort- 

James  v   Brown,  11  Mich.  25;  Carter  gage  was  given,  without  knowledge 

V  Neal  24  Ga.  346,  71  Am.  Dec.  136;  of  its  existence,  the  injury  is  the 
Taylor  V  Maris,  5  Rawle,  51;  Ritch  result  of  the  second  mortgagee's 
v    Bichelberger    13  Fla.  169;  Brown  negligence  in  not   giving  notice." 

v    Simons    44    N.    H.    475;    Johnson        '=^  Pitts   v.    American   Freehold   L. 

v'  Bell    58  N.   H.  395;    Gage  v.  Mc-  Mortg.  Co.  123  Ala.  469.  475    26  So. 

Gregor    61  N    H.  47;  Lyman  v.  Ly-  286;  Matteson  v.  Thomas,  41  111.  110; 

man,    32   Vt.    79,    76    Am.    Dec.    151;  Lausman    v.    Drahos,    8    Neb.    457; 

Chase    V.    Woodbury,    6    Cush.    143;  Hoy  v.  Bramhall,  19  N.  J.  Ec^  56o. 

Hosmer    v.    Campbell.    98    111.    572;  97    Am.    Dec.    687;    Blair    v.    Ward, 

Iglehart  v.  Crane,  42  111.  261;  Boone  10  N.  J.  Eq.  119;  King  v.  McVickar, 

V  Clark  129  111.  466.  21  N.  E.  850;  3  Sandf.  Ch.  192;  Cheesebrough  v. 
Meier  v  'Meier,  105  Mo.  411,  16  S.  W.  Millard,  1  Johns.  Ch.  409.  414,  7  Am 
223-  Norton  v.  Met.  L.  Ins.  Co.  74  Dec.  494;  Gouverneur  v.  Lynch,  2 
Minn    484,  493,  77  N.  W.  298,  539.  Paige,  300. 


569  ORDER  OF  SALE.  [§  1625. 

chasers,  and  obtain  a  stay  of  the  sale  until  the  respective  equities  can  be 
adjusted.    After  a  sale  it  is  too  late  to  assert  his  rights. ^-'^ 

In  like  manner  when  there  lias  been  a  partition  of  land,  of  which 
an  undivided  half  was  mortgaged,  that  part  of  the  land  set  off  to 
the  mortgagor  should  be  first  sold;  and  if  the  officer,  having  been 
offered  the  whole  amount  of  the  debt  for  that  part,  proceeds  to  sell 
an  undivided  half  of  the  whole,  the  sale  will  be  set  aside.^-^  And  so 
if  a  portion  of  the  mortgaged  land  has  been  sold  to  pay  the  mort- 
gagor's debts  after  his  decease,  the  residue  of  the  premises  remaining 
in  his  heirs  must  be  first  resorted  to  for  the  satisfaction  of  the  mort- 
gage.^^* 

If  the  purchaser  of  one  parcel  has  failed  to  record  his  deed  a  subse- 
quent purchaser  who  has  first  recorded  his  deed  can  insist  that  the 
parcel  of  such  prior  purchaser  shall  first  be  sold  to  satisfy  the  mort- 
gage. ^^'^ 

§  1625.  But  this  rule  does  not  apply  in  cases  where  the  parties 
have  by  agreement  in  their  deed  charged  the  mortgage  upon  the 
land  in  a  different  manner;  as  where  by  the  terms  of  sale  of  a  part 
of  the  premises  the  mortgage  is  made  a  common  charge  upon  the 
whole  premises,  or  the  part  conveyed  is  subjected  to  a  proportion- 
ate part  of  the  incumbrance  ;^^°  or  it  is  provided  that  a  certa^in  parcel 
of  the  mortgaged  premises  shall  first  be  charged  with  the  payment 
of  the  mortgage  debt.^^^  In  such  cases  if  there  be  no  specific  agree- 
ment as  to  the  proportion  which  each  part  is  to  bear,  contribution 
must  be  made  according  to  the  relative  value  of  each  part."-  A  por- 
tion of  a  parcel  of  land  subject  to  a  mortgage  was  sold  to  one  who 
agreed  to  pay  the  entire  mortgage,  and  afterwards  the  remaining  por- 

^^''Lausman  v.  Drahos,  8  Neb.  457;  covenant   on   which   a   strictly   per- 
De  Haven  v.  Musselman,  123  Ind.  62,  sonal    liability    may    be    based;    but 
24  N.  E.  171.  it  clearly  makes  the  part  conveyed 
^-'  Quaw  V.  Lameraux,  36  Wis.  626.  subject  to  its   proper  proportion  of 
^-^  Moore  v.  Chandler,  59  111.  466.  the  incumbrances,  so  as  to  relieve, 
1="  Gray   v.    Loud    Lumber   Co.    128  to  that  extent,  that  part  retained  by 
Mich.  427,  87  N.  W.  376.  the    mortgagor,    and    that   therefore 
""  Mutual  Life  Ins.  Co.  v.  Bough-  both  parts  must  contribute  accord- 
rum,   24   N.   J.   Eq.   44;    Pancoast  v.  ing    to    their    relative    values."     To 
Duval,    26    N.    J.    Eq.    445;    Hoy    v.  same    effect    see   Briscoe    v.    Power, 
Bramhall,  19  N.  J.  Eq.  563.     In  this  47  111.  447;  Halsey  v.  Reed.  9  Paige, 
case     the     conveyance     was     made,  446;    Torrey  v.   BanK   of  Orleans,   9 
"subject,   however,   to   the   payment  Paige,    649;    "Warren    v.    Boynton,    2 
by  said  grantee  of  all  existing  liens  Barb.  13;  Coles  v.  Appleby.  22  Him, 
upon  said  premises."     The  effect  of  72;  Zabriskie  v.  Salter,  80  N.  Y.  555. 
this  was  to  subject  the  lands  con-  '^^  Mickle  v.  Maxfield,  42  Mich.  304, 
veyed  to  the  payment  of  a  propor-  3  N.  W.  961. 

tionate  part  of  the  mortgage.     The  ^'=  Moore  v.  Shurtleff.  128  111.  370, 

court  say:     "It  may  be  that  the  Ian-  21  N.  E.  775,  quoting  text. 

guage  is  not  sufficient  to  create  a  , 


g    1635.]  UNDER   DECREE   OF    COURT.  570 

tion  was  sold  to  another.  The  mortgagee,  with  notice  of  such  con- 
veyances, sold  the  land  as  one  parcel  in  foreclosure.  The  second 
purchaser  made  no  request  that  the  land  he  sold  in  parcels,  but 
several  months  after  the  foreclosure  sale  brought  a  bill  to  have  the 
sale  set  aside  as  to  the  portion  of  the  land  conveyed  to  him,  on  the 
ground  that  the  other  portion  should  have  been  sold  first.  It  was 
held  that  the  bill  could  not  be  maintained. ^"^ 

When  a  purchaser  of  a  part  of  the  premises  has  agreed  to  assume  the 
whole  or  a  part  of  the  mortgage  debt  as  a  part  of  the  consideration  he 
pays  for  the  land,  and  subsequently  sells  it  to  another,  this  grantee 
having  notice  of  such  agreement  stands  in  no  better  position  than 
the  first  purchaser  as  regards  any  equity  against  the  mortgagor. ^^*  And 
so  where  the  whole  of  a  tract  of  land  was  subject  to  a  mortgage  and  a 
portion  of  it  was  conveyed,  and  afterwards  the  remainder  was 
conveyed  to  the  same  purchaser  subject  to  the  payment  of  the 
mortgage,  and  the  purchaser  subsequently  made  mortgages  of  the 
different  parcels,  upon  a  foreclosure  of  the  first-named  mortgage  the  as- 
sumption of  this  mortgage  in  the  deed  of  the  second  parcel  was  re- 
garded as  operating  between  the  parties  as  an  agreement  that  the  land 
therein  named  should  be  the  primary  fund  for  the  payment  of  the 
debt,  and  that  the  mortgage  should  be  enforced  upon  that  land  in  the 
first  instance,  and  upon  the  lot  first  conveyed  in  the  case  of  a  deficiency ; 
and  therefore  it  was  held  that  the  order  of  sale  was  not  determined  by 
the  order  of  alienation  by  the  purchaser.^^^ 

But  the  assumption  of  the  mortgage  as  it  appears  in  a  deed  of 
a  part  of  the  mortgaged  premises  is  not  always  conclusive  as  to  a 
purchaser  of  another  part  as  regards  the  equities  of  the  parties. 
The  grantor  may,  by  a  subsequent  agreement  with  a  purchaser  of 
a  part  of  the  premises  wlio  has  assumed  the  whole  mortgage,  re- 
lease such  purchaser  wholly  or  in  part  from  his  obligation  to 'pay 
the  mortgage;  and  a  subsequent  grantee  of  another  part  of  the 
premises  will  succeed  only  to  the  equities  of  his  grantor  as  they 
exist  at  the  time  of  the  conveyance  to  him,  whether  he  has  no- 
tice of  such  equities  or  not.  Thus  the  owner  of  a  tract  of  land, 
having  conveyed  a  portion  of  it  supposed  to  contain  eight  acres, 
with  a  covenant  that  in  case  of  a  deficiency  he  would  make  com- 
pensation  therefor    at   a   certain   price,   the   grantee    assuming   and 

"'Long   V.    Kaiser,    81    Mich.    518,  ton,  14  S.  C.  437;   Sldnner  v.  Hark- 

43  N.  W.  19.  ner,  23  Colo.  333,  48  Pac.  648.     See, 

"*Engle    V.    Haines,    5    N.    J.    Eq.  also.  Gray  v.  Loud  Lumber  Co.  128 

186,  43  Am.  Dec.  624;  Ross  v.  Haines,  Mich.  427.  87  N.  W.  376. 

5  N.  J.  Eq.  632;  Crenshaw  v.  Thacks-  '■'''  Steere  v.  Childs,  15  Hun,  511. 


571  ORDER  OF  SALE.  [§  1G36. 

agreeing  to  pay  the  mortgage  upon  the  whole  tract,  subsequently, 
upon  ascertaining  that  there  was  a  deficiency  in  quantity  of  the 
land  conveyed,  agreed  to  save  the  grantee  harmless  from  a  part 
of  the  mortgage  debt  amounting  to  the  value  of  the  deficient  land. 
The  grantor,  after  making  that  agreement,  conveyed  the  residue  of 
the  land  to  another  jjerson  by  a  deed  covenanting  that  such  land 
was  free  of  all  incumbrances.  In  an  action  to  foreclose  the  mort- 
gage it  was  held  that  the  grantee  of  such  residue  succeeded  only  to 
the  equities  of  the  grantor  existing  at  the  time  of  the  conveyance; 
that  the  resitluc  of  the  land  was  chargeable  with  the  portion  of  the 
mortgage  against  which  the  grantor  had  agreed  to  protect  the  pur- 
chaser of  the  portion  of  the  land  first  conveyed;  that  the  fact  that 
the  covenant  of  such  purchaser  to  pay  the  whole  mortgage  was  con- 
tained in  a  deed  on  record  was  immaterial;  and  that  it  was  also 
immaterial  that  the  agreement  of  the  grantor  to  reassume  the 
amount  of  the  rebate  for  the  deficiency  in  the  quantity  of  land  was  not 
of  record,  and  that  the  grantee  of  the  residue  had  no  notice  of  it.^^" 
The  rule  does  not  apply  in  case  the  mortgage  provides  that  in 
the  event  of  a  sale  of  any  portion  of  the  mortgaged  lands,  the  mort- 
gagee shall,  upon  payment  to  him  of  the  purchase-money  for  such 
portion,  release  the  same  from  the  mortgage  and  credit  the  amount 
so  received  on  the  mortgage  debt,  and  the  mortgagee  accordingly, 
receives  for  the  portion  of  the  land  sold  part  of  the  purchase-money 
in  cash  and  notes  for  the  remainder  and  reserves  a  lien  upon  such 
jjortion  for  the  deferred  payments ;  but  in  case  of  default  on  the 
mortgage,  foreclosure  should  first  be  had  on  the  portion  so  sold 
for  the  amount  due  on  the  notes  given  for  the  deferred  payments 
before  resorting  to  the  land  held  by  the  mortgagor  or  held  by  a  pur- 
chaser from  him  succeeding  to  his  equities.^''" 

§  1626,  Contribution  according  to  value. — The  riile  that  the  sale 
shall  take  place  in  the  inverse  order  of  alienation  is  rejected  in  the 
States   of    lowa,^^'^    and    Kentucky.^^^      Instead    of    this   they   have 

"'  Judson  v.  Dada,  79  N.  Y.  373.  rule  is  discussed  at  length,  and  the 

13T  Northwestern     Land     Asso.     v.  earlier    decisions    approved    and    af- 

Harris,  114  Ala.  468,  21  So.  999;  Al-  firmed,  thou-gh  contrary  to  the  later 

derholt   v.    Henry,   87   Ala.   415,   418,  decisionsinotherStates.lt  was  con- 

6  So.  625.  sidered  more  equita.ble  that  the  bur- 

"'  Bates   V.   Ruddick,   2   Iowa,   423,  den    should    be    equalized    according 

65  Am.  Dec.  774;   Massie  v.  Wilson,  to    the    value    of   the    different   par- 

16   Iowa,   390;    Barney  v.   Myers,   28  eels    than    that    the    whole    should 

Iowa,  472;  Huff  v.  Farwell,  67  Iowa,  be  thrown  upon  the  last  purchaser  of 

298.  25  N.  W.  2v52.  the  last  lot.     See,  also.  Hunt  v.  Mc- 

"^  Poston  V.  Eubank,  3  ,T.  J.  Marsh.  Connell,  1  T.  B.  i\Ion.  219. 

43;    Campbell   v.   Johnston,   4  Dana,  As  to  North  Carolina,   see   Stanly 

177,  182;   Dickey  v.  Thompson,  8  B.  v.  Stocks,  1  Dev.  Eq.  318,  vj  ere  the 

Mon.    312.     In    the    latter    case    this  ouestion  was  raised. 


§§    1637,    1638.]  UNDER    DECREE    OF    COURT. 


572 


adopted  the  rule  that  the  several  owners  shall  contribute  according 
to  the  value  of  their  portions  of  the  property.  If  the  purchasers 
have  made  improvements  upon  their  lots,  the  enhanced  value  re- 
sulting from  the  improvements  is  not  included  in  the  valuation  of  the 
property  under  this  rule.  In  these  States,  therefore,  the  mortgaged 
lands  may  be  sold  under  the  decree  of  foreclosure,  without  reference 
to  the  mortgagee's  knowledge  that  they  have  been  sold  in  parcels 
at  different  times  to  different  persons. 

§  1627.  Valuation  to  be  made  as  of  what  time. — When  contri- 
bution is  to  be  made  under  the  rule  adopted  by  these  States,  that 
the  proportion  is  to  be  determined  by  the  relative  value  of  the  differ- 
ent parcels,  whether  the  valuation  should  be  taken  at  the  date  of 
the  mortgage,  at  the  time  of  foreclosure,  or  at  the  date  of  the  several 
purchases,  is  not  perhaps  very  material,  as  the  fluctuation  of  price 
woidd  generally  be  about  equal  for  the  different  parcels.""  The 
practice  in  different  courts  has  not  been  uniform.  Nor,  indeed, 
has  the  practice  of  the  same  court  always  been  the  same  in  this 
regard. 

When  the  mortgaged  premises  have  been  conveyed  in  distinct 
parcels,  and  the  suljsequent  grantees  or  mortgagees  of  the  parts 
are  bound  to  contribute  in  proportion  to  the  value  of  their  parts, 
they  are  entitled  to  have  the  premises  sold  in  parcels,  provided  it 
can  be  done  without  prejudice  to  the  rights  of  the  mortgagee."^ 

§  1628.     As  a  general  rule,  if  a  mortgagee  has  other  security 

for  his  demand,  and  another  creditor  has  a  lien  upon  one  of  the 
funds  only,  the  former  must  resort  in  the  first  place  to  that  secu- 
rity upon  which  no   one   other  than  his   debtor  has   any   claim  ;"- 

""Valuation    at    the    date    of    the  2  Atk.  444,  446:     "Suppose  a  person 

mortgage  was  adopted  in  Stevens  v.  who  has  two  real  estates  mortgages 

Cooper,  1  Johns.  Ch.  425,  7  Am.  Dec.  both  to  one  person,  and  afterwards 

499-    Hill  V.  Howell,  36  N.  J.  Eq.  25;  only   one  estate   to   a  second   mort- 

Joh'nson   v.   Williams,  4   Minn.   260;  gagee,    who    had    no    notice    of    the 

Parkman   v.   Welch,   19   Pick.   Mass.  first;   the  court,  in  order  to  relieve 

231-    Morrison  v.   Beckwith,  4  Mon.  the  second  mortgagee,  have  directed 

72,  76,  16  Am.  Dec.  136;  but  in  Burk  the  first  to  take  his  satisfaction  out 

V  'Chrisman   3  B.  Mon.  50,  the  same  of  that  estate  only  which  is  not  in 

court  sustained   a   valuation   at  the  mortgage  to  the  second   mortgagee, 

date  of  the  several  purchases;    and  if   that   is    sufficient    to    satisfy    the 

in  Dickey  v.   Thompson,   8  B.   Mon.  first    mortgage,    in    order    to    make 

312    seemed  to  approve  of  a  valua-  room    for    the    second    mortgagee 

tion  at  the  time  of  foreclosure.     \  Also,  Wright  v.  Nutt,  1  H.  Bl.  lob, 

>"Pancoast  v.  Duval,  26  N.  J.  Eq.  150;     McLean  v.   Lafayette  Bank,  4 

445;   Stelle  v.  Andrews,  19  N.  J.  Eq.  McLean,  430. 

409.  Iowa:     Swift  v.  Conboy,  12  Iowa, 

"=  §  728;   Story's  Eq.  Juris.  §§  559,  444.                                           ,       a          i 

560      This  principle  is  illustrated  by  Pennsylvania:      Ramsey  s    Appeal, 

Lord  Hardwicke  in  Lanoy  v.  Athol,  2  Watts,  228,  27  Am.  Dec.  301. 


573  ORDER  OF  SALE.  [§  1628. 

and  he  must  exercise  good  faith  and  reasonable  diligence  in  the 
enforcement  of  his  rights.^"  This  rule  is  subject  to  the  qualifica- 
tion that  it  shall  not  be  applied  where  it  would  work  any  injustice 
to  the  prior  creditor/**  or  to  any  other  person  interested  in  the  secu- 
rities, as,  for  instance,  an  intervening  lien-holder,  having  a  supe- 
rior equity/*''*  or  where  the  mortgagee's  right  to  satisfy  his  claim 
out  of  both  funds  would  be  in  any  way  impaired ;  or  where  there 
is  any  doubt  of  the  sufficiency  of  the  fund  upon  which  the  junior 
creditor  has  no  claim ;  or  where  the  prior  creditor  is  not  willing  to 
run  the  risk  of  obtaining  satisfaction  out  of  that  fund;  or  where 
that  fund  is  of  a  dubious  character,  or  is  one  which  may  involve 
him  in  litigation  to  realize.^**'  "But  it  is  the  ordinary  case,"  says 
Lord  .Eldon,  "'to  say,  a  person  having  two  funds  shall  not  by  his 
election  disappoint  the  party  having  only  one  fund;  and  equity,  to 
satisfy  both,  will  throw  him  who  has  two  funds  upon  that  which  can 
be  affected  by  him  only,  to  the  intent  that  the  only  fund  to  which 
the  other  has  access  may  remain  clear  to  him.""'^ 

In  accordance  with  these  restrictions  of  the  rule,  where  a  cred- 
itor was  secured  by  a  mortgage  of  land  and  slaves,  and  the  land  was 
afterwards  sold  by  the  mortgagor,  and  one  of  the  slaves  was  sold 
by  the  sheriff  under  executions  issued  part  before  and  part  after  the 
mortgage,  though  the  sum  received  by  the  sheriff  was  sufficient  to 
satisfy  the  senior  executions  and  the  balance  of  the  mortgage  debt, 
the  mortgagee  was  not  compelled  to  resort  to  this  fund,  because  he 
might  thereby  incur  the  expense  and  risk  of  litigation,  but  was  al- 
lowed to  foreclose  the  mortgage  upon  the  land  to  satisfy  his  demand.^** 

The  mortgagee  might  lose  the  very  benefit  sought  by  having  a 
double  security,  if  he  were  compelled  to  incur  the  risk  of  delay  or 
loss  by  being  referred  for  his  payment  to  security  he  deemed  the 

South  Carolina:    Fowler  v.  Barks-  Alabama:     Bryant  v.  Stephens,  58 

dale,  Harper's  Eq.  164.  Ala.   636. 

Arkansas:    Terry  v.  Resell,  32  Ark.  '"Shields   v.    Kimbrough,    64   Ala. 

478.  504;      Hurd    v.    Eaton,    28    111.    122; 

New  Jersey:    Warwick  v.   Ely,  29  Iglehart  v.  Crane,  42  111.  261. 

N.  J.  Eq.  82;    Dawes  v.  Caramus,  32  "*  Slater   v.    Breese,    36   Mich.    77; 

N.  J.  Eq.  456;     Bishop  Bailey  B.  &  Farwell   v.    Bigelow,   112    Mich.    285, 

L.  Asso.  V.  Kennedy  (N.  J.),  12  Atl.  70  N.  W.  579;     Norfolk  State  Bank 

141;     Sherron  v.  Acton    (N.  J.  Eq.),  v.   Schwenk,  51  Neb.   146,  70  N.  W. 

18  Atl.   978.  970. 

Illinois:     Iglehart  v.  Crane,  42  111.  "^  Leib  v.  Stribling,  51  Md.  285. 

261;     Boone   v.    Clark,    129    111.    466,  ""Boone  v.  Clark,  129  111.  466,  21 

21  N.  E.  850.  N.  E.  850. 

Vermont:     Blair  v.   White,   61  Vt.  '^' Aldrich   v.    Cooper,    8   Ves.    382, 

110.  17  Atl.  49.  395.       And     see    Averall     v.     Wade, 

Wisconsin:     Scott   v.    Webster,   44  Lloyd   &   Goold   temp.    Sugden,    252, 

Wis.  185,  6  Reporter,  287.  and  notes. 

"'^  Walker  v.  Covar,  2  S.  C.  16. 


§    1629.]  UNDER    DECREE   OE    COURT.  574 

more  uncertain.  The  subsequent  purchaser  of  the  mortgaged  prop- 
erty takes  it  with  full  knowledge  of  the  incumbrance,  and  it  is 
more  equitable  that  he  should  be  obliged  to  pay  the  mortgage  debt  and 
be  subrogated  to  the  other  security  of  tlie  mortgagee  than  that  the 
latter  should  be  prejudiced. 

It  is  not  necessary  that  it  should  appear  that  a  second  mortgagee 
knew  at  the  time  he  took  his  mortgage  that  the  prior  mortgagee 
had  collateral  security,  or  that  the  second  mortgagee  took  his  mort- 
gage relying  on  the  equitable  right  to  compel  the  marshalling  of 
the  assets. 

§  1629.  So  also  when  two  persons  have  mortgages  upon  the  same 
piece  of  property,  which  is  insufficient  to  satisfy  both,  and  one  of 
them  has  a  lien  for  his  debt  upon  other  property,  equity  requires 
that  he  shall  exhaust  the  latter  before  resorting  to  the  mortgaged 
property.^*^  In  like  manner  when  two  persons,  to  secure  the  debt 
of  one  of  them,  have  jointly  mortgaged  three  parcels  of  land,  one 
of  which  they  own  jointly,  while  each  of  them  owns  one  of  the  others 
individually,  the  decree  should  order  the  sale,  first,  of  the  portion 
of  the  mortgagor  equitably  bound  to  pay  the  debt,  and  next  of 
the  joint  parcel.^ ^^ 

The  senior  mortgagee  shoidd  be  notified  by  the  junior  mortgagee 
of  his  equitable  rights,  as  the  constructive  notice  arising  from  rec- 
ords is  not  a  sufficient  notice. ^^^ 

But  where  a  principal  debtor  and  his  surety  have  both  mort- 
gaged their  lands  to  secure  a  debt,  the  lands  of  the  principal  debtor 
are  to  be  first  sold,  and  those  of  the  surety  only  for  the  deficiency. ^°- 
Therefore  if  a  mortgage  made  to  decree  a  husband's  debt  covers  his 

"'Russell   V.    Howard,   2   McLean,  per  Olds,  J.:      "And  a  purchaser  of 

489;    Andreas  v.  Hubbard,  50  Conn,  the  property  of  the  surety  so  mort- 

351;  Trowbridge  V.  Harleston,  Walk-  gaged  would  have  this  same  right; 

er  (Mich.),  185;    Sibley  v.  Baker,  23  so  one  taking  title  to  such  property 

Mich.    312;     Sternberg  v.   Valentine,  of  the  surety  by  inheritance  would 

6  Mo.  App.  176;    Warner  v.  DeWitt  have  this   right.     It  has  been   held 

Co.  Nat.  Bank,  3  Bradw.  305;    Mill-  repeatedly  by  this  court  that  a  wife, 

saps  v.  Bond,  64  Miss.  453;    Turner  joining  in  a  mortgage  with  her  hus- 

V.    Flinn,    67    Ala.    529;     Denton    v.  band    to    secure    his    debt,    has    the 

Nat.     Bank,     18    N.     Y.     Supp.     38;  right  to  have  the  two-thirds  interest 

Whittaker   v.    Belvidere    Roller-Mill  in    the    land    first    sold    to    pay    the 

Co.  55  N.  J.  Eq.  674.  38  Atl.  289.  debt."     Citing  Birke  v.   Abbott,   103 

'''"Ogden  v.  Glidden,  9  Wis.  46.  Ind.  1,  1  N.  E.  48-5;    Fi-gart  v.  Hald- 

'^' Annan  v.   Hays,  85  Md.   505,  37  erman,    75    Ind.    564;      Medsker    v. 

Atl.  20.  Parker,  70  Ind.  509;    Leary  v.  Shaff- 

'"=  Drake  v.  Bray,  2  Stewart's  Dig.  er,  79  Ind.  567:    Grave  v.  Bunch,  83 

1877,  p.  1036;    Gresham  v.  Ware,  79  Ind.    4;     Main   v.    Ginthert.    92    Ind. 

Ala.    192;     Norman    v.    Norman,    26  180;    Trentman  v.  Eldridge,  98  Ind. 

S.   C.   41,   11   S.   E.   1096;     Hoppes   v.  525. 
Hoppes,  123  Ind.  397,  24  N.  E.  139, 


5T5  ORDKit  OF  SALE.  [§g  1030,  lG30a. 

land  and  land  of  his  wife,  the  husband's  land  should  lirst  be  sold  in 
exoneration  of  that  of  his  wife.^^^ 

AVhere  one  of  two  tenants  in  common  has  paid  his  share  of  a 
joint  mortgage,  and  the  other  has  mortgaged  his  portion  again, 
•the  former  is  entitled  to  a  discharge  under  a  statute  authorizing 
joint  debtors  to  make  separate  settlements  with  their  creditors;  and 
the  second  mortgagee  cannot  have  the  first  mortgage  satislied  from 
the  joint  property,  or  postponed  to  his  own,  on  the  ground  that  the 
release  is  in  fraud  of  his  rights. ^^^ 

§  1630.  If  one  holds  two  mortgages  on  different  parcels  of  land, 
or  one  mortgage  on  two  parcels  of  land,  to  secure  the  same  debt, 
in  the  absence  of  an}^  cfjuities  in  subsequent  purchasers  he  may 
foreclose  either  one  without  the  other  ;^°^  but  if  there  are  subse- 
quent purchasers,  the  equitable  rules  already  spoken  of  must  be 
observed ;"''  and  if  the  mortgages  cover  in  part  the.  same  land,  and 
are  both  foreclosed  together,  the  land  included  in  the  first  mortgage 
should  be  exhausted  before  recourse  is  had  to  the  second.^^'^ 

Where  a  mortgage  covers  two  parcels  of  land,  the  owners  of 
which  have  apportioned  the  mortgage  between  them,  and  the  owner 
of  one  parcel  has  paid  his  share  of  it,  upon  a  foreclosure  of  the 
2nortgage  the  other  tract  should  first  be  sold.^^^ 

Where  joint  owners  of  land  have  executed  a  mortgage,  one  of 
the  mortgagors,  upon  alleging  and  proving  that  he  executed  the 
mortgage  as  a  surety  for  the  other,  under  a  statute  providing  for 
the  determination  of  the  question  of  suretyship,  may  have  the  irr- 
terest  of  the  principal  debtor  sold  before  his  interest  is  sold.^-'^'' 

When  a  principal  and  a  surety  have  jointly  mortgaged  lands  be- 
longing to  each  individually,  the  surety  has  an  equity  to  require 
that  the  lands  of  the  principal  shall  be  first  sold  and  applied  to  the 
satisfaction  of  tlie  debt.^"** 

§  1630a.  The  same  rule  applies  in  case  of  a  mortgage  by  tenants 
in  common  or  joint  owners,  of  the  common  land  to  secure  the  debt 
of  one  of  them.^"^     If  tliere  has  subsequently  been  a  valid  partition 

"'Shew  v.  Call,  119  N.  C.  450,  26  alleged    principal    that    the    original 

S.  E.  33,  56  Am.  St.  678.  surety,  for  a  valuable  consideration, 

"*Southworth  v.  Parker,  41  Mich,  had    agreed    with    his    principal    to 

198.  pay  the  joint  indebtedness,  is  good, 

155  Myers  v.  Pierce,  86  Ga.  786,  12  S.  for  such  original  surety  thereby  be- 

E.  978.  comes   the   principal,   and   the  prin- 

'="  Burpee  v.  Parker,  24  Vt.  567.  eipal  becomes  his  surety.     Sefton  v. 

"■Raun  V.  Reynolds,  11  Cal.  14.  Hargett,  113  Ind.  592,  15.  N.  E.  513. 

"'Weyant  v.  Murphy,  78  Cal.  278,  '""  Gresham  v.  Ware,  79  Ala.  192. 

20  Pac.  568.  i"'  Lorev  v.  Overton,  42  N.  J.  Eq. 

''■■'Chaplin  v.  Baker,  124  Ind.  385,  330,  11  Atl.  15. 
24  N.  E.  233.    But  an  answer  by  such 


§    1G31.]  UNDER   DECREE   OF    COURT.  576 

between  such  tenants  by  a  recorded  conveyance,  the  court  would 
doubtless  require  the  mortgagee  to  resort  in  the  first  instance  to  the 
portion  conveyed  in  severalty  to  the  principal  debtor;  and  it  has 
been  held  that  the  court  will  direct  a  partition,  if  the  parties  have 
not  made  one,  so  that  the  share  of  the  principal  debtor  shall  first  be 
applied  on  the  debt."-  But  an  unregistered  deed  does  not  afford 
complete  evidence  of  title  in  severalty  in  the  former  co-tenants  to 
a  creditor  holding  an  incumbrance  on  the  undivided  estate.  ''This 
is  putting  the  creditor  to  the  disadvantage  of  the  danger  of  sacrificing 
a  part  of  the  mortgaged  estate  by  selling  a  title  that  does  not  exist, 
or  of  the  existence  of  which  the  evidence  is  doubtful,  and  thus  en- 
dangering the  ultimate  security  of  his  debt."^^^ 

§  1631.     If  the  mortgagee,  having  notice  of   successive  aliena- 
tions   of   parts   of   the   mortgaged   premises,   has   released   a   part 

which  is  primarily  liable  for  the  payment  of  the  debt,  he  cannot 
charge  the  other  portions  of  the  premises  with  the  payment  of  it 
without  first  deducting  the  value  of  the  part  released,"'*  and  he 
must  make  this  deduction  before  proceeding  to  sell  the  other  por- 
tions.^*'^  If  that  value  equals  the  entire  debt,  he  must  bear  the  loss, 
as  he  cannot  then  resort  to  the  first  lot  sold;  if  it  is  equal  to  a 
part  of  the  debt  only,  he  may  resort  to  the  lot  sold  for  the  deficiency. 
But  if  the  mortgagor  had  no  title  to  the  lot  released,  or  it  could  in 
any  way  be  shown  that  the  owners  of  the  other  lots  were  not  prejudiced 

'"-Wheat  v.  McBrayer  (Ky.)  26  Other  States:  Deuster  v.  McCamus, 
S.  W.  809.  14  Wis.  307;  Birnie  v.  Main,  29  Ark. 
^"^  Evans  v.  Fields  (Miss.),  11  So.  591;  Taylor  v.  Maris,  5  Rawle,  51; 
224.  James  v.  Brown,  11  Mich.  25;  Miller 
'''  See  §§  727,  731.  v.  Rogers,  49  Tex.  398. 
New  Jersey:  Reilly  v.  Mayer,  12  In  Iglehart  v.  Crane,  42  111.  261, 
N.  J.  Eq.  55;  Vanorden  v.  Johnson,  the  court  say:  "From  this  rule,  as 
14  N.  J.  Eq.  376;  Mickle  v.  Rambo,  to  the  order  in  which  mortgaged 
1  N.  J.  Eq.  501;  Shannon  v.  Mar-  premises  are  to  be  charged,  it  fol- 
selis,  1  N.  J.  Eq.  413;  Harrison  v.  lows  as  a  corollary  that,  if  the  mort- 
Guerin,  27  N.  J.  Eq.  219;  Mount  v.  gagee  with  actual  notice  of  the  facts 
Potts,  23  N.  J.  Eq.  188;  Hoy  v.  Bram-  releases  from  the  mortgage  that 
hall,  19  N.  J.  Eq.  563;  97  Am.  Dec.  portion  of  the  premises  primarily 
687;  Blair  v.  Ward,  10  N.  J.  Eq.  119;  liable,  he  thereby  releases  pro  tanto 
Gaskill  v.  Sine,  13  N.  J.  Eq.  400,  78  the  portion  secondarily  liable.  When 
Am.  Dec.  105.  the  mortgage  is  sought  to  be  en- 
New  York:  Guion  v.  Knapp,  6  forced  against  the  owner  of  the 
Paige,  35,  29  Am.  Dec.  741;  Stevens  latter,  he  can  claim  an  abatement 
V.  Cooper,  1  .Johns.  Ch.  425,  7  Am.  of  his  liability  to  the  extent  of  the 
Dec.  499;  Stuyvesant  v.  Hone,  1  value  of  that  portion  which  should 
Sandf.  Ch.  419;  Patty  v.  Pease,  8  have  made  the  primary  fund." 
Paige,  277,  35  Am.  Dec.  683.  Followed  in  Boone  v.  Clark,  129  111. 

Massachusetts:    Parkman  v.  Welch,  466,  21  N.  E.  Rep.  8.50. 
19    Pick.    231;     George    v.    Wood,    9        '"-'Hall  v.   Edwards,  43  Mich.   473, 

Allen,  80,  85  Am.  Dec.  741;    Beard  v.  5  N.  W.  652;    Hill  v.  Howell,  36  N.  J. 

Fitzgerald,  105  Mass.  134;    Clark  v.  Eq.  25;    Schrack  v.  Shriner,  100  Pa. 

Fontain,  135  Mass.  464.  St.  451. 


577  ORDER  OF  SALE.  [§  1632, 

by  the  release,  this  rule  would  not  apply.^"*'  In  such  cases,  in  or- 
der to  ascertain  the  value  of  the  different  parts  of  the  land,  and  the 
amount  due  on  the  mortgage,  a  reference  is  ordered.^^^  A  mortgagee, 
however,  does  not,  by  a  partial  release  without  consideration,  impair 
his  right  to  enforce  his  mortgage  against  the  remainder  of  the  property, 
unless  he  had  actual  notice  of  the  previous  transfer  of  the  remainder 
or  of  some  portion  of  it  by  the  mortgagor.  The  same  rule  about 
notice  already  stated  applies  equally  here.  A  reference  in  his  re- 
lease to  a  conveyance  of  another  part  of  the  land  by  the  mortgagor 
is,  however,  constructive  notice  of  it.^"^ 

If  the  mortgagee  having  also  personal  security  for  his  demand  by 
his  fault  and  negligence  loses  this,  a  purchaser  of  the  land  may  com- 
pel him  to  deduct  from  the  mortgage  debt  the  value  of  the  security    ^ 
lost,  so  that  the  mortgage  can  be  foreclosed  only  for  the  balance.^®** 

But   where   by    the   term.s    of    the   mortgage   the'  mortgagee    has    | 
agreed  to  release  any  portion  of  the  mortgaged  land  upon  receiving 
a  certain  price  per  foot,  and  the  mortgagor  divides  the  land  into     \ 
lots   and   sells   two   of   them   by   warranty    deed   to    different   pur- 
chasers, who  build  dwelling-houses  upon  the  lots,  and  one  purchaser      / 
obtains  a  release  of  his  lot  upon  paying  to  the  mortgagee  the  stip- 
ulated   price    per    foot    for    the    land,  the    other    purchaser    cannot 
restrain  the  mortgagee  from  selling  his  lot  under  the  mortgage,  the 
lots  remaining  unsold  not  being  worth  enough  to  pay  the  mortgage 
debt;  but  such  purchaser  is  entitled  to  redeem  on  paying  the  stip- 
ulated price  per  foot.^^" 

§  1632.  Homestead. — The  fact  that  the  mortgage  covers  a  home- 
stead and  also  other  property,  which  is  subject  to  a  subsequent 
judgment  lien,  gives  the  debtor  no  right  to  have  the  latter  property 
first  applied  to  the  payment  of  the  mortgage  debt,  so  that  he  may 
save  his  homestead. ^'^^    The  power  to  compel  a  mortgagee  to  resort  in 

i""  Taylor   v.    Short,   27   Iowa,   361,  588;     Brown   v.    Cozard,   68   111.    178. 

1  Am.  Rep.  280.  See  Dodds  v.  Snyder,  44  111.  53. 

^"  Gaskill    V.    Sine,    13    N.    J.    Eq.  Kentucky:     Webster  v.   Bronston, 

400,  78  Am.  Dec.  105.  5  Bush,  521. 

1'^"  Booth  V.  Swezey,  8  N.  Y.  276.  Pennsylvania:     Hallman    v.    Hall- 

"^  Moody  V.  Haselden,  1  S.  C.  129.  man,    124   Pa.    St.    347,    16   Atl.    871; 

""  Clark    V.    Fountain,    135    Mass.  Pittman's  App.  48  Pa.  St.  315. 

464.  South   Carolina:     State  Sav.   Bank 

"M§  731,  1286,  where  the  reasons  v.   Harbin,   18  S.   C.   425;     Bowen  v. 

for  the  rule  are  stated:—  Barksdale,  33  S.  C.  142,  11  S.  B.  640. 

Massachusetts:      Searle    v.    Chap-  Wisconsin:     White   v.    PoUeys,   20 

man,  121  Mass.  19.  Wis.  503,  91  Am.  Dec.  432;    Jones  v. 

Kansas:      Chapman    v.    Lester,    12  Dow,  18  Wis.  241. 
Kans.  592.     See,  however,  LaRue  v.  But  in  other  States  the  courts  re- 
Gilbert,  18  Kans.  220.  quire  the  mortgagee  to  exhaust  his 

Illinois:     Plain    v.    Roth,    107    111.  remedy     against     the     non-exempt 


1633.] 


UNDER    DECREE   OF    COURT. 


578 


the  first  instance  to  one  of  several  parcels  mortgaged,  or  to  one  part 
of  the  mortgaged  property,  is  exercised  only  for  the  protection  of 
the  equities  of  different  incumbrancers  or  sureties,  and  never  for 
the  benefit  of  the  mortgagor,  who  has  voluntarily  waived  his  right 
of  exemption.^'-  The  fact  that  part  of  the  property  is  a  homestead 
does  not  change  the  equity  rule  that  a  party  having  security  on  two 
funds  shall  first  exhaust  his  remedy  upon  the  fund  he  alone  is  se- 
cured upon,  when  there  is  another  party  having  security  on  the 
other.^'^^  In  a  case  where  the  mortgage  embraced  the  homestead  and 
a  business  lot,  and  the  homestead  had  been  sold  to  satisfy  the  mort- 
gage debt,  and  there  were  judgment  liens  upon  the  business  lot, 
the  court  declined  to  set  aside  the  foreclosure  sale.^''* 


property   included   in   the   mortgage 

before  resorting  to  the  mortgagor's 

homestead  or  other  exempt  property. 

California:     McLaughlin   v.    Hart, 

46  Cal.  638. 

Illinois:  Gaither  v.  Wilson,  164 
111.  544,  46  N.  E.  58.  A  statute  so 
providing. 

Michigan:  Armitage  v.  Toll,  64 
Mich.  412,  13  N.  W.  408. 

Minnesota:       Miller     v.     McCarty, 

47  Minn.  321,  50  N.  W.  235.  In 
McArthur  v.  Martin,  23  Minn.  74, 
and  Horton  v.  Kelly,  40  Minn.  193, 
41  N.  W.  1031,  this  rule  was  adopted, 
at  least  where  the  second  lien  has 
been    acquired    by    proceedings    in 

'invitum,  and  not  by  the  contract  of 
the  debtor. 

Kansas:  Frick  Co.  v.  Ketels,  42 
Kans.  527,  22  Pac.  580;  Colby  v. 
Crocker,  17  Kans.  527,  530;  LaRue 
v.  Gilbert,  18  Kans.  220. 

Iowa:  Equitable  Life  Ins.  Co.  v. 
Gleason,  62  Iowa,  277,  17  N.  W.  524. 
In  this  State,  a  distinction  is  taken 
between  a  subsequent  sale  of  the 
mortgaged  land  and  a  subsequent 
mortgage  of  it  as  regards  the  effect 
upon  the  homestead  right.  Thus,  in 
Dilger  v.  Palmer,  60  Iowa,  117,  10 
N.  W.  763,  14  N.  W.  134,  it  was  held, 
upon  a  subsequent  sale  with  cov- 
enants of  warranty  of  the  portion 
of  the  mortgaged  premises  not  em- 
braced in  the  homestead,  the  mort- 
gagor could  not  insist  that  the  prop- 
erty so  conveyed  should  be  first 
sold  to  satisfy  the  mortgage.  The 
homestead,  on  the  contrary,  must 
first  be  sold.  This  distinction  is 
placed  on  the  ground  that  the  con- 
veyance in  this  case  is  the  voluntary 
act  of  the  mortgagor,  while  in  the 


other    case    the    conveyance    is    the 
legal  result  of  the  mortgage. 

In  South  Carolina  it  is  held  that 
the  extent  of  the  homestead  should 
be  judicially  ascertained  before  judg- 
ment* of  foreclosure  is  passed.  Adger 
V.  Bostick,  12  S.  C.  64.  There  the 
judgment  creditor  has  the  equitable 
right  to  compel  the  mortgagor  to 
first  exhaust  so  much  of  the  debtor's 
land  as  embraces  the  homestead. 
State  Sav.  Bank  v.  Harbin,  18  S.  C. 
425. 

In  Texas  no  mortgage  on  the 
homestead  is  valid  except  for  the 
purchase-money  thereof  or  improve- 
ments thereon.  Const.  1876,  art.  16, 
§  50.  But  where  a  mortgage  was 
given  upon  land,  a  specific  part  of 
which  was  a  homestead,  and  a  por- 
tion of  the  loan  secured  was  used  to 
jmy  off  vendors'  liens  on  the  home- 
stead upon  foreclosure  of  the  mort- 
gage, it  was  held  that  the  mortgagee 
was  subrogated  to  the  right  of  the 
holders  of  the  vendors'  liens  as  to 
such  specific  part,  and  on  foreclosure 
was  entitled  to  sell  the  whole  tract, 
except  the  homestead,  and,  if  suf- 
ficient was  not  realized  to  satisfy 
the  mortgage  debt,  then  to  sell  the 
homestead  to  satisfy  so  much  of  the 
decree  as  should  not  exceed  the  sum 
used  to  pay  off  such  vendors'  liens. 
Ivory  V.  Kennedy,  57  Fed.  Rep.  310; 
Pridgen  v.  Warn,  15  S.  W.  559,  79 
Tex.  588,  followed. 

^'=  Story  Eq.  Jur.  §  640;  Pom.  Eq. 
Jur.  §  1414;  Searle  v.  Chapman,  121 
Mass.  19;  Ivory  v.  Kennedy,  57 
Fed.  310. 

'"^  In  re  Sauthoff  &  Olsen,  7  Biss. 
167;    Hall  v.  Morgan,  61  Miss.  47. 

^•*  Jones  V.  Dow,  18  Wis.  241,  Chief 


579  ORDER    OF    SALE,  [§    1G3^. 

But,  on  the  other  hand,  it  has  been  held  that  the  courts  will  not 
place  burdens  on  the  homestead  not  created  by  the  parties  them- 
selves or  by  the  law;  and  tlierefore  that,  where  a  first  mortgage 
executed  by  a  husband  and  wife  covers  a  homestead  and  other  land 
standing  in  the  name  of  the  wife,  and  afterwards  the  wife  alone 
executes  a  mortgage  upon  all  the  land  covered  by  the  first  mortgage 
except  the  homestead,  the  first  mortgagee  will  not  be  required  to 
exhaust  the  funds  derived  from  a  sale  of  the  homestead  before  re- 
sorting to  the  land  covered  by  the  second  mortgage,  in  order  that 
both  debts  may  be  paid.  The  securities  will  not  be  marshalled 
where  the  effect  will  be  to  place  an  additional  liability  against  the 
homestead,  to  which  the  husband  and  wife  had  not  assented. ^'^^ 

Even  under  a  statute  which  requires  that  other  property  shall  be 
exhausted  before  resort  is  had  to  a  homestead  covered  by  the  mort- 
gage, a  foreclosure  sale  under  a  mortgage  embracing  a  homestead 
estate  will  not  be  set  aside  because  the  land  was  first  offered  in  sep- 
arate parcels  corresponding  with  the  government  subdivisions,  and 
no  bids  were  received,  when  the  whole  of  the  land  including  the 
homestead  was  offered  and  sold.^'" 

If  a  mortgage  be  executed  by  a  husband  alone,  so  that  it  has  no 
validity  against  the  homestead  estate,  and  this  be  set  apart  and  the 
remainder  of  the  land  sold  under  foreclosure  proceedings,  the  mort- 
gagee's lien  is  exhausted.^"'^  It  seems,  too,  that  in  such  case  the 
homestead  property  in  excess  of  the  statutory  limit  may  be  sub- 
Justice  Dixon  saying:  "However  ises;  the  mortgagee  may  be  re- 
just  and  reasonable  it  might  be  for  quired  to  sell  the  other  mortgaged 
the  court  to  compel  a  sale  of  the  land  before  resorting  to  that  set  off 
business  lot  first,  and  thus  save  the  as  dower.  Askew  v.  Askew,  103  N. 
homestead,  if  that  were  the  only  C.  285,  9  S.  E.  646. 
question,  yet  we  think  the  mort-  In  case  a  debt  is  secured  by  mort- 
gagor's equity  to  hold  his  home-  gage  on  real  and  personal  property, 
stead  fully  countervailed  .by  the  the  mortgagee  will  not  be  compelled 
equities  of  his  creditors,  who  must  to  resort  to  the  realty  before  suing 
look  to  the  business  lot  for  their  a  purchaser  of  the  personalty,  to 
satisfaction,  and  who  have  no  lien  the  prejudice  of  the  mortgagor's 
upon  the  homestead.  Until  the  leg-  homestead.  Harris  v.  Allen,  104  N. 
islature  shall  have  declared  the  C.  86,  10  S.  E.  127. 
obligation  to  preserve  the  home-  ''<'  Brumbaugh  v.  Shoemaker,  51 
stead  superior  to  that  of  paying  Iowa,  148,  50  N.  W.  493;  Burmeister 
one's  honest  debts,  we  must  hold  v.  Dewey,  27  Iowa,  468. 
the  equity  of  the  creditor  at  least  Offering  the  lands  other  than  the 
equal  to  that  of  the  debtor  in  cases  homestead  in  separate  tracts,  and 
like  this."  See,  also,  Schreiber  v.  endeavoring  thus  to  sell  before  offer- 
Carey,  48  Wis.  208,  4  N.  W.  124.  ing  and  selling  in  a  body,  is  exhaust- 

^"*  Mitchelson  v.  Smith,  28  Neb.  ing  the  other  property,  within  the 
583,  44  W.  871.  meaning  of  the  statute. 

This  same  rule  applies  where  dow-  '"Lear  v.  Tatten,  14  Bush.  101; 
er  has  been  assigned  to  the  widow  Marks  v.  Wilson,  115  Ala.  561,  22. 
in  some  part  of  the  mortgaged  prem-    So.  134. 


§§  lG32a,  1633.]        under  decree  of  court.  580 

jected  to  the  satisfaction  of  the  mortgage,  hut  the  pleading  must 
put  in  issue  the  value  of  the  property.^"^ 

Where  a  first  mortgage  was  made  hy  a  husband  and  wife  with  a 
release  of  their  homestead  right,  and  a  second  mortgage  of  the 
same  premises  was  made  without  such  a  release,  the  wife  not  join- 
ing, and  the  homestead  was  declared  as  having  been  selected  upon 
a  certain  part  of  tlie  land,  upon  a  foreclosure  of  the  first  mortgage 
it  was  held  that  the  second  mortgagee  could  not  insist  that  the  home- 
stead should  be  first  sold.^'^® 

The  mortgagee  should  be  made  a  party  to  the  proceedings  for 
setting  off  the  homestead,  or  he  will  not  be  estopped  from  denying 
the  right  upon  foreclosure.^^" 

§  1632a.  But  this  is  a  right  which  the  mortgagor  must  seasonably 
assert  for  himself.  The  mortgagee  is  under  no  obligation  to  see 
that  the  debtor's  homestead  right  is  not  lost  by  the  sale.  "The 
mortgagee  owes  him  no  duty  to  assert  it  for  him,  or  to  institute 
proceedings  to  protect  it.  The  equity  is  simply  one  which  the  law 
will  protect  upon  seasonable  application  of  the  mortgagor,  where 
the  mortgagee  proceeds  to  enforce  his  mortgage."  The  rule,  more- 
over, being  founded  on  a  mere  equity,  will  not  be  enforced  to  the 
displacement  of  a  countervailing  equity,  or  where,  for  any  special 
"facts,  it  would  be  inequitable  to  enforce  it.^^^ 


IV.     Conduct  of  Sale. 

§  1633.     The   officer   conducting  the   sale   should  he   present. — 

The  sale  is  made  by  public  auction  to  the  highest  bidder,  unless 
otherwise  ordered  by  the  court.  It  is  conducted  by  the  officer 
designated  by  the  decree  or  by  statute,^®^  though  he  may  employ 
an  auctioneer  to  act  for  him  in  his  presence.^^^  His  presence  is  re- 
quired in  order  that  the  parties  interested  may  have,  the  benefit  of 
the  discretion  and  judgment  which  he  should  exercise  for  their 
benefit,  in  order  to  obtain  a  fair  price  for  the  property.^^*     There  is 

I'^Whitlock    v.    Gosson,    35    Neb.  ^^' Blossom  v.  R.  Co.  3  Wall.   196, 

829,  53  N.  W.  980.  205. 

''•'Arraitage  v.   Toll,  64  Mich.  412,  ^«*  Powell- v.    Tuttle,   3   N.   Y.    396. 

31  N.  W.  408.  In   this   case,   a   sale    made   by   one 

^'°  Goodall  V.  "Boardman,  53  Vt.  92.  loan    commi&sio-ner    was    set    aside. 

'^^  Miller  v.  McCarty,  47  Minn.  321,  The  law  required  that  the  sale  should 

50  N.  W.  235.  he     made     hy     two     commissioners, 

1S2  Heyer  v.   Deaves,   2   .Tohns.    Ch.  hut  only  one  was  present.     The  cir- 

154;     Shepard  v.   Whaley,   13  N.   Y.  cumstances  were  such  that  the  sale 

Supp.  532.  should    have    been    postponed,    and 


581  CONDUCT  OF  SALE.  [§  1034. 

often  special  occasion  for  the  exercise  of  a  reasonable  discretion 
in  the  matter  of  adjournments;  for  unex^Dected  occurrences  may 
at  the  last  moment  threaten  a  sacrifice  of  the  property,  unless  he 
exercises  his  right  to  adjourn  the  sale  to  another  day.  This  is  one 
of  the  duties  which  he  cannot  properly  delegate  to  another.  If  a 
sale  be  made  in  the  absence  of  the  sheriff,  whose  duty  it  is  to  con- 
duct it,  by  his  agent  or  bailiff  informally  appointed,  and  the  sheriff 
executes  a  deed  to  the  purchaser,  the  deed  will  pass  the  title,  and 
will  be  good  in  a  collateral  proceeding  as  the  act  of  an  officer  de 
facto,  but  will  be  set  aside  on  a  direct  application  made  in  the  course 
of  the  same  proceeding.^*^  It  has  even  been  held  that  a  sale  by  one 
loan  commissioner  in  the  absence  of  his  associate  is  irregular,  thougli 
the  deed  be  executed  by  both.^^*' 

The  property  must  be  offered  to  the  highest  bidder,  and  bids  re- 
ceived so  long  as  they  are  offered ;  and  after  waiting  a  reasonable 
time  for  another,  and  none  being  made,  it  should  be  struck  off  to 
the  highest  bidder. ^^'^ 

§  1634.  Adjournment.^^^ — If  at  the  time  and  place  of  sale  there 
be  no  bidder  present  otJier  than  the  mortgagee  or  his  attorney, 
it  is  the  duty  of  the  auctioneer  or  officer  making  the  sale  to  ad- 
journ it.^®°  The  application  for  an  adjournment  usually  comes  from 
some  one  or  more  of  the  parties  interested;  but  it  may  be  the  duty 
of  the  officer  to  adjourn  the  sale  without  the  request  of  any  one, 
and  even  against  the  wish  of  a  party  in  interest.^^"  The  officer 
making  the  sale  may  properly  adjourn  it  by  direction  of  the  com- 
plainant's solicitor,  for  the  purpose  of  enabling  the  mortgagors  to 
pay  the  debt;  and  he  may  make  several  short  adjournments  for 
this  purpose,  and  finally,  upon  payment,  may  discontinue  the  sale 
altogether.^^^  He  has  a  discretionary  power  in  this  respect;  but 
if  he  exercises  it  in  an  arbitrary  or  unreasonable  manner,  the  sale 
will  be  set  aside  and  a  resale  ordered. ^''^     The  adjourned  day  of 

the  court  of  appeals  held  that  the  486.    And  see  May  v.  May,  11  Paige, 

decision    of    the    question    whether  201. 

the  sale  should  go  on  or  be  put  off  '**■*  See  chapter  xl.,  division  10. 

was  a  judicial  act.  and  that  the  par-  ^''^  Strong  v.  Catton,  1  Wis.  471. 

ties  interested  were  entitled  to  have  "'"  Astor  v.  Romayne,  1  Johns.  Ch. 

had    that    question    determined    by  310;    McGown  v.  Sandford,  9  Paige, 

both  commissioners.  290.     See,  also,  Russell  v.  Richards, 

^^^  Meyer  v.  Patterson,  28  N.  J.  Eq.  11  Me.  371,  26  Am.  Dec.  532;    Tinkom 

249,  sub.  nom.  Meyer  v.  Bishop,  27  v.    Purdy,    5    .Johns.    345;     Richards 

N.  J.  Eq.  141.  V.  Holmes.  18  How.  143,  147;    Ward 

ISO  York    V.    Allen,    30   N.    Y.    104;  v.  James,  8  Hun,  526. 

Olmsted  v.  Elder,  5  N.  Y.  144;    Pell  ''^Blossom  v.  Railroad  Co.  3  Wall. 

V.  Ulmar,  21  Barb.   500.     See.  how-  196. 

ever,  King  v.  Stow,  6  Johns.  Ch.  323.  '"'  Breese   v.    Busby,    13    How.    Pr. 

'''''  Bicknell  v.  Byrnes,  23  How.  Pr.  485. 


8    1635.]  UNDER   DECREE   OF    COURT.  583 

eaie  should  be  announced  at  the  time  of  the  adjournment  ;^^^  but  if 
this  cannot  be  done  on  account  of  an  injunction,  a  general  ad- 
journment may  be  made,  and  the  day  advertised  afterwards.^^*  If 
the  first  day  is  by  mistake  set  upon  a  Sunday,  the  postponement 
may  be  effected  by  an  advertisement  before  the  day  arrives. ^^^  If 
the  day  fixed  for  sale  be  afterwards  appointed  a  legal  holiday,  an 
adjournment  should  be  made.  In  such  case  the  advertisement  is  not 
rendered  invalid.""  If  a  referee  is  appointed  to  conduct  the  sale, 
and,  at  the  time  and  place  advertised  for  the  sale,  plaintiff's  at- 
torney, witliout  authority  from  the  referee,  orders  the  sale  to  be 
postponed  on  account  of  the  latter's  absence,  the  sale  must  be  re- 
advertised  by  the  referee."^ 

If  the  day  of  sale  be  fixed  in  the  announcement  of  the  adjourn- 
ment, and  other  notice  of  the  adjourned  sale  name  a  different  day, 
the  sale  will  be  irregular.^^^ 

The  adjournment  may  be  made  to  a  different  place  than  that 
named  in  the  original  notice,  unless  the  place  be  fixed  by  law  or  by 
the  decree;""  though  a  sale  adjourned  to  a  place  different  from  that 
named  in  the  decree  has  been  confirmed.^"*' 

It  is  the  better  and  safer  practice  to  advertise  the  adjourned  sale, 
though  this  is  not  always   essential  to   the   legality   of   the   sale.^*^ 

Omission  to  publish  notice  of  the  adjourned  sale,  though  required 
by  statute,  is  an  irregularity  merely,  which  may  afford  good  ground 
for  vacating  and  setting  aside  the  sale  made,  but  one  which  the 
parties  are  competent  to  waive,  and  which  must  be  regarded  as 
waived  after  the  sale  has  been  confirmed  without  objection.^*'^  If  an 
adjournment  be  made  at  the  request  of  the  owner  of  the  equity  of 
redemption,  under  an  agreement  to  allow  commissions  and  expenses 
of  the  postponed  sale,  these  are  a  personal  claim  against  him,  and 
cannot  be  taken  out  of  the  proceeds  of  the  sale  to  the  detriment  of 
any  one  else.^°^ 

§  1635.  The  objection  to  the  mortgagee's  buying  at  the  sale, 
when  the  mortgaged   property   is   sold   under   jndicial   process,   has 

"^  La  Farge  v.   Van  Wagenen,   14  =""  Farmers'  Bank  v.  Clarke,  28  Md. 

How.  Pr.  54.  145. 

i»*La  Farge  v.  Van  Wagenen,   14  =»' Stearns  v.   Welsh,   7   Hun,   676; 

How.  Pr.  54.  Bechstein   v.    Schultz,   45    Him,    191. 

'"■•Westgate    v.    Handlin,    7    How.  This    is    by    rule    of    court    in    New 

Pr.  372.  York. 

'"'■  White  V.  Zust.  28  N.  J.  Eq.  107.  ""-  Bechstein  v.   Schultz,  120  N.   Y. 

'■■''  Shepard    v.    Whaley,    13    N.    Y.  168,  24  N.  E.  388. 

Supp.  532.  ="^  Neptune   Ins.    Co.   v.   Dorsey,   3 

""Miller  v.  Hull,  4  Den.  104.  Md.  Ch.  334. 

"'  See     Richards     v.     Holmes,     18 
How.  143,  147. 


583  CONDUCT  OF  SALE.  [§  1635, 

much  less  force  than  it  has  when  the  sale  is  made  under  a  power;-"* 
for  the  judicial  sale  is  made  by  an  officer  designated  by  the  court  or 
by  statute  for  the  purpose,  and  the  mortgagee  for  whose  benefit  it 
is  made  has  not  the  actual  control  and  management  of  the  sale,  as 
he  has  in  case  of  a  sale  under  a  power.  Accordingly,  in  those  States 
in  which  the  sale  under  a  power  is  taken  out  of  the  hands  of  the 
mortgagee  and  placed  under  the  direction  of  a  sheriff  or  other 
officer,  the  restriction  against  the  mortgagee's  buying  is  at  the  same 
time  generally  removed. -^"^ 

As  against  the  purchaser  at  foreclosure,  the  holder  of  the  equity 
of  redemption  is  entitled  to  rents  and  profits  collected  during  the 
period  for  redemption  which  remain  in  the  receiver's  hands  after 
paying  the  deficiency  decree  and  other  items  allowed  by  the  court.^"® 

Where  the  authority  is  not  given  to  the  mortgagee  by  statute  or 
by  judicial  construction  to  buy  at  a  sale  imder  decree  of  court  upon 
his  own  mortgage,  it  is  sometimes  provided  in  the  decree  that  he 
may  become  a  purchaser,  and  he  may  generally  obtain  leave  to 
purchase  for  himself.-"^  It  is  generally  for  the  interest  of  the 
mortgagor  and  others  interested  that  he  should  have  the  right  to 
buy,  as  it  often  happens  that  he  will  pay  more  for  the  property  than 
any  one   else  will   pay;   and   it   is   often   equally   important   to   the 

'"*  See  §§    1876-1886.  trustee,  and  the  rule  forbidding  him 

^"'^  See  §   1882;    Stover  v.  Stark,  61  to  purchase  at  his  own  sale  has  no 

Neb.  374,  85  N.  W.  286.  application."     In    this    case,    on    the 

-""  Stevens  v.  Hadfield,  178  111.  532,  execution  of  a  trust  deed  to  secure 

52  N.   E.   875,  affirming  76  111.  App.  a    loan    from    the    grantee    to    the 

420.  grantor,    one    who   had    been    attor- 

•"'  See    Conger   v.    Ring,    11    Barb,  ney  for  both  parties,  and  who  acted 

356;   Domville  v.  Berrington,  2  Y.  &  for  the  grantee  in  making  the  loan, 

C.  723.  induced    the    grantee    to    include    in 

In  New  York,  by  rule  of  court,  a  the  deed  a  sura  due  from  the  grantor 
provision  is  inserted  in  every  decree  to  him  for  legal  services,  and  agreed 
for  the  sale  of  mortgaged  premises,  that  no  part  of  such  sum  should  be 
unless  otherwise  specially  ordered,  paid  until  the  loan  was  repaid  in 
that  the  plaintiff  may  become  the  full.  The  grantee  afterwards,  de- 
purchaser.  Ten  Eyck  v.  Craig,  62  N.  siring  to  terminate  the  trust,  was 
Y.  406,  421,  per  Andrews,  J.,  37  Am.  advised  by  the  attorney  that  he 
Dec.  233.  In  Felton  v.  Le  Breton,  could  not  purchase  at  a  sale  under 
92  Cal.  457,  28  Pac.  490,  it  was  said:  the  power  contained  in  the  deed, 
"A  court  of  equity  has  the  same  but  that  he  might  do  so  on  fore- 
right  to  determine  in  advance  of  closure  by  action,  and  take  the  land 
the  sale,  in  any  particular  case,  discharged  of  the  trust.  The  action 
that  the  circumstances  are  such  as  to  foreclose  was  conducted  by  the 
will  justify  it  to  authorize  the  trus-  attorney  for  the  grantee.  The 
tee  to  become  a  purchaser,  as  it  has  grantee,  being  authorized  by  the  de- 
after  the  sale  to  approve  a  pur-  cree,  purchased  at  the  foreclosure 
chase  made  by  a  trustee  under  stat-  sale  for  less  than  the  amount  of  his 
utory  authority.  When  the  sale  is  loan.  It  was  held  that  he  took  the 
made  under  the  direction  of  a  court  land  discharged  of  any  trust  on  ac- 
of  equity,  by  officers  appointed  by  count  of  the  sum  secured  for  the 
the   court,   it  is   not   a  sale   by   the  benefit  of  the  attorney. 


§    1635.]  UNDER   DECREE   OF    COURT.  584 

mortgagee  to  have  this  power,  in  order  to  prevent  a  sacrifice  erf  his 
own  interests. ^^^  But  under  the  technical  rule  against  his  pur- 
chasing, no  one  not  interested  in  the  equity  of  redemption 'can  take 
advantage  of  his  purchasing  ;^''^  and  a  person  entitled  to  do  so  can 
only  redeem.  He  acquires  the  same  title  against  third  parties  as 
does  any  other  purchaser.  The  fact  that  property  so  acquired  may 
be  or  is  treated  as  personal  estate  in  the  distribution  of  the  prop- 
erty of  his  intestate  does  not  affect  his  holding  of  the  lands  as  to 
others.  He  acquires  the  fee,  and  can  dispose  of  it  by  deed,  wliich 
deed  will  carry  the  same  title  as  would  the  deed  of  any  other  pur- 
chaser.^'^" If  such  administrator  is  a  creditor  of  the  estate  to  an 
amount  exceeding  the  purchase-price  of  the  mortgaged  land,  and 
he  pays  for  the  land  so  purchased  by  crediting  the  estate  with  this 
amount,  the  heirs  of  the  intestate,  asserting  their  right  to  charge 
the  administrator  as  a  trustee  for  them  of  the  title  acquired  by  such 
purchase,  should  not  be  required  to  pay  to  him  the  full  amount  of 
his  debt  against  the  estate,  but  only  so  much  of  it  as  he  had  applied 
in  malving  the  purchase.-" 

The  attorney  for  plaintiff,  acting  fairly  and  honestly,  may  buy 
in  the  premises  for  his  own  benefit  and  hold  the  same,  except  as 
against  his  own  client.^^^ 

An  officer  of  a  corporation  may  purchase  corporate  property  at  a 
sale  on  foreclosure  of  a  mortgage  thereof,  and  the  sale  is  not  nec- 
essarily void  even  though  'such  mortgage  was  originally  made  to  him, 
and  was  assigned  by  him  to  another  to  be  foreclosed;  especially 
where  he  had  an  interest  to  protect  as  holder  of  a  subsequent  judg- 
ment against  the  corporation,  and  the  party  objecting  had  abundant 
notice  of  the  sale,  and  there  was  no  fraud  or  unfairness.-^^ 

A  subsequent  mortgagee  may  purchase  at  a  sale  under  a  senior 
mortgagee   to   protect   his    own    mortgage.      There   is    no    equitable 

'°^  See  Holcomb  v.  Holcomb,  11  N.  a    director    of    a    railroad    company 

J.  Eq.  281;  Galvin  v.  Newton,  19  R.  could    not    become    a    purchaser    of 

I.  176,  36  Atl.  3.  property  of  the  corporation,  except 

-"^  Edmondson    v.    Welsh,    27    Ala.  subject  to  the  right  of  the  corpora- 

578.  tion   to   elect   to   disaffirm   the   sale 

-'"Watson   V.    Grand   Rapids   &   I.  and  have  a  resale.     But  it  was  not 

R.  Co.  91  Mich.  198,  51  N.  W.  990.  said    that   the   sale   was   void,    only 

="  Lewis  V.  Welch,  47  Minn.  193,  49  that  the  corporation  might  ask  for  a 

N.  W.  665,  affirming  48  N.  W.  608.  resale  if  they  believed  the  property 

"=  Holland  Trust  Co.  v.  Hogan,  17  would  sell  for  more;  and  it  was  fur- 

N.  Y.  Supp.  919;  McCotter  v.  Jay,  30  ther  stated  that,  where  the  director 

N.  Y.  80.  himself  was  the  judgment  creditor, 

="  Preston  v.   Loughran,  12  N.   Y.  he  had  a  clear  right  to  sell  the  prop- 

Supp.  313.    See  Twin-Lick  Oil  Co.  v.  erty  of  the  corporation,  and  it  was 

Marbury,  91  U.  S.  587,  589.     In  Hoyle  not  decided  that  he  might  not  then 

V.    Railroad    Co.    54    N.    Y.    314,   the  purchase  in  his  own  right. 
Commission  of  Appeals  stated  that 


585  CONDUCT  OF  SALE.  [§  1635. 

consideration  that  puts  a  person  bidding  upon  premises  at  such  a 
sale,  because  he  holds  a  second  mortgage  upon  the  premises,  in  any 
different  position  than  a  person  bidding  who  has  no  second  mort- 
gage or  other  lien  upon  the  premises.^" 

Creditors  of  the  mortgagor,  whether  they  be  all  the  bondholders 
secured  by  the  mortgage  or  a  part  of  such  bondholders,  may  fairly 
combine  to  purchase  the  property  at  the  mortgage  sale.  Other 
creditors  are  not,  by  such  combination,  deprived  of  the  right  to  bid  at 
such  sale."^^ 

The  mortgagee's  heirs  or  personal  representatives  may  purchase 
at  the  sale.^^*^  An  executor  or  administrator  of  the  mortgagee  pur- 
chasing at  the  foreclosure  sale  holds  the  title  for  the  benefit  of  the 
estate,  and  the  land  is  treated  as  personal  property.-"  An  appraiser 
of  the  property  may  purchase  at  tJie  sale  where  it  appears  that  he 
had  no  idea  of  making  the  purchase  at  the  time  he  made  the  ap- 
praisement, and  that  he  appraised  the  property  at  as  high  a  price  as 
it  should  have  been  appraised.-^* 

A  purchase  by  an  executor  or  administrator  in  his  individual  name 
and  right  is  not  absolutely  void,  but  only  voidable  by  persons  interested 
in  the  estate  of  the  mortgagee.^^^ 

The  relation  of  the  life-tenant  to  the  remainder-men  is  not  of 
such  a  fiduciary  nature  that  he  cannot  purchase  the  property  at  a 
foreclosure  sale;  and  his  vendee,  for  valuable  consideration,  and 
without  knowledge  of  any  fraud,  takes  a  good,  fee-simple  title.^-* 

A  mortgagee  who  becomes  a  purchaser  under  a  decree  made  upon 
his  own  complaint  is  not  allowed  to  object  to  the  title  on  the  ground 
that  persons  in  possession  of  the  property  without  title  were  not 
made  parties."^  And  even  if  there  be  a  defect  in  the  proceedings 
he  is  supposed  to  have  full  notice  of  it,  though  actual  notice  be  not 
shown,  and  is  not  allowed  to  object  on  account  of  it.-"  The  plain- 
tiff's attorney  may  bid  off  the  property,  and  the  presumption  is  that 
he  is  making  tlie  purchase  on  his  own  account.--^ 

2"  Watson   v.   Grand   Rapids   &   I.  -''*  Barlow  v.  McClintock  (Ky.),  11 

R.  Co.  91  Mich.  198,  51  N.  W.  990.  S.  W.  29. 

-^^  Kropholler    v.    St.    Paul,    Minn.  -''■'  Phillips  v.   Love,  57  Kans.   828, 

&  Manitoba  Ry.  Co.  1  McCrary,  299;  48    Pac.    142;    Merket    v.    Smith,    33 

Marie  V.  Garrison,  83  N.  Y.  14;  Santa  Kans.   66;    Briggs  v.   Chicago,   K.  & 

Marina  v.  Connolly,  79  Cal.  517,  21  W.  R.  Co.  56  Kans.  526,  43  Pac.  1131; 

Pac.  1093.  Beck  v.  Uhrich,  16  Pa.  St.  499. 

='"  Briant  v.   Jackson,   99   Mo.   585,  -"  German- American    Deposit    Co. 

13  S.  W.  91.  V.  Dietz,  132  Pa.  St.  36,  18  Atl.  1090. 

-''  Valentine    v.    Belden,    20    Hun,  -"'  Ctetrom  v.  McCann,  21  How.  Pr. 

537;  Lockman  v.  Reilly,  95  N.  Y.  64,  431. 

71;  Stevenson  v.  Polk,  71  Towa,  279-  -'"Boyd  v.  Ellis,  11  Iowa,  97. 

291,   32   N.   W.    340;    Briggs   v.    Chi-  -'^  Chappel    v.    Dann,   21   Barb.   17. 

cag'o  Kan.  &  W.  R.  Co.  56  Kans.  526,  And   see   Squier   v.   Norris,   1   Lans. 

43  Pac.  1131.  282.     But  see  §§  1878,  1879. 


§    1636.]  UNDER   DECREE   OF    COURT.  586 

If  the  foreclosure  proceedings  are  for  any  cause  ineffectual,  and  a 
mortgagee  purchases  and  enters  into  possession  under  such  void  pro- 
ceedings, his  relation  to  the  mortgaged  premises  is  that  of  a  mort- 
gagee in  possession."-*  He  is  accountable  to  one  who  establishes  a 
right  to  the  property  for  rents  and  profits,  and  may  be  allowed  for 
pa}TTients  for  taxes  and  repairs.^^^ 

When  the  mortgagee  has  the  right  to  purchase,  the  mortgage 
debt  is  not  extinguished  for  any  unsatisfied  balance,  any  more  than 
it  is  in  case  a  stranger  becomes  the  purchaser. ^^'^ 

A  purchaser  of  land  subject  to  a  mortgage  which  he  has  agreed 
to  assume  and  pay  is  not  precluded  from  purchasing  at  a  sale  under 
the  mortgage  within  the  rule  against  mortgagees  buying.--^ 

The  usual  provision  in  a  decree  of  foreclosure,  that  any  of  the 
parties  to  the  suit  may  purchase  on  the  sale,  does  not  authorize  one 
defendant  to  1jid  in  property  belonging  to  another,  and  to  hold  it 
against  the  latter  contrary  to  equity.^-** 

The  mortgage  debtor  may  purchase  at  the  foreclosure  sale;^^* 
and  his  wife  has  the  same  right  as  any  person  to  purchase  at  such 
sale,  and  to  hold  the  property  free  from  liability  on  account  of  her 
husband's  debts,  provided  she  does  so  in  good  faith  and  with  her 
own  money.-^*^ 

A  life  tenant  stands  in  no  such  fiduciary  relation  to  the  remainder- 
men that  he  cannot  purchase  the  property  at  a  foreclosure  sale.  He 
owes  them  no  duty,  and  is  not  charged  with  any  trust.^^^ 

§  1636.  A  sale  may  be  kept  open  so  as  to  enable  the  mortgagee 
or  officer  making  the  sale  to  put  up  the  property  again,  in  case  the 
person  bidding  it  off  fails  to  make  good  his  bid.  Xotifying  the 
persons  brought  together  by  the  published  notice  that  the  sale  would 
thus  be  held  open  is  all  that  is  requisite;  and  a  sale  made  in  ac- 
cordance with  such  notification  will  not  be  set  aside  at  the  instance 
of  the  first  bidder,  in  the  absence  of  equities,  and  merely  for  the 
reason  that  it  was  made  after  the  time  when  it  was  advertised  to  take 
place.-^- 

--^  Cooke  v.   Cooper,   18  Oreg.   142,  ='"  Houston  v.  Nord,  39  Minn.  490, 

22  Pac.  945.  40  N.  W.  568;   Mooring  v.  Little,  98 

-'  Wood   V.    Kroll,    4    N.    Y.    Supp.  N.  C.  472,  4  S.  E.  Rep.  485. 

678.  "''  German- American    Deposit    Co. 

""Edwards  v.  Sanders,  6  S.  C.  316.  v.  Dietz,  132  Pa.  St.  36,  18  Atl.  1090. 

-'-•McNeill  V.  McNeill,  36  Ala.  109,  ='- Isbell   v.    Kenyon,   33   Mich.    63; 

76  Am.  Dec.  320.  Wilson  v.  Thorn  (Ky.),  13  S.  W.  365; 

--•"  Bennett  v.  Austin,  81  N.  Y.  308.  Hughes  v.   Swope,  88  Ky.   254,   1   S. 

"■'  Toliver  v.  Morgan,  75  Iowa,  619,  W.   394.     And   see  Baring  v.  Moore, 

34  N.  W.  858;  Bensieck  v.  Cook,  110  5  Paige,  48. 
Mo.  173,  19  S.  W.  646. 


587  CONFIRMATION    OF    SALE.  [§    1637, 

If  the  purchaser  refuses  to  make  good  his  bid,  the  officer  conduct- 
ing the  sale  may  properly  open  the  sale  and  sell  the  property  again. 
A  purchaser  refused  to  complete  his  bid,  on  the  ground  that  imme- 
diately thereafter  he  had  discovered  that  there  was  a  mortgage  for 
eight  thousand  dollars  on  the  premises  undischarged  of  record,  and 
that  he  did  not  have  time  to  ascertain  the  status  of  the  mortgage. 
The  referee  on  the  same  day  resold  the  premises  to  another  pur- 
chaser for  a  less  price.  It  appeared  that  the  sum  unpaid  on  the 
mortgage  was  as  stated  by  the  referee.  The  court,  in  its  discretion, 
properly  refused  to  vacate  the  second  sale  and  permit  the  first  pur- 
chaser to  complete  his  bid,  and  such  refusal  was  not  appealable."^ 

V.     Confirmation  of  Sale. 

§  1637.     ITntil   confirmed   by  the   court   the   sale   is   incomplete. 

The  acceptance  of  the  bid  confers  no  title  upon  the  purchaser,  and 
not  even  any  absolute  right  to  have  the  purchase  completed.  He  is 
nothing  more  tlian  a  preferred  bidder,  or  proposer  for  the  purchase, 
subject  to  the  sanction  of  the  court  afterwards.^^*  When  this  is 
given,  it  relates  back  to  tlie  time  of  sale,  and  carries  the  legal  title 
from  the  delivery  of  the  deed  and  the  equitable  title  without  a 
deed."^^  Equities  in  the  property  pendente  lite  or  after  a  valid  sale  do 
not  prevent  a  confirmation  of  the  sale.-^"  In  a  few  States  the  fore- 
closure sale  is  made  by  a  special  writ  of  execution  issued  to  the  sheriff, 
and  no  report  of  the  sale  or  confirmation  of  it  is  required.  Such  a  sale 
is  not  purely  a  judicial  sale,  which  is  founded  upon  proceedings  in 
equity,  or  upon  an  equitable  action.  In  those  States  in  which  fore- 
closure is  obtained  by  a  suit  at  law,  as  by  scire  facias,  or  by  proceed- 
ings of  a  mixed  nature,  the  sale  is  either  ministerial  or  only  quasi 
judicial. 

The  confirmation  cures  all  mere  irregularities  in  the  proceed- 
ings to  obtain  the  sale,  and  in  the  conduct  of  it,^^^  but  does  not 
make  good  a  defect  arising  from  want  of  jurisdiction  of  the  court 

="Judson   V.    O'Oonnell,    14   N.    Y.  of    redemption.     Odd    Fellows'    Sav- 

Supp.  92.  Ings  &  Commercial  Bank  v.   Harri- 

='*Daniell's    Ch.     1454;     Busey    v.  gan,  53  Cal.  229. 

Hardin,   2   B.   Men.   407;    Hay's   Ap-  =^^  Stang  v.  Redden,  28  Fed.  11. 

peal,    51    Pa.    St.    58,    61;     Young   v.  ='"  Pendleton  v.  Spear,  56  Ark.  194, 

Keogh,  11  111.  642;   Gowan  v.  Jones,  19  S.  W.  578. 

18    Miss.    164;    Mills    v.    Ralston,    10  ='■  Cross  v.  Knox,  32  Kans.  725,  5 

Kans.  206;    Allen  v.  Poole,  54  Miss.  Pac.    32.     It   is   binding  on   all   par- 

323;  Wells  v.  Rice,  34  Ark.  346;  Me-  ties    in    court,    though    the  commis- 

bane  v.  Mebane,  80  N.  C.  34,  44  Am.  sioner  failed   to  sell   the  parcels  in 

Dec.    102;    Harwood    v.    Cox,    26    111.  the    order    directed    by    the    decree. 

App.  374.  An  order  of  confirmation  Beard  v.  Morns  (Ky.),  19  S.  W.  598. 
not  appealed  from  cuts  off  the  right 


§    1G37.]  UNDER   DECREE   OF    COURT.  588 

either  of  the  case  or  of  any  party  interested;  and,  moreover,  fraud, 
accident,  or  mistake,  whicli  will  invalidate  a  contract  generally,  are 
grounds  for  setting  aside  the  sale  after  confirmation.-^**  If,  however, 
the  deed  be  delivered  without  confirmation,  long  continued  posses- 
sion under  it  will  make  the  title  valid.^^'* 

Even  the  question  of  the  validity  of  a  mortgage  may  be  deter- 
mined imder  exceptions  to  the  ratification  of  the  sale;  and  after 
such  exceptions  have  been  overruled,  and  the  sale  has  been  ratified, 
no  action  can  be  brought  to  test  its  validity.^'*"*  But  the  mortgagor  at 
this  stage  of  the  proceedings  has  no  right  to  redeem.^*^ 

Confirmation  cannot  be  objected  to  on  the  ground  that  there 
would  be  no  default  in  the  payment  of  interest  if  the  sum  retained 
as  a  bonus  by  the  mortgagee  at  the  time  of  the  loan  were  applied 
to  the  payment  of  the  legal  interest  upon  the  sum  actually  ad- 
vanced. Usury  cannot  be  taken  advantage  of  in  this  way.  "In 
determining  whether  there  has  been  a  default  the  court  must  be 
governed  by  the  terms  of  the  mortgage  itself,  irrespective  of  the 
question  of  usury.  After  a  default  thus  made,  a  sale  or  its  ratifica- 
tion can  be  prevented  on  this  ground  only  by  payings  or  at  least 
offering  to  pay,  the  sum  actually  loaned,  with  legal  interest.^*^  The 
usurious  interest,  when  once  paid,  may  be  recovered  back  by  an 
action  at  law,  or  in  equity  may  be  eliminated  from  the  claim,  upon 
the  objection  of  others  whose  rights  its  allowance  would  injuriously 
affect.-" 

An  erroneous  or  imperfect  description  of  the  premises  in  any  of 
the  proceedings  is  not  a  sufficient  ground  of  objection  to  confirma- 
tion unless  it  be  alleged  and  shown  that  the  party  objecting  will  be 
prejudiced.^** 

The  usual  order  nisi,  that  the  sale  stand  confirmed  unless  cause 
to  the  contrary  be  shown  within  a  specified  time,  is  a  sufficient  order 
of  confirmation  of  a  sale.^*^  An  appeal  may  be  taken  from  such 
order.^*'' 

='^  The    statement    in    the    text    is  "'  Smith  v.  Myers,  41  Md.  425,  434. 

fully  illustrated  by  Mr.  Justice  Beck-  '"  Cooper  v.  Foss,  15  Neb.  515. 

with,  in  Dills  v.  Jasper,  33  111.  262;  =«  Torrans  v.  Hicks,  32  Mich.  307. 

though    Mr.    Justice    Caton,    in    the  If  it  be  ordered   that  a  foreclosure 

previous    case    of   Jackson    v.    War-  sale  be  confirmed  unless  objections 

ren,  32  111.  331,  had  asserted  that  a  are    filed,    and    such    objections    are 

valid  and  binding  contract  is  made  filed  for  the  sole  purpose  of  deciding 

Wiien  the  hammer  falls,  and  that  the  who     is     entitled     to     the     surplus 

purchaser  is  entitled  to  a  deed.  money,    an    order    disposing   of    the 

==^=  Gowan  v.  Jones,  18  Miss.  164.  surplus   amounts   to   a  confirmation 

=*"  Albert  v.  Hamilton,  76  Md.  304,  of  the  sale  as  against  the  objectors. 

25  Atl.  341.  Lambert  v.  Livingston,  131  111.   161, 

="  Payne  v.  Long-Bell  Lumber  Co.  23  N.  E.  352. 

9  Okl.  683,  60  Pac.  235.  =*«  Detroit    F.    &    M.    Ins.    Co.    v. 

="  Smith  v.  Myers,  41  Md.  425,  434.  Renz,  33  Mich.  298;  Koehler  v.  Ball, 


589  CONFIRMATION  OF  SALE.  [§  1638. 

§  1638.     It     rests     wholly     in     the    discretion     of     the     court 

whether  the  sale  shall  be  confirmed  or  not,  and  this  power  will  be  exer- 
cised prndently  and  fairly  in  the  interest  of  all  concerned.'*^  An  order 
directing  or  refusing  a  resale  is  not  subject  to  review  or  appeal.^*^ 
The  court  should  be  satisfied  that  the  sale  has  been  made  in  accord- 
ance with  the  requirements  of  the  decree,^*^  and  especially  that  no- 
tice of  the  sale  was  given  as  required.^^**  If  the  sale  has  been  regular 
in  all  respects,  the  motion  to  confirm  should  be  allowed.-^^  The  mort- 
gagee is  entitled  to  a  confirmation  of  the  sale,  and  satisfaction  of  his 
decree,  without  regard  to  the  equities  acquired  in  the  mortgaged 
premises  by  a  purchaser  from  the  mortgagor  pendente  lite.^^^ 

Confirmation  of  the  sale  can  only  be  regularly  made  after  notice 
of  the  motion  for  it  to  the  parties  adversely  interested  that  they 
may  show  cause  against  it.^^^  "Notice  of  the  motion  is  given  to  the 
solicitors  in  the  cause,  and  confirmation  nisi  is  ordered  by  the  court, 
— to  become  absolute  in  a  time  stated,  unless  cause  is  shown  against 
it.  Then,  unless  the  purchaser  calls  for  an  investigation  of  the 
title  by  the  master,  it  is  the  master's  privilege  and.  duty  to  draw  the 
title  for  the  purchaser,  reciting  in  it  the  decree  for  sale,  his  approval 
of  it,  and  the  confirmation  by  the  court  of  the  sale,  in  the  manner 
that  such  confirmation  has  been  ordered."^^*  An  order  of  confirma- 
tion cannot  be  properly  made  before  the  coming  in  of  the  report.-^^ 

The  confirmation  is  usually  made  by  a  formal  order.  It  is  the 
practice,  generally,  for  the  master  or  other  officer  who  makes  the 
sale  to  fully  complete  it  so  far  as  he  can,  by  delivery  of  the  deed 
and  payment  of  the  proceeds,  before  obtaining  the  order  of  court; 
but  confirmation  may  be  made  in  the  first  place  of  the  sale,  and 
afterwards  of  the  deed.  In  England  it  is  the  practice  to  with- 
hold the  deed  until  the  final  order  confirming  the  sale  is  made  abso- 
lute.'^*^     One  whose  bid  is  not  accepted  by  the  officer,  though  it  is 

2  Kans.  160,  83  Am.  Dec.  451;  Trill-  1  N.  W.  320;  State  v.  Doane,  35  Neb.. 

ing  v.   Schumltsch,  67   Wis.   186,  30  707,  53  N.  W.  611. 

N.  W.  222.  ="  Moore  v.  Titman,  33  111.  358. 

""  Moore  v.  Triplett,  96  Va.  603,  32  "-'■'>  Perrien  v.  Fetters,  35  Mich.  233. 


S.  E.  50;  Hudgins  v.  Lanier,  23  Gratt 
494;  Brock  v.  Rice,  27  Gratt.  812 
Roudabush  v.  Miller,  32  Gratt.  454 


New    England    Mortgage    Secu- 
rity Co.  V.  Smith,  25  Kans.  622. 
-"  Pendleton  v.  Spear,  56  Ark.  194, 


Berlin  v.  Melhorn,  75  Va.  C39;  Han-  19  S.  W.  578. 

sucker  v.  Walker,  76  Va.  753.  ^^'^^  Branch   Bank   v.    Hunt,    8    Ala. 

-^''Goodell  v.  Harrington,  76  N.  Y.  876. 

547;   Hale  v.  Clauson,  60  N.  Y.  339;  =^*  Williamson    v.    Berry,    8    How. 

Crane  v.  Stiger,  58  N.  Y.  625;   State  495-546.  per  Wayne,  Justice. 

Bank  v.  Green,  8  Neb.  297,  2  N.  W.  "'''  Citizens'  Savings  Bank  v.  Bauer, 

'228;    Berkley  v.    Lamb,   8  Neb.   392,  1  N.  Y.  Supp.  450,  49  Hun,  238. 

-'"  Ex  parte  Minor,  11  Ves.  559. 


8    1639.]  UNDER   DECREE   OF    COURT.  590 

the  highest  made,  cannot  insist  upon  a  confirmation  to  himself  of  the 
sale.^^'^ 

One  who  was  a  party  to  the  deed,  and  was  duly  served  with  proc- 
ess but  failed  to  appear,  and  allowed  a  decree  of  foreclosure  to  be 
entered  and  a  sale  to  be  made,  will  not  be  allowed  to  object  to  the- 
confirmation,  and  to  set  up  his  lien,  unless  he  can  show  sufficient 
cause  for  his  delay  and  default.^^* 

The  order  of  confirmation  is  merely  interlocutory  and  subject  to  the 
court's  revision,  and  correction  until  the  final  judgment  or  decree  is 
rendered  in  the  case.^^® 

Thus  where  the  trustee  in  a  deed  of  trust  brings  suit  to  foreclose  the 
trust  deed  or  mortgage  and  a  receiver  is  appointed  to  take  charge  of  the 
mortgaged  property,  and  it  is  referred  to  a  special  master  to  ascertain 
what  property  is  covered  by  the  mortgage  and  what  property  so  covered 
is  in  the  hands  cf  the  receiver ;  and  the  master  reports  certain  property 
as  being  mentioned  in  the  mortgage,  but  omits  other  after-acquired 
property  covered  by  the  mortgage,  and  which  was  not  in  the  hands  of 
the  receiver,  and  the  report  is  confirmed  by  the  court,  the  order  of  con- 
firmation was  only  interlocutory  and  did  not  limit  the  power  of  the 
court  to  thereafter  by  final  decree  subject  to  the  after-acquired 
property  to  the  mortgage  debt.^®* 

^  1639.  A  resale  may  be  asked  for  by  any  one  whose  rights  are 
injuriously  affected  by  the  sale,  although  he  be  not  a  party  to  the 
suit,-"  and  though  he  have  no  specific  lien,  provided  his  rights  are 
affected.-"^  The  circumstances  of  each  particular  case  must  be  in- 
quired into  and  acted  upon.^^^  The  most  general  principle  on  which 
the  courts  act  in  setting  aside  the  sale  and  ordering  a  new  one  is 
that  equity  will  not  allow  any  unfairness  or  fraud,  either  on  the 
part  of  the  purchaser,^''*  or  of  any  other  person  connected  with  the 
sale.^"^  Thus  where  prior  to  a  foreclosure  sale  the  mortgagee's  agent 
•  agreed  to  bid  off  the  property  for  the  mortgagors  for  two  thousand 
and  fifty  dollars,  but  instead  of  doing  so  bid  it  oil;  for  himself  for 
fifteen  hundred  dollars,  an  order  refusing  to  confirm  the  sale,  and 

''"Blossom   V.    R.    R.    Co.    3   Wall.  21    N.    Y.    Supp.    795;    Adklsson    v. 

196.  Dent,  11  S.  W.  950. 

^^^  Graves    v.    Fritz,    24    Neb.    375,  -'^»  Rust    v.    Electric    Lighting    Co. 

38  N.   W.   819;    Albert  v.   Hamilton,  124  Ala.  202,  27  So.  263. 

76  Md.  304,  25  Atl.  341.  -''  Kellogg  v.  Howell,  62  Barb.  280. 

"^Rust    V.    Electric    Lighting    Co.  ="- Goodell  v.  Harrington,  76  N.  Y. 

124  Ala.  202,  207,  per  Tyson,  J.,  cit-  547. 

ing  Latta  v.  Kilbourn,  150  U.  S.  524,  ="'    Lefevre  v.   Laraway,   22   Barb. 

14  S.  Ct.  201;  Kimberly  v.  Arms,  129  167. 

U.   S.   523,   9   S.   Ct.   355;    Mosher   v.  ^■'•' Murdock  v.  Empie,  19  How.  Pr. 

Joyce,  51  Fed.  444;   Ward  v.  Ward,  79. 

-"■■•  Stahl  v.  Charles,  5  Abb.  Pr.  348. 


591  CONFIllMATION    OF    SALE.  [§    1G40. 

granting  of  a  resale  on  the  filing  of  a  bond  by  the  mortgagors  condi- 
tioned that  on  a  resale  the  property  should  bring  two  thousand  dol- 
lars, was  properly  granted. ^'^*' 

It  is  no  ground  for  refusing  to  order  a  resale  that  the  purchaser, 
before  confirmation,  has  conveyed  the  land,  or  that  there  is  a  sur- 
plus which  is  claimed  by  judgment  creditors.^"  Neither  the  pur- 
chaser nor  any  one  else  has  any  right  to  regard  the  sale  as  concluded 
until  it  is  coniirmed. 

The  application  may  be  made  by  motion  to  the  court,  at  any 
time  before  the  report  of  the  sale  has  been  confirmed,  notice  of 
which  should  be  given  to  every  person  who  has  appeared  in  the 
cause,  or  who  has  any  interest  in  the  sale,  as  well  as  to  the  pur- 
chaser."*'^ A  sale  may  be  set  aside,  under  an  order  upon  the  pur- 
chaser to  show  cause,  procured  by  the  mortgagor  or  other  defend- 
ant.-*^^ A-  sale  may,  however,  under  special  circumstances,  be  set 
aside  after  confirmation,  although  more  and  stronger  evidence  of 
fraud  or  misconduct,  or  other  grounds  for  invalidating  the  sale,  is 
then  required.'"** 

It  is  not  proper  for  the  master  or  other  officer  who  has  made  the 
sale  to  resell  tire  property  without  an  order  of  court,  on  the  failure 
of  the  purchaser  to  comply  with  the  terms  of  sale;  but  if  he  does 
resell  upon  his  own  responsibility,  there  is  not  necessarily  sufficient 
ground  for  holding  the  second  sale  void.^^^ 

The  court  will  generally  impose  terms  and  conditions  upon  the 
mortgagor  upon  directing  a  resale,  especially  if  the  occasion  for  it 
is  in  any  way  attributable  to  his  own  negligence.-''^ 

The  purchaser  may  object  to  the  confirmation  of  the  sale,  and 
it  will  not  be  confirmed  when  it  appears  that  the  title  is  bad,  or  of 
doubtful  validity.-''^ 

<^  1640.  Before  confirmation  of  the  sale  the  court  may  open  the 
biddings  at  the  instance  of  one  who  is  bound  to  make  good  any  defi- 
ciency, on  his  offering  a  large  advance  upon  the  bid  of  the  mort- 
gagee, who  was  the  purchaser,  and  paying  the  costs  of  the  former 
sale."*     It  has  been  the  practice  in  England  to  open  biddings  upon 

2M  New    York    Missionary    Soc.    v.        ^">  Lansing  v.  McPherson,  3  Johns. 

Bishop.  8  N.  Y.  Supp.  60.  Ch.  424. 

-"■  Wolcott    V.    Schenclv,    23    How.         -''  Augustine    v.    Doud,    1    Bradv/. 

Pr.  385.  588;  Dills  v.  Jasper,  33  111.  262. 

-"'Robinson  V.  Meigs,  10  Paige,  41;         -"=  Miller   v.    Kendrick    (N.    J.),    15 

St.   John   v.   Mayor   &   Aldermen   of  Atl.  259. 

N.  Y.  6  Duer,  315,  13  How.  Pr.  527;         ='^  Trapier  v.  Waldo,  16  S.  C.  276. 
Tyer  v.  Charleston  Rice  Milling  Co.        ='*  Lansing  v.  M'Pherson,  3  Johns. 

32  S.  C.  598,  10  S.  B.  1067.  Ch.  424.     In  this  case  the  offer  wis 

-•■■"  Hubbard  v.   Taylor,  49  Wis.  68,  an  advance   of  fifty   per  cent.     See, 

4  N.  W.  1066.  also,  Mott  v.  Walkley,  3  Edw.  590. 


§    IG-il.]  UNDER   DECREE   OF    COURT.  593 

the  offer  of  a  reasonable  advance  beyond  the  last  bid;^''^  but  this 
practice  has  not  prevailed  very  much  here/'^^  and  its  utility  has  been 
doubted  or  denied  quite  generally.^^^  The  opening  of  biddings,  in- 
stead of  being  a  practice  here,  is  rather  something  that  is  allowed  in 
special  cases;  and  generally  something  more  than  inadequacy  of 
price  must  be  shown,  unless  this  be  very  gross.  The  opening  of 
biddings  is  a  matter  of  discretion  for  the  court  in  which  the  action  is 
pending.  The  appellate  court  will  not  interfere  with  the  action 
of  that  court  in  refusing  to  open  a  mortgage  sal6,  except  for  an 
abuse  of  its  discretion,  which  cannot  be  presumed  because  the  appli- 
cant offers  a  substantial  advance  on  the  price  at  which  the  property 
was  sold.-^^ 

In  Alabama,  when  the  property  has  been  purchased  by  the  mort- 
gagee, a  resale  will  be  ordered  before  confirmation  if  an  advance  of 
not  less  than  ten  per  cent,  on  the  former  sale  is  offered  and  the 
money  deposited  in  court.^'^^ 

§  1641.  Great  inadequacy  of  price  may  be  urged  with  force 
against  a  confirmation  of  the  sale,  because  this  is  incomplete  and 
depends  upon  the  equitable  discretion  of  the  court  for  completion.-^" 
Until  the  sale  is  approved  by  court,  the  piirchaser  does  not  acquire 
any  independent  right  by  his  purchase;  he  may  be  regarded  merely 
as  an  accepted  or  preferred  bidder.  The  inadequacy  of  price  may 
be  such  as  to  be  of  itself  an  indication  of  fraud  or  unfairness;  and 
if  not  so  gross  as  to  indicate  fraud,  when  taken  in  connection  with 
other  circumstances,  it  is  ground  for  setting  the  sale  aside  and  order- 
ing a  resale;  as,  for  instance,  when  a  party  whose  interests  are  inju- 
riously affected  by  the  sale  has  been  prevented  from  attending  it 
through  mistake  or  misapprehension.-®^  But  generally  an  objection 
to  confirmation  on  account  of  the  price  obtained  will  be  overruled, 

="  Garstone  v.  Edwards,  1  S.  &  S.  to    confirmation    of    sales    in    New 

20.      Vice-Chancellor     Leach     said:  Jersey,  see  §  1350. 

"The   court   does   not   confine   itself  -""See    Chapter    xl.,    division    14; 

to   a  particular  per  cent,   although  Vanbussum  v.  Maloney,  2  Mete.  550; 

£10   per   cent,    is   a   sort   of   general  Busey  v.  Hardin,  2  B.  Mon.  407,  411; 

rule."     The  advance  must  be  at  least  Williams  v.  Woodruff,  1  Duval,  257; 

£40   to    cover   expenses.      Farlow   v.  Taylor  v.  Gilpin,  3  Mete.  544;   Hor- 

Weildon,  4  Madd.  460.  sey  v.  Hough,  38  Md.  130. 

=■'•  Williamson    v.    Dale,    3    Johns.  An  offer  to  bid  $2,400  at  a  resale, 

Ch.    290,    292;    Lefevre   v.    Laraway,  when    the    premises    brought    $2,000 

22  Barb.  167,  173.  at   the   original    sale,    is   no   ground 

="  Duncan  v.  Dodd,  2  Paige,  99;  for  refusing  to  confirm.  Allis  v. 
Collier  v.  Whipple,  13  Wend.  224;  Sabin,  17  Wis.  626.  See,  also,  Bui- 
Adams  V.  Haskell,  10  Wis.  123.  lard  v.  Green,  10  Mich.  268. 

-"  Germer   v.    Ensign,    155   Pa.    St.  '"'  Wetzler    v.    Schaumann,    24    N. 

464,  26  Atl.  657.  J.    Eq.    60.     In    this    case    property 

='»  Littell  V.  Zuntz,  2  Ala.  256.  worth  $4,500  was  sold  for  $2,000. 

For  statutory  provision  in  regard 


593  ENFORCEMENT  AGAINST  PURCHASER.        [§  1642. 

unless  it  be  shown  that  upon  a  resale  a  larger  price  would  be  ob- 
tained.^^^ 

In  general  a  resale  may  be  had  for  any  cause  which  would  be  a 
ground  for  setting  aside  the  sale  after  confirmation;  and  causes  of 
like  nature,  which  might  not  be  regarded  as  sufficient  for  setting 
aside  the  sale  after  it  has  been  completed,  will  be  sufficient  to  pre- 
vent confirmation  and  subject  the  property  to  a  resale. -^^ 

A  sale  was  confirmed  against  the  objection  of  the  mortgagee 
where  the  sale  was  regularly  and  fairly  conducted,  but  the  mortga- 
gee's agent  failed  to  attend  the  sale  and  bid  upon  the  property,  and 
it  sold  for  much  less  than  its  value.^^* 


VI.    Enforcement  of  Sale  against  Purchaser. 

§  1642.  One  who  bids  off  property  at  a  foreclosure  sale  becomes  a 
quasi  party  to  the  suit,  so  that  he  subjects  himself  to  the  juris- 
diction of  the  court,  and  may  be  compelled  to  pay  the  amount  bid,^"' 
by  its  process  for  contempt,  if  necessary.^*''  He  becomes  a  party 
by  signing  the  bid.-*''  Such  sale  is  not  within  the  statute  of  frauds.-*** 
The  fact  that  the  purchaser  acts  for  another  person  will  not  re- 
lieve him  if  he  makes  the  bid  in  his  own  name.^*''  Neither  lapse  of 
time,  nor  the  death  of  the  original  parties  to  the  suit,  will  bar  the 
right  of  the  court  to  compel  his  compliance  with  the  conditions  of 
sale.^^''  If  however,  the  delay  be  unreasonable,  and  in  the  mean 
time  there  has  been  a  material  change  detrimental  to  his  interests, 
the  purchase  will  not  be  enforced.  On  the  failure  of  the  purchaser 
without  good  cause  to  comply  with  the  terms  of  sale,  if  it  appears 
that  he  is  unable  to  perform  his  contract,  the  parties  interested 
in  the  sale  may,  upon  motion,  obtain  an  order  discharging  the  sale 
and  directing  a  resale;  but  if  he  is  responsible  the  court  may  order 

=*=  Farmers'     Bank    v.     Quick,     71  Simonson,  74  N.  Y.  133;    Coulter  v. 

Mich.  534,  39  N.  W.  752:   Pliillips  v.  Herrod,     27    Miss.     685;     Moody    v. 

Love,    57    Kans.    828,    48    Pac.    142;  Northwestern     &     Pac.     Hypotheek 

Capital  Bank  v.  Huntoon,  35  Kans.  Bank,  20  M'ash.  413,  55  Pac.  568. 

577,  11  Pac.  369;    Cross  v.  Knox,  32  -'*"  Andrews  v.    O'Mahoney,   112   N. 

Kans.  725,  5  Pac.  32.  Y.  567,  20  N.  E.  374. 

-"'See  §  1640.  =5' Goorum  v.  Tucker  (N.  J.  Eq.), 

='*  Babcock    v.    Canfield,    36   Kans.  26  Atl.  456. 

437,  13  Pac.  787.  ^'^  Andrews  v.   O'Mahoney,  112  N,. 

='=Kneeland  v.   American  L.  &  T.  Y.  567,  20  N.  E.  ?74. 

Co.    136   U.    S.    89,    10   Sup.    Ct.    950;  =«»  Atkinson  v.  Richardson,  14  Wis. 

Blossom  V.  Railroad  Co.  1  Wall.  655;  157.     And  see  Lyon  v.  Elliott,  3  Ala. 

Wood   V.    Mann,    3    Suran.    318;    Re-  654. 

qua  V.  Rea,  2  Paige,  339,  341;   Cazet  -'"  Cazet  v.  Hubbell,  36  N.  Y.  667; 

V.    Hubbell.  36  N.  Y.  677;    Miller  v.  Merchants'  Bank  v.  Thomson,  55  N. 

Collyer,    36    Barb.    250;    Goodwin   v.  Y.  7. 


§    1642.]  UNDER   DECREE   OF    COURT.  594 

him  to  pay  tl\e  money  into  court,  and  may  enforce  his  submission 
by  attachment,  or  order  to  stand  committed ;  or  may  order  a  resale  of 
the  estate,  and  that  the  defaulting  purchaser  pay  the  expenses  of  it, 
jud  any  deficiency  in  price  arising  from  it.-°^ 

When  the  purchaser  of  property  at  a  mortgage  sale  makes  default  in 
payment  and  the  property  is  resold,  imder  an  order  of  court,  at  his 
risk,  he  is  entitled  to  any  excess  in  the  proceeds  at  the  resale  just  as  he 
is  responsible  for  any  deficiency,  and  being  therefore  a  person  inter- 
ested in  the  property  is  entitled  to  file  exceptions  to  the  resale  as  re- 
ported.^®- 

If  after  a  purchaser  has  made  default  in  making  payment,  the 
court  without  notice  to  him  orders  a  resale,  he  is  discharged  from 
any  liability  to  make  good  the  deficiency  arising  from  the  last  sale.^^^ 
The  holder  of  the  mortgage  by  obtaining  such  resale  is  deemed  to  have 
elected  to  waive  the  first  sale,  and  to  have  taken  the  risk  of  obtaining 
a  better  price.^^* 

A  mortgagor  cannot  defend  against  a  claim  for  a  deficiency  on 
the  ground  that  the  premises  were  at  first  sold  for  a  sum  sufficient 
to  pay  the  mortgage  debt;  but  the  purchaser  failing  to  complete 
the  purchase,  an  order  was  granted  directing  a  resale,  whereupon 
there  was  a  deficiency,  unless  it  appear  that  payment  could  have 
been  enforced  against  the  first  purchaser,  that  the  mortgagor  re- 
quested the  mortgagee  to  enforce  such  pa}anent,  or  that  the  mort- 
gagee acted  fraudulently  in  the  matter.  Moreover,  the  mortgagor 
cannot  defend  in  such  case,  because  the  mortgagee  has  the  right 
to  elect  either  to  proceed  against  the  purchaser  to  enforce  his  lia- 
bility upon  his  bid,  or  to  apply  for  a  resale;  and  having  chosen 
the  latter  remedy,  and  the  court  having  ordered  a  resale,  the  order 
is  conclusive,  and  releases  the  mortgagee  from  any  obligation  to 
institute  proceedings  to  recover  the  deficiency  of  the  purchaser.-'^^  If, 
upon  the  first  sale  only  one  of  two  lots  embrax^ed  in  the  mortgage  is 
sold,  and  the  bidder  makes  default,  the  court  may  order  a  sale  of 
the  second  lot  without  confirming  the  sale  to  the  first  bidder,  or 
ordering  a  resale  of  the  first  lot  at  his  risk.^^^ 

"'2    Daniell's     Ch.     Pr.  1460-1462;  ^^^  Anthon    v.    Batchelor,    22    Abb. 

Harding  v.    Harding,   4   Myl.    &   Cr.  N.  C.  423,  16  Civ.  Proc.  304,  5  N.  Y. 

514;   Lansdown  v.  Elderton,  14  Ves.  Supp.  798. 

512;    Camden  v.   Mavhew,   129  U.  S.  -■"  Riggs  v.  Pursell,  74  N.  Y.  370; 

73,  9  Slip.  Ct.  Rep.  246;   Goodwin  v.  Miller     v.     Collyer,    36    Barb.     2'o0; 

Simonson,  74  N.  Y.  133.  Home    Ins.    Co.    v.    Jones,    45    How. 

It  was  formerly   the   rule   that  a  Pr.  498. 

forfeiture    of    the    deposit    Vv^as    the  ="'■  Goodwin  v.  Simonson.  74  N.  Y. 

only  redress  against  the  purchaser.  133. 

Savile  v.  Savile,  1  P.  Wms.  745.  =»"  Kershaw  v.   Dyer,   6   Utah,   239, 

"'  Aukam    v.    Zantzinger,    94    Md.  24  Pac.  621. 
421,  51  Atl.  93. 


595  ENFORCEMEKT    AGAINST    PUUCIIASER.  [§    164-3. 

Subsequent  mortgagees,  and  others  interested  in  property  aljout 
to  be  sold  under  a  first  mortgage,  may  agree  that,  instead  of  selling 
sufficient  of  the  property  only  to  satisfy  the  first  mortgage,  the  en- 
tire premises  shall  be  sold  in  different  parcels,  so  as  to  raise  a  suffi- 
cient sum  to  pay  the  second  mortgage,  and  any  otlier  liens  that 
might  exist.  If  in  such  case,  owing  to  the  refusal  of  some  of  the 
bidders  to  complete  their  purchase,  the  amount  received  by  the  sale 
is  insufficient  to  pay  the  whole  amount  due  on  the  second  morto-ao-e, 
the  holder  of  such  second  mortgage  is  not  estopped  by  reason  of 
such  stipulation  from  bringing  an  action  to  foreclose  his  mortgage 
for  the  balance  due  thereon,  and  he  is  not  bound  to  proceed  in  the 
former  suit  in  which  he  was  a  defendant  to  compel  the  bidders  to 
complete  their  purchase;  that  duty  devolves  either  upon  the  first 
mortgagee  or  the  owner  of  the  equity  of  redemption.  While  the  second 
mortgagee  might  have  taken  upon  himself  that  labor,  he  was  not  so 
compelled,  either  by  force  of  the  judgment  itself  or  the  stipulation 
for  the  sale  of  the  entire  property.-"^ 

A  mortgagee  who  has  bid  a  much  larger  sum  than  the  amount  of 
the  decree  of  sale  cannot  be  relieved  from  his  bid  on  the  ground 
that  he  had  been  advised  that  he  would  not  be  required  to  pay  over 
the  surplus  to  the  mortgagor;  the  mistake  alleged  being  one  of  law 
and  not  one  of  fact."^* 

§  1643.  Performance  is  enforced  by  attachment.^"^  The  proper 
tribunal  to  enforce  the  purchaser's  undertaking  is  that  in  which 
the  decree  of  sale  was  made,  and  the  application  may  be  by  motion.^"" 
The  mode  of  enforcing  compliance  Avith  the  order  of  court  is  bv 
attachment  against  the  person. ^°^  The  fact  that  upon  the  pur- 
chaser's default  remedy  may  be  had  by  a  resale  of  the  lands,  or  by 
suit  against  him  for  damages,  does  not  deprive  the  court  of  the 
right  to  enforce  performance  in  this  summary  way;  the  option  as 
to  remedy  lies  with  the  court  or  the  party  selling,  and  not  with  the 
purchaser. ^<*2  Even  after  the  purchaser  has  complied  with  the  terms 
of  sale,  by  paying  part  cash  and  giving  a  bond  and  security  for 
the  balance,  and  the  sale  has  been  confirmed  by  court,  he  may  upon 
his  failure  to  pay  the  bond  be  proceeded  against  by  a  rule  made 

="  Jarvis  v.  Chapin,  13  N.  Y.  Supp.  Ch.    151;    Brasher    v.    Cortlandt,    2 

693.  Johns.   (N.  Y.)   Ch.  505. 

-"■'"§§   1650,   1929;    Shear  v.   Robin-  '"'"Wood    v.    Mann,    3    Sumn.    318, 

son,  18  Fla.  379.  326. 

-'■' Clarkson  v.  Read,  15  Gratt.  288;  '"Graham  v.  Bleakie,  2  Daly,  55; 

Anderson  v.   Foulke.  2  Har.   &  Gill  Miller  v.  Collyer,  36  Barb.  250. 

(Md.),  346;    Richardson  v.   Jones.   3  '"=  Wood    v.    Mann,    3    Sumn.    318; 

Gill  &  Johns.  (Md.)  163,  22  Am.  Dec.  Cazet  v.  Hubbell,  36  N.  Y.  677. 
293;    Gordon  v.   Saunders,       McCord 


§    1G44,]  UNDER   DECREE   OF    COURT,  59() 

upon  him  to  show  cause  why  the  land  should  not  be  sold  for  the 
payment  of  the  purchase-money;  and  upon  that  proceeding  a  decree 
may  be  made  for  the  sale  of  the  land.^"^ 

In  a  case  where  the  purchaser  refused  to  complete  the  purchase 
after  having  made  a  small  deposit,  he  was  ordered  to  show  cause 
why  an  attachment  should  not  issue  against  him.  The  Chancellor 
said  that  he  had  no  doubt  of  the  power  of  the  court  to  coerce  a 
purchaser  where  the  conditions  of  sale  had  not  given  an  alterna- 
tive; and  that  in  this  case  the  forfeiture  of  the  deposit  would  not 
be  sufficient,  either  as  punishment  to  the  one  party  or  a  satisfaction 
to  the  other.  He  was  ordered  to  pay  the  money  in  six  days,  or 
that  an  attachment  issue.^°* 

The  fact  that  the  purchaser  has  been  ordered  to  complete  the 
purchase,  after  a  specific  objection  to  the  title  or  to  the  parties, 
does  not  decide  a  question  of  title  not  brought  to  the  consideration 
of  the  court  by  objection,  and  is  no  protection  to  the  purchaser 
against  persons  having  vested  interests  in  the  equity  of  redemption, 
who  ought  to  have  been,  but  were  not,  made  parties  to  the  suit.^°^ 

In  order  to  hold  a  purchaser  for  a  deficiency  upon  a  resale,  the 
terms  of  the  resale  should  be  substantially  the  same  as  the  terms 
upon  which  the  first  sale  was  made.  A  resale  under  different  terms 
would  not  afford  a  just  measure  of  the  liability  of  a  defaulting  pur- 
chaser. If  the  terms  of  the  resale  differ  materially  from  those  of 
the  original  sale,  the  mortgagee  cannot  collect  from  the  former  pur- 
chaser a  deficiency  arising  under  the  second  sale;  and  the  court  may 
order  that  the  purchaser  be  relieved  from  his  purchase  and  from 
paying  any  defieiency.^°^ 

§  1644.  Forfeiture  of  deposit. — If  the  purchaser  without  good 
cause  does  not  complete  the  purchase,  he  forfeits  the  deposit  made 
at  the  time  of  sale,  so  far  as  it  may  be  needed  to  make  up  a  de- 
ficiency in  price  of  a  resale.^°^  He  is  also  chargeable  with  the  ex- 
penses of  the  resale.^"*    A  resale  is  ordered ;  and  if  there  is  a  loss  in 

^"^  Clarkson  v.  Read,  15  Gratt.  288.  '"^  Williamson   v.    Field,    2    Sandf. 

In    Richardson    v.    Jones,    3    Gill    &  Ch.  533. 

Johns.  163,  22  Am.  Dec.  293,  it  was  ='""'  Riggs  v.  Pursell,  74  N.  Y.  370. 

held,  contrary  to  the  decision  above,  ""  Willets    v.    Van    Alst,    26    How. 

that   the    power    of    the    court    does  Pr.  325. 

not    extend    to    enforcing    sales    on  ™  Knight  v.   Moloney,   4  Hun,  33. 

credit,  after  the  purchaser  has  once  But  he  is  not  chargeable  with   the 

complied  with  the  terms  of  sale  by  expense  of  curing  a  formal  irregu- 

giving  security  that  the  remedy  is  larity   in   the   foreclosure.     2   N.    Y. 

at  law  on  the  security.  Weekly  Dig.  40. 

""'*  Brasher  v.   Cortlandt,   2   Johns. 
Ch.  505. 


597  ENFORCEMENT  AGAINST  PURCHASER.        [§  1G45. 

price  from  the  former  sale,  judgment  may  be  had  against  the  pur- 
chaser for  the  difference,  towards  which  the  deposit  will  be  ap- 
plied.-'"'' When  it  is  desired  to  hold  a  third  person  responsible  for  the 
loss  as  the  real  purchaser,  instead  of  the  person  who  bid  at  the  sale, 
the  order  for  resale  should  require  the  payment  to  be  made  by  him, 
and  the  suit  cannot  be  maintained  against  him  when  the  order  re- 
quires the  payment  to  be  made  by  the  bidder.^^"  If  on  the  pur- 
chaser's default  a  resale  be  made,  without  any  application  to  the  court, 
to  the  same  purchaser,  he  is  liable  only  on  his  bid  at  the  second 
sale.^^^ 

§  1645.  If  there  be  a  defect  in  the  title,  unknown  to  the  pur- 
chaser at  the  time  of  sale,  and  of  which  he  had  neither  actual  nor 
constructive  notice,  the  court  will  not  ordinarily  compel  him  to  take 
a  deed  and  complete  the  purchase.^^-  The  decisions  upon  this  point 
are  not,  however,  in  harmony,  and  the  rule  more  generally  adopted 
is  stated  in  the  following  section. 

Where  the  purchaser  at  a  foreclosure  sale  made  his  bid  and  signed 
the  terms  of  sale  with  full  knowledge  of  the  visible  situation  of  the 
property  and  of  the  contents  of  an  instrument  referred  to  in  the 
notice  of  the  foreclosure  sale  imposing  a  restriction,  he  cannot  refuse 
to  complete  his  contract  by  reason  of  such  restriction.^^^ 

If  there  be  a  defect  in  the  title  to  a  part  of  the  land,  the  court 
will  not  allow  the  purchaser  to  reject  that  part  alone  and  have  a 
deduction  from  the  purchase-price  and  take  title  to  the  remainder; 
though  he  may  refuse  to  complete  the  purchase,  and  move  for  re- 
turn of  the  deposit  made.^^* 

The  innocent  bidder  is  entitled  to  be  repaid  his  proper  expenses. 
These  include  the  deposit  paid  by  him  on  the  sale,  the  expenses 
of  the  examination  of  the  title,  and  the  costs  of  the  motion  for 
repayment.^^^  The  repayment  is  made  out  of  the  funds  in  the 
case,  if  there  are  any ;  and  if  not,  the  plaintiff  must  pay  the  expenses 
in  the  first  instance,  but  may  recover  them  over  in  a  suit  or  upon  a 
resale.     If,  however,  the  defect  in  the  proceedings  results  from  the 

'""Graham  v.  Bleakie,  2  Daly,  55.  Hun,  9,  48  How.  Pr.  243;  Veeder  v. 

=1"  Paine  v.  Smith,  2  Duer,  298.  Fonda,  3  Paige,  94;  Seaman  v.  Hiclvs, 

^"  Home  Ins.  Co.  V.  Jones,  45  How.  8   Paige,    655;    Shiveley   v.   Jones,    6 

Pr.  498.  B.  Mon.  274. 

='^  People  V.  Knickerbocker  L.  Ins.  ^"  Kingsland   v.   Fuller,   157  N.   Y. 

Co.  66  How.  Pr.  115;  Fryer  v.  Rock-  507,  52  N.  E.  562. 

efeller,    63    N.    Y.    268;     Merchants'  ^"Thompson     v.      Schmieder,      38 

Bank  v.  Thomson,  55  N.  Y.  7;  Simar  Hun,  504. 

v.    Canaday,    53    N.    Y.    298,    13    Am.  '' ■  Morris  v.  Mowatt,  2  Paige,  586, 

Rep.  523;   Mills  v.  Van  Voorhies,  20  22  Am.  Dec.  661. 
N.   Y.   412;    Hirsch  v.   Livingston,  3 


§    1646.]  UNDER   DECREE   OF    COURT.  598 

plaintifE's  negligence  in  omitting  to  mal-ce  some  one  interested  under 
the  mortgage  a  party  to  the  suit,  as,  for  instance,  the  owner  of  the 
equity  of  redemption,  such  expenses  cannot  be  deducted  from  the 
surplus  moneys  arising  from  the  second  sale,  as  these  belong  to  the 
owner  of  the  equity,  and  he  is  not  responsible  for  the  irregularity 
in  the  sale.^^*' 

§  1646.  Defects  in  the  title  prior  to  the  mortgage  do  not  excuse 
the  purchaser  from  carrying  out  his  purchase.  He  is  bound  to  take 
such  title  as  an  examination  of  the  foreclosure  proceedings  will  show 
that  he  will  get.^"  He  buys  the  title  of  the  mortgagor  as  it  existed 
at  the  time  of  the  making  of  the  mortgage,  and  nothing  more.  The 
foreclosure  cuts  off  the  equity  of  redemption,  and  by  the  sale  he  gets 
the  mortgage  title  divested  of  all  rights  of  the  mortgagor,  and  those 
claiming  under  him  subsequent  to  the  mortgage.  He  takes  the  risk 
of  the  mortgagor's  having  any  title  that  passed  by  the  mortgage.^*'* 
It  is  the  duty  of  the  purchaser  to  ascertain  for  himself  by  an  ex- 
amination of  the  records  what  title  he  is  about  to  acquire.^^^  If 
the  title  by  the  mortgage  purports  to  be  an  estate  in  fee,  when  it  is 
in  fact  only  a  leasehold  interest,  although  the  judgment,  following 
the  terms  of  the  mortgage,  erroneously  directs  a  sale  of  the  premises 
as  in  fee,  the  purchaser  is  bound  by  the  sale,  if  he  has  notice  at  the 
time  of  the  facts,  and  of  the  leasehold  title  of  the  mortgagor.  The 
sale  under  the  judgment  transfers  whatever  title  the  mortgagor 
had.^^'*  The  purchaser  cannot  be  relieved  on  account  of  defects  in 
the  property,  or  in  the  title  to  it,of  which  he  had  notice,  and  in  ref- 
erence to  which  he  may  be  supposed  to  have  bid.^^^  He  is  not  en- 
titled to  get  what  is  called  a  merchantable  title.^-^ 

""Raynor  v.  Selmes,  52  N.  Y.  579,  Pa.  St.  199,  57  Am.  Dec.  599;  Lynch 

reversing  7  Lans.  440.  v.    Baxter,    4    Tex.    431;    Watson   v. 

"'Boorum   v.    Tucker    (N.    J.),   26  Jones,  41  Fla.  241,  25  So.  678. 

Atl     456;    Campbell    v.    Gardner,    11  ^'"Norton  v.  Taylor   (Neb.),  53  N. 

N.  J.   Eq.   423;    Cool  v.   Higgins,  23  W.   481;    Roberts  v.   Hughes,  81   111. 

N.  J.  Eq.  308,  25  N.  J.  Eq.  117.  130;    Vanscoyoc    v.    Kimler,    77    111. 

318  Fryer  v.  Rockefeller,  4  Hun,  800,  151;   Riggs  v.  Pursell,  66  N    Y.  193; 

63   N    Y    268;    Riggs  v.   Pursell,   66  Preston  v.  Breckinridge,  86  Ky.  619, 

N.  Y.  193;  Holden  .  Sackett,  12  Abb.  6    S.    W.    641;    White   v.    Seaver,   25 

Pr    473;    Boggs   v.    Fowler,    16    Cal.  Barb.    235;    Eccles    v.    Timmons,    95 

559,  76  Am.  Dec.  561;  Strong  v.  Wad-  N.  C.  540;   Weber  v.   Herrick   (111.), 

deli    56  Ala.  471;  Osterberg  v.  Union  26  N.  E.  360;  Dennerlein  v.  Denner- 

Tru'st   Co.   93   U.    S.   424;    Norton   v.  lein,  111  N.  Y.  518,  19  N.  E.  85,  46 

Taylor  (Neb.),  53  N.  W.  481;  Miller  Hun,  561. 

V    Finn    1  Neb.  254;   Smith  v.  Pain-  ^™  Graham  v.  Bleakie,  2  Daly,  55. 

tf"-    5  Serg.  &  R.  223;  Vattier  v.  Ly-  =>=' Riggs  v.   Pursell,  66  N.   Y.   193, 

tie'  6  Ohio,  477;    Lewark  v.   Carter,  74  N.  Y.  371;  Van  Rensselaer  v.  Bull, 

117  Ind.   206,  20  N.   E.  119;    Corwin  17  N.  Y.  Supp.  117. 

V.  Benham,  2  Ohio  St.  36;  Mason  v.  =- Boorum   v.    Tucker    (N.    J.),   26 

Wait   5  111.  127;  Bishop  v.  O'Conner,  Atl.  456. 
69   111.   431;    Gackett  v.   Twining,   18 


599  ENFORCEMENT    AGAINST    PURCHASER.  [§    1646a. 

A  purchaser  at  a  foreclosure  sale  is  presumed  to  know  tl)e  con- 
dition of  the  title  which  he  purchases.  If  the  mortgage  contains  no 
covenant  of  warranty,  and  the  title  proves  defective,  the  purciiaser 
has  no  claim  upon  tlie  mortgagor  to  make  it  good;  nor  will  any 
outstanding  and  paramount  title  subsequently  acquired  by  the  mort- 
gagor inure  to  the  benefit  of  the  purchaser;  although,  while  the 
relation  of  mortgagor  and  mortgagee  existed,  a  title  acquired  sub- 
sequent to  the  mortgage  would  go  to  strengthen  the  mortgage  security. 
When  that  relation  is  extinguished  by  foreclosure,  the  mortgagor  is 
under  no  obligation  to  protect  the  purchaser's  title.^^^  So  also  the 
purchaser  is  affected  with  notice  of  all  the  defects  and  irregularities 
of  the  foreclosure  and  sale  that  appear  of  record,  and  is  bound  to 
take  notice  that  a  junior  mortgagee,  or  other  incumbrancer  of  record, 
was  not  made  a  party  to  the  suit,  and  therefore  may  redeem.^^* 

§  1646a.  A  purchaser  will  not  be  relieved  by  reason  of  his  own 
mistake,  though  he  will  be  when  mislead  by  false  representations. 
The  application  of  a  purchaser  at  a  foreclosure  sale  to  be  relieved 
from  his  bid,  on  the  ground  that  the  wife  of  the  mortgagee  and 
owner  of  the  equity  of  redemption  had  not  been  cut  off  by  the  fore- 
closure proceedings,  was  denied,  although  it  was  admitted  that  the 
latter  would  be  burdened  with  the  wife's  inchoate  right  of  dower.^^^ 
The  court  said  "that,  although  the  purchaser  acted  under  a  mis- 
take, he  alone  was  responsible  for  it.  He  neither  sought  informa- 
tion nor  examination  by  inquiry.  His  misapprehension  was  entirely 
the  result  of  his  own  carelessness  and  inattention  to  his  interests." 

But  where  a  bill  to  foreclose  was  based  upon  a  mortgage  which 
was  alleged  in  the  bill  to  be  signed  and  acknowledged  by  the  wife, 
and  was  in  fact  signed  by  her,  but  not  effectually  acknowledged, 
though  the  decree  recited  that  the  mortgage  was  not  acknowledged 
by  her,  but  nevertheless  contained  the  usual  clause  of  foreclosure 
against  her,  it  was  held  that  such  a  decree  did  not  bar  her  dower; 
but  as  it  was  calculated  to  mislead  the  purchaser,  the  sale  would  not 
be  specifically  enforced.^^*' 

The  purchaser  is  not,  however,  bound  by  his  bid  if  he  was  in- 
duced to  make  it  through  the  false  representations  of  persons  having 
an  interest  in  the  property;  as  where  at  a  sale  under  a  junior  mort- 

==' Jackson  v.  Littell,  56  N.  Y.  108.  ed  in  Twining  v.  Neil,  38  N.  J.  Eq. 

•••-^  McKeruan  v.  Neff,  43  Ind.  503;  470,  and  in  Sullivan  v.  Jennings  44 
Piel  V.  Brayer,  30  Ind.  332,  95  Am.  N.  J.  Eq.  11,  14  Atl.  104,  and  Boor- 
Dec.  699;  Alexander  v.  Greenwood,  um  v.  Tucker  (N.  J.),  26  Atl.  456, 
24  Cal.  505.  which  is  the  latest  judicial  expres- 

'^=  Hayes    v.    Stiger.    29    N.    J.    Eq.  sion  on  this  topic. 

196.     The  same  principle  was  adopt-  ==»  Ely  v.  Perrine,  2  N.  J.  Eq.  396. 


§    1647.]  UNDER   DECREE   OF    COURT.  600 

gage  the  purchaser  was  induced  to  buy  the  property  through  the 
false  representations  of  the  attorneys  of  both  the  plaintiff  and  the 
senior  mortgagee  that  the  prior  mortgage  would  be  paid  off  out  of 
the  proceeds  of  the  sale,  and  that  he  would  take  the  property  dis- 
charged of  such  lien.  It  was 'held  that  said  false  representations  of 
the  parties  were  sufficient  grounds  for  vacating  the  sale.^'^ 

The  purchaser,  after  having  completed  the  sale  and  paid  over  the 
money,  cannot  call  upon  the  mortgagee  to  make  restitution  of  any 
part  of  it  on  the  ground  that  the  title  has  proved  defective,  and  the 
purchaser  has  been  forced  to  pay  a  further  sum  to  perfect  it.  His 
only  remedy  is  to  avail  himself  of  the  covenants  of  the  several  con- 
veyances preceding  the  conveyance  to  the  mortgagee.^^^ 

§  1647.  Errors  in  the  decree  or  in  the  proceedings  under  it  af- 
ford no  ground  for  relieving  the  purchaser  from  the  sale  after  its 
confirmation.^-"  Of  course  the  purchaser  may  take  objection,  even 
after  confirmation,  to  a  defect  arising  from  a  want  of  jurisdiction 
in  the  court  ;^^*'  but  he  need  not  look  further  than  to  the  judgment, 
and  the  deed  given  in  execution  of  it,  so  long  as  they  stand  unim- 
peached.  Erroneous  rulings  in  the  case  upon  questions  of  law  do 
not  concern  him.^^^  Even  if  the  decree  be  erroneous,  it  cannot  be 
attacked  collaterally.^^^  After  a  decree,  and  sale  under  it,  the  valid- 
ity of  the  mortgage  cannot  again  be  called  in  question. ^^^  I£  the 
decree  was  valid,  and  the  execution  and  deed  are  regular,  a  pur- 

^"Paulett  V.  Peabody,  3  Neb.  196;  198,  44  Am.  Dec.  384;  Daniel  v. 
Frasher  v.  Ingham,  4  Neb.  531;  Nor-  Leitch,  13  Gratt.  195;  Splahn  v.  Gil- 
ton  V.  Taylor  (Neb.),  53  N.  W.  481.  lespie,  48  Ind.  397;  Sowles  v.  Harvey, 
Maxwell,  C.  J.,  delivering  a  dis-  20  Ind.  217;  Hutchinson  v.  Wall,  24 
senting  opinion  on  other  pointsi,  J.  &  S.  104,  4  N.  Y.  Supp.  717.  One 
upon  this  point  says:  "Misrepre-  of  the  defendants  in  a  foreclosure 
sentations  which,  if  made  by  the  suit,  after  default  had  been  entered 
land-owner  himself  to  a  purchaser,  and  a  sale  advertised,  moved  to  open 
would  be  good  ground  to  set  a  sale  the  default;  but  it  was  subsequently 
aside,  are  equally  so  when  made  by  agreed  that  the  sale  should  pro- 
the  person  appointed  by  the  court  ceed,  and  that  this  defendant  might 
to  conduct  a  sale  under  a  decree;  make  claim  against  the  proceeds, 
and  experience  has  shown  that  the  The  sale  was  accordingly  made,  and 
establishment  of  this  rule  has  in-  the  default  was  afterwards  opened 
duced  competition  in  bidding  at  such  to  allow  the  defendant  to  set  up 
sales "  Citing  McGown  v.  Wit-  his  claim  to  the  proceeds.  It  was 
kins  1  Paige  120;  Morris  v.  Mowatt,  held  that  this  order  ^id  not  affect 
2  Paige  586;  Veeder  v.  Fonda,  3  the  sale  or  relieve  the  purchaser 
Pa.ige  94;  Seaman  v.  Hicks,  8  Paige,  therefrom.  Waugh  v.  Bailey,  4  N. 
655;  Kauffman  v.  Walker,  9  Md.  229;  Y.  Supp.  817.  ..  ^  ,  rm 
Toolev  V.  Kane,  Smede  &  M.  (Miss.)  ''"  Boggs  v.  Fowler,  16  Cal.  559, 
Ch   518  76  Am.  Dec.  561. 

'-'  McMurray  v.  Brasfield,  10  Heisk.        =>"  Mills  v.  Ralston,  10  Kans.  206 
529  33=  Ogden  v.  Walters,  12  Kans.  282. 

"^^'oworsham  v.  Hardaway,  5  Gratt.        ^^a  ^est  v.  Flock,  2  N.  J.  Eq.  108. 
60;  Threlkelds  v.  Campbell,  2  Gratt. 


601  ENFORCEMENT   AGAINST    PURCHASER.  [§    1648. 

chaser  in  good  faith  acquires  a  good  title  to  tlie  property,  although, 
as  against  the  mortgagor,  the  decree  was  erroneous. •'^* 

A  purchaser,  however,  under  the  foreclosure  of  an  unregistered 
mortgage,  is  not  such  a  bona  fide  purchaser  as  to  acquire  any  rights 
against  one  who  had  taken  a  conveyance  from  the  mortgagor  after  the 
mortgage  and  before  foreclosure,  and  who  was  in  possession  at  the 
time  of  the  foreclosure  sale.^^^  Although  the  mortgage  has  been 
paid  but  left  undischarged  of  record,  one  purchasing  in  good  faith 
at  a  foreclosure  sale  under  the  mortgage  acquires  a  good  title  as 
against  the  mortgagor  and  those  claiming  under  him.^^® 

§  1648.  Reference  as  to  title. — While  the  purchaser  under  a 
judicial  sale  submits  himself  to  the  jurisdiction  of  the  court,  and 
may  be  compelled  to  carry  out  his  contract,  he  is  also  entitled  to 
the  protection  of  the  court  in  respect  to  the  avoidance  of  the  pur- 
chase, if  by  reason  of  imperfections  in  the  title  or  otherwise  he 
is  freed  from  his  agreement. ^^'^  He  may  apply  for  a  reference  to 
inquire  into  the  title.  The  abstract  of  title  and  deeds  and  the 
statement  of  facts  being  laid  before  the  referee,  the  purchaser  may 
examine  them  and  file  objections.  If  the  report  be  against  the 
title,  the  purchaser  may  move  to  be  discharged,  and  for  a  return  of 
his  deposit  and  for  costs.^^^  It  is  well  settled  that,  if  there  be  a  rea- 
sonable doubt  as  to  the  soundness  of  the  title,  the  court  will  not 
compel  the  purchaser  to  complete  the  purchase,  even  if  the  better 
opinion  be  that  the  title  is  good.^^'' 

If  the  master,  upon  examination  of  the  abstract  of  title,  and 
the  facts  bearing  upon  it,  reports  that  the  title  is  defective  or  doubt- 
ful, the  purchaser  may  upon  motion  be  discharged,  and  have  an 
order  for  the  repayment  of  his  deposit  and  for  the  costs  of  the  ref- 
erence.^*" He  will  not,  of  course,  be  compelled  to  complete  the  pur- 
chase if  the  proceedings  for  any  reason  were  void,  as  for  want  of 
jurisdiction  in  the  court  to  entertain  the  case;  or  if  a  party  in  in- 
terest, as,  for  instance,  one  tenant  in  common  of  the  premises,  has 
not  been  served  with  process  ;^*^  or  if  an  incumbrancer  is  not  made 
a  party  to  the  suit.^'*-  A  bidder's  liability  is  terminated  if  the  sale 
is  not  reported  to  the  court,  or  approved  when  reported;  or  if  the 

''*  Splahn  V.  Gillespie,  48  Ind.  397.  ^^  Graham  v.  Bleakie,  2  Daly,  55. 

^^'^  Hawley  v.  Bennett,  5  Paige,  104.  And   see  Ormsby  v.   Terry,   6  Bush, 

=="=  Atwater  v.  Seymour,  Brayt.  209.  55.'^. 

'"  Hoffman's  Referees,  240.  *"  Cook  v.  Farnham,  21  How.  Pr. 

3^*  Hoffman's  Referees,  241,  242.  286,  34  Barb.  95.  12  Abb.  Pr.  359. 

="">  Abel    V.    Heathco-te,    2    Ves.    98,  ^"  Verdiu  v.  Slocum,  71  N.  Y.  345. 
100;  Stapylton  v.  Scott,  16  Ves.  272; 
Plser  V.  Lockwood,  313  Hun,  6. 


§§    1649,    1650.]  UNDER    DECREE   OF    COURT.  602 

master  sells  the  property  again  on  his  own  responsibility,  and  this 
sale  is  approved  by  the  court. ^*^ 

If  the  defect  in  the  title  be  such  that  it  may  be  cured,  and 
within  a  reasonable  time  releases  are  obtained  or  other  acts  done 
to  remedy  the  defect,  the  purchaser  cannot  refuse  to  complete  the 
purchase.^'**  On  the  other  hand,  delay  in  taking  the  deed  on  ac- 
count of  defects  in  the  title,  all  the  parties  apparently  acquiescing 
and  the  purchaser  holding  possession,  is  no  ground  for  the  mort- 
gagor's claiming  a  right  to  redeem,  and  to  have  an  accounting  by 
the  purchaser  for  the  rents  received  by  him.^*^ 

If,  however,  a  party  in  interest  has  not  been  made  a  party  to  the 
suit,  though  this  is  a  ground  upon  which  the  purchaser  may  be 
relieved  from  his  purchase,  he  cannot  hold  on  to  it,  and  insist  upon 
having  his  title  perfected  by  the  application  of  the  proceeds  of  the 
sale  to  the  payment  of  the  outstanding  claim.^*^ 

§  1649.  Taxes. — Neither  will  a  purchaser  be  required  to  com- 
plete the  purchase  when  he  will  not  obtain  such  an  interest  in 
the  property  as  he  had  a  right  to  suppose  from  the  terms  of  sale 
he  was  buying.^*''  Where,  by  the  terms  of  sale  the  premises  are 
sold  free  from  incumbrances,  the  taxes  and  assessments  to  be  paid 
out  of  the  purchase-money,  and  there  is  a  large  assessment  still 
unconfirmed  by  the  municipal  authorities,  and  which  cannot  be 
paid,  the  purchaser  is  not  bound  to  complete  the  purchase  and 
take  the  property  subject  to  the  assessment.^*^  If,  however,  the 
property  can  be  relieved  of  incumbrance  by  payment  of  the  tax, 
the  court  may  direct  the  master  to  satisfy  the  claim  out  of  the 
proceeds  of  sale,  and  thus  relieve  the  title  from  the  objection.^*^ 

The  purchaser  himself  cannot  retain  from  his  bid  a  sum  sufficient 
to  pay  the  taxes.^'*" 

§  1650.  A  purchaser  may  by  his  conduct  preclude  the  opening  of 
ing  of  the  sale.  If,  during  the  progress  of  a  foreclosure  sale,  he 
has  announced  to  the  other  bidders  that  he  had  prior  incumbrances 
on  the  property,  and  that  the  sale  would  be  made  subject  to  these, 

"'  Dills  V.  Jasper,  33  111.  262.  '"  Duvall  v.  Speed,  1  Md.  Ch.  Dec. 

'"  Graham  v.  Bleakie,  2  Daly,  55.  229,  235. 

In  Coffin  v.   Cooper,   14   Vesey,  205,  =''  Seaman  v.   Kicks,  8  Paige,  655. 

Lord       Chancellor       Eldon       said:  =*«  Post  v.  Leet,  8  Paige,  337.     See, 

"Vv^here  the  master's  report  is  that  also,  Easton  v.  Pickersgill,  55  N.  Y. 

the   vendor,    getting   in    a   term,    or  310. 

getting  administration,  will  have  a  •'"  Lawrence   v.    Cornell,    4    Johns, 

title,  the  court  will  put  him  under  Ch.  542. 

terms  to  procure  that  speedily."  ™  Osterberg  v.  Union  Trust  Co.  93 

^«  Belter  v.  Lyon,  13  Daly,  422.  U.  S.  424. 


603  ENFORCEMENT    xVGAIXST    PURCHASER,  [§    1651. 

he  cannot  consistently  ask  to  be  relieved  from  his  own  bid,  on  the 
ground  that  he  supposed  he  would  be  entitled  to  have  the  surplus 
money  applied  to  the  payment  of  his  prior  incumbrances.  He 
must  be  presumed  to  understand  that  if  others  on  his  own  an- 
nouncement were  bidding  for  the  property,  subject  to  the  incum- 
brances, he  was  competing  with  them  on  equal  terms. ^^^ 

A  purchaser  may  also  by  his  own  conduct  with  reference  to  the 
property  practically  confirm  a  sale,  so  as  to  preclude  himself  from 
having  the  sale  opened;  as  where  he  has  taken  possession  of  the 
premises  under  a  claim  of  title  derived  from  the  sale,  paid  laborers 
for  work  upon  them,  and  made  arrangements  for  planting  crops  for 
the  following  year.^^- 

§  1651.  An  irregularity  in  the  foreclosure  proceedings  which  is 
merely  formal,  and  cannot  result  in  injury  to  the  purchaser,  is  no 
ground  for  his  refusing  to  complete  the  purchase;  and  if  on  his  re- 
fusal to  complete  the  purchase  a  resale  is  ordered,  he  is  chargeable 
with  the  expenses  of  it.^^^  The  purchaser  has  a  right  to  insist  upon 
the  terms  of  his  purchase  being  complied  with.  Where  by  agree- 
ment of  the  parties  the  referee  sold  the  premises  on  time,  the  pur- 
chaser cannot  be  compelled  to  pay  cash.^^* 

Judicial  sales  must  be  conducted  with  the  utmost  fairness  and 
good  faith;  and  if  a  purchaser  at  a  sale  under  a  decree  of  fore- 
closure of  a  jimior  mortgage  is  by  false  representations  induced  to 
believe  that  the  proceeds  of  the  sale  will  be  applied  to  payment  of 
the  prior  mortgage,  and  that  he  would  take  a  clear  title,  the  sale 
will  be  set  aside  ;^^^  and  so  also  it  will  be  set  aside  where  the  pur- 
chaser thought  he  was  buying  an  absolute  title  to  the  land,  and  not 
one  subject  to  the  first  mortgage.^^*' 

But  where  the  agent  of  a  first  mortgagee  just  before  the  sale 
inquired  of  the  sheriff  the  amount  of  the  first  lien  and  the  sheriff 
gave  him  the  amount  of  both  the  first  and  second  liens,  and  the 
agent  bid  this  amount,  which  was  accepted,  and  the  sale  was  con- 
firmed, it  was  held  that  the  purchaser  was  bound  by  the  sale  and 
could  not  recover  the  excess  of  his  bid  over  the  correct  amount  of 
tlie  first  mortgage  lien,  for  it  was  no  part  of  the  sheriff's  duty  to 

^"§§   1642,   1929;   Ledyard  v.  Phil-        '"Rhodes  v.  Butcher,  6  Hun,  453. 
lips,  32  Mich.  13.  ^'^  Paulett  v.  Peabody,  3  Neb.  196. 

''-  liedyard  v.  Phillips,  32  Mich.  13.        ''"  Shiveley    v.    Jones,    6    B.    Men. 

='^  Knight  v.  Moloney,  4  Hun,  33;  274.     See    Vanderkemp    v.    Shelton, 

Farmers'  Loan  &  Trust  Co.  v.  Bank-  11  Paige,  28. 
ers'  &  Merchants'  Tel.  Co.  119  N.  Y. 
15,  23  N.  E.  173. 


§§    1653,    1653.]  UNDER    DECREE   OP    COURT,  604 

inform  the  creditor  of  the  amount  of  his  lien,  as  the  latter  had  the 
same  means  of  ascertaining  the  facts  as  the  sheriff  had.^" 


VII.     The  Deed,  and  'passing  of  Title. 

§  1652.  It  is  a  recognized  practice  to  allow  another  person  to  be 
substituted  for  the  purchaser,  and  to  take  the  deed  directly  to  him- 
self.^^^  Any  equitable  rights  or  liens  acquired  by  third  persons 
against  the  original  purchaser  before  the  assignment  are  protected. 
Where  the  original  purchaser  had  entered  into  a  contract  of  sale  of 
the  premises  with  another,  and  had  died,  in  the  absence  of  his  heir 
the  court  ordered  a  conveyance  to  the  substituted  purchaser,  and 
the  paj^ment  of  the  money  into  court.^^® 

If  the  purchase  be  made  by  a  third  person  for  the  mortgagor, 
who  pays  the  price,  the  mortgagor  is  entitled  to  a  release  of  the 
mortgage  upon  tendering  the  deed  to  be  signed. ^"^^ 

§  1653.  Delivery  of  deed. — The  master's  deed  passes  the  title 
to  the  purchaser  at  the  moment  of  delivery,  though  the  sale  has 
not  been  confirmed. ^^^  From  that  time  the  property  is  at  his  risk, 
and  having  accepted  the  deed  he  cannot  repudiate  the  contract.^®^ 
From  that  time,  and  from  that  time  only,  the  co-tenancy  of  a  pur- 
chaser of  the  interest  of  a  tenant  in  common  sold  on  foreclosure 
commences,  with  the  liability  of  accounting  for  rents  and  profits, 
repairs  and  improvements.^''^  The  holder  of  the  deed  has  prima 
facie  a  valid  title  to  the  land  described  in  it.^''*  In  England  the 
practice  is  to  withhold  the  deed  until  the  final  order  confirming 
the  sale  is  made  absolute,  but  the  confirmation  relates  back  to 
the  delivering  of  the  deed,  and  gives  it  effect  from  that  time.^f^ 
The  practice  in  this  country  in  this  regard  is  not  uniform.  The 
better  practice  is  to  report  the  sale  and  obtain  a  confirmation  of  it 

="  Farm  Land  Mortg.  &  D.  Co.  v.        ^"  Fuller   v.    Von    Geesen,    4    Hill, 

Hopkins,  63  Kans.  678,  66  Pac.  1015.  171,  4  How.  Pr.  182;   Fort  v.  Burch, 

=''*  Proctor  v.  Farnam,  5  Paige,  619;  6  Barb.  60;    Mitchell  v.  Bartlett,  51 

Rorer  on  Jud.  Sales,  145;  Ehleringer  N.  Y.  447,  52  Barb.  319.     For  form  of 

V.   Moriarity,   10   Iowa,  78;    McClure  sheriff's    or    referee's    deed    used    in 

V.  Englehardt,  17  111.  47;   Splahn  v.  New   York,  see  5  "Wait's  Prac.  225, 

Gillespie,  48  Ind.  397;  Culver  v.  Mc-  226. 

Keown,  43  Mich.  322,  5  N.  W.  422;         ^"  Jones  v.  Burden,  20  Ala.  382. 
Bensieck   v.    Cook,   110   Mo.    173,   19        "''''  Davis  v.  Chapman,  36  Fed.  42. 
S.  W.  642;  Massey  v.  Young,  73  Mo.        ^""'^  Jackson  v.  Warren,  32  111.  331; 

260.  Simerson   v.   Branch   Bank,   12    Ala. 

"'  Pearce  v.  Pearce,  7  Sim.  138.  205. 

'«''  Bush    v.    Macklin,    87    Ky.    482,        ^"  Ex  parte  Minor,  11  Ves.  559. 
9  S.  W.  420. 


605  THE  DEED  AXD  PASSING  OF  TITLE.         [§  1G53. 

before  the  delivery  of  the  deed;  but  in  some  States,  and  especially 
in  those  in  which  a  time  for  redemption  is  allowed  after  the  sale, 
it  is  the  practice  to  delay  the  report  until  the  deed  is  executed  and 
delivered/'*"'  If  in  such  case  the  mortgagor  delays  to  move  for  the 
filing  of  the  report  and  the  setting  aside  of  the  sale  until  the  deed 
is  delivered,  he  is  regarded  as  waiving  all  objections  to  the  sale 
which  are  merely  formal. ^"'^ 

When  a  judgment  in  foreclosure  provides  that  the  purchaser 
shall  be  let  into  possession  upon  production  of  the  referee's  deed, 
the  purchaser  acquires  no  title  or  right  of  possession  until  the  de- 
livery of  the  deed  to  him,  and  therefore  he  is  not  entitled  to  the 
rents  from  the  time  of  sale  by  relation  back,  although  he  is  charged 
with  interest  on  the  purchase-money  from  that  time;  until  the  deed 
is  given,  the  owner  of  the  equity  is  entitled  to  the  possession  of  the 
land  and  to  the  rents.^**  Upon  the  delivery  of  the  deed  the  pur- 
chaser is  entitled  to  the  proper  process  of  court  for  the  delivery  of 
possession  to  him  as  against  all  the  defendants  who  were  before  the 
court.^"*^  When  consummated  by  the  deed,  the  sale  passes  as  against 
them  the  entire  estate  hold  by  the  mortgagor,  whatever  it  may  have 
been  at  the  date  of  the  mortgage;  and  the  purchaser  is  entitled  upon 
the  receipt  of  his  deed  to  the  possession  of  the  premises,  even  though 
the  plaintiff  pending  the  action  has  conveyed  the  property  to  one 
of  the  defendants.^^*'  If  the  mortgagee  be  the  purchaser,  and  before 
a  deed  is  made  receives  from  the  mortgagor  the  amount  of  the  de- 
cree, the  sale  and  confirmation  under  it  are  rendered  void.^'^^ 

The  sale  under  the  decree  of  foreclosure  conveys  a  clear  and  ab- 
solute title  as  against  all  parties  to  the  suit  and  their  privies.^^^ 
When  a  junior  mortgagee  is  a  party  defendant  to  a  foreclosure  bill 
in  which  there  is  a  prayer  that  he  be  decreed  to  redeem,  and  when 
the  priority  of  the  plaintiff's  mortgage  is  found  or  conceded,  and 
a  sale  is  ordered  in  default  of  payment,  declaring  the  right  of  the 
debtor  to  redeem  to  be  forever  barred,  a  similar  order  as  to  right 
of  redemption  by  the  junior  mortgagee  is  not  substantially,  or  even 

^"^  Walker    v.    Schum,    42    111.    462.  447.     See,  to  the  contrary,  however, 

In  Illinois  this  was  the  practice  be-  Lathrop  v.  Nelson,  4  Dill.  194. 

fore     the     enactment    allowing    re-  ^''■'''  Frisbie  v.  Fogarty,  34  Cal.  11. 

demption  after  the  sale.     But  since  •■""  Montgomery    v.    Middlemiss,    21 

this  statute  the  report  is  not  gener-  Cal.  103;  Belloc  v.  Rogers,  9  Cal.  123, 

ally  made  until  after  the  deed  is  ex-  125. 

ecuted     and     delivered,     and    some-  ^"'•^  Applegate  v.  Kingman,  17  Neb. 

times  it  is  never  reported  and  con-  338.,  22  N.  W.  765. 

firmed  at  all.  ^'^  Chicago,  D.  &  Vincennes  R.  Co. 

^"■Walker   v.    Schum,    42    111.    462;  v.  Fosdick,  106  U.  S.  47,  68,  1  S.  Ct. 

Fergus  v.  Woodworth,  44  111.  ^74,  379.  10;     Lansing  v.  Goelet,  9  Cow.  346, 

^"^  Mitchell    v.    Bartlett,    51    N.    Y.  391. 


§    1654.]  UNDER    DKCREE   OF    COURT.  60G 

formally  necessary.  In  such  case  a  junior  mortgagee,  who  stands 
by  while  the  sale  is  made  and  confirmed,  must  be  deemed,  in  equity, 
to  have  waived  his  right  to  redeem.'*'^  A  decree  in  such  a  suit  that 
the  sale  is  to  be  made  subject  to  the  rights  of  tlie  junior  mortgagee 
and  of  intervening  creditors,  and  reserving  to  the  court  the  right 
to  make  further  orders  and  directions,  and  providing  that  no  sale 
shall  be  binding  until  reported  to  the  court  for  its  approval,  and  a 
subsequent  order  that  the  property  shall  be  sold  subject  to  the  future 
adjudication  as  to  such  rights,  and  the  property  conveyed  subject 
thereto,  while  it  warrants  a  contention  that  the  court  intended  to 
make  a  future  disposition  of  the  claims  of  such  parties,  does  not 
authorize  the  junior  mortgagee  to  wait  for  a  period  of  seven  years 
before  attempting  to  enforce  his  alleged  rights;  and  such  delay  de- 
prives him  of  the  right  to  ask  the  aid  of  a  court  of  equity  in  enforc- 
ing them.^'* 

Whether  the  death  of  the  mortgagor,  a  party  to  the  foreclosure 
suit,  after  the  decree  and  sale  under  it,  but  before  the  officer  charged 
with  the  execution  of  the  decree  has  executed  and  delivered  the 
deed,  affects  the  title  under  the  sale,  is  a  question  upon  which  the 
Supreme  Court  of  Michigan  was  equally  divided.  It  would  seem, 
however,  that  the  death  of  the  mortgagor  at  that  stage  of  the  pro- 
ceedings would  not  affect  the  subsequent  confirmation  of  the  offi- 
cer's report  and  his  delivery  of  the  deed.^^^ 

§  1654.  As  the  title  of  the  purchaser  relates  back  to  the  time 
of  the  execution  of  the  mortgage,  it  does  not  matter  to  him  what 
disposition  the  mortgagor  may  afterwards  have  made  of  the  prop- 
erty if  the  foreclosure  is  perfect.  All  conditions  and  reservations 
and  easements,  as  well  as  all  incumbrances  or  liens,  he  may  have 
afterwards  imposed  upon  the  property,  art  extinguished. ^'^^  A  pur- 
chaser at  a  foreclosure  sale  takes  title  free  of  an  easement  upon  a 
part  of  the  mortgaged  land  used  by  the  mortgagor  at  the  time  the 
mortgage  was  executed,  but  not  reserved  in  the  mortgage.  It  may  be 
presumed  that  the  easement  was  abandoned  by  the  mortgagor  when 
he  omitted  to  mention  or  reserve  it  from  the  operation  of  the  mort- 

'•^  Simmons    v.    Burlington,    Cedar  84  111.508;    Shaw  v.  Heisey,  84  Iowa, 

Rapids  &  N.   R.   Co.   159  U.    S.   278,  468;    Rnggles    v.    First    Nat.    Bank, 

16  S.  Ct.  1.  43    Mich.    192;    Gamble    v.    Horr,    40 

^'*  Simmons    v.    Burlington,    Cedar  Mich.   561;    Bull's   petition,   15  R.    I. 

Rapids  &  N.  R.  Co.  159  U.  S.  278,  16  534,  10  Atl.  484;   Briggs  v.  Chicago, 

S.  Ct.  1.  Kans.    &   W.    Co.    56    Kans.    526,    43 

^"  Hochgraef  v.  Hendrie,  66  Mich.  Pac.    1131;     Leavenworth    Lodge    v. 

556   34  N.  W.  15.  Byers,    54    Kans.    323,    38    Pac.    261; 

"'King  V.  McCully,  38  Pa.  St.  76;  Logan  v.   Stieff,  36  Fla,   473,   18  So. 

Davis   V.   Conn.   Mut.   Life   Ins.   Co.  762. 


GOT  THE  DEED  AND  PASSING  OF  TITLE.         [§  1G54. 

gage.^^''  In  this  respect  the  purchaser's  rights  are  the  same  whether 
the  sale  be  under  a  decree  of  a  court  of  equity,  under  a  judgment 
in  scire  facias,  or  under  a  power  in  the  mortgage  or  trust  deed. 
The  title  takes  effect  by  virtue  of  the  original  deed;  the  sale  car- 
ries that  title,  and  cuts  off  all  liens  and  interests  created  subsequent 
to  the  mortgage.''"  Tlie  mortgagee  is  not  bound  by  judgments  or 
decrees  affecting  the  mortgaged  property  rendered  in  suits  begun  by 
third  persons  after  the  execution  of  the  mortgage,  unless  the  mort- 
gagee is  made  a  party  to  it,  and  the  rights  of  a  purchaser  at  a  fore- 
closure sale  are  the  same  as  those  of  the  mortgagee,  and  relate  back 
to  the  mortgage.^"  The  purchaser  becomes  privy  in  estate  with  the 
mortgagee  and  not  with  the  mortgagor,  except  in  respect  to  the 
estate  as  it  existed  when  the  mortgage  was  executed.^^° 

Title  acquired  by  foreclosure  relates  back  to  the  date  of  the  mort- 
gage, so  as  to  cut  off  intervening  equities  and  rights. '^^^  If  all  sub- 
sequent purchasers  and  incumbrancers  are  made  parties  to  the  bill, 
the  title  under  the  mortgage  foreclosed  is  perfected  to  an  absolute 
one.  In  such  case  the  purchaser  acquires  the  title  of  the  mortga- 
gee, and  also  the  title  of  the  mortgagor  as  it  stood  at  the  time  of 
the  making  of  the  mortgage.^^-  If  the  mortgage  was  of  an  undivided 
interest  in  common  with  others,  the  purchaser  acquires  the  same 
interest.^^^  He  obtains  the  title  of  all  the  parties  to  the  suit,  whether 
their  title  be  that  which  is  set  forth  in  the  bill  or  not.  Whatever 
the  title  of  the  parties  to  the  suit  may  be,  that  is  what  the  court 

"■Wells  V.  Garbutt,  132  N.  Y.  430,  ton,    45    Me.    412;    Haynes    v.    Wel- 

30  N.  E.  978.  lington,  25  Me.  458;  Taylor  v.  Kearn, 

^"Champion    v.    Hinkle,    45    N.    J.  68    111.    339;     Vroom    v.    Ditmas,    4 

Eq.  162,  16  Atl.  701;  Rector  v.  Mack,  Paige,    526,    531:    Christ    Church    v. 

93  N.  Y.  488;   Pardee  v.  Steward,  37  Mack,    93    N.     Y.    488;     Slattery    v. 

Hun,  259.  Schwannecke.  44  Hun,  75;    Wells  v. 

-"Mathes  v.  Cover,  43   Iowa,  512;  Garbutt,  132  N.  Y.  430,  30  N.  E.  978; 

Logan  v.   Stieff,  36  Fla.   473,  18  So.  McMillan  v.  Richards,  9  Cal.  365,  70 

762;     Coles    v.     Allen,    64    Ala.    98;  Am.    Dec.    655;     Poweshiek    Co.    v. 

Boutwell   v.    Steiner,   84   Ala.   307,   4  Dennison,  36  Iowa,  244,  14  Am.  Rep. 

So.   Rep.    184,   5   Am.    St.    Rep.    375;  521;    Carter   v.    Walker,    2    Ohio    St. 

Looney  v.  Simpson,  87  Tex.  109,  26  339;  Frische  v.  Kramer,  16  Ohio,  125, 

S.   W.   Rep.    1065;    Cromwell  v.   Mc-  47  Am.   Dec.   368;    Hodson  v.   Treat, 

Lean,  123  N.  Y.  474,  25  N.  E.  Rep.  7  Wis.  263;  De  Haven  v.  Landell.  31 

932;   Shattuck  v.  Bascom,  105  N.  Y.  Pa.   St.   120;    West  Branch   Bank  v. 

39,    12    N.    E.    Rep.    283;    Pierce    v.  Chester,  11  Pa.  St.  282,  51  Am.  Dec. 

Faunce,     47     Me.     507;     Powers     v.  547;    Hamilton  v.  State,  1  Ind.  128; 

Heath,  20  Mo.  319.  Sellwood    v.    Gray,    11    Oreg^    534; 

='''«  Secor  V.  Singleton,  41  Fed.  725;  Watson   v.    Dundee   M.   &   T.    I.    Co. 

Mathes  v.  Cover,  43  Iowa,  512.  12    Oreg.    474;    Baldwin    v.    Howell, 

='1  Logan  V.  Stieff,  36  Fla.  473,  18  45  N.  J.  Eq.  519,  15  Atl.  236;   Tant 

So.  764.  V.  Gess,  37  S.  C.  489,  16  S.  E.  472. 

'*=  Ritger  v.  Parker,  8  Cush.  Mass.         •*"  Mahoney   v.   Middleton,   41   Cal. 

145;    Brown    v.    Tyler,    8    Gray,   135,  41. 
69  Am.  Dec.  239;   Marston  v.  Mars- 


§    1C55,]  UNDER   DECREE   OF    COURT.  608 

undertakes  to  sell,  and  what  the  purchaser  is  entitled  to  have  con- 
veyed to  him.^^*  The  fact  that  the  purchaser  at  a  foreclosure  sale 
under  a  first  mortgage  had  previously  bought  the  equity  subject  to 
a  second  mortgage,  which  he  did  not  expressly  stipulate  to  pay,  does 
not  prevent  his  acquiring  a  perfect  title  against  that  mortgage  by 
the  purchase.^^^  The  mortgagor  is  estopped  from  denying  the  title 
he  has  set  forth  in  his  mortgage,^^*'  and  all  the  parties  to  the  foreclo- 
sure suit  are  estopped  from  disputing  the  title  acquired  by  the  pur- 
chaser under  the  sale.^^^  The  purchaser  occupies  the  same  position, 
as  to  the  priority  of  claims  or  liens  on  the  property,  that  the  mort- 
gagee did.^*^ 

If  the  mortgage  was  a  forgery,  and  the  persons  purporting  to 
have  executed  the  same  were  not  served  by  process  in  the  foreclosure 
suit,  the  purchaser  at  the  foreclosure  sale  acquired  no  title,  and 
the  land  may  be  recovered  from  him  in  an  action  of  ejectment  by 
the  rightful  owners.^^^ 

After  a  foreclosure  sale  a  mortgagee  has  no  such  ownership  of 
the  property  as  will  enable  him  to  charge  the  premises  with  a  lien 
for  labor  done  and  materials  furnished.^''" 

The  purchaser  acquires  the  benefit  of  a  covenant  of  warranty 
contained  in  the  deed  conveying  the  property  to  the  mortgagor, 
and  may  recover  for  a  breach  of  it.^®^ 

§  1655.  Errors  in  deed. — If  the  master's  deed  by  inadvertence 
embraces  the  whole  mortgaged  premises,  of  which  a  portion  had 
been  released  from  the  operation  of  the  mortgage  and  was  excepted 
from  the  operation  of  the  decree,  no  title  to  the  released  portion 
passes  to  the  purchaser.^^-  Even  if  this  portion  of  the  premises  had 
been  embraced  in  the  decree,  but  were  not  offered  at  the  sale,  the 
title  would  not  pass  by  the  conveyance. ^^^ 

Where  a  mortgage,  by  reason  of  an  error  in  the  description, 
did  not  cover  the  entire  tract  intended  to  be  mortgaged,  and  the 
error  was  first  discovered  after  a  foreclosure  sale  and  conveyance 
to   a  purchaser  who   supposed   he  was   buying  the  whole   tract,   he 

='^*Zollman    v.     Moore,     21     Gratt.  462;   White  v.  Evans,  47  Barb.  179; 

(Va.)    313;    Gillett  v.   Eaton,  6  Wis.  Holden  v.  Sackett,  12  Abb.  Pr.  473. 
30;     Tallman    v.    Ely,    6    Wis.    244;         ^"^  Davis    v.    Conn.    Mut.    Life    Ins. 

Dutro  V.   Kennedy,   9  Mont.   101,  22  Co.  84  111.  508. 

Pac.    763;    Mount  v.   Manhattan   Co.        ''"Pray  v.   Jenkins,   47  Kans.   599, 

43  N.  J.  Eq.   25,  9  Atl.  114;    Young  28  Pac.  716. 
v.  Brand,  15  Neb.  601,  quoting  text.  ='■"'  Davis   v.    Conn.    Mut.    Life    Ins. 

='^^  Brown  v.  Winter,  14  Cal.  31.  Co.  84  111.  508. 

='»  Vallejo  Land  Asso.  v.  Viera,  48        '■">'  Mygatt  v.  Coe,  44  Hun,  31. 
Cal.  572.  =°=  Lavertv  v.  Moore,  32  Barb.  347. 

'*'  McGee   v.    Smith,   16   N.    J.    Eq.        ''''  Laverty  v.  Moore,  33  N.  Y.  658, 

affirming  the  above. 


609  THE    DEED   AND   PASSING   OF    TITLE.  [§    1656. 

was  protected  in  the  possession  of  the  whole. ^"^  Usually,  however, 
the  property  to  which  the  purchaser  acquires  title  is  coextensive 
with  the  descri])tion  contained  in  the  mortgage,  the  bill  to  fore- 
close, and  the  order  or  writ  under  which  the  sale  is  made.^"^ 

After  the  sale  is  completed  and  the  money  paid  over  by  the 
purchaser,  he  cannot  have  the  sale  set  aside  and  the  money  re- 
paid by  reason  of  a  mistake  in  the  mortgage  deed,  whereby  land 
not  belonging  to  the  mortgagor  was  described  instead  of  his  own 
land.^'^*' 

§1656.  After-acquired  title. — Ordinarily  the  title  ordered  to  be 
sold  is  only  the  title  which  was  held  by  the  mortgagor  at  the  date 
of  the  mortgage.'"'''^  But  a  title  subsequently  acquired  by  the  mort- 
gagor will  generally  be  subjected  to  the  lien  of  the  mortgage  when 
that  contains  full  covenants  of  warranty,^''^  even  if  it  was  given  to 
secure  the  purchase-money  of  land,  the  title  of  which  proves  defec- 
tive and  the  mortgagor  makes  it  good  from  another  source,  the 
mortgagee  having  conveyed  to  him  without  covenants  and  without 
fraud  ;^°^  arid  even  a  title  acquired  by  a  purchaser  from  the  mortga- 
gor after  his  purchase  may,  under  equitable  circumstances,  be  sub- 
jected to  the  Lien  in  the  same  manner.  But  in  order  to  subject 
such  after-acquired  title  to  sale,  the  facts  should  be  set  forth  in 
the  complaint,  and  the  decree  should  expressly  cover  the  after- 
acquired  title.*"" 

A  title  acquired  by  the  owner  under  a  tax  sale  before  the  sale 
under  the  mortgage  passes  to  the  purchaser.  This  rule  holds  good 
even  in  case  the  assessment  on  which  the  taxes  were  levied  was 
made  after  the  decree  of  foreclosure,  where  the  foreclosure  sale  was 
made  after  the  tax  sale;  for  it  is  the  duty  of  the  person  who  was 
the  owner  at  the  time  the  taxes  were  levied,  and  became  pa3^able,  to 
pay  them.*°^ 

The  deed  also  passes  the  title  or  interest  of  the  mortgagor,  in- 
cluding that  arising  under  any  tax  certificate  or  deed  held  by  him  at 
the  time  of  the  sale.**^ 

^"*Waldron  v.  Letson,  15  N.  J.  Eq.  115,  7  N.  W.  3,  10  N.  W.  335;  Land 

126.                                                            "  Asso.  V.  Viera,  48  Cal.  572 

'^^McGeie   v.    Smith,   16   N.    J.   Eq.  ■■"'•' Hitchcock     v.     Fortier,     65     111. 

462.  239.     Otherwise  where  the  mortgage 

^'■"^  Neal  V.  Gillaspy,  56  Ind.  451,  26  contained  no  covenants  of  warranty. 

Am.  Rep.  37.  Smith  v.  De  Russy,  29  N.  J.  Eq.  407. 

'•"  San    Francisco    v.    Lawton,    18  ^'"'  Kreichbaum   v.   Melton,   49   Cal. 

Cal.  465,  79  Am.  Dec.  187.  50. 

^'''^Bybee  v.  Hageman,  66  111.  519;  ^'"Barnard  v.  Wilson,  74  Cal.  512. 

Haggerty    v.    Byrne,    75    Ind.    499;  16  Pac.  307. 

Brayton  v.   Merithew,  56  Mich.   166,  "=  Ames  v.  Storer,  98  Wis.  372.  74 

22  N.  W.  259;  Rice  v.  Kelso,  57  Iowa,  N.  W.  101;   Tallman  v.  Ely,  6  Wis. 

244. 


1657,    1658.]  UNDER    DECREE    OF    COURT. 


610 


^  1657.  Fixtures. — The  purchaser's  deed  taking  effect  by  rela- 
tion at  the  date  of  the  mortgage  passes  the  property  as  it  then 
was,  with  all  fixtures  subsequently  annexed  by  the  mortgagor,  such 
as  an  engine  and  boilers  used  in  a  flour-mill  and  permanently  at- 
tached to  the  premises."^  The  rule,  that  whatever  is  fixed  to  the 
freehold  becomes  a  part  of  it,  applies  as  strictly  between  the  mort- 
gagor and  mortgagee  as  between  vendor  an,d  vendee.*"*  The  court 
may  in  the  foreclosure  suit,  before  entering  a  decree  of  sale,  deter- 
mine whether  a  building,  removed  from  the  mortgaged  land  and 
sold,  is  still  subject  to  the  lien.*''^  The  purchaser  acquires  title  to 
the  fixtures  as  a  part  of  the  realty.  If  they  are  wrongfully  severed 
by  any  one  after  the  sale,  though  before  the  execution  of  a  deed  to 
the  purchaser,  he  may  sue  for  them  in  trover,  take  them  by  replevin,*"" 
may  recover  damages  in  an  action  of  waste,*"'  or  may  enjoin  their 
removal.*"-^  A  mortgagee  who  comes  into  possession  of  the  premises, 
by  virtue  of  a  decree  of  strict  foreclosure,  acquires  title  to  a  bam 
erected  on  the  premises  during  the  pendency  of  the  foreclosure  suit 
by  a  stranger  with  permission  of  the  mortgagor.*"" 

§  1658.  The  purchaser  is  entitled  to  the  crops  gro^nng  at  the 
time  of  the  sale  to  him,  in  preference  to  the  mortgagor  or  any  one 
claiming  under  him  whose  claim  originated  subsequently  to  the 
mortgage;*^"  and  he  is  entitled  in  preference  to  one  who  bids  off 

^"'See  §§  428-452;    Sands  v.  Pfeif-'  Land   Co.   v.   Barwick,  50  Kans.   57, 
fer   10  Cai.  258.  31    Pac.    68-5;     Smith    v.    Hague,    25 
«^  Gardner  v    Finley,  19  Barb.  317;  Kans.    246;    Chapman    v.    Veach,    32 
Dutro  V    Kennedy,   9  Mont.   101,   22  Kans,    167,   4   Pac.    100;    Garanflo  v. 
Pac.  763!  Cooley,    33    Kans.    137,    5    Pac.    766; 
405  g     1446-     Partridge    v.    Hemen-  Goodwin  v.  Smith,  49  Kans.  351,  31 
way    89  Mich    454,  50  N.  W.  1084.  Pac.  153;  Heavilon  v.  Farmers' Bank, 
406 '§§  453-455  81    Ind.    249;    Skilton    v.    Harrel,    5 
'"'  Lackas  v.  Bahl,  43  Wis.  53.  Kans.  App.  753,  47  Pac.  177;  Shockey 
*«' Dutro  V    Kennedy,  9  Mont.  101,  v.  Johntz,  2  Kans.  App.  483,  43  Pac. 
22  Pac   763  993;     Rardin    v.    Baldwin,    9    Kans. 
«'» Preston  v   Briggs,  16  Vt.  124.  App.  516,  60  Pac.  1097;  Reily  v.  Car- 
d's  697-    Shepard   v.    Philbrick,   2  ter.  75  Miss.  798,  23  So.  435;   Allen  v. 
Den   174;  Jones  v.  Thomas,  8  Blackf.  Elderkin,  62  Wis.  627,  22  N.  W.  842; 
428;    Lane  v.  King,  8  Wend.  584,  24  Gregory  v.  Rosenkrans,  72  Wis.  220 
Am    Dec    105"    Jones  v.    Adams,   37  39  N.  W.   378.;    Perley  v.   Chase,  79 
Ores    473    59   Pac.   811.   62   Pac.    16,  Me.  519,  11  Atl.  418;  Montgomery  v. 
50  L    R    A.   388;    Batterman  v.    Al-  Merrill,  65  Cal.  432,  4  Pac.  414;  Kerr 
bright,  122  N.  Y.  484,  25  N.  E.  856;  v.   Hill,  27  W^  Va^   ^^^AYTw 
Crews  V.   Pendleton,  1  Leigh   (Va.),  Burkemper,    101   ^o.    644    14   S.   W 
297,    19    Am.    Dec.    750;     Parker    v.  767;  Downard  v.  Groff   40  Iowa   597 
Storts.  15  Ohio  St.  351;    Anderson  v.  Richards  v-  Knight.  78  Iowa    69    71 
Strauss.  98  111.  4?5;   Rankm  v.  Kin-  42  N  Y;  "584;  Sherman  v^Willett   42 
sey    7  Bradw.  215;   Siigden  v.  Beas-  N.  Y.  146;  Wooton  v.  White    90  Md. 
lev   7  Bradw.  71,  quoting  text;  Scri-  64.  44  Atl.  1026.  quoting  te^xt. 
ven  v.  Moote,  36  Mich.  64:  Calvin  v.        In  Batterman  J-  A"^"-^*-  ^2^,  j!- 
Shimer  (N.  J.\  15  Atl.  255:  Beokman  Y.  484.  25  N.  E.  856.  Judge  Bradley 
v.  Sikes,  35  Kans.  120;  Missouri  Val.  delivering  the  judgment,  said.       ine 


611  THE    DEED   AND   PASSING   OF   TITLE.  [§    1658. 

the  property  at  a  sale  subsequently  made  by  the  assignee  in  bank- 
ruptcy of  the  mortgagor.-'ii  After  the  sale,  while  awaiting  confirma- 
tion thereof,  and  a  delivery  of  the  deed  and  possession,  the  purchaser 
may,  it  seems,  upon  application  to  tlie  court,  have  an  injunction 
restraining  the  mortgagor  and  others  claiming  under  him  from  med- 
ling  with  the  crops.^^^  Before  confirmation  the  purchaser's  title  is 
not  gufficient  to  enable  him  to  maintain  replevin  for  crops  that  have 
been  severed  by  the  person  in  possession."^  The  confirmation  of  the 
sale  relates  back  to  the  sale,  and  entitles  tlie  purchaser-  to  the  crops 
from  that  time  if  no  equities  prevent  and  due  notice  has  been  given 
to  interested  parties.*"  If,  however,  the  growing  crop  be  expresslv 
reserved  at  the  sale,  it  having  been  previously  sold  by  the  mortga- 
gee as  administrator  of  the  mortgagor,  the  purchaser  acquires  no 
title  to  it.*i^  But  the  sheriff  or -other  officer  in  selling  has  no  author- 
ity to  reserve  the  way-growing  crops.  If  he  does  so,  but  does  not 
make  the  reservation  in  the  deed,  it  will  pass  the  crops  to  the  pur- 
chaser.*^® 

This  rule  in  regard  to  crops  applies  as  well  to  trees  and  shrubs 
growing  in  a  nursery.  "The  rule,  as  between  mortgagor  and  mort- 
gee,  as  to  crops  growing  on  mortgaged  premises,  is  no  less  favor- 
able to  the  claim  of  the  plaintiff  than  that  relating  to  nursery 
trees,  which  partake  of  the  same  character,  and  the  principle  appli- 
cable to  both  in  such  case  may  be  treated  as  the  same."*^^ 

doctrine  peculiar  to  growing  crops,  820;     Walker   v.    Hill,   22   N    J    Eg 

originating  in  considerations  deemed  513;     Morse   v.    Bank,'  47   N    J    Eq 

beneficial  to  the  interests  of  agricul-  279,  20  Atl.  961. 

ture,  has  remained  substantially  un-  "'■'  Woehler  v.  Endter    46  Wis   301 

changed,    and    the    rule,    as    stated  50  N.  W.  1099. 

in    Lane   v.    King,    8   Wend.    584,   24  ^'^  Ruggles  v.   first  Nat.  Bank    43 

Am.  Dec.  105,  was  not  only  followed  Mich.  192,  5  N.  W.  257. 

in   some   of  the   cases   before   cited,  *'"■  Sherman    v.    Willett,    42    N     Y 

but  that  case  and  its  doctrine  have  146. 

more  recently  been  judicially  cited  ""Howell  v;  Schenck,  24  N    J    L 

and    referred    to    with    approval    in  89. 

this  State."  Citing  Harris  v.  Frink,  "'  Batterman  v.  Albright  122  N  Y 
24  N.  Y.  31;  Samson  v.  Roe,  65  N.  484,  25  N.  E.  856.  Bradley,  J.  said: 
^-  ^1^-  "It  may  be  observed  that  the  doc- 
In  Cassilly  v.  Rhodes,  12  Ohio,  88,  trine  applicable  to  growing  crops  is 
It  was  held  that  a  tenant  of  the  distinguishable  from  that  relating 
mortgagor  was  entitled  to  the  an-  to  other  personal  property  on  land, 
nual  crops.  as  between  grantor  and  grantee 
*"  Gillett  v.  Balcolm,  6  Barb.  370.  and  mortgagor  and  mortgagee  The 
"=  Ruggles  V.  First  Nat.  Bank,  43  theory  on  which  it  rests  is  that  they 
Mich  192,  5  N.  W.  257;  Mut.  Life  in  some  sense,  appertain  to  the 
Ins.  Co.  V.  Bigler,  79  N.  Y.  568;  Mis-  realty:  and  the  general  rule,  as 
souri  Land  Co.  v.  Barwick.  50  Kans.  declared  from  an  early  day  by  text 
57,  31  Pac.  Rep.  685;  Galbreath  v.  and  judicial  writers,  is  that  a  party 
Drought,  29  Kans.  711;  Farlin  v.  entering  into  possession  bv  title 
Sook,  30  Kans.  402,  1  Pac.  Rep.  123;  paramount  to  the  right  of  the  ten- 
Emerson  v.   Samsome,   41   Cal.   552;     ant   takes   them And  while   the 

Frink  v.   Roe,   70   Cal.   296,   11   Pac.  plaintiff    (a   purchaser  upon  execu- 


§    1658.]  UNDER   DECREE   OF    COURT.  613 

This  rule  uniformly  prevails  where  the  common  law  on  the  sub- 
ject of  mortgages  remains  in  force.  Even  in  some  States  in  which 
a  mortgagee  is  regarded  as  a  security  merely,  the  title  remaining  in 
the  mortgagor,  the  rule  is  the  same.  In  a  recent  important  case  on 
tliis  subject  in  New  York  the  court  say :  "Our  attention  is  called  to 
no  reason  why  the  considerations  upon  which  the  doctrine  relating  to 
emblements  was  founded,  and  has  since  been  observed,  are  now  any 
less  entitled  to  sanction  than  formerly.  The  fact  that  the  right  to 
ejectment  is  taken  away  'from  the  mortgagee  by  the  statute,  and  the 
mortgage  reduced  to  a  mere  chose  in  action,  secured  by  lien  iipon 
the  land  while  the  defeasance  remains  effectual,  does  not  seem  to 
have  any  essential  bearing  upon  the  question,  inasmuch  as  the  per- 
fecting of  title  under  it  has  relation  to  the  time  it  became  a  lien."*^'^ 

But  in  some  other  States  where  a  mortgage  creates  no  estate  in 
the  mortgagee,  but  confers  on  him  only  a  lien,  the  mortgagor  or  his 
tenant  may  claim  the  crops  which  have  matured  at  the  time  of  the 
foreclosure.*^''  In  such  States  the  mortgagor  is  entitled  to  the  pos- 
session and  use  of  the  land,  and  to  the  crops  gro^\Ti  thereon,  until 
his  right  is  divested  by  appropriate  judicial  proceedings.  The  title 
to  the  land  remains  in  the  mortgagor,  and  his  right  to  control  and 
dispose  of  the  annual  crops  remains  in  him,  at  least  until  a  receiver 
is  appointed  and  obtains  possession.  The  fact  that  the  mortgage 
debt  is  due,  and  that  the  mortgagor  is  in  default,  does  not  of  itself 
divest  him  of  the  right  to  control  and  dispose  of  the  crops.  The 
crop  is  chattel  property,  which  the  mortgagor  has  a  right  to  sell, 

tion    against    the    mortgagor,    prior  56    Iowa,    679;      7    N.    W.    495,    10 

to  the  foreclosure  sale),  as  against  N.    W.    241;     Caldwell   v.    Alsop,    48 

the  mortgagor,  and  without  liability  Kans.  571,  29  Pac.  1150. 
to  the  mortgagee,  may  have  taken         Heavilon    v.    Farmers'    Bank,    81 

the  nursery  trees  from  the  premises  Ind.  249,  reversing  Jones  v.  Thomas, 

prior  to  the  time  of  the  foreclosure  8    Blackf.    428,    which    was    decided 

of   the    mortgage,    he    had    no    such  when  the  rule  in  Indiana  was  that 

right  as  against  the  purchase  or  his  a  mortgage  creates  an  estate  in  the 

grantee,  who  had  entered  under  the  mortgagee.      Allen    v.    Elderkin,    62 

title  perfected  by  the  sale  on  fore-  Wis.  627,  22  N.  W.  842;   Gregory  v. 

closure,    and   the    conveyance    made  Wis.  627  22,  N.  W.  842;    Gregory  v. 

pursuant    to    it."      Citing    Lane    v.  Rosenkrans,  72  Wis.   220,  39  N.  W. 

King,  8  Wend.  584;    Shepard  v.  Phil-  378. 

brick,  2  Denio,  174;     Gillett  v.  Bal-        In  Beckman  v.  Sikes,  35  Kans.  120, 

com,  6  Barb.  370;     Jewett  v.  Keen-  10  Pac.   592,  the  mortgagor  planted 

holts,    16    Barb.    193;      Sherman    v.  a  crop  of  corn  after  the  foreclosure 

Willett,    42    N.    Y.    146;     Aldrich   v.  of    the    mortgage,    and    it    was    im- 

Reynolds,   1  Barb.   Ch.   613;     Adams  mature  and  growing  when  the  land 

V.  Beadle,  47  Iowa,  439.  was  sold  pursuant  to  the  decree  of 

^''  Batterman   v.    Albright,    122    N.  foreclosure,  and  it  was  held  that  the 

Y.  484,  25  N.  B.  856.  crop  passed  by  the  sale  to  the  pur- 

""  Richards    v.    Knight,    78    Iowa,  chaser. 
69,  42  N.  W.  584;    Hecht  v.  Dettman, 


613  THE    DEED   AND   PASSING    OF    TITLE.  [§    1659. 

and,  if  he  sells  the  same  ])rior  to  the  appointment  of  a  receiver,  the 
purchaser  oht^iins  a  good  title.*-*' 

§  1659.  The  rents  accruing  between  the  day  of  sale  and  the  de- 
livery of  the  deed  belong  to  the  owner  of  the  equity  of  redemp- 
tion, and  not  to  the  purchaser,  as  they  go  with  the  possession,  or 
the  right  of  possession;  and  generally  the  purchaser  is  not  entitled 
to  possession,  or  to  the  rents,  until  he  has  made  a  demand  for  posses- 
sion under  his  deed.*^^  If,  however,  the  purchaser  is  already  in  pos- 
session under  a  former  purchase  at  a  sale  not  confirmed,  he  is  enti- 
tled to  the  rents  from  the  date  of  the  confirmation  of  the  last  report 
of  sale.*-- 

The  purchaser  is  entitled  to  rents  from  the  tenants  notwithstand- 
ing they  have  paid  the  rent  in  advance  to  the  mortgagor  for  a  pe- 
riod extending  beyond  the  time  of  the  delivery  of  the  deed  to  the 
purchaser.*-^  Rents  payable  in  advance,  and  collected  in  advance  by 
a  receiver  appointed  in  the  action,  for  a  period  extending  beyond 
the  date  of  delivery  of  the  deed  to  the  purchaser  at  the  foreclosure 
sale,  may  be  apportioned  to  such  purchaser.*-*  One  who  has  pur- 
chased the  mortgaged  property  at  a  foreclosure  sale  under  a  junior 
mortgage,  and  has  received  the  deed,  is  entitled  to  the  rents  as 
against  a  prior  mortgagee  who  has  bought  the  premises  at  a  sale 
under  his  mortgage,  but  the  year  for  redemption  has  not  expired, 
although  he  holds  an  assignment  from  the  mortgagor  of  all  rents 
due  or  to  become  due.*^^  The  senior  mortgagee  acquired  no  rights 
to  the  rents  other  than  those  the  mortgagor  had,  and  these  rights 
were  cut  off  l^y  the  passing  of  the  title  under  the  first  foreclosure. 

By  statute  the  judgment  debtor  not  redeeming  may  be  made 
liable  to  the  purchaser  for  the  rent  of  the  premises,  or  for  use  and 

*^''§    1522;     Caldwell    v.    Alsop,   48  ^"  Taliaferro  v.  Gay   78  Ky   496 

Kans.  571,  29  Pac.  1150,  per  Johnson,  "^  Hatch    v.    Sykes     64    Miss     307 

J.;    Hecht  v.  Dettman,  56  Iowa,  679,  1  So.  248;    Patton  v.  Var^a   75  Iowa' 

7  N.  W.  495,  10  N.  W.  241.  368,  39  N.  W.  647;    Harrfs  v.  Foster' 

But    a    mortgage    sale    does    not  97   Cal.   292,  32  Pac.   246;     McDevitt 

affect  the  right  of  a  tenant  of  the  v.   Sullivan,  8  Cal.  592;     Clement  v 

mortgagor  to  crops  growing  on  the  Shipley,  2  N.  D.  430,  51  N    W    414- 

mortgaged  land,  where  such  tenant  United  States  Mortg.   Co.   v    Willis 

was  not  made  a  party  to  the  fore-  41    Oreg.    481,    69    Pac.    266-     Byers 

closure    proceedings.      St.    John    v.  v.  Rothschild,  11  Wash.  296    39  Pac 

Swain,  14  N.  Y.  Supp.  743.  G88;    Walker    v.    McCusker,' 71    Cal. 

"*§    1120;     Taliaferro   v.    Gay,    78  594,  12  Pac.   723;     Harris  v.   Foster 

Ky.  496;    Clason  v.  Corley,  5  Sandf.  97  Cal.  292,  32  Pac.  246,  33  Am    St 

447;    Astor  v.  Turner,  11  Paige,  436,  187. 

43  Am.  Dec.  766;    Mitchell  v.  Bart-  -=^  Cowen  v.  Arnold,  12  N.  Y.  Supp. 

lett,  52  Barb.  319;    Lombard  Invest-  601. 

ment    Co.    v.    Burton,    5    Kan.    App.  '-■  Patton  v.   Varga,   75   Iowa,  368 

201,  47  Pac.  154;    Condon  v.  Marley,  39  N.  W.  647 
7  Kans.  App.  383,  51  Pac.  924. 


§§    1660,    IGGl.]  UNDER    DECREE    OF    COURT.  6V. i 

occupation  of  the  same  after  the  sale;*"''  or  the  purchaser  may  be 
entitled  to  receive  the  rents  of  the  property,  or  the  value  of  the 
use  and  occupation.'*-^ 

§  1660.  When  a  mortgagee  purchases  at  a  sale  of  the  premises 
under  a  decree  of  court,  no  deed  from  the  tnistee  appointed  to  make 
the  sale  is  requisite  to  invest  him  with  the  legal  title.  The  decree 
of  sale  does  not  of  course  operate  as  a  conveyance  of  the  legal 
title,  but  the  purchaser,  though  a  stranger,  becomes  the  substantial 
owner  of  the  property  from  the  moment  the  sale  is  ratified.  He  is 
entitled  to  possession  and  no  one  can  eject  him.  But  when  the 
mortgagee  purchases  the  title,  according  to  the  doctrine  of  the  com- 
mon law  the  legal  title  is  already  in  him,  and  the  sale  confirms  him 
in  the  possession  of  the  property;  and  without  a  deed  from  the 
trustee  he  can  maintain  ejectment  for  the  property.*^^ 

§  1661.  The  purchaser  has  no  legal  title  until  the  time  allowed  for 
redemption  has  expired.*-''  He  cannot  on  his  certificate  of  pur- 
chase maintain  ejectment  or  other  possessory  action.  He  is  not 
entitled  to  possession  until  a  deed  has  been  executed  to  him  by  the 
officer  selling.*^"  He  acquires  only  a  lien ;  no  new  title  vests  till  the 
period  of  redemption  has  passed.  His  deed  will  relate  back,  it  is 
true,  to  the  beginning  of  his  lien,  in  order  to  cut  off  intervening 
i  incumbrances;  but  it  will  not  carry  back  the  absolute  divestiture 
of  title,  as  is  evident  from  the  fact  that  neither  judgment  debtor 
'  nor  mortgagor  can  be  called  to  account  for  rents  and  profits.  His 
title  becomes  absolute  only  when  his  right  to  a  deed  accrues.  The 
mortgagor  still  has  the  estate  of  a  mortgagor,  with  this  qualifica- 
tion, that  the  amount  and  time  of  redemption  have  become  abso- 
lutely fixed  by  the  decree  of  sale,  and  his  estate  will  be  absolutely 
divested  if  he  fails  to  redeem  within  the  alloted  time.*''^ 

But  the  mortgagor,  though  entitled  to^  the  possession  until  the 
period  of  redemption  has  expired,  is  liable  for  any  injury  he  may 
do    to   the   premises   by   cutting   and   carrying   away    growing   tim- 

"'As  in  Indiana:     2  R.  S.  1876,  p.  156;    Stephens  v.  III.  Mut.  Ins.  Co., 

720-     Gale    v.    Parks,    58    Ind.    117;  43  111.  327;    Llghtcap  v.  Bradley,  186 

Clements  v.  Robinson,  54  Ind.  599.  111.  510,  532,  58  N.  E.  221. 

*"As  in  California:     Code  of  Civ.  ""Bennett  v.   Matson,  41  111.   332; 

Proc.    §    707;     Walker  v.   McCusker,  O'Brian  v.  Fry,  82  111.  87,  274. 

71    Cal     594     12    Pac.    723;     Page   v  ^=>  Lightcap    v.     Bradley,    186    111. 

Rogers    31  Cal.  293.  510,  532,  58  N.  E.  291;    Stephens  v. 

"'La'nnay   v.  Wilson,  30  Md.   536.  111.    Mut.    F.    Ins.    Co.    43    111.    327; 

See  §§  1892,  1893.  Sweezy    v.    Chandler,    11    111.    445; 

"'Rockwell     v.     Servant,     63     111.  Johnson  v.  Baker,  38  111.  98,  87  Am. 

424;     Delahay    v.    McConnell,    5    111.  Dec.  293. 


615  DELIVERY  OF  POSSESSION  TO  rURCHASER.  [§§  1662,  1663. 

ber."-  He  might  be  restrained  from  committing  waste  by  injunc- 
tion."^ 

§  1662.     An   appeal   does   not   affect   a  sale   previously   made.— 

The  judgment  of  the  court  being  conclusive  so  long  as  it  stands  un- 
reversed and  without  appeal,  a  sale  made  under  it  before  any  appeal 
is  taken  and  the  execution  of  the  judgment  stayed  is  not  affected 
by  any  appeal  afterwards  taken,  though  that  part  of  the  decree 
directing  the  sale  to  be  made  by  a  referee,  instead  of  the  sheriff, 
be  set  aside  as  erroneous.*^* 

The  rule  is  the  same  although  the  purchaser  was  one  of  the  par- 
ties to  the  suit;*=*^  or  even  if  he  had  notice  at  the  time  of  the  sale 
that  an  effort  would  be  made  to  obtain  a  reversal  of  the  decree."'' 
The  law  does  not  require  a  purchaser  to  inspect  the  record  and  to 
see  that  it  is  free  from  error.  All  that  is  required  of  him  is  to  see 
that  there  is  a  subsisting  judgment  by  a  court  having  jurisdiction 
of  the  case.  "If  such  was  not  the  rule,  no  one  would  become  a 
purchaser  at  a  judicial  sale,  and  all  competition  would  cease,  and 
plaintiffs  would  become  purchasers  at  their  own  price."'*^^ 


VIII.     The  Delivery  of  Possession  to  Purchaser. 

§  1663.  Possession  delivered  to  purchaser. — It  has  long  been 
the  practice  of  courts  of  chancery  in  England,  adopted  also  in  this 
country,  wherever  a  sale  and  conveyance  of  real  estate  has  been 
decreed,  to  compel  the  person  in  possession  of  the  property  to  sur- 
render it  to  the  purchaser,  by  an  order,  or  by  injunction,  or  by  a 
writ  of  assistance.     Lord  Hardwicke  said  that  this  practice  had  its 

"'Stout  v.  Keyes,  2  Dougl.  (Mich.),  rule  to  be,  that  "although  the  judg- 

184,  43  Am.  Dec.  465.  ment    or    decree    may    be    reversed 

"'  Phoenix    v.    Clark,    6    N.    J.    Eq.  yet  all  rights  acquired  at  a  judicial 

447.    See  §§  684-698.  sale  while   the   decree  or  judgment 

"'Armstrong  v.   Humphreys,  5  S.  were  in  full  force,  and  which  they 

C.    128;     Breese    v.    Bange,   2    E.    D.  authorized,  will  be  protected.     It  is 

Smith,  474;     Blakeley  v.   Calder,   15  sufficient  for  the  buyer  to  know  that 

N.   Y.  617;     Buckmaster  v.  Jackson,  the   court   had   jurisdiction   and   ex- 

4    111.    104;     Holden    v.    Sackett,    12  ercised    it,    and    that    the    order,    on 

Abb.    Pr.    473;     Bailey    v.    Fanning  the  faith  of  which  he  purchased,  was 

Orphan  School   (Ky.),  14  S.  W.  908;  made,  and  authorized  the  sale."   And 

Evans  v.  Kahr,  60  Kans.  719,  725,  57  see    Bank    v.    Voorhees,    1    McLean, 

Pac.    950.    58    Pac.    467;      Runge    v.  221. 

Brown,  29  Neb.   116,  122.   45  N.  W.  "^  Gossom  v.  Donaldson.  18  B.  Mon. 

271;     Smith    v.    Dixon,   27   Ohio   St.  230,  68  Am.  Dec.  723. 

471.  «^  Irwin  v.  Jeffers,  3  Ohio  St.  389. 

In   Gray  v.   Brignardello,  1  Wall.  "'Fergus    v.    Woodworth,    44    111. 

627,  634,  Mr.  Justice  Davis  stated  the  374,  384. 


§  1663.] 


UNDER   DECREE   OF    COURT. 


616 


origin  in  the  reign  of  James  I.  ;*^^  but  Mr.  Eden  says  that  this  state- 
ment is  a  mistake,  as  many  precedents  for  injunctions  to  deliver 
possession  after  a  decree,  and  a  commission  or  writ  of  assistance  to 
the  sheriff,  are  in  the  printed  reports  as  early  as  the  reign  of  Queen 
Elizabeth,  and  are  also  found  in  a  manuscript  book  of  orders  in  the 
time  of  Henry  VIII.,  Edward  VI.,  and  Mary.*^'*  But  whenever  the 
practice  was  begun,  it  has  long  been  fully  established  both  in  Eng- 
land and  in  this  country,**^  and  is  applied  to  sales  under  decrees  in 
foreclosure  suits.  • 

Accordingly,  after  a  sale  has  been  made  under  a  decree  in  a 
foreclosure  suit,  the  court  has  power  to  give  possession  to  the 
purchaser,  though  the  delivery  of  possession  is  not  made  part  of 
the  decree.  He  is  not  driven  to  an  action  of  ejectment  at  law  to 
obtain  possession.*'*^    But  if  the  person  in  possession  was  not  a  party 

^^*  Roberdeau  v.  Rous,  1  Atk.  543;  cree,  and,  in  his  luminous  opinion, 

Penn  v.  Baltimore,  1  Ves.  Sen.  444.  says:  — 

*^"  Eden  on  Injunctions,  261,  Water-  "It  does  not  appear  to  consist  with 

man's  ed.  2d  vol.  425.  sound  principle  that  the  court  which 

**"  Dove    V.    Dove,    2    Dick.    617,    1  has  exclusive  authority  to  foreclose 

Bro.   Ch.   375;     Huguenin  v.   Basely,  the  equity  of  redemption  of  a  mort- 

15  Ves.  180;    Dorsey  v.  Campbell,  1  gagor,  and  can  call  all   the   parties 

Bland,  356,  363;    Garretson  v.   Cole,  in    interest   before   it   and    decree   a 

1  Har.   &  John.   370,  387;     Buffum's  sale    of     the     mortgaged     premises, 

case,  13  N.  H.  14.  should  not  be  able  even  to  put  the 

"'  Illinois:    Jackson  v.  Warren,  32  purchaser    into    possession    against 

111.   331;     Williams  v.   Waldo,  4   111.  one  of  the  very  parties  to  the  suit, 

264;    Lambert  v.  Livingston,  131  111.  and    who    is    bound    by    the    decree. 

161,  23  N.  E.  352.  When  the  court  has  obtained  lawful 

New  York:     Suffern  v.  Johnson,  1  jurisdiction  of  a  case,   and  has   in- 

Paige,  450,  19  Am.  Dec.  440;    Freling-  vestigated   and   decided   it   upon   its 

huysen  v.  Colden,  4  Paige,  204;    Van  merits,    it   is   not   sufficient   for   the 

Hook    V.     Throckmorton,     8    Paige,  ends    of    justice    merely    to    declare 

33;     McGown    v.    Wilkins,    1    Paige,  tne  right  without  affording  the  rem- 

120;  Kershaw  v.  Thompson,  4  Johns,  edy.      If    it    was    to    be    understood 

Ch.    609;     Bolles   v.    Duff,   43   N.    Y.  that,  after  a  decree  and  sale  of  mort- 

469;      Ludlow     v.     Lansing,     Hopk.  gaged    premises,    the   mortgagor,   or 

231;    Valentine  v.  Teller,  Hopk.  422.  other  party  to  the  suit,  or  perhaps 

California:     Skinner  v.  Beatty,  16  those   who   have   been   let    into   the 

Cal.  156;    Horn  v.  Volcano  Water  Co.  possession    by    the    mortgagor    pen- 

18  Cal.  141,  73  Am.  Dec.  569;  Kirsch  dente  lite,  could  withhold  the  pos- 

V.  Kirsch,  113  Cal.  56,  45  Pac.  164;  session  in  defiance  of  the  authority 

Hibernia  Sav.  &  Loan  Soc.  v.  Lewis,  of  this  court,  and  compel  the  pur- 


117  Cal.  577,  47  Pac.  602. 

Alabama 
Ala.  138 


chaser  to  resort  to  a  court  of  law, 
Creighton   v.    Paine,   2    I  apprehend  that  the  delay  and  ex- 
pense   and    inconvenience    of    such 


Arkansas:    Bright  v.  Pennywit,  21  a  course  of  proceeding  would  great- 
Ark.  130.  ly    impair   the    value    and    diminish 
Kentucky:    Trabue  v.  Ingles,  6  B.  the    results    of    sales    under    a    de- 

Mon.  82.  cree The    distribution    of    power 

Oregon:  Hald  v.  Day,  36  Oreg.  among  the  courts  would  be  injudi- 
189,  59  Pac.  189.  cious,  and  the  administration  of  jus- 
Chancellor  Kent,  in  Kershaw  v.  tice  exceedingly  defective,  ard 
Thompson,  4  Johns.  Ch.  609.  fully  chargeable  with  much  useless  delny 
examines  the  question  of  the  power  and  expense,  if  it  were  necessary  to 
of  a  court  of  equity  to  give  posses-  resort,  in  the  first  instance,  to  a 
sion  of  property  sold  under  its  de-  court  of  equity,  and   afterwards  to 


617 


DELIVERY  OF  POSSESSION  TO  PURCHASER. 


[§  1GG3. 


to  the  suit,  and  is  a  mere  stranger  who  entered  into  possession  be- 
fore the  suit  was  begun,  he  cannot  be  turned  out  of  possession  by 
an  execution  on  the  decree.**^  Had  he  come  into  possession  pendente 
lite,  he  would  be  bound  by  the  decree  in  the  same  manner  as  the 
defendant  is.**^  So  long  as  the  owner  of  the  premises  is  in  posses- 
sion, and  has  the  right  to  redeem  under  a  prior  mortgage,  a  pur- 
chaser under  a  foreclosure  sale  of  a  subsequent  mortgage  cannot 
recover  possession  from  him.  He  has  the  legal  right  to  retain  pos- 
session until  such  equity  has  been  foreclosed  and  sold  under  the 
prior  mortgage;  and  it  does  not  matter  that  he  is  barred  by  the 
statute  of  limitations  from  bringing  his  suit  to  redeem  it.*** 

The  remedy  for  obtaining  possession,  when  this  is  wrongfully  with- 
held from  the  purchaser,  is  an  order  of  court,  which,  if  not  obeyed, 
niay  be  followed  by  an  injunction,  or  if  need  be  by  a  writ  of  assist- 
ance.**^ If  the  order  for  the  delivery  of  possession  be  not  included 
in  the  decree,  a  special  order  may  be  entered;  but  the  writ  of  as- 


a  court  of  law,  to  obtain  a  perfect 
foreclosure  of  a  mortgage.  It  seems 
to  be  absurd  to  require  the  assist- 
ance of  two  distinct  and  separate 
jurisdictions  for  one  and  the  same 
remedy,  viz.,  the  foreclosure  and 
possession  of  the  forfeited  pledge. 
But  this  does  not,  upon  due  exam- 
ination, appear  to  be  the  case;  and 
it  may  be  safely  laid  down  as  a 
general  rule,  that  the  power  to 
apply  the  remedy  is  coextensive 
with  the  jurisdiction  over  the  sub- 
ject matter." 

In  New  Jersey  the  practice  is  of 
recent  adoption;  but  the  propriety 
of  it,  are  fully  established  in  the 
of  it,  and  the  power  of  the  court  to 
apply  it,  are  fully  established  in  the 
case  of  Schenck  v.  Conover,  13  N.  J. 
Eq.  220,  78  Am.  Dec.  95;  Melick  v. 
Pidcock,  44  N.  J.  Eq.  525. 

In  New  York  it  is  now  provided 
by  statute  that,  where  any  person 
shall  continue  in  possession  of  any 
real  estate  sold  pursuant  to  the  fore- 
closure of  a  mortgage,  possession 
may  be  recovered  by  summary  pro- 
ceedings. 2  Bliss  Annot.  Code,  § 
1675. 

"-  Benhard  v.  Darrow,  Walker 
(Mich.),  519;  Thompson  v.  Smith, 
1  Dill.  458;  Terrell  v.  Allison,  21 
Wall.  289;  Comer  v.  Felton,  22  U.  S. 
App.  313,  61  Fed.  731;  Anderson  v. 
Thompson  (Ariz.),  20  Pac.  803; 
Paine  v.  Root,  121  111.  77,  13  N.  B. 


541;   Exum  v.  Baker,  115  N.  C.  242 
20  S.  E.  448,  44  Am.  St.  Rep.  449. 

'"  Kessinger  v.  Whittaker,  82  111. 
22;  Herr  v.  Sullivan,  26  Colo.  133, 
56  Pac.  175. 

*"  Wells  V.  Pierce,  3  Keyes,  (N.  Y-) 
102. 

"=^  Illinois:  O'Brian  v.  Fry,  82  111. 
87;  Aldrich  v.  Sharp,  4  111.  261. 

New  York:  Kershaw  v.  Thomp- 
son, 4  Johns.  Ch.  609;  Van  Hook  v. 
Throckmorton,  8  Paige,  33;  Freling- 
huysen  v.  Golden,  4  Paige,  204. 

California:  Montgomery  v.  Tutt, 
11  Cal.  190. 

South  Carolina:  Trenholm  v.  Wil- 
son, 13  S.  C.  174. 

Kansas:  Bird  v.  Belz,  33  Kans. 
391,  6  Pac.  627. 

Florida:  Gorton  v.  Paine,  18  Fla. 
117. 

Colorado:  Herr  v.  Sullivan,  26 
Colo.  133,  56  Pac.  175. 

In  South  Carolina,  under  the  re- 
cent Code,  the  remedy  is  an  order 
of  the  court,  and  a  writ  of  habere 
facias  possessionem  is  not  necessary 
or  proper.  Armstrong  v.  Hum- 
phreys, 5  S.  C.  128. 

In  Alabama  an  apeal  from  the  or- 
der directing  a  writ  of  assistance 
to  issue  may  be  taken  by  the  tenant 
against  the  purchaser,  though  a 
writ  of  error  will  also  lie.  Creigh- 
ton  V.  Planters'  &  Merchants'  Bank,  , 
3  Ala.  156. 


^    IGG-i.]  UNDER   DECREE   OF    COURT.  618 

sistance  may  follow  after  a  refusal  to  obey  the  order.*"  A  motion 
and  order  for  a  writ  of  assistance  may  be  made  at  the  time  of  the 
confirmation  of  the  sale,  or  after,  without  actual  notice  to  the  defend- 
ant of  the  motion.*"  It  will  be  granted  also  at  the  instance  of  the  pur- 
chaser, or  of  the  complainant;  and  it  may  be  issued  not  only 
against  the  defendant,  but  as  well  against  any  person  in  possession 
under  him,  or  holding  by  any  title  not  paramount  to  the  mortgage,*** 
who  was  a  party  to  the  foreclosure  suit.**®  If  a  tenant  is  in  posses- 
sion, the  deed  should  be  shown  him  by  the  purchaser  when  he 
makes  demand  of  possession,  and,  upon  his  refusal  to  comply,  notice 
of  the  application  to  court  should  be  given.*^°  As  against  a  party 
to  the  suit  the  writ  will  be  granted  upon  a  motion  ex  parte,  but  it 
would  seem  that  one  who  has  come  into  possession,  pendente  lite 
would  be  entitled  to  notice  of  the  motion.*^^  The  writ  of  assistance, 
is  the  only  process  necessary  for  giving  possession,  and  should  issue 
in  the  first  instance  without  a  prior  injunction,  upon  proof  of  the 
service  of  the  order  to  deliver  possession  and  of  refusal  to  comply 
with  it.*"  The  vendee  of  the  purchaser  at  the  sale  is  entitled  to  this 
remedy  against  the  mortgagor  in  possession  ;*^^  and  the  assignee  of 
the  purchaser's  bid  may  also  have  it.*^*  A  bill  to  enforce  a  former  de- 
cree by  means  of  a  writ  of  assistance,  is  not  a  new  suit  but  an  incident 
to  the  original  suit.*^'* 

§  1664.  Possession  will  be  given  to  the  purchaser  not  only  as 
against  all  the  parties  to  the  suit,  but  also  as  against  any  persons  who 
have  come  into   possession  under  them  pending  the  suit.*^^     This 

^«0'Brian  v.  Fry,  82  111.  87;  Ogles-  "''2  Daniell's  Ch.  Pr.  1280;  Schenck 

by  V.  Pearce,  68  111.  220;   Kessinger  v.  Conover,  13  N.  J.  Eq.  395,  78  Am. 

V.  Whittaker,  82  111.  22.  Dec.    95;    Hart   v.    Lindsay,    Walker 

"'Coor   V.    Smith,    101    N.    C.    261,  (Mich.),    144;     Valentine    v.    Teller, 

11  S.  E.   1089;    Meehan  v.   Blodgett,  Hopk.    422;    Ballinger   v.    Waller,    9 

91  Wis.  63,  64  N.  W.  429;  Loomis  v.  B.  Men.  67. 

Wheeler,    18   Wis.    524;    Woehler   v.  "^  McLane  v.   Piaggio,  24   Fla.   71, 

Endter,  46  Wis.  301,  1  N.  W.  329,  50  3  So.  823;   Ketchum  v.  Robinson,  48 

N.  W.  1099.  Mich.  618,  12  N.  W.  877. 

"'^  Schenck    v.    Conover,    13    N.    J.  "*  Ekings  v.  Murray,  29  N.  J.  Eq. 

Eq.    220,   78   Am.    Dec.    95;    Watkins  388;  Keil  v.  West,  21  Fla.  508;  Motz 

V.  Jerman,  36  Kans.  464,  13  Pac.  798;  v.  Henry,  8  Kans.  App.  416,  54  Pac. 

Bird  V.  Belz,  33  Kans.  391,  6  Pac.  627.  796. 

*^"  Anderson  v.   Thompson   (Ariz.),  '==  Lancaster  v.  Snow,  184  111.  534. 

20  Pac.  803;   Gerald  v.  Gerald,  31  S.  ■'^'' Bell    v.    Birdsall,    19    How.    Pr. 

C.  171,  9  S.  E.  792.  491;   Kessinger  v.  Whittaker,  82  111. 

^^''Fackler  v.  Worth,  13  N.  J.  Eq.  22.     If,  however,  the  interest  of  the 

395;    New    York   Life   Ins.    &   Trust  mortgagor  which   is  the  subject  of 

Co.  V.  Rand,  8  How.  Pr.  35,  39.  foreclosure   and   sale   is   merely  the 

^^'^  Benhard     v.     Darrow,     Walker  net    income    in    land,    without    any 

'(Mich.),      519;      Commonwealth     v.  interest  in  or  title  to  the  land  itself, 

Ragsdale,  2  Hen.  &  Mun.  8;    Lynde  the  title  and  the  right  of  possession 

V.    O'Donnell,    12    Abb.    Pr.    286,    21  being  vested  in  trustees,  a  direction 

How.  Pr.  34.  to  put  the  purchaser  in  possession 


G19  DELIVERY  OF  POSSESSION  TO  PURCHASER.  [§    1GG5. 

remedy  is  not  allowed  as  against  a  lessee  of  the  mortgagor  or  other  per- 
son whose  rights  attached  prior  to  the  sale,  and  who  was  not  made  a 
party  to  the  foreclosure  proceedings.*^^  But  possession  acquired  by  any 
one  after  the  purchaser  has  received  his  deed  and  conveyed  the  premises 
to  another  will  not  be  interfered  with.  Neither  is  one  who  enters  fifteen 
months  after  the  sale  deemed  as  having  entered  pending  the  suit,  and 
therefore  he  cannot  be  removed  by  a  writ  of  assistance,  though  he  en- 
tered under  a  party  to  the  suit.*^^  Though  one  enter  pending  the  suit 
if  he  did  not  enter  under  a  party  to  the  suit,  or  under  any  who  had  de- 
rived title  to  the  premises,  or  had  gone  into  possession  of  them  under  a 
party  pending  the  suit,  he  cannot  be  turned  out  of  possession  under  the 
decree  5*^^  as,  for  instance,  if  he  purchased  after  the  commencement 
of  the  suit,  at  a  sale  under  a  judgment  against  the  mortgagor  re- 
covered before  that  time.*^" 

§  1665.  If  the  person  in  possession  shows  a  right  paramount  to 
the  mortg-age,  of  course  the  court  will  not  attempt  to  decide  any 
question  of  legal  title,  and  the  possession  must  then  be  sought  for 
by  proceedings  at  law.*''^  Such  would  be  the  case  when  the  part}' 
in  possession  claims  under  a  lease  made  before  the  mortgage  under 
which,  the  sale  has  been  made.*""  If  the  purchaser  allows  the  mort- 
gagor to  remain  in  possession  under  an  agreement  to  redeem,  he  is 
after  that  in  possession  under  this  contract,  and  not  as  defendant  in 
the  foreclosure  suit;  and  therefore  he  cannot  be  removed  under  a 
writ  of  assistance.*^^  The  exercise  of  the  power  of  the  court  to  de- 
liver possession  in  any  case  rests  in  the  sound  discretion  of  the  court, 
and  in  cases  of  doubtful  right  the  possession  will  be  left  to  legal 
adjudication.*®* 

Where  a  wife  is  a  necessary  party  to  a  foreclosure  suit  by  reason 
of  a  prior  homestead  right,  but  has  not  been  joined  with  her  hus- 
band as  a  defendant,  and  she  is  in  possession  of  the  mortgaged 

is  not  proper.     There  should  be,  in  ^"  Wade  v.  Miller,  92  N.  J.  L.  296; 

such  case,  an  order  that  the  trustee  Kirkpatrick  v.  Corning,  38  N.  J.  Eq. 

apply   the   net    income   to   the   pay-  234;    Chadwick  v.   Island  Beach  Co. 

ment  of  the  mortgage  debt.     Wilson  42  N.  J.  Eq.  602,  8  Atl.  650;  Ex  parte 

V.  Russ,  17  Fla.  691.  Jenkins,  48  S.  C.  325,  26  S.  E.  686; 

"'  State     V.     Superior     Court,     21  Exum  v.  Baker,  115  N.  C.  242,  20  S. 

Wash.   469,   58  Pac.    572;    Baruch   v.  E.  448,  44  Am.  St.  Rep.  449;   Roach 

Moore,   21   Wash.    628,   59   Pac.   487;  v.  Clark,  150  Ind.  93,  48  N.  E.  796, 

Wiley  V.  Carlisle,  93  Ala.  237,  9  So.  65  Am.  St.  Rep.  353. 

288.  "*==  Thomas   v.    De  Baum,   14  N.   J. 

"^Betts    V.    Birdsall,    11    Abb.    Pr.  Eq.  37. 

222,  19  How.  Pr.  491.  ""^  Toll  v.  Hiller,  11  Paige,  228. 

*'■"  Van   Hook  v.    Throckmorton,   8  *"*  McKomb    v.    Kankey,    1    Bland, 

Paige,  33.  363,    note   c;    Thomas   v.    De   Baum, 

4.0  Frelinghuysen     v.      Golden,      4  14  N.  J.  Eq.  37. 
Paige,  204. 


§§    1666,    1667.]  UNDER   DECREE   OF    COURT.  620 

premises  with  her  husband,  a  purchaser  at  the  foreclosure  sale  will 
not  be  entitled  to  a  writ  of  assistance  against  the  husband.*^^  But 
the  fact  that  the  wife  is  entitled  to  one-third  of  the  proceeds  arising 
from  the  sale  does  not  defeat  the  purchaser's  right  of  possession,*^*' 

§  1666.  Until  the  purchaser  has  complied  with  the  terms  of  sale/" 
and  a  deed  has  been  executed  to  him  by  the  selling  officer,  and 
confirmed  by  the  court,  he  is  not  entitled  to  an  order  of  court  to- 
be  let  into  possession.*^^  He  is  not  entitled  to  a  deed  until  he 
has  paid  the  whole  of  the  purchase-money.  Even  if  the  purchaser 
be  a  junior  mortgagee,  and  is  entitled  to  a  portion  of  the  surplus 
money,  he  will  be  required  to  pay  in  the  whole  of  it,  especially  if 
there  are  other  incumbrancers  who  might,  perhaps,  have  claims 
upon  the  surplus  superior  to  his.*"^ 

The  purchaser  before  obtaining  a  deed  cannot  maintain  an  ac- 
tion of  forcible  detainer  against  one  in  possession;  and  a  judgment 
against  the  purchaser  in  such  suit  is  no  bar  to  an  application  by 
him  for  a  writ  of  assistance  to  put  him  in  possession.*'^" 

As  already  noticed  a  purchaser  is  not  generally  entitled  to  the 
rents  until  he  receives  a  deed  of  the  property;  but  after  this  has 
been  delivered  to  him,  and  he  has  demanded  possession  under,  it,  he 
is  entitled  to  the  accruing  rents.*'^  If  he  is  put  into  possession  of 
the  land  immediately  upon  the  sale  and  before  the  payment  of  the 
purchase-money,  he  is  chargeable  with  interest  upon  this  to  the  time  of 
payment.*'^^ 

A  purchaser  may,  upon  petition  pending  confirmation  of  the  sale, 
obtain  an  injunction  against  the  mortgagor  restraining  him  from 
committing  waste.*  ^^ 

§  1667.  These  summary  proceeding's  do  not  preclude  remedy  by 
suit  at  law  in  ejectment,*^*    or  by  forcible  entry  and  detainer.*""    In 

"'Hefner  v.  Urton,  71  Cal.  479,  12  *"«  Batter  shall    v.    Davis,    23    How. 

Pac.  Rep.  486.  Pr.  383. 

*'"  Dill  v.  Vincent,  78  Ind.  321.  ""  Cochran  v.  Folger,  116  111.  194. 

*"  Armstrong  v.   Humphreys,  6  S.  *■'-  Castleman    v.    Belt,    2    B.    Men. 

C.  128.  157;  Clason  v.  Corley,  5  Sandf.  447. 

•'"^Clason  v.  Corley,  5  Sandf.  447;  *'=  Haven  v.  Grand  June.  R.  R.  & 

Bennett  v.  Matson,  41  111.  332;  Myers  Depot  Co.  109  Mass.  88. 

v.    Mannv,    63    111.    211;    Howard    v.  ^'^  Mutual  L.  Ins.  Co.  v.  Bigler,  79 

Bond,    42    Mich.    131,    3   N.   W.   289;  N.  Y.  568. 

Meehan  v.  Blodgett,  91  Wis.  63,  64  "^  Kessinger  v.  Whittaker,   82   111. 

N.  W.  429.  22;  Cook  v.  Wiles,  42  Mich.  439,  4  N. 

In    Wisconsin,    by    rule    of    court  W.  169;  Trope  v.  Kerns,  83  Cal.  553, 

(1857),  the  purchaser  was  entitled  to  23  Pac.  691,  20  Pac.  82. 

be   let   into   possession    before   con-  ■*"  Smith   v.    Soper,    12   Colo.    App. 

firmation    of    the    sale.     Loomis    v.  264,  55  Pac.  195. 
Wheeler,  18  Wis.  524. 


621  SETTING  ASIDE  OF  SALE.  [§  1668. 

• 

such  case  the  plaintiff  must  in  the  first  place  show  a  valid  foreclosure.*^® 
The  validity  and  execution  of  the  mortgage  cannot,  however,  be  in- 
quired into.'*"  The  decree  in  the  foreclosure  suit,  and  the  sale  under  it, 
are  conclusive  if  regular ;  and  .therefore  a  mortgagor  cannot  defend  the 
action  on  the  ground  that  the  premises  are  his  homestead ;  that  defence 
is  available  only  in  the  foreclosure  suit.*" 


IX.     Setting  aside  of  Sale. 

§  1668.  A  sale  under  a  decree  of  foreclosure  may  be  set  aside  by 
a  bill  in  equity  brought  for  the  purpose,  when  the  sale  has  been 
fraudulently  conducted  to  the  prejudice  of  the  plaintiff  even 
when  he  might  have  a  remedy  by  motion  in  the  original  suit.*'^  Ho 
then  has  a  legal  and  absolute  right  independent  of  the  discretion  of 
the  court.**''  When  the  rights  of  third  persons  have  accrued,  some 
original  iDrocceding  is  necessary  in  which  these  rights  may  be  tried  in 
the  ordinary  way:  they  cannot  be  adjudicated  in  a  summary  man- 
ner upon  motion.***^  They  must  in  some  way  be  brought  into  court, 
and  given  an  opportunity  to  be  heard.*®-  But  ordinarily,  if  there  is 
nothing  to  prevent  an  application  in  the  original  suit,  an  original 
bill  for  this  purpose  cannot  be  sustained  ;*^^  and  when  the  proceed- 
ings are  regular  and  free  from  fraud,  and  the  party  is  only  equita- 
bly entitled  to  relief,  his  only  remedy  is  by  motion  in  the  foreclosure 
suit,  addressed  to  the  discretion  of  the  court,  to  open  the  biddings 
or  set  aside  the  sale.*®*  In  allowing  him  to  come  in,  the  court  may 
impose  such  terms  as  may  seem  proper.  This  application  may  be 
made  by  any  one  injured  by  the  proceedings  nnder  the  decree,  al- 
though he  is  not  a  party  to  the  suit.*®** 

An  original  suit  to  set  aside  a  sale  by  a  party  to  the  foreclosure 
suit   should   only   be   sanctioned   in   exceptional   cases,    where   relief 

*■«  Dwight  V.  Phillips,  48  Barb.  116.  *'^  Crawford  v.  Tuller,  35  Mich.  57. 

See  Heyman  v.  Babcock,  30  Cal.  367.  ^'^Jewett  v.  Morris,  41  Mich.  689, 

*■' Hayes  v.   Shattuck,  21   Cal.   51;  3  N.  W.  186. 

Smith   V.    Soper,   12   Colo.   App.   264,  •*»=  Brown  v.   Frost,  10  Paige,  243; 

55  Pac.  195.  Sked  v.  Sedgley,  36  Ohio  St.  483. 

■•"  Haynes  v.  Meek,  14  Iowa,  320.  ^"^  New  York:    McCotter  v.  Jay,  30 

^'^  Vandercook  V.  Cohoes  Sav.  Inst.  N.    Y.    80:    Smith    v.    Am.    Life   Ins. 

5  Hun,  641:  McMurray  v.  McMurray,  &  Trust  Co.   Clarke,  307;    White  v. 

66  N.  Y.   175;    McWilliams  v.  With-  Coulter,  1  Hun,  357. 

ington,   7  Fed.   Rep.   326;    Sanger  v.  ^^^  New  York:    Gould  v.  Mortimer, 

Nightingale,    122    U.    S.    176,    7    Sup.  26    How.    Pr.    167;    Am.    Ins.    Co.    v. 

Ct.   1109;    Tucker  v.  Jackson,  60  N.  Oakley,    9    Paige,    259,    496,    38    Am. 

H.  214.  Dec.  561;  Brown  v.  Frost,  10  Paige, 

•»»See  Gould  v.  Mortimer,  26  How.  243;  Nicholl  v.  Nicholl,  8  Paige,  349. 
Pr.  167. 


R    1668.]  UNDER   DECREE   OF    COURT.  622 

cannot  be  obtained  by  a  summary  application  in  the  foreclosure  suit. 
Ordinarily  it  is  only  the  court  in  the  foreclosure  suit  which  is  com- 
petent to  protect  all  parties  interested  in  the  sale,  because  protection 
for  all  can  bo  given  only  by  ordering  a  resale  upon  conditions.*'**' 

An  original  suit  cannot  be  maintained  without  making  parties  to 
the  action  not  only  the  parties  to  the  foreclosure  suit,  but  as  well 
the  purchaser  at  the  sale  which  is  called  in  question.**' 

A  purchaser  at  a  foreclosure  sale  submits  himself  to  the  jurisdic- 
tion of  the  court  in  the  foreclosure  suit  as  to  all  matters  connected 
with  the  sale  ;*^^  and  he  moreover  acquires  a  siifficient  status  to  enable 
liim  to  apply  to  that  court  to  vacate  a  resale  of  the  same  property.*^^ 

The  sale  may  be  set  aside  by  an  order  made  upon  a  motion  in  the 
original  suit,  even  after  the  deed  has  been  delivered,  either  for  im- 
propriety in  the  sale,  or  for  the  purpose  of  letting  in  a  defence  to 
the  action.*"*'  This  course  is  clearly  proper  if  the  purchaser  has 
made  no  payment,  and  no  certificate  of  purchase  has  been  filed  for 
record.*"^  The  motion  for  resale,  when  founded  on  facts  not  apparent 
upon  the  record,  should  properly  be  heard  and  determined  upon  affi- 
davit.*"- The  purchaser  under  the  sale  sought  to  set  aside  should 
be  made  a  party  to  the  bill,  or  should  be  notified  of  the  motion 
made  for  that  purpose.  Third  persons  who  have  bought  of  the 
first  purchaser  should  in  like  manner  have  an  opportunity  to  be 
heard.*"^ 

Allegations  of  fraud  in  procuring  the  mortgage,  and  allegations 
of  the  payment  of  it,  will  not  support  an  action  against  the  pur- 
chaser to  set  aside  the  foreclosure  sale,  when  no  fraud  or  mala  fides 
on  the  part  of  the  purchaser  is  alleged.*"*  Such  questions  are  ne- 
cessarily involved  in  the  proceedings  leading  to  the  Judgment,  and, 
whether  actually  raised  or  not,  are  concluded  by  the  judgment. 

After  a  confirmation  of  the  sale  and  final  decree,  an  application 
to  set  aside  the  sale,  decree  of  confirmation  and  final  decree,  reasons 
founded  on  irregularities  in  making  the  sale  are  not  available,  unless 
a  sufficient  excuse  is  shown  for  failure  to  present  such  reasons  in 
opposition  to  the  application  to  confirm  the  sale.*"^    In  general  it  may 

"''Mut    Life    Ins.    Co.    v.    Sturges,  ^"'Lawrence    v.    Jarvis,    36    Mich. 

33  N  J  Eq  328  281;  Crawford  v.  Tuller,  35  Midi.  57. 

*'■  Harwood  v.  Cox,  26  111.  App.  374.  '''  Ruff  v.  Doty,  26  S.  C.  173,  1  S. 

"^Van  Loben  Sels  v.  Bunnell,  131  E.  707. 

Cal    489    63  Pac.  773.  "=>  Coles    v.    Yorks,    36    Mmn.    388, 

""Terbell     v.     Lee,     40    Fed.     40;  31   N.   W.   353;    Smith  v.   Valentine, 

Brown  v.  Frost,  10  Paige,  243.  19    Minn.    452;    Dodge    v.    Allis,    27 

490  Terbell  V.  Lee,  40  Fed.  40.  Minn.   .376;    Marsh  v.   Sheriff   (Md.), 

*^'  Terbell  v.  Lee,  40  Fed.  40  14  Atl.  664. 

"-  Savery  v.  Sypher,  6  Wall.  157. 


623  SETTING  ASIDE  OF  SALE.  [§§    1669,   1669a. 

be  said  that  objections  to  a  sale  based  upon  errors  in  the  proceed- 
ings or  in  the  decree  will  not  be  considered.*''® 

§  1669.     An  application  for  a  resale  can  be  made  only  by  some 

one  who  is  either  intei'csied  in  the  mortgaged  premises,  or  is  under 
personal  liability  for  a  deficiency.'*^^  A  sale  will  not  be  set  aside  at 
the  instance  of  one  who  was  not  a  party  to  the  suit,  when  he  was 
not  made  a  party  through  his  own  negligence  in  having  his  deed 
recorded,  and  liis  grantor,  who  appeared  by  the  record  to  be  the 
owner  of  the  property  when  the  suit  was  brought,  was  properly 
made  a  defendant.*^^  If  the  applicant  be  a  subsequent  mortgagee 
who  holds  his  mortgage  only  as  collateral  security  for  the  debt  of  a 
third  person,  he  should  on  equitable  grounds  be  required  to  exhaust 
his  remedy  against  the  principal  debtor  before  he  can  have  the  sale 
set  aside.*'"'  It  must  be  made  without  delay;  though  relief  has  been 
granted  even  after  two  or  three  years,  when  the  purchaser  had  not 
parted  with  his  title,  and  there  was  a  reasonable  excuse  for  the 
delay.^«° 

A  wife  having  only  an  inchoate  right  of  dower  in  the  premises 
cannot  sustain  an  application  made  in  the  lifetime  of  her  husband 
to  set  aside  a  foreclosure  sale,  or  the  decree  of  sale,  on  the  ground 
that  she  was  not  made  a  party  to  the  suit,  or  was  not  properly 
served  with  sunimons.^°^  If,  instead  of  applying  for  a  resale,  the 
party  interested  agrees  ^^■ith  the  purchaser  for  a  future  redemption 
of  the  premises,  and  for  the  possession  in  the  mean  time,  the  court 
will  not  afterwards  set  aside  the  sale.^°^ 

If  no  one  applies  for  a  resale,  and  all  parties  are  content  that  the 
sale  shall  stand,  and  justice  can  be  done  without  it,  the  court  will 
not  order  a  resale  of  its  own  motion.^*'^ 

§  1669a.  A  sale  will  not  be  set  aside  at  the  instance  of  a  party 
whose  own  misconduct  has  been  the  occasion  of  an  irregularity. 

Thus,  where  a  notice  of  sale  was  published  to  occur  on  March   9, 
but  as  published   in  certain   issues  of  the  paper  the  figure  9   was 

^"^  Meyer  v.  Utah  &  Pleasant  Val.  Hun,  503,  6  Thomp.  &  C.  24;  Depew 

Ry.  Co.  3  Utah,  280;   Holland  Trust  v.    Dewey,   2   T.   «&   C.   515    46   How 

Co.   V.    Hogan,   17   N.   Y.   Supp.   919;  J-r.  441. 

Taylor  v.    Ellenberger,    134   Cal.   31,  '^""Fergus    v.    Woodworth,    44    111. 

66  Pac.  4.  374;  Nicholl  v.  Nicholl,  8  Paige,  349. 

"'New  York:    Bodine  v.  Edwards,  ^"' White   v.    Coulter,    1    Hun,    357. 

3    Ch.      Dec.    46,   2   N.    Y.    Leg.   Obs.  See,  however,  Cain  v.  Gimon,  36  Ala. 

231;    Gould    v.    Mortimer.    26    How.  168. 

Pr.  167;  May  v.  May.  11  Paige,  201.  ^"- Toll  v.  Hiller,  11  Paige,  228. 

"'§    1412;    Leonard   v.    N    Y.   Bay  '"^Eleventh    Ward    Sav.    Bank    v. 

Co.  28  N.  J.  Eq.  192.  Hay,  55  How.  Pr.  444. 

^'"New  York:    Soule  v.  Ludlow,  3 


1670.] 


UNDER   DECREE   OF    COURT. 


624 


turned  upside  down,  so  that  it  made  it  appear  that  the  day  of  sale 
was  March  6,  it  was  found  that  the  alteration  in  the  notice  was 
caused  or  procured  to  be  made  by  the  mortgagor,  whose  property 
was  advertised  to  be  sold,  for  the  purpose  of  avoiding  the  sale. 
On  a  motion  of  the  mortgagor  to  set  aside  the  sale  by  reason  of  the 
defective  notice,  it  was  held  that  a  party  guilty  of  such  misconduct 
is  not  in  a  position  to  appeal  to  the  court  for  assistance  in  consum- 
mating the  wrong,  and  that  the  court  will  not  aid  him  in  reaping 
the  anticipated  fruits  of  his  wrongful  conduct.^"* 

§  1670.  A  sale  will  not  be  set  aside  on  account  of  mere  inadequacy 
of  price;  in  addition  it  must  be  shown  that  the  sale  was  unfairly 
conducted,  or  there  was  fraud  or  surprise  or  mistake,  which  prevented 
the  obtaining  of  any  adequate  price,^"^  or  the  party  had  no  notice 
of  the  order  of  sale,  or  of  the  confirmation  thereof.^^*^     The  fact 


'"*  Green  v.  Corson,  50  Kans.  624, 
32  Pac.  380. 

505  2jg^  York:  Am.  Ins.  Co.  v.  Oak- 
ley, 9  Paige,  259,  496,  38  Am.  Dec. 
561;  Tripp  v.  Cook,  26  Wend.  143; 
Whitbeck  v.  Rowe,  25  How.  Pr.  403; 
Kellogg  V.  Howell,  62  Barb.  280; 
Thompson  v.  Mount,  1  Barb.  Ch.  607; 
Gould  V.  Libby,  24  How.  Pr.  440; 
Lefevre  v.  Laraway,  22  Barb.  167; 
Eleventh  Ward  Sav.  Bank  v.  Hay, 
55  How.  Pr.  444;  Bonnett  v.  Brown, 
13  N.  Y.  Supp.  395;  Howell  v.  Mills, 
53  N.  Y.  322. 

Wisconsin:  Strong  v.  Catton,  1 
Wis.  471;  Hill  v.  Hoover,  5  Wis. 
354,  68  Am.  Dec.  70;  Warren  v.  Fore- 
man, 19  Wis.  35. 

Alabama:  Alexander  v.  Messer- 
vey,  35  S.  C.  409,  14  S.  E.  854;  Ma- 
hone  V.  Williams,  39  Ala.  202;  Lit- 
tell  V.  Zuntz,  2  Ala.  256,  36  Am.  Dec. 
415. 

Tennessee:  Henderson  v.  Lowry, 
5  Yerg.  240. 

Ohio:  West  v.  Davis,  4  McLean, 
241. 

Indiana:  Benton  v.  Shreeve,  4 
Ind.  66. 

New  Jersey:  Bovd  v.  Hudson  City 
Academical  Soc.  24  N.  J.  Eq.  349; 
Twining  v.  Neil,  38  N.  J.  Eq.  470. 

California:  Haynes  v.  Backman 
(Cal.),  31  Pac.  745. 

Missouri:  Briant  v.  Jackson,  99 
Mo.  585,  13  S.  W.  91. 

Kentucky:  Ison  v.  Kinnaird  (Ky.), 
17  S.  W.  634. 

Maryland:  Marsh  v.  Sheriff  (Md.1, 
14  Atl.  664;  Garritee  v.  Popplein,  73 
Md.  322,  20  Atl.  1070. 


Kansas:  Babcock  v.  Canfield,  36 
Kans.  437,  13  Pac.  787;  Means  v. 
Rosevear,  42  Kans.  377,  22  Pac.  319; 
Jones  V.  Carr,  41  Kans.  329,  21  Pac. 
258;  Wolfert  v.  Milford  Sav.  Bank, 
5  Kans.  App.  222,  47  Pac.  175;  Evans 
v.  Bushnell,  59  Kans.  160,  52  Pac. 
419;  Wood  v.  Drury,  56  Kans.  409, 
43  Pac.  763;  Vint  v.  Monk,  56  Kans. 
789,  44  Pac.  986. 

Wisconsin:  Meehan  v.  Blodgett, 
86  Wis.  511,  57  N.  W.  291;  Kemp  v. 
Hein,  48  Wis.  32,  3  N.  W.  831;  Hub- 
bard V.  Taylor,  49  Wis.  68,  4  N.  W. 
1066;  Homestead  Land  Co.  v.  Jo- 
seph Schlitz  B.  Co.  94  Wis.  600,  69 
N.  W.  346;  John  Paul  Lumber  Co. 
V.  Neumeister,  106  Wis.  243,  82  N.  W. 
144. 

In  Kneeland  v.  Smith,  13  Wis.  591, 
the  court  refused  to  set  aside  a  sale 
fairly  made  and  confirmed,  on  a 
mere  offer  to  bid  $8,000,  where  the 
former  bid  was  $7,601;  and  so  in 
Allis  V.  Sabin,  17  Wis.  626,  where 
there  was  an  offer  to  bid  $2,400  on  a 
resale  of  premises  which  at  the  for- 
mer sale  were  bid  in  for  $2,000; 
and  in  Northrop  v.  Cooper,  23  Kans. 
432,  where  the  sale  was  fair  and  the 
property  brought  only  $100,  the  court 
refused  to  set  aside  the  sale,  al- 
though it  appeared  that  its  actual 
value  was  from  $565  to  $933.  For 
other  cases  relating  to  inadequacy 
of  price  see  Miller  v.  Lanham,  35 
Neb.  886,  53  N.  W.  1010;  New  York 
L.  Ins.  Co  v.  Murphy  (N.  J.  Eq.), 
25  Atl.  381. 

^""Nugent  v.  Nugent,  54  Mich.  557, 
20  N.  W.  584. 


635  SETTING  ASIDE  OF  SALE.  [§  1G70. 

that  a  higher  price  may  reasonably  be  expected  on  a  resale  is  by  itself 
no  ground  for  granting  it.^"^  Great  inadequacy  of  price  is  a  circum- 
stance which  will  always  be  regarded,  and  slight  additional  circum- 
stances only  are  required  to  aiithorize  the  setting  aside  of  the  sale.^''* 
Although  the  inadequacy  of  price  be  such  as  to  afford  ground  for 
setting  aside  the  sale,  this  will  not  be  done  unless  it  be  shown  that 
a  larger  price  will  probably  be  obtained  by  a  resale.^"''^  Any  unfair- 
ness or  misrepresentation  on  the  part  of  the  purchaser,  by  which  a 
person  interested  in  the  property  is  prevented  from  attending  the 
sale  and  bidding,  and  the  purchaser  obtains  the  property  at  a  price 
considerably  below  its  actual  value,  is  a  good  ground  for  setting  the 
sale  aside."^"  Thus  a  resale  was  ordered  where,  upon  the  foreclosure 
of  a  first  mortgage  for  $10,000,  property  worth  $14,000  was  sold  to 
the  first  mortgagee  for  the  amount  of  his  mortgage,  and  the  second 
mortgagee  alleged  that  he'  refrained  from  bidding  on  account  of  the 
representations  of  the  first  mortgagee,  and  also  of  a  third  person, 
as  to  the  amount  each  would  bid  for  the  property.  The  petitioner 
was  required  to  give  security  to  obtain  a  bid  of  $13,000,  and  to  re- 
imburse the  purchaser  for  actual  betterments  made  and  taxes  paid 
since  the  sale,  with  interest,  before  applying  any  of  the  proceeds  of 
the  sale  to  the  second  mortgage.^^^     A  similar  order  was  made  in  a 

case  where  property  worth  $12,000  or  more  was  sold  for  less  than 
$2,500.^^2 

A  misapprehension  on  the  part  of  a  bidder  as  to  statements  made 
by  the  mortgagor  at  the  time  of  the  sale  whereby  he  ceased  to  bid, 
and  the  premises  were  sold  for  much  less  than  the  bidder  would 
have  paid,  is  ground  for  setting  aside  the  sale.^^^  So  also  is  a  mis- 
understanding on  the  part  of  a  second  mortgagee  in  making  his  bid 
subject  to  the  first  mortgage,  whereby  property  worth  $2,500  was 
sold  for  $25.^1* 

=<"  King  v.  Piatt,  37  N.  Y.  155;  Kel-  posit  and   the   payment   of  the   ex- 

logg  V.  Howell,  62  Barb.  280;  Garri-  penses,    including    the    auctioneer's 

tee  V.  Popplein,  73  Md.  322,  20  Atl.  fees,  and  $100  for  fees  in  examining 

1070.  the  title;    and  furthermore  the  giv- 

^"*  Means    v.    Rosevear,    42    Kans.  ing  of  a  bond  with  sureties  to  bid 

377,  22  Pac.  319;  Dewey  v.  Linscott,  a  certain  sum  at  the  resale,  and  to 

20  Kans.  684;   Capital  Bank  v.  Hun-  pay    the    expenses    of    it.     And    see 

toon,    35    Kans.    577,    11    Pac.    369;  Hubbard  v.  Taylor,  49  Wis.  68,  4  N. 

Wood    v.    Drury,    56    Kans.    409,    43  W.    1066;    Van   Dyke   v.    Van   Dyke, 

Pac.  763.  31  N.  J.  Eq.l76;  Hallam  v.  Huffman, 

=»»  Farmers'     Bank     v.     Quick,     71  5  Kans.  App.  303,  48  Pac.  602. 

Mich.   534,   39  N.  W.   752;    Means  v.  ''"  Dawson  v.  Drake,  29  N.  J.  Eq. 

Rosevear,  42  Kans.  377,  22  Pac.  319;  383. 

Iowa   Sav.   Bank  v.  Blair,   56   Kans.  "'  Gilbert  v.   Haire,   43   Mich.   283, 

430,  43  Pac.  686.  5  N.  W.  321. 

^"Murdock  v.   Empie,   9   Abb.   Pr.  ">"  Banta  v.  Brown,  33  N.  J.  Eq.  41. 

283.     The     conditions     imposed     in  ^^*Van  Arsdalen  v.  Vail,  32  N.  J. 

this  case  were  the  return  of  the  de-  Eq.  189. 


§    1670a.]  UNDER   DECREE   OF    COURT.  Q26 

A  resale  should  not  be  granted  on  the  ground  of  inadequacy  of 
price  when  the  property,  M^iich  was  not  worth  on  the  day  of  sale 
more  than  $40,000,  was  bid  in  by  the  mortgagee  for  $35,000,  the 
mortgagor  having  notice  that  he  would  not  bid  above  that  sum.^^° 

An  agreement  between  bondholders  to  bid  a  certain  price  for  the 
property,  and  if  they  obtained  the  property  to  sell  it  to  others  for  a 
certain  advance  price,  if  not  intended  to  suppress  competition  at  the 
sale  and  obtain  the  property  at  a  sacrifice,  is  a  legitimate  one.^^«  An 
agreement  between  the  mortgagee  and  the  debtor  that  the  former 
should  bid  off  the  property  at  the  foreclosure  sale,  provided  the  bids 
should  not  run  up  above  the  amount  of  the  mortgage  debt,  and  that 
in  such  case  the  mortgagee  would  resell  the  property  to  the  debtor 
at  an  a.greed  price,  within  a  time  fixed,  does  not  invalidate  the  sale.^^'^ 

A  sale  will  not  be  set  aside  on  the  ground  of  mere  assertions 
made  at  the  sale  by  irresponsible  persons  that  the  sale  "was  a  mere 
formality,"  especially  if  the  person  seeking  to  have  the  sale  set 
aside  was  present  at  the  sale,  and  he  does  not  show  that  he  was  de- 
ceived by  such   assertions."^ 

After  a  foreclosure  sale  the  only  relief  for  one  who  claims  that 
the  sale  was  for  an  inadequate  price  is  an  application  to  have  the 
sale  set  aside.  If  the  mortgagee  has  bought  the  property,  a  suit 
cannot  be  maintained  against  him  for  the  recovery  of  the  difference 
between  the  price  paid  and  the  actual  value.^^^ 

§  1670a.     A  sale  may  be  set  aside  at  the  instance  of  the  mortgagee. 

This  was  done  in  a  case  wliere  the  property  was  sold  for  about 
a  third  only  of  its  value,  which  was  about  the  amount  of  the 
mortgage,  and  the  officer  making  the  sale  was  instructed  to  bid  for 
the  mortgagee  to  the  amount  of  the  mortgage,  but  neglected  to  do 
so.  The  purchaser  knew  of  the  mortgagee's  intention  to  bid  at  the 
sale,  and  the  mortgagee  could  not  collect  any  part  of  the  deficiency 
from  the  mortgagor.^-" 

A  sale  will  be  set  aside  at  the  instance  of  the  mortgagee  when 
the  mortgagor  has  by  his  acts  prevented  a  free  competition  between 
the  bidders.  Such  acts  have  been  called  chilling  the  bidding.  Thus 
where  a  mortgagor,  a  woman,  at  a  sale  of  the  mortgaged  premises, 

"=  White   V.    Coulter,    1    Hun,    357.  "•*  Rnssell    v.    Pew,    12    Mont.    509, 

And   see   New    York    L.    Ins.    Co.    v.  31  Pac.  75. 

Murphy  (N.  J.),  25  Atl.  381.  ""  Leavitt    v.    Files,    38    Kans.    26, 

"^Terbell  v.  Lee,  40  Fed.  Rep.  40;  15  Pac.  891. 

Wicker    v.    Hoppock,    6    Wall.    94;  ^='' Haynes   v.    Backman    (Cal.),   31 

Kearney  v.  Taylor,  15  How.  494.  Pac.  745. 

"'  Davis  v.  Citizens'  Bank,  39  La. 
Ann.  523.  2  So.  401. 


627  SETTING  ASIDE  OF  SALE.       [§§  1071,  1673. 

publicly  announces  that  she  intends  to  bid,  that  she  is  a  widow,  de- 
pendent on  such  premises  for  a  support,  and  requests  that  no  one 
bid  against  her,  thus  preventing  free  competition  among  the  bidders, 
a  sale  to  her  for  an  inadequate  price  will  be  set  aside.'^^^ 

§  1671.     When  the  complainant  himself  becomes  the  purchaser, 

the  court  is  always  more  ready  to  open  a  sale  than  where  the  prop- 
erty has  been  purchased  by  a  stranger  to  the  suit  for  the  purpose  of 
investment;  the  sale  is  set  aside  upon  less  evidence  of  fraud,  sur- 
prise, or  accident,  or  of  the  invalidating  circumstance,  whatever  it 
may  be;^^^  but  the  mere  fact  that  the  mortgagee  purchased  at  the 
sale  for  a  sum  much  below  the  value  of  the  property  is  not  by  itself 
evidence  of  fraud.'^^ 

Where  a  mortgagee,  by  inducing  prospective  buyers  not  to  bid  at  a 
foreclosure  sale,  was  enabled  to  bid  in  the  lands  at  much  less  than 
their  value  and  almost  immediately  thereafter  sold  the  lands  to  one 
who  was  present  at  the  foreclosure  sale  at  an  advance  of  more  than 
fifty  per  cent.,  he  was  required  to  account  to  the  mortgagor  for  at  least 
the  amount  he  actually  received  for  the  lands.^^* 

Where  a  mortgagee  agreed  that  he  would- bid  in  the  land  and  allow 
the  mortgagor  a  reasonable  time  to  redeem,  and  after  the  sale  re- 
fused to  permit  the  mortgagor  to  redeem,  and  it  was  shown  that  the 
mortgagee  induced  others  not  to  bid  at  the  sale,  and  the  property 
was  sold  for  only  a  little  more  than  half  its  value,  it  was  held 
that  this  was  such  a  fraud  upon  the  mortgagor  as  entitled  him  to 
maintain  an  action  to  redeem.'^^^ 

§  1672.  Neglect  of  officer  selling. — The  parties  interested  in  the 
property  have  a  right  to  expect  that  it  will  be  sold  in  the  usual 
manner,  and  in  a  way  to  produce  a  fair  competition  at  the  sale. 
They  will  not  be  relieved  against  their  own  negligence,  however  in- 

»=iHerndon   v.    Gibson    (S.    C),   17  "=  New   York:     Tripp   v.    Cook,   26 

S.   E.    145.     The   court   cites   Carson  Wend.  143;  Gould  v.  Libby,  24  How. 

V.   Law,  2  Rich.  Eq.  29G,  as  an  apt  Pr.  440;  Kellogg  v.  Howell,'  62  Barb, 

illustration  of  this  principle.    In  this  280;    Mott  v.   Walkley,  3  Edw.   590; 

case  the  bidder  ottered  $1,000  for  a  Cain  v.  Gimon,  36  Ala.  168;   Nugent 

lot  of  nine  negro  slaves,  announcing  v.    Nugent,   54   Mich.   557,  20   N.   W. 

when  he  did  so  that  it  was  his  pur-  584;    Evans  v.  English   (Ky.),   10  S. 

pose  to  send  them  as  a  gift  to  the  W.  626. 

wife  and  children  of  the  defendant  ■-'  Glide  v.  Dwyer,  83  Cal.   477,  23 

in  execution.     His  bid  was  the  only  Pac.  706;   Briant  v.  Jackson,  99  Mo. 

bid.     He   paid    the   purchase-money,  585,  13  S.  W.  91. 

and    sent    the    slaves    as    proposed.  "*  Huntzicker  v.  Dangers,  115  Wis. 

He    therefore    told    the    truth.     He  570,  92  N.  W.  232. 

concealed     nothing.     He     misrepre-  "'  Brown  v.  Johnson,  115  Wis.  430, 

sented    nothing.     His    conduct    was  91  N.  W.  1016. 
generous.     Yet  the  court  set  the  sale 
aside. 


8    1673.1  UNDER  DECREE  OF   COURT.  628 

adequate  may  be  the  price  obtained,  unless  it  be  so  great  as  to  show 
fraud  or  unfairness  in  the  sale.  But  relief  may  be  had  if  the  prop- 
erty was  sacrificed  by  the  neglect  or  mistake  of  the  master  or  officer 
conducting  the  sale/^"  as,  for  instance,  in  selling  the  whole  premises 
together,  when  he  should  have  sold  in  separate  parcels.^"  The  fact 
that  a  sale  was  made  in  the  city  of  New  York  upon  the  day  of  the 
charter  election,  though  not  for  that  reason  void,  yet,  taken  in  con- 
nection with  the  circumstances  that  a  party  interested  in  obtaining 
the  best  price  possible  for  the  property  objected  to  the  sale  on  that 
day,  and  made  reasonable  requests  for  a  postponement,  and  for  a  sale 
in  a  particular  manner,  was  held  to  justify  the  court  in  setting  aside 
the  sale  and  ordering  the  premises  sold  again.^^^ 

If  a  master  has  violated  his  instructions  limiting  the  price  of 
the  property,  of  which  the  purchaser  had  notice,  the  sale  will  be 
set  aside.^2^  So,  if  a  referee  sell  on  terms  not  authorized  by  the 
decree,  a  resale  will  be  ordered  ;'='°  or  if  the  master  give  the  im- 
pression to  parties  in  interest  that  the  sale  will  not  take  place, 
and  they  in  consequence  do  not  attend  f^^  or  if  a  commissioner 
appointed  to  make  the  sale  does  not  pursue  the  instructions  of 
the  court  in  respect  to  advertising  the  sale;^^=^  or  if  a  receiver  sells 
several  distinct  parcels  of  land,  greatly  exceeding  in  value  the 
debt,  in  one  mass,  to  the  prejudice  of  the  debtor  f^^  or  if  the  officer 
requires  paj^nent  of  the  whole  amount  of  the  purchase-money  within 
an  hour  after  the  salef'*  or  if  he  sell  a  lot  not  equitably  liable  for 
the  debt;°^^  or  if  the  land  is  not  properly  divided  into  lots.^^^ 

But  the  neglect  of  a  master  to  give  to  a  person  interested  in 
the  foreclosure  actual  personal  notice  of  the  day  of  sale,  in  accord- 
ance with  a  promise  to  do  so,  is  not  such  an  official  delinquency  as 
would  justify  setting  aside  the  sale.^" 

"°  Marsh  v.  Ridgway,  18  Abb.  Pr.  "''  Collier    v.    Whipple,    13    Wend. 

262;  Griffith  v.  Hadley,  10  Bosw.  587;  224. 

Minnesota  Co.  v.  St.  Paul  Co.2  Wall.  "'  Vanbussum  v.  Maloney,  2  Mete. 

g09  550;  Denning  v.  Smith,  3  Johns.  Ch. 

"'  New  York:    Am.  Ins.  Co.  v.  Oak-  332;  Baily  v.  Baily,  9  Rich.  Eq.  392. 

ley    9  Paige,  259,  496,  38  Am.   Dec.  "'  Griffith  v.  Hadley,  10  Bosw.  587. 

561-    Wolcott   V.    Schenck,    23    How.  And  see  Wolcott  v.  Schenck,  23  How. 

Pr    385      See  Whitbeck  v.  Rowe,  25  Pr.  385;  Arnold  v.  Gaff,  58  Ind.  543. 

How  Pr  403.  '"*  Goldsmith   v.    Osborne,    1    Edw. 

»^«  king  V.  Piatt,  37  N.  Y.  155,  35  560. 

How.  Pr.  23,  3  Abb.  Pr.  N.  S.  434.  "''  Breese   v.    Busby,    13   How.    Pr. 

^^"Requa  v.  Rea,  2  Paige,  339.    The  _  485. 

limit   of  price   was   $2,600,   and   the  ''^"Miller  v.   Kendrick    (N.   J.),   15 

master  sold  for  $1,000.  Atl.  259.     See  this  case  as  to  terms 

""Hotchkiss   v.    Clifton  Air   Cure,  imposed  upon  mortgagor. 

4  Keyes,  170;  Koch  v.  Purcell,  13  J.  ^"  Crumpton  v.  Baldwin,  42  111.  165. 
&  S.  162'. 


699  SETTING   ASIDE    OF    SALE.  [§1673. 

The  owner  was  allowed  to  redeem  where  the  sale  was  made  con- 
trary to  the  sheriff's  assurance  that  it  would  be  adjourned."^* 

§  1673.  Upon  an  application  for  a  resale  the  rights  of  the  pur- 
chaser will  be  taken  into  account,  and  will  prevail  when  the  sale 
has  been  fair  and  free  from  fraud,  or  other  circumstances,  which 
give  an  undoubted  right  to  have  it  set  aside.^^^  There  must  be  a 
good  reason  for  disturbing  the  sale;  and  when  there  is  no  legal 
right  to  relief,  and  the  application  is  addressed  merely  to  the  discre- 
tion of  the  court,  the  court  will  consider  the  equities  of  all  the  par- 
ties, to  the  end  of  giving  substantial  justice.^*'^ 

It  is  no  good  cause  for  setting  aside  a  foreclosure  sale  that  it  was 
advertised  in  a  newspaper  of  small  circulation;^*^  nor  that  the  mas- 
ter has  failed  to  report  the  sale  at  the  next  term  of  the  court  ;^"  ^or 
that  the  judgment  was  entered  for  too  large  an  amount,^*^  for  the 
court  cannot  inquire  whether  the  judgment  was  too  large  or  too 
small,  or  investigate  the  proceedings  in  the  suit  prior  to  the  decree, 
upon  an  application  to  set  aside  a  foreclosure  sale;^**  nor  that  the 
original  mortgagee,  who  had  assigned  the  mortgage  and  guaranteed 
the  payment  of  it,  but  was  a  party  to  the  foreclosure  suit,  did  not 
know  of  the  time  and  place  of  sale,  for  he  was  bound  to  use  due 
diligence  in  obtaining  this  information,  if  he  wished  to  protect  his 
interests  ;5*^  nor  that  a  party  to  the  suit  was  too  blind  to  read  the 
newspapers  and  had  no  notice  of  the  sale,  and  the  property  sold  for 
much  less  than  its  value.^**^ 

A  sale  should  not  be  set  aside  on  account  of  a  mere  irregularity 
in  the  sale,  as  in  selling  the  homestead,  together  with  other  premises, 
without  inquiring  whether  the  other  lands  cannot  first  be  sold 
separately,  unless  it  be  shown  that  injury  was  done  by  such  irregu- 
larity.^*^ A  sale  on  a  decree  of  foreclosure  cannot  be  impeached  col- 
laterally for  any  irregularity  in  the  proceedings;^*^  or  because  the 
decree  was  prematurely  entered  ;^*^  or  because  the  mortgage  was 
not  duly  executed. '^^^ 

A, sale  may  be  set  aside  before  confirmation  in  case  the  purchaser 

"'  Nevius  v.  Egbert,  31  N.  J.  Eq.        "=  Young  v.  Bloomer,  22  How    Pr 

460.  383. 

"»  Gardiner       v.       Schermerhorn,       •="  BuIIard  v.  Green,  10  Mich  268 
Clarke  (N.  Y.),  101.  "=  McCotter  v.  Jay,  30  "N.  Y    80  " 

""Wiley  V.  Angel,  Clarke  (N.  Y.),        ""  Parkhurst  v.  Cory,  11  N    J    Ea 

217;    Tripp  v.   Cook,   26  Wend.   143;  233.  " 

Cole  V.  Miller,  m  Ind.  463;   Kremer        =^"  Llovd  v.  Frank,  30  Wis    306 
v.  Thwaits,  105  Wis.  534,  81  N.  W.        "•*  Nagle  v.  Macy,  8  Cal.  426. 
654.  "3  Alderson  v.  Bell,  9  Cal.  315. 

="  Wake  V.  Hart,  12  How.  Pr.  444.  "°  Hayes  v.  Shattuck,  21  Cal.  51. 

"'  Walker  v.  Schum,  42  111.  462. 


1674.] 


UNDER    DECREE   OF    COURT. 


630 


bids  and  pays  to  the  sheriff  a  sum  greater  than  the  value  of  the 
premises  after  deducting  prior  incumbrances,  under  an  honest  and 
genuine  mistake  as  to  such  prior  incumbrances,  induced  in  some 
measure  by  the  record  and  foreclosure  proceedings.^^^ 

A  sale  will  not  be  set  aside  for  the  reason  that  the  special  mas- 
ter conducting  it  departed  from  the  terms  of  the  decree  ordering 
the  sale,  unless  it  appears  that  the  party  complaining  has  been  in- 
jured thereby,  and  has  a  right  to  be  heard  concerning  the  matter.^^^ 

§  1674.  Waived  by  delay — Any  irregularity  in  a  sale  which 
renders  it  voidable  will  be  deemed  to  be  waived  if  it  is  not  taken 
advantage  of  within  a  reasonable  time,  and  before  innocent  -parties 
acquire  rights.^^^  After  a  delay  of  seven  or  eight  years,  the  court 
declined  to  inquire  whether  the  price  bid  was  adequate,  or  whether 
the  property  should  have  been  sold  in  smaller  quantities. ^'"^  After  a 
delay  beyond  the  period  prescribed  by  statute,  within  which  an  ac- 
tion to  redeem  the  mortgage  can  be  brought,  the  court  has  no  power 
to  set  aside  the  sale.^^^ 

A  mortgagor,  by  inducing  a  person  to  purchase  the  certificate 
under  a  foreclosure  sale,  upon  the  representation  that  he  had  no 

them,  provided  the  rights  of  par- 
ties interested  have  not  been  preju- 
diced or  affected  injuriously  there- 
by." Old  Colony  Trust  Company  v. 
Great  White  Spirit  Co.  181  Mass. 
413,  416,  03  N.  E.  945,  per  Morton, 
J.,  citing  Meeker  v.  Evans,  25  111.  322; 
Nebraska  Loan  &  Trust  Co.  v.  Ha- 
mer,  40  Neb.  281,  286,  58  N.  W.  695. 

^"■'-^  Harwood  v.  Railroad  Co.  17 
Wall.  78;  Terbell  v.  Lee,  40  Fed.  40; 
Rigney  v.  Small,  60  111.  416.  In  this 
case  the  mortgagor  waited  nine 
yers  before  bringing  his  bill  to  re- 
deem. In  Hamilton  v.  Lubukee,  51 
111.  415,  it  was  held  that  a  mort- 
gagor, after  delaying  four  years 
from  the  time  he  had  knowledge  of 
the  sale  and  proceedings  under  it, 
could  not  redeem  as  against  remote 
purchasers,  on  the  ground  of  de- 
fective notice  of  the  sale  and  inade- 
quacy of  price.  See  MciMurray  v. 
McMurray,  66  N.  Y.  175;  Barnard 
V.  Wilson,  66  Cal.  251;  Bryan  v. 
Gales  (Ariz.),  2u  Pac.  311;  Diefendorf 
V.  House,  9  How.  Pr.  243;  Ex-Mis- 
sion Land  Co.  v.  Flash,  97  Cal.  610, 
32  Pac.  600;  Meier  v.  Meier,  105  Mo. 
411,  16  S.  W.  223. 

="  Roberts  v.  Fleming,  53  111.  196. 
=5"  Depew   v.   Dewey,  46   How.   Pr. 
441. 


"^Kremer  v.  Thwaits,  105  Wis. 
534,  81  N.  W.  654.  On  motion  to 
confirm  the  sale,  the  purchaser  in- 
tervened, and  the  sale  was  set  aside 
on  condition  of  payment  of  costs  of 
the  sale  set  aside,  interest  from  its 
date  to  the  time  when  a  resale  could 
be  had,  and  costs. 

"-Old  Colony  Trust  Co.  v.  Great 
White  Spirit  Co.  181  Mass.  413,  415, 
63  N.  E.  945;  Farmers'  Loan  Co.  v. 
Oregon  Pacific  R.  Co.  28  Oreg.  44, 
40  Pac.  1089;  Calvert  v.  Godfrey, 
6  Beav.  97;  Freeman  on  Void  Judi- 
cial Sales,  343.  "The  case  presented 
is  not  that  of  a  donee  of  a  power 
who  is  bound  to  follow  strictly  the 
provisions  of  the  power,  or  of  an 
ofl[icer  selling  on  execution,  for  in- 
stance, who  also  is  bound  to  follow 
strictly  the  requirements  of  the  stat- 
ute, but  is  that  of  a  special  master  in 
chancery  appointed  to  make  sale  of 
certain  property  under  a  decree  in 
a  suit  in  equity.  In  such  a  case  the 
court  can  change  or  modify  the  de- 
cree at  any  time  before  it  is  car- 
ried into  effect,  and  after  it  is  car- 
ried into  effect  can  confirm  or  ratify 
the  doings  of  its  agent,  as  in  the 
case  of  receivers  and  other  agents, 
if  they  have  departed  from  or  ex- 
ceeded the  authority  conferred  upon 


G31  SETTING   ASIDE    OF   SALE.  [§1G75. 

title  to  the  premises,  the  time  of  redemption  having  expired,  is 
thereby  estopped  from  afterwards  questioning  tlie  regularity  of  the 
foreclosure  and  sale  as  against  such  purchaser.'^^" 

A  foreclosure  sale  will  not  be  set  aside  at  the  instance  of  the 
mortgagor,  for  the  reason  that  there  was  an  understanding  between 
him  and  the  purchaser,  in  fraud  of  third  persons,  that  the  mortgagor 
might  redeem  from  the  sale,'^^'^  especially  if  this  claim  is  wholly  in- 
consistent with  plaintiff's  previous  acts  regarding  the  sale.^^^ 

§  1675.  When  mistake  or  accident  on  the  part  of  any  one  inter- 
ested in  the  property  is  relied  upon  as  a  ground  for  setting  aside  a 
sale,  it  must  be  shown  that  the  consequence  of  it  was  that  the  prop- 
erty sold  for  a  less  price  than  it  would  otherwise  have  sold  for, 
and  that  a  material  advance  may  be  expected  on  a  resale/'"'^"  Partic- 
ular emphasis  is  placed  in  such  cases  upon  the  amount  of  the  ad- 
vance that  can  be  obtained,  the  sale  having  been  fairly  conducted.^"* 
When  the  principal  defendants  were  prevented  by  unavoidable  acci- 
dent from  reaching  the  place  of  sale  until  after  it  had  been  con- 
cluded, the  court,  in  granting  a  resale,  imposed  as  terms  the  deposit 
of  the  amount  proposed  to  be  bid,  and  the  payment  of  the  costs  of 
the  former  sale.^*'^ 

A  mistake  in  the  proceedings,  such,  for  instance,  as  a  misdescrip- 
tion in  the  bill  of  the  land  mortgaged,  when  first  discovered  after 
decree  and  sale,  is  ground  for  setting  aside  the  decree  and  sale  either 
wholly  or  as  to  the  land  erroneously  described,  and  for  maintaining  a 
bill  of  review  to  correct  the  error. 

A  sale  may  be  set  aside  on  the  ground  of  surprise;  and  this  re- 
lief was  granted  in  a  case  where  the  defendant  was  a  German 
woman,  who  understood  little  English,  and  did  not  understand  the 
nature  of  the  proceedings  against  her.  She  lived  upon  the  prop- 
erty and  thought  that  if  the  house  was  to  be  sold  a  notice  of  sale 
would  be  posted  on  the  house.  She  did  not  know  of  the  decree  or 
of  the  sale  until  the  property  had  been  sold,  when  she  tendered  to 
the  sheriff  the  amount  of  the  execution,  with  costs,  and  alleged  in 
her  petition  that  she  stood  ready  to  pay  the  same  at  any  time.^'^- 

""'Curyea  v.  Berry,  84  Dl.  600.  ="">  Hudgins  v.  Lanier,  23  Gratt.  494. 

'"  Randall  v.  Howard,  2  Black,  585.  For  cases  in  which  the  court  refused 

6"  Williams    v.    Watson    (Ky.),    21  to  set  aside  a  sale  for  surprise,  see 

S.  W.  349.  Hunt   v.    Ellison,    32    Ala    173;    Hill 

"»  Stryker  v.  Storm,  1  Abb.  Pr  N.  v.   Hoover,  5  Wis.  354,  67  Am.  Dee. 

S.  424.     See,  also,  Hev  v.   Schoolev.  70 

7  Ohio,  Part  II,  49;  Wolfert  v.  Mil-  ^""  Adams  v.  Haskell.  10  Wis.  123. 

ford   Sav.   Bank,   5   Kans.   App.   222,  '>»' Schulling   v.    Lintner,    43    N.    J. 

47  Pac.  175.  Eq.  444,  11  Atl.  153. 


§§  1675a,  1676.]        under  decree  of  court.  633 

A  sale  may  be  set  aside,  upon  the  application  of  the  mort- 
gagee, on  the  ground  of  a  mistake  whereby  the  land  was  sold  at  a 
grossly  inadequate  price;  as  where  a  mortgagee  instructed  an  agent 
to  attend  the  sale  and  bid  the  amount  of  the  mortgage,  and  through 
his  mistake  or  inadvertence  he  failed  to  do  so,  and  the  land  was 
sold  for  a  small  part  of  the  amount  of  the  mortgage  debt.°®^ 

It  is  not  a  valid  ground  of  objection  on  the  part  of  the  pur- 
chaser, to  the  completion  of  an  executory  contract  for  the  sale  of 
land  subject  to  a  specific  mortgage,  that  a  special  clause  in  the 
mortgage  making  it  payable  in  gold  was  not  disclosed  at  the  time  the 
contract  was  made,  provided  there  was  no  deceit  or  misrepresenta- 
tion, and  it  appears  that  the  silence  of  the  contract  did  not  affect 
the  value  of  the  property  or  influence  the  purchaser  in  making  his 
bid,  and  that  it  will  not  impose  any  additional  burden  on  him  in 
case  the  contract  is  completed.^^* 

§  1675a.     The  purchaser  may  have  the  sale  set  aside  on  account 

of  a  mistake  as  to  the  location,  the  boundaries,  or  the  quantity 
of  the  land  described  in  the  notice  of  sale.  Thus  a  purchaser- 
should  be  relieved  from  his  purchase  where  the  lot  sold  contains  only 
eight  or  nine  acres  instead  of  eighty-nine  acres,  as  described  in  the 
notice  of  sale,  and  he  made  his  bid  in  the  honest  belief  that  it  con- 
tained the  larger  quantity.^"^  And  so  a  purchaser  was  relieved  from 
his  purchase  where  he  made  a  mistake  as  to  the  location  of  the  lots 
purchased,  he  believing  that  each  lot  had  a  house  upon  it,  when  in 
fact  two  houses  were  upon  one  lot,  and  the  owner  proceeded  to  re- 
deem the  lot  upon  which  both  houses  were  situated  for  the  sum  bid 
for  that  lot.  Had  his  mistake  been  one  merely  as  to  the  value  of 
the  lots,  he  would  not  be  entitled  to  relief.^"'^ 

§  1676.     A  sale  will  not  be  set  aside  without  some  pressing  reason. 

If  the  mortgagor  is  competent  to  take  care  of  his  interests,  and 
has  the  opportunity  of  attending  the  sale,  and  this  is  fairly  con- 
ducted, the  court  will  not  interfere.^*'^  A  resale  will  not  be 
granted,  even  at  the  instance  of  infant  defendants,  on  account  of 
tJie  failure  of  their  guardian  to  attend  the  sale,  unless  it  appears 

"'Cole  Co.  v.  Madden,  91  Mo.  585,  v.  Whipple,  13  Wend.  224;   Hoppock 

4  S.  W.  397;  Holdsworth  v.  Shannon  v.  Conklln,  4  Sandf.  Ch.  582. 

(Mo.)    21   S.   W.    85;    Williamson   v.  »"*  Blanck  v.  Sadlier,  153  N.  Y.  551, 

Dale,    3    Johns.    Ch.    290;    Bixly    v.  552,  47  N.  E.  920. 

Mead,  18  Wend.  611;  Howell  v.  Hes-  ^'-  Dunn  v.  Herbs,  10  N.  Y.  Supp.  34 

ter,  4  N.  J.  Eq.  266;  Seaman  v.  Rig-  '''"Root  v.   King,  91  Mich.   488,  51 

gins,    2    N.    J.    Eq.    214;    Griffith    v.  N.  W.  1118. 

Hadley,    10    Bosw.    587;    Wetzler    v.  "'Haines    v.    Taylor,    3    How.    Pr. 

Schaumann,  24  N.  J.  Eq.  60;   Collier  206. 


633  SETTING    ASIDE    OF    SALE,  [§16T6a. 

that  their  share  of  the  proceeds,  after  indemnifying  the  purchaser 
at  the  first  sale,  will  be  materially  increased  by  a  sale  fairly  con- 
ducted in  all  respects.'^*'^  A  resale  will  not  be  ordered  in  favor  of 
a  party  to  the  suit  who  has  been  negligent  or  inattentive,  and  made 
no  inquiry  in  relation  to  the  sale,  br  the  time  of  it.^^®  But  if  a  mort- 
gagor is  prevented,  without  negligence  on  his  part,  from  taking  care 
of  his  interests,  as  by  his  illness,  which  the  purchaser  took  advantage 
of  by  preventing  a  postponement  of  the  sale  and  purchasing  for  one 
third  of  the  real  value  ;^'*  or,  being  absent  from  the  State,  his  agent 
in  charge  of  the  property  became  insane  f'^  or,  having  appealed  from 
the  decree  and  supposing  the  sale  was  stayed,  the  plaintiff  without 
his  knowledge  proceeds  to  sell;^^"  or  a  subsequent  incumbrancer  is 
prevented  from  attending  the  sale  by  accident,  and  the  premises  are 
sold  for  an  inadequate  price, — in  all  these  cases  the  sale  will  be  set 
aside.'" 

If  the  mortgagor  and  others  interested  in  the  property  have  been 
misled  by  the  mortgagee,  or  even  by  a  third  person,  in  reference 
to  the  foreclosure,  and  in  consequence  did  not  attend  the  sale,  and 
the  property  was  bought  by  the  mortgagee  for  a  price  greatly  less 
than  its  value,  a  resale  will  be  granted.''^*  The  petitioner  may 
properly  be  required  to  guarantee  a  bid  of  a  certain  sum  at  the 
resale.^'^^  A  resale  was  granted  where  a  party  to  the  suit  persuaded 
the  plaintiff  to  withdraw  his  consent  to  a  postponement  of  the 
sale,  knowing  that  the  mortgagor  was  sick  and  unable  to  attend, 
and  himself  became  the  purchaser  at  a  price  wholly  inadequate.'"^ 
A  sale  will  be  set  aside  whenever  the  debtor  has  been  misled  in  any 
way  by  the  mortgagee  or  the  purchaser,  and  thereby  prevented  from 
protecting  his  interests  at  the  sale,  and  the  property  has  been  sold 
greatly  below  its  value.''^ 

§  1676a.  The  insanity  of  the  mortgagor  at  the  time  of  the  sale 
would  be  a  ground  for  setting  it  aside,  especially  if  any  unfair  ad- 
vantage was  taken  of  his  condition.     But  the  insanity  must  be  well 

^^^  Stryker    v.    Storm,    1    Abb.    Pr.  '■''''  Gould    v.    Libby,    24    How.    Pr. 

N.   S.   424.     The  guardian  was  kept  440,  18  Abb.  Pr.  32. 

from  the  sale  by  delay  of  the  rail-  '-'^  Howell   v.    Hester,   4   N.    J.    Eq. 

way  train  by  which  he  wa,s  to  go  to  266. 

the  place  of  sale.  ^'*  Campbell    v.    Gardner,   11   N.    J. 

="^'' Francis   v.    Church,    Clarke    (N.  Eq.  423,  69  Am.  Dec.  598. 

Y.),  475.  "^Hazard  v.  Hodges,  17  N.  J.  Eq. 

•^""May  v.  May,  11  Paige,  201;  Bil-  123. 

lington    v.    Forbes,    10    Paige,    487;  ""  Billington  v.    Forbes,   10   Paige, 

Carpenter  v.  Smith,  30  N.  J.  Eq.  463.  487. 

"'  Thompson    v.    Mount,    1    Barb.  '"''  Collier    v.    Whipple,    13    Wend. 

Ch    607.  224,    226;     Hoppock    v.    Conklin,    A 

Sandf.  Ch.  582. 


§    1677.]  UNDER   DECREE   OF    COURT.  63i 

established.  A  sale  will  not  be  set  aside  on  this  ground  where  the 
affidavits  fail  to  show  with  any  definite  particularity  when  the  in- 
sanity commenced,  and  it  appears  that  the  mortgagor  did  not  give 
up  business  until  two  years  after  the  sale.^^^ 

§  1677.  Few  bidders. — It  is  no  good  cause  for  setting  aside  a 
judicial  sale,  that  only  a  few  bidders  were  present.  If  the  terms 
of  the  decree  have  been  pursued,  and  the  property  sold  for  an 
adequate  price,  the  sale  must  stand.  But  a  sale  at  which  no 
bidders  were  present  except  the  auctioneer,  wdio  bid  in  the  prop- 
erty for  the  mortgagee,  was  held  void.^''^  And  so,  without  deter- 
mining whether  the  price  obtained  at  a  sale  was  adequate,  the 
court  set  it  aside  on  its  appearing  that  only  one  bidder  was  pres- 
ent, and  that  others  intending  to  be  present  and  bid  for  a  part  of  the 
land  were  deterred  from  doing  so  by  the  inclemency  of  the  weather.^^** 

A  combination  of  bidders  not  to  bid  against  each  other  and  to 
share  in  the  profits  of  a  purchase  might  invalidate  a  sale.  But  if 
there  are  two  mortgagees  who  have  separate  liens  on  mortgaged 
land,  which  each  claims  to  be  superior  to  the  other,  they  may  agree 
to  purchase  the  land  for  their  joint  benefit,  and  are  not  obliged  to 
bid  against  each  other.^^^  It  is  now  settled  that  agreements  be- 
tween two  or  more  persons  that  all  l)ut  one  shall  refrain  from  bid- 
ding, and  permitting  that  one  to  become  the  purchaser,  are  not 
necessarily,  and  under  all  circumstances,  void.^*^ 

578  Provost  V.  Roedieger,  10  N.   Y.  ket    value,    it    will    be    illegal,    and 

Supp.  812.  may  be  avoided  as  between  the  par- 

""  Campbell  v.  Swan,  48  Barb.  109.  ties  as  a  fraud   upon  the  rights  of 

"'"Roberts    v.    Roberts,    13    Gratt.  the  vendor  but,  on  the  other  hand, 

639.  if  the  arrangement   is  entered   into 

"'  Huber  v.   Crosland,   140  Pa.   St.  for  no  such  fraudulent  purpose,  but 

575,  21  Atl.  404.  for   the   mutual   convenience   of  the 

"*^  Hopkins    v.    Ensign,    122    N.    Y.  parties  .  .  .  and     for    a     reasonable 

144,   25   N.   E.   306,   citing  People   v.  and  honest  purpose,  such  agreement 

Stephens,  71  N.  Y.  527,  546;    Marsh  will    be    valid    and    binding."     The 

V.    Russell,    66   N.   Y.   288;    Marie   v.  older    cases,    Jones    v.     Caswell,    3 

Garrison,  83  N.  Y.  14,  28;   Myers  v.  Johns.    Cas.   29;    Doolin  v.   Ward,   6 

Dorman,    34    Hun,    115;    Kearney   v.  Johns.  194;  Wilbur  v.  How,  8  Johns. 

Taylor,    15    How.    494;     Wicker    v.  444;   Thompson  v.  Davies,  13  Johns. 

Hoppock,    6    Wall,    94;    Phippen    v.  112,   holding  that  such  an  arrange- 

Stickney,    3    Mete.    384;     Maffet    v.  ment     necessarily     invalidates     the 

Ijams,    103    Pa.    St.    266;    Garrett   v.  sale,  are  no  longer  authority. 

Moss,    20    111.    549;     Nat.    Bank    v  An    agreement    to    abstain    from 

Sprague,  20  N.  J.  Eq.  159;  In  re  Ca-  bidding  at  the  sale  when  justifiable 

rew's  Estate,  26  Beav.   187      It  was  is    a    sufficient    consideration    for    a 

said      in      Phippen      v.      Stickney:  mortgage    given    to    a    lawyer    who 

"Where    such    an     arrangement    is  had  a  claim  for  services  against  the 

made  for  the  purpose  and  with  the  mortgagor's  estate,  but  agreed  with 

view  of  preventing  fair  competition,  the    mortgagor's    widow    to    abstain 

and    by   reason   of  want   of  bidders  from  bidding  at  the  foreclosure  sale 

to  depress   the   price   of  the   article  to  enable  her  to  bid  in  the  land  for 

offered  for  sale  below  the  fair  mar-  the  amount  of  the  mortgage,   upon 


C35  SETTING  ASIDE  OF  SALE.  [§  1678. 

§  1678.  When  a  foreclosure  sale  is  invalid  by  reason  that  in 
making  it  the  requirements  of  statute  iiave  not  been  followed,  the  ])\xv- 
chaser  is  subrogated  to  the  rights  of  the  mortgagee.  When  the 
proper  parties  to  the  suit  are  omitted,  and  therefore  are  not  bound 
by  it,  or  there  is  any  other  irregularity  in  the  proceedings,  the  sale 
operates  as  a  voluntary  assignment  by  the  mortgagee  of  his  interest 
to  the  purchaser.^*^  This  is  true  of  sales  under  powers  of  sale,^^*  as 
well  as  those  under  decrees  of  court.  Such  purchaser  also  acquires 
the  mortgagee's  rights  to  recover  from  the  mortgagor,  or  others 
personally  liable  for  the  debt,  any  deficiency  there  may  be  after  the 
application  of  the  proceeds  of  the  property.^®^  In  such  cases  the 
purchaser  may  use  his  mortgage  title  to  protect  himself  in  the  pos- 
session of  the  property  if  he  has  obtained  this;^^°  the  mortgagor 
cannot  maintain  ejectment  against  him  any  more  than  he  could 
against  the  mortgagee  lawfully  in  possession  after  condition  broken. ^^'^ 
Moreover,  he  may  maintain  ejectment  on  the  mortgagee's  legal 
title,  where  the  mortgagee  himself  could  maintain  the  action. ^'^^  The 
purchaser's  title  under  an  invalid  sale  is  good  against  all  except  the 
mortgagor  and  those  claiming  under  him.^*^^ 

If  a  purchaser  of  a  foreclosure  sale  under  a  judgment  regular  ^ipon 
its  face,  refuses  to  take  title  on  the  ground  that  the  owner  of  the  fee 
had  not  been  properly  served  with  the  summons  in  the  foreclosure 
suit,  the  court  may  inquire  into  the  facts,  and,  upon  a  conclusion 
that  the  smnmons  was  duly  served  upon  the  owner,  may  issue  an  order 
compelling  the  purchaser  to  complete  his  purchase.''^" 

her    agreement    to    secure    him    the  row   v.   Morgan,   48   Tex.   304;    King 

amount  of  his  claim  by  mortgage,  if  v.  Brown,  80  Tex.  276,  16  S.  W.  39. 

she     should     secure     the     property.  ^"*  Grosvenor    v.    Day,    Clarke    (N. 

Hopkins   v.    Ensign,    122   N.   Y.    144,  Y.),  109;   Jackson  v.  Bowen,  7  Cow. 

25  N.  E.  306.  13;  Gilbert  v.  Cooley,  Walk.  (Mich.) 

'"^  See    §S    812,    1902;    Robinson   v.  494.     See  chapter  xl. 

Ryan,  25  N.  Y.  320;  Grapengether  v.  ='*■•  Robinson  v.  Ryan,  25  N.  Y.  320. 

Fejervary,  9  Iowa,  163,  74  Am.  Dec.  In   a  late   case   in  Missouri,   how- 

336;     Honaker    v.    Shough,    55    Mo.  ever,    it   is    held    that   the   irregular 

472;  Stoney  v.  Shultz,  1  Hill  (S.  C.)  sale  does  not  operate  to  assign  the 

Eq.  405,  27  Am.  Dec.  429;   Cheek  v.  debt  itself.  Wells  v.  Lincoln  County, 

Waldrum,   25   Ala.    152;    Tutwiler  v.  80   Mo.    424,    explaining   Honaker  v. 

Atkins.  106  Ala.  194,  17  So.  394;   At-  Shough.  55  Mo.  472. 

kins  v.  Tutwiler,  98  Ala.  129,  11  So.  "'Honaker  v.  Shough,  55  Mo.  472; 

640;  Stark  v.  Brown,  12  Wis.  572,  78  .Jones  v.  Mack,  53  Mo.  147;  Jackson 

Am.    Dec.    7G2;    Moore    v.    Cord,    14  v.   Magruder,   51   Mo.   55;    Brewer  v. 

Wis.  213;    Childs  v.  Childs,  10  Ohio  Nash,  16  R.  I.  458,  17  Atl.  857. 

St.    339,    75    Am.    Dec.    512;    Frische  ■•'^' Gillett    v.    Eaton,    6    Wis.    30; 

V.    Kramer,    16    Ohio,    125,    47    Am.  Tallman  v.  Ely,  6  Wis.  244. 

Dec.  368;  Nims  v.  Sherman,  43  Mich.  ■"'■  Georgia  Pacific  R.  Co.  v.  Walker, 

45,  4   N.  W.   434;    Cooke  v.   Cooper,  61  MIfs.  481. 

18  Oreg.  142.  22  Pac.  945;   Bryan  v.  =«'' Caller  v.  Shipman,  35  N.  Y.  533. 

Brasius    (Ariz.),    31   Pac.    519;    Mor-  ""  O'Connor  v.  Felix.  147  N.  Y.  614, 

42  N.  E.  269,  87  Hun,  79. 


§§  1679,  1G80.]      UNDER  DECREE  OF  COURT.  636 

§  1679.  A  second  action  to  foreclose. — If  the  owner  of  the  equity 
has,  through  mistake,  not  been  made  a  party,  the  mortgagee  who 
has  purchased  at  the  sale  may  maintain  a  second  action  to  fore- 
close the  equity  of  such  owner,  and  for  a  new  sale,^^^  but  he  cannot 
recover  the  costs  of  the  previous  sale.^'*^  The  foreclosure  is  valid  as 
against  those  who  were  made  parties  to  the  proceeding;  and  if 
the  error  was  in  not  making  a  junior  mortgagee  a  party,  the  pur- 
chaser acquires  an  estate  subject  only  to  the  lien  of  the  junior  mort- 
gagee,^^^  and  the  purchaser  may  maintain  proceedings  to  foreclose 
such  lien.^'**  By  the  act  of  purchase  he  submits  himself  to  the  juris- 
diction of  the  court  in  the  foreclosure  suit  as  to  all  matters  con- 
nected with  the  sale,  and  he  is  entitled  to  apply  for  relief  such  as  the 
facts  may  justify.  He  may,  by  a  supplemental  bill,  bring  in  all 
persons  interested  in  the  premises  whose  rights  are  not  already  fore- 
closed ;  or,  if  necessary,  he  may  have  the  sale  set  aside  and  obtain  a 
resale  of  the  premises;  or  the  court  may  give  such  other  relief  as 
justice  demands.^'*^ 

Although  a  new  action  is  the  proper  remedy  for  a  foreclosure  im- 
perfect through  failure  to  make  all  persons  interested  in  the  equity 
of  redemption  parties  to  the  suit,  the  courts  have  allowed  the  original 
suit  to  be  reinstated  upon  an  amended  petition,  even  after  an  in- 
terval of  several  years.^'^'' 

§  1680.  Redemption  in  such  case  can  only  be  effected  by  sat- 
isfying the  prior  mortgage.  It  is  not  sufficient  to  pay  the  amount 
for  which  the  property  was  bid  off  at  the  sale,  where  this  amount 
is  less  than  the  mortgage  debt;  and  this  rule  applies  as  well  in 
those  States  where  a  mortgage  is  regarded  as  a  mere  lien,  as  where 
the  common  law  doctrine  still  prevails  that  the  mortgage  is  the 
legal  estate.  Although  the  mortgage  be  regarded  only  as  a  lien  for 
enforcing  the  debt,  the  mortgagee  is  just  as  much  entitled  to  pay- 
ment, and  his  lien  is  not  merged  or  lost  in  the  judgment  of  foreclos- 
ure and  sale.^^'^ 

If  before  the  sale  is  set  aside  the  purchaser  has  sold  the  prop- 

^^'  Georgia  Pacific  R.  Co.  v.  Walker,  ^^'  Boggs  v.  Hargrave,  16  Cal.  559; 

61  Miss.  481;  King  v.  Brown,  80  Tex.  Goodenow  v.  Ewer,   16  Cal.   461,   76 

276,  16  S.  W.  39.  Am.  Dec.  540. 

^^- State  Bank  v.   AbboU,  20  Wis.  '=^  Lof tin  v.  Strew   (Ky.),  4  S.  W. 

570.     And  see  Stackpole  v.  Robbins,  180. 

47    Barb.    212;     Shirk    v.    Andrews,  ""Johnson    v.    Harmon,    19    Iowa, 

92  Ind.  509,  quo-ting  text.  56;  Knowles  v.  Rablin,  20  Iowa,  101; 

'^^  Carpentier  v.  Brenham,  40  Cal.  Street  v.  Beal,  16  Iowa,  68,  85  Am. 

221.  Dec.  504;  Massie  v.  Wilson,  16  Iowa, 

»°*  Goodenow  v.  Ewer,  16  Cal.  461,  390;    Douglass   v.    Bishop,   27    Iowa, 

76  Am.  Dec.  540.  214. 


637  SETTING  ASIDE  OF  SALE.  [§  1G8L 

erty  or  any  part  of  it  to  another,  who  has  taken  it  in  good  faith, 
for  value,  and  without  notice,  such  sale  will  not  be  affected  by  the 
action  of  the  court  and  the  resale  under  its  authority.  But  the 
court  will  inquire  into  the  circumstances  of  the  purchaser's  sale,  and 
if  any  collusion  be  found,  or  any  facts  from  which  notice  should  be 
inferred,  the  title  will  be  made  void  as  effectually  as  if  it  had  been 
retained  in  the  first  purchaser.^'*^  Judgments  against  the  first  pur- 
chaser after  the  delivery  of  the  deed  to  him,  being  merely  liens 
upon  his  interest,  cease  to  incumber  it  on  the  sale  being  set  asidc^**^ 
Intervening  purchasers  and  mortgagees  may  be  protected  by  pro- 
viding that  the  money  received  from  the  resale  of  the  property  shall 
be  held  and  not  distributed,  until  the  further  order  of  the  court,  to 
the  end  that  it  may  be  applied  so  far  as  necessary  to  the  repayment 
of  the  moneys  advanced  by  them  in  good  faith  on  the  property.*'"^ 
One  who  has  purchased  of  the  vendee  at  the  foreclosure  sale,  during 
the  pendency  of  a  motion  to-  set  the  sale  aside,  is  not  entitled  to 
protection. •'^^ 

A  bill  by  a  subsequent  mortgagee  to  set  aside  a  foreclosure  of  a  prior 
mortgage  may  be  considered  a  bill  to  redeem,  though  it  contains  no 
specific  prayer  for  that  relief,  and  no  express  offer  to  pay  the  mort- 
gage debt.''"^ 

§  1681.  When  a  sale  is  set  aside  by  order  of  court  the  title  of  the 
purchaser  is  vacated,"*'^  and  the  mortgage  is  restored  to  the  same 
position  it  occupied  before  the  proceedings  were  commenced,  with- 
out any  affirmative  judgment  of  the  court.  The  satisfaction  of 
the  mortgage  debt  caused  by  the  sale  is  also  vacated.^"*  The  mort- 
gage cannot  be  deemed  to  be  paid,  or  the  lien  upon  the  premises 
in  any  way  impaired.''"^  The  purchaser  also  is  entitled  to  be  put 
into  the  same  situation  he  was  before  the  purchase.**"^  If  the  sale 
be  set  aside,  a  purchaser  who  has  entered  into  possession  is  held 
to  account  for  the  rents  and  profits  received  by  him  while  in  pos- 
session, for  the  benefit  of  the  mortgagor  or  owner  of  the  equity.^" 
In  like  manner,  in  case  a  person  interested  in  the  property  was 
not  made  a  party  to  the  suit,  and  consequently  redeems  it  after 
the  sale,  the  purchaser  becomes  liable  to  account  for  the  rents  and 
profits;  and  he  is  under  the  same  liability  in  case  he  forecloses  the 

»»'  Colby  V.  Rowley,  4  Abb.  Pr.  361.        °°«  Freeman  v.  Munns,  15  Abb.  Pr. 

"»  Colby  V.  Rowley,  4  Abb.  Pr.  361.  468. 

«°»  Gould  V.  Llbby,  18  Abb.  Pr.  32,        «°*  Fort  v.  Roush,  104  U.  S.  142. 
24  How.  Pr.  440.  ""^  Stackpole  v.   Robbins,  47  Barb. 

«<"  Quaw  V.  Lameraux,  ?,G  Wis.  626.  212,  affirmed  48  N.  Y.  665. 

""=  Brown  v.  Burney,  128  Mich.  205,        ""«  Trotter  v.  White.  27  Miss.  88. 
87  N.  W.  221.  «°-  Raun  v.  Reynolds,  15  Cal.  459. 


§    1681.]  UNDER   DECREE    OF    COURT.  638 

outstanding  incumbrance  by  another  suit.  He  acquires  by  the  sale 
in  such  case  only  the  rights  of  a  mortgagee  in  possession.^"* 

If  the  purchaser  in  good  faith  relying  upon  the  validity  of  the 
title  obtained  by  him  under  the  mortgage  sale  makes  improvements 
of  the  property  and  the  mortgagor  is  allowed  to  redeem  because  the 
foreclosure  is  invalid,  the  purchaser  should  be  allowed  the  sums  so 
expended  by  him  so  far  as  the  value  of  the  property  has  thereby  been 
increased. ^°^ 

Where  after  confirmation  of  a  foreclosure  sale  the  purchaser  had 
mortgaged  the  premises,  a  resale  should  not  be  ordered  without  re- 
quiring a  proper  undertaking,  to  be  approved  by  the  court,  to  save 
the  purchaser  harmless  from  liability  on  the  covenants  in  the  mort- 
gage and  the  undertaking  in  the  note."^" 

"'^  Walsh  V.  Rutgers  Fire  Ins.  Co.  ^'"' Veil  v.  Meyer,  105  Wis.  530,  81 
13  Abb.  Pr.  33.  N.  W.  653. 

'"'Pearson  v.  Gooch,  69  N.  H.  571, 
45  Atl.  406. 


CHAPTEE  XXXVII. 


APPLICATION  OF  PROCEEDS  OF  SALE. 


I.  Payment  of  the  mortgage  debt, 
1682-1G83  a. 
II.  Disposition  of  the  surplus,  16S4- 
1698. 


III.  Priorities  between  holders  of 
several  notes  secured,  1699- 
1707. 

VI.  Costs  of  subsequent  mortga- 
gees,  1708. 


I.     Payment  of  the  Mortgage  Debt. 

§  1682.  In  g:eneral. — The  proceeds  of  the  sale  must  be  disposed 
of  as  directed  in  the  decree  of  court,  or  by  the  rules  and  practice 
adopted  by  it.  In  general  it  may  be  said  that  the  officer  making 
the  sale  is  first  to  pay  out  of  the  proceeds  of  it  to  the  plaintiff  or 
his  attorney  the  amount  of  the  mortgage  debt  with  interest,  and 
the  costs  of  the  proceedings.  He  should  take  a  receipt  for  this,  to 
file  in  court  with  his  report  of  the  sale.  But  the  court,  and  not  the 
officer  appointed  to  make  the  sale,  must  determine  all  questions  of 
priority  of  claim  to  the  proceeds,  and  must  see  that  the  moneys 
reach   the  persons  entitled   to  them.^ 

§  1683.  If  a  mortgagee  in  order  to  preserve  his  security  has  been 
obliged  to  pay  taxes  or  other  charges  upon  the  mortgaged  j^roperty, 
he  may  add  the  amount  to  his  mortgage  upon  foreclosure  of  it."  A 
prior  judgment  lien,'*  or  rent  due  on  leasehold  premises,*  or  a  prior 
mortgage  that  is  due  and  payable,^  if  it  be  a  lien  upon  the  same 
premises,  may  be  paid  by  the  junior  mortgagee,  and  he  will  succeed 
'by  subrogation  to  the  rights  of  such  prior  party  without  any  assign- 
ment or  transfer  of  the  prior  claim  to  him.     In  such  cases  the  mort- 

^ Eleventh  Ward  Savings  Bank  v.  ^Silver    Lake    Bank    v.    North     4 

Hay,  55  How.  Pr.  444.  Johns.  Ch.  370. 

'See    1173;     New    York:      Dale    v.  ^Robinson  v.  Ryan,  25  N.  Y.  320. 

M'Evers,  2  Cow.  118;  Burr  V.  Veeder,  =  Burnet    v.    Denniston,    5    Johns. 

3    Wend.     412;     Faure    v.    Winans,  Ch.  35. 
Hopk.  283,  14  Am.  Dec.  545. 

639 


§    1683a.]  APPLICATION    OF   PROCEEDS    OF    SALE.  640 

gagoT,  on  a  bill  to  foreclose,  is  entitled  to  be  reimbursed  the  sum  he 
has  paid,  and  to  have  a  decree  of  indemnity  out  of  the  proceeds  of 
the  sale.® 

The  ta:xes  and  assessments  due  on  the  property  sold,  if  unpaid, 
are  to  be  deducted  from  the  moneys  arising  from  the  sale,  unless  it 
was  made  subject  to  them;  but  a  direction  to  the  officer  in  the  judg- 
ment to  so  deduct  the  amount  of  them  does  not  authorize  the  pay- 
ment of  them  by  him.'^ 

But  except  when  the  mortgagee  has  paid  prior  liens,  the  proceeds 
of  lands  sold  under  a  mortgage  are  applicable  first  to  the  mortgage 
debt,  then  to  subsequent  liens  and  incumbrances,  and  not  to  prior 
and  paramount  liens  ;^  and  after  that  the  surplus  is  payable  to  the 
mortgagor,  the  owner  of  the  equity  of  redemption,  or  other  person 
entitled.^ 

§  1683a.  The  rule,  that  a  creditor  may  apply  a  payment  made  by 
his  debtor  without  special   direction  to  any  one  of  several  debts 

the  latter  is  owing  him,  is  confined  to  cases  of  voluntary  payments. 
The  proceeds  of  a  foreclosure  sale  are  paid  by  operation  of  law: 
and  if  the  mortgage  does  not  provide  for  the  application  of  the  pay- 
ments, or  the  order  of  priority  of  the  claims  secured  by  it,  the 
court  must  make  the  application  in  accordance  with  equitable  prin- 
ciples.^'^ Where  the  moneys  arise  from  a  foreclosure  sale,  the  rule 
of  equity  most  generally  adopted  is  that  they  shall  be  applied  to  all 
the  debts  pro  rata,  each  debt  sharing  in  the  fund,  without  regard  to 
the  priority  of  date,  or  to  the  fact  that  for  some  of  his  claims  the 
creditor  holds  other  security.^^ 

« Ellsworth  v.  Lockwood,  42  N.  Y.  the   payment  of   several   notes,   the 

89,  96;  Dale  v.  M'Evers,  2  Cow.  118.  proceeds  not  being  enough  to  pay  all 

See  §    1597;    Odpyke  v.   Crawford,  the  liabilities,  the  bank  applied  the 

19  Kans.  604;  Cord  v.  Southwell,  15  money  first  to  the  payment  of  a  note 

Wis.  211.  upon    which    the    debtor    was    alone 

^  Reybold  v.  Herdman,  2  Del.  Ch.  liable,    and    then    upon    notes    upon 

34;    Hotchkiss  v.    Clifton   Air   Cure,  which  the  debtor  and  sureties  who 

4  Keyes,  170;  Koch  v.  Purcell,  13  J.  might  be  insolvent  were  liable,  and 

&  S.  162.  the  balance  upon  paper  with  solvent 

'  Day  v.  Town  of  New  Lots,  107  N.  sureties.     The    court    held    that   the 

Y.  148,  13  N.  E.  915.  bank  had  the  right  so  to  do.     This 

"  Orleans      Co.      Nat.      Bank      v.  decision     was      placed      upon      two 

Moore,  112  N.  Y.  543,  20  N.  B.  357,  grounds,  first,  that  the  sureties  not 

affirming    48    Hun,    70;     Blackstone  having  paid  or  tendered  in  full  the 

Bank  v.  Hill,  10  Pick.  129;   Cage  v.  debts    for    which    the    security    was 

Her,  5  Sm.  &  M.  410.  given    had    no    claim,  to    be    subro- 

1^  Orleans  Co.  Nat.  Bank  v.  Moore,  gated  to  the  rights  of  the  bank; 
112  N.  Y.  543,  20  N.  E.  357,  affirm-  and  second,  that  the  bank  had  the 
ing  48  Hun,  70,  disapproving  of  Wil-  right  to  appropriate  the  whole  pro- 
cox  V.  Fairhaven  Bank,  7  Allen,  270,  ceeds  of  the  property  to  any  debt 
where  upon  a  sale  of  personal  prop-  it  might  choose.  This  latter  princi- 
erty  held  as  security  by  a  bank  for  pie,  say  the  court  in  the  New  York 


641  DISPOSITION   OF   SURPLUS.  [§§    1684,   1685. 

II.     Disposition  of  the  Surplus. 

§  1684.  Usually  the  surplus  money  is  paid  into  court  to  await 
its  order  of  distribution.^^  Any  party  to  the  suit  liaving  a  lien 
upon  the  premises  subordinate  to  the  mortgage  upon  which  the  sale 
was  made  may  file  a  notice  or  petition,  stating  the  nature  and  ex- 
tent of  his  claim,  and  he  may,  according  to  the  general  practice, 
have  an  order  of  reference  to  ascertain  and  report  the  amount  due 
to  him,  and  to  others  having  liens  upon  the  property.  Notice  of 
this  is  given  to  all  claimants  or  others  having  liens,  and  the  referee 
proceeds  to  ascertain  the  amounts  due  to  each.  The  court  has 
power  to  distribute  the  surplus  among  the  persons  entitled,  although 
the  mortgagor  has  died  pending  the  proceedings,  and  his  estate  is 
in  course  of  settlement  in  the  probate  or  surrogate  court.  His 
heirs  and  creditors  must  apply  for  it  there.^^ 

The  omission,  in  a  judgment  foreclosing  a  mortgage,  of  a  provi- 
sion directing  what  disposition  shall  be  made  of  the  surplus,  does 
not  work  a  reversal  of  the  judgment.  The  court  may,  upon  appli- 
cation after  judgment,  direct  the  payment  of  the  surplus  to  any 
one  entitled  thereto.^* 

§  1685.  The  court  may  appoint  a  master  or  referee  to  ascertain 
the  rights  of  claimants  to  the  surplus,  and  may  confirm  or  set  aside 
or  refer  back  his  report,  or  may,  while  the  moneys  remain  in  court, 
vacate  the  report  and  order  further  proof.^'^  According  to  the  prac- 
tice of  some  courts,  this  reference  is  allowed  as  a  matter  of  course; 
while  the  practice  of  others  is  to  allow  it  on  application.^*' 

All  parties  to  the  foreclosure  suit  should  have  notice  of  the  ap- 
plication for  the  surplus  money,  that  they  may  appear  and  assert 
their  rights,  and  the  report  should  show  on  its  face  that  they  w^ere 
summoned ;  and  an  order  of  payment  without  such  notice  will  be  set 
aside.^'^  They  should  prove  the  nature  of  their  respective  liens  and 
the   amounts    due   them ;     verifying   them    in   the   same   manner   as 

case,    "leaves    out    of    view    entirely  "  Loucks  v.  Van  Allen,  11  Abb.  Pr. 

all  rights  or  equities  of  the  surety.  N.  S.  427. 

The    law    has    always    regarded    a  '*  Brier  v.  Brinkman,  44  Kans.  570, 

surety  as  having  some  rights  in  the  24  Pac.  1108. 

security,    though    furnished    directly  ^^  Mut.    Life    Ins.    Co.    v.    Salem,    3 

by  the  debtor  to  the  creditor.     The  Hun,  117. 

security   having   been    furnished    by  ^^  Ward  v.   Montclair  Railway  Co. 

the   debtor,    the    creditor    must    dis-  26  N.  J.  Eq.  260. 

pose    of    it    upon    equitable    princi-  "'  Franklin  v.  Van  Cott,  11  Paige, 

pies."     Field   v.    Holland,   6   Cranch,  129;    Smith  v.  Smith,  13  Mich.  258; 

9,  is  also  disapproved.  Romberg  v.  McCormick,  194  111.  205; 

1=  Clark   V.    Carnall,   18   Ark.   209;  Moss  v.  Robertson,  56  Neb.  774,  77 

Baker  v.  Gladden,  72  Ga.  469.  N.  W.  403. 


§§  1686,  1687.]  APPLICATION  OF  PROCEEDS  OF  SALE.  642 

creditors  comin-g  in  under  a  decree  are  required  to  do  in  court.^"* 
The  costs  and  expenses  of  proceedings  for  the  distribution  of  the  sur- 
plus are  properly  chargeable  to  the  fund.^''  A  creditor  who  was 
not  a  party  to  the  suit  generally  bears  the  expense  of  proving  his 
claim^;  and  the  court  may  refuse  a  creditor  his  costs  imder  other  cir- 
cumstances.-° 

§  1686.  Upon  the  filing  of  the  report  of  the  referee  exceptions 
may  be  taken  to  his  findings  of  facts,  and  his  conclusions  upon  them, 
and  upon  notice  to  the  parties  interested  a  hearing  may  be  had; 
but  generally,  if  exceptions  are  not  taken  within  a  specified  time 
after  the  filing  of  the  report,  the  report  stands  confirmed.  An  order 
of  distribution  follows,  directing  the  payment  of  the  moneys  in  ac- 
cordance with  the  report,  when  no  exception  has  been  taken  to 
this,  or  otherwise  in  accordance  with  the  determination  of  court  upon 
the  report.  No  payment  can  properly  be  made  without  such  final 
order  of  court.^^ 

A  referee's  report  which  erroneously  shows  a  surplus  in  his  hands 
may  be  amended  so  as  to  show  that  there  was  no  surplus,  by  per- 
mission of  the  court.^^ 

^  1687.  In  general  no  claim  which  has  not  become  an  absolute 
lien  upon  the  property  can  be  considered,  however  equitable  it  may 
be.-'^  But  mechanics'  liens,  though  not  established  by  judgment,-* 
and  judgment  liens,  though  not  perfected  by  execution,  are  trans- 
ferred from  the  land  to  the  surplus  money.  After  a  sale  upon  exe- 
cution under  a  judgment  junior  to  the  mortgage,  the  right  of 
redemption  not  having  expired  at  the  time  of  the  foreclosure  sale, 
the  general  lien  of  the  judgTOent  is  turned  into  a  specific  lien  upon 
the  surplus  to  the  extent  of  the  purchaser's  bid  and  interest  there- 
on.-^ If  the  purchaser's  title  has  become  complete  at  the  time  of 
the  foreclosure  sale,  so  that  he  is  entitled  to  a  deed,  he  is  entitled  to 

"Hulbert  v.  McKay,  8  Paige,  651.  440;    Know^es  v.  Sullivan,  182  Mass. 

"Harvey  v.   Harvey,  6  Madd.   91;  318;      Western    Union    Tel.    Co.    v. 

Oppenheimer  v.  Walker',  3  Hun,  30.  Caldwell,  141  Mass.  489,  6  N.  E.  737; 

=»Abell    V.    Screech,    10    Ves.    355,  Wiggin  v.  Heywood,  118  Mass.  514; 

359.  Abbott  v.  Sturtevant,  30  Me.  40,  47. 

"Ex  parte  Allen,  2  N.  J.  Eq.  388;  A  judgment  creditor,  who  was  prop- 
Franklin  V.  Van  Cott,  11  Paige,  129.  erly  made  a  party  to  the  suit,  does 

"Willson    V.    Schorpp,    16    N.    Y.  not  lose  his  right  to   share   in   the 

Supp.  823.  surplus  by   the   fact  that  his  judg- 

-■■*  Husted    V.    Dakin,    17    Abb.    Pr.  ment  became   dormant  pending  the 

137;     King    v.    West,    10    How.    Pr.  action.     Dempsey  v.   Bush,   18  Ohio 

333;     Mut.   Life  Ins.   Co.   v.   Bowen,  St.  376.    See  §§  1934,  1935. 
47  Barb.  618.  -'Snyder  v.  Stafford,  11  Paige,  71; 

=*  Livingston  v.  Mildrum,  19  N.  Y.  Clarkson  v.  Skidmore,  46  N.  Y.  297. 


(>43  DISPOSITION   OF   SURPLUS.  [§    1688. 

the  whole  surplus.-*'  The  claimant,  whatever  his  lien  may  be,  is  not 
entitled  to  any  part  of  the  surplus  money  arising  from  the  sale  un- 
less he  was  a  party  to  the  suit;  for  otherwise  his  lien  is  not  affected 
by  the  proceedings,  and  the  land  is  not  discharged  from  it  by  the 
sale  and  transferred  to  the  money  ;^^  unless,  however,  he  fdes  a 
cross-bill,  or  voluntarily  appears  in  the  original  suit  and  establishes 
his  claim. ^^  Wlien  the  subsequent  lien-holders  have  been  made  par- 
ties to  the  suit,  the  decree  of  sale  may  properly  direct  the  payment 
of  any  surplus,  after  satisfying  the  mortgage,  among  th6  lien  cred- 
itors, according  to  their  respective  rights  and  equities;  and  no  cross- 
bill is  necessary  for  the  purpose.^^  It  is  not  necessary  that  the  de- 
cree should  find  the  precise  amount  due  such  lien-holder,  if  it  finds 
that  there  is  due  him  more  than  the  surplus,"" 

The  proceeds  of  the  sale,  after  satisfying  the  mortgage  debt,  may 
be  said,  in  general,  to  stand  in  place  of  the  equity  of  redemption 
to  those  who  had  title  or  right  in  that  or  lien  upon  it.''^  If  the 
mortgagor  or  his  vendee  be  the  only  one  interested  in  it,  the  sur- 
plus belongs  wholly  to  him.  If  he  has  died  and  his  heirs  are  made 
parties  to  the  suit,  the  surpjus  goes  to  them;^-  although  it  is  held 
in  some  cases  that  the  personal  representatives  are  entitled  to  be 
heard  on  the  petition  for  the  surplus,  on  the  ground  that  it  is  per- 
sonalty.^^ 

§  1688.     When   there  are   several  liens  upon   the  premises,   the 

surplus  money  must  be  applied  to  their  discharge  in  the  order  of 
their  priority.^*  Generally  a  priority  of  right  may  be  presumed 
from  a  priority  of  record.  This  presumption  will  prevail  between 
the  holders  of  several  mortgages  upon  the  property;  and  to  over- 
come this  presumption  the  burden  of  proof  is  upon  the  holder  of  a 
junior  mortgage  to  overcome  it  by  positive  evidence  of  prior  right.^' 
Questions  of  priority  between  persons  having  claims  upon  the  equity 
of  redemption  are  properly  settled  after  the  sale,  upon  their  appli- 
cation for  the  surplus  after  it  has  been  brought  into  court,  rather 

'"See  §  1934.  =*  Averill   v.   Loucks,   6  Barb.   470; 

-■  Winslow  v.  McCall,  32  Barb.  241;  Lithauer  v.  Royle,  17  N.  J.  Bq.  40; 

Root   V.    Wheeler,    12   Abb.    Pr.    294.  State  v.  Clapp,  147  Ind.  244,  46  N.  E. 

See  Koch  v.  Purcell,  13  J.  &  S.  162.  533;  Moss  v.  Robertson,  56  Neb.  774, 

=^  Ellis  V.  Southwell,  29  111.  549.  77  N.  W.  403. 

*  Crocker  v.  Lowenthal,  83  111.  579.  ==  §  1929;   New  York:     Freeman  v. 

'"Walker   v.    Abt,   83    111.    226.  Sehroeder,  43  Barb.  618;  Peabody  v. 

'■Habersham  v.  Bond,  2  Ga.  Dec.  Roberts,  47  Barb.  91;  People  v.  Ber- 

46.  gen,  53  N.  Y.  404,  15  Abb.  Pr.  (N.  S.) 

'-  Shaw  v.  Hoadley,  8  Blackf.  165 ;  97. 

Beard  v.  Smith,  71  Ala.  568,  quoting  Minnesota:     Brown    v.    Crookston 

text.  Ag.  Asso.  34  Minn.  545,  26  N.  W.  907. 

"  Smith  V.  Sntith,  13  Mich.  258. 


§  1688.]        APPLICATION  OF  PROCEEDS  OP  SALE.  644 

than  by  a  stay  of  proceedings  on  the  execution  of  the  order  of  sale.^" 
A  judgment  creditor  may  attack  the  validity  of  a  subsequent  con- 
veyance of  the  equity  of  redemption,  upon  a  reference  for  distribu- 
tion of  the  purchase  money.^^  Until  it  is  ascertained  that  there  will 
be  a  surplus,  the  parties  are  not  permitted  to  litigate  their  claims 
between  themselves. ^^  Upon  such  reference  the  referee  may  inquire 
as  to  the  validity  of  the  various  liens,  and  conveyances  as  well  as 
liens  may  be  attacked  as  fraudulent.  The  rights  and  equities  of  the 
lien-holders  or  claimants  are  as  much  before  the  court,  and  as  much 
the  objects  of  its  care,  as  those  of  the  owner  of  the  mortgage  to  be 
foreclosed.^'' 

The  fund  collected  by  a  receiver,  appointed  generally  witliout 
reference  to  particular  liens,  on  the  application  of  either  a  senior 
or  junior  incumbrancer,  is  applicable  to  the  liens  on  the  property  in 
the  order  of  their  priority,  just  as  the  proceeds  from  a  sale  are  to 
be  applied.**'  Thus,  where  a  receiver  has  been  appointed  under  a 
first  mortgage,  and  has  collected  rents,  and  upon  a  sale  of  the  prop- 
erty there  is  a  surplus  which  is  insufficient  to  pay  a  second  mort- 
gage upon  the  property,  the  court  may  direct  the  application  of  the 
rents  in  the  receiver's  hands  to  the  payment  of  such  second  mort- 
gage so  far  as  needed,  and  the  balance  to  be  paid  to  the  mortgagor 
or  owner  of  the  equity  of  redemption.*^  In  cases  where  a  receiver 
has  been  appointed  on  the  application  of  a  junior  mortgagee  for 
his  benefit  only,  the  rents  collected  by  such  receiver  are  applicable 
to  the  junior  mortgage  to  the  exclusion  of  the  prior  mortgages.*^ 

A  junior  mortgagee,  who  is  a  party  to  the  suit,  may  have  his 
rights  protected  by  an  appropriate  decree  as  to  the  application  of 
the  surplus,  if  there  be  any  after  satisfying  the  prior  mortgage."^ 
He  should,  however,  appear  and  ask  for  payment  out  of  the  sur- 
plus.** He  cannot  maintain  a  separate  action  to  reach  the  surplus, 
but  must  enforce  his  claims  in  the  court  which  rendered  the  judgment 
of  foreclosure.*^     A  cross-bill  is  not  necessary  for  his  protection.*'' 

""^  Schenck  v.  Conover,  13  N.  J.  Eq.        '"  Williamson  v.   Gerlach,  41  Ohio 

31,  78  Am.  Dec.  95.  St.  632. 

"  Rogers  v.  Ivers,  23  Hun,  414.  "  Keogh  v.  McManus,  34  Hun,  521. 

^^  Union   Ins.    Co.   v.   Van   Rensse-        "  §  1524. 
laer  4  Paige,  85.  *'  Ward  v.  McNaughton,  43  Cal.159; 

""Bergen  v.  Carman,  79  N.  Y.  146;  Romberg  v.  McCormick,  194  111.  205. 
Bergen  v.  Snedeker,  8  Abb.  N.  C.  50;         **  Kenton  v.  Spencer,  6  Ind.  321. 
Livingston  v.  Mildrum,  19  N.  Y.  440,        ''  Fliess  v.  Buckley,  90  N.  Y.  286. 
441-  Beekman  V.  Gibbs,  8  Paige,  511;         ^^Wallen   v.    Moore,   187    111.    190; 

Halsted   v     Halsted,    55    N.    Y.    442;  Rock  Island  Nat.  Bank  v.  Thompson 

Schafer  v   Reilly   50  N.  Y.  61;  Tator  173  111.  593;  Romberg  v.  McCormick, 

V.    Adams,    20    Hun,    131.     King    v.  194  111.  205;  Blatchford  v.  Blanchard, 

West,  10  How.  Pr.  333,  is  questioned  160  111.  115. 
in  Bergen  v.  Carman,  70  N.  Y.  146. 


645  DISPOSITION  OF  SURPLUS.  [§§   1G88,   1691. 

§  1689.  So  if  there  be  simultaneous  mortgages  upon  the  same 
land,  theiy  are  in  effect  one  instrument,  and,  upon  the  foreclosure 
of  one  of  them,  the  surplus  remaining  after  satisfying  that  is  ap- 
plicable to  the  payment  of  the  other,  although  only  part  of  it  is 
due.*^  When  such  mortgages  are  held  by  different  persons,  the 
money  arising  from  the  sale  of  the  property  should  be  equitably 
divided  between  the  mortgagees;*^  the  fact  that  one  was  recorded 
before  the  other  does  not  matter,  if  both  mortgages  were  made 
under  an  agreement  entered  into  by  the  mortgagor  at  the  same  time 
with  both  mortgagees.*" 

Where  the  mortgage  is  executed  by  two  parties  as  mortgagors,  one 
of  them  cannot  maintain  an  action  for  the  surplus  arising  on  the 
sale  without  alleging  that  the  entire  title  had  been  transferred  to 
him  before  the  sale.  A  transfer  of  the  title  after  the  foreclosure  sale, 
would  not  of  itself  operate  to  assign  the  right  to  the  surplus  which 
vested  in  the  mortgagors  jointly .^° 

§  1690.  The  complainant  himself  may  present  and  establish  a 
claim  to  the  surplus  moneys  by  reason  of  another  debt  due  him 
from  the  mortgagor.  The  validity  and  amount  of  this  may  be 
ascertained  upon  a  reference,  in  the  same  manner  as  when  a  claim  is 
presented  by  any  other  person  ;^^  and  there  is  no  obligation  upon 
him  to  establish  his  claim  beforehand.^^ 

Upon  a  foreclosure  to  satisfy  an  instalment  of  interest  or  princi- 
pal before  the  maturity  of  the  whole  principal  debt,  a  surplus  remain- 
ing after  the  payment  of  such  instalment  should  be  applied  in  reduc- 
tion of  the  principal  debt.^^  , 

§  1691.     The  equities  of  subsequent  incumbrances  of  part  of  the 

premises  are  to  be  regarded.  In  general  it  may  be  said  that  the 
same  equities  which  govern  the  order  of  sale  of  property  subject 
to  other  liens,  or  accompanied  by  other  security  in  the  hands  of 
the  mortgagee,^*  apply  also  to  the  distribution  of  the  proceeds  of 
sales  under  like  circumstances.  If  the  mortgage,  under  the  circum- 
stances of  the  case,  is  a  charge  upon  all  the  land  covered  by  the 
mortgage,  and  only  a  part  of  it  is  foreclosed,  the  proceeds  must  be 

*'  Barber  v.  Gary,  11  Barb.  549.  '^  Field  v.  Hawxhurst,  9  How.  Pr. 

**  Eleventh  Ward  Savings  Bank  v.  75. 

Hay,  55  How.  Pr.  444.  =^  Ohio  Central  R.  R.   Co.  v.   Cen- 

*=•  Daggett  V.  Rankin,  31  Cal.  321.  tral  Trust  Co.  133  U.  S.  83,  10  Sup. 

"'Clyde  V.  Johnson,  4  N.  D.  92,  58  Ct.  35;    Chicago  &  Vincennes  R.  R. 

N.  W.  512.  Co.  V.  Fordick,  106  U.  S.  47,  68,  1  S. 

^'  Beekman  Fire  Ins.  Co.  v.  First  M  Ct.  10. 

E.    Church,   29   Barb.   658;    Field   v.  =*  See   chapter  xxxvi. 
Hawxhurst,  9  How.  Pr.  75. 


§    1691a.]  APPLICATION    OF    PROCEEDS    OF    SALE.  64G 

applied  to  the  discharge  of  a  proportional  part  only  of  the  debt,  and 
the  balance  to  the  persons  having  incumbrances  upon  that  part  in 
their  order. ^^ 

Upon  the  foreclosure  of  a  mortgage  upon  several  lots  which  were 
also  covered  by  junior  mortgages  on  the  separate  lots,  a  sale  was 
ordered  in  the  inverse  order  in  which  the  junior  mortgages  were 
given.  On  the  sale  of  the  last  parcel,  the  surplus  after  paying  the 
blanket  mortgage  was  distributed  among  the  holders  of  the  junior 
mortgages  according  to  the  dates  at  which  those  mortgages  respec- 
tively became  liens;  except  that  in  no  case  was  a  greater  amount 
paid  on  account  of  any  mortgage  on  any  one  lot  than  was  received 
for  that  lot  at  the  sale.^^ 

§  1691a.  In  a  proceeding  for  the  distribution  of  surplus  moneys, 
there  is  no  room  for  the  application  of  the  doctrine  of  marshalling 
securities,  whereby  a  creditor  who  has  a  double  fund  to  which  he 
may  resort  for  satisfaction  of  his  debt,  and  another  creditor  has 
only  one  of  these  funds,  the  first  creditor  will  be  required  pri- 
marily to  resort  to  that  fund  for  the  satisfaction  of  his  debt  over 
which  he  has  the  exclusive  control.  That  rule  of  course  implies 
the  right  of  the  creditor  with  the  double  fund  or  security  to  appro- 
priate both  funds  if  necessary.  Therefore  a  second  mortgagee,  ap- 
plying for  surplus  moneys  arising  from  a  sale  on  foreclosure  of  the 
first  mortgage  will  not  be  compelled  to  release  his  lien  in  favor  of 
subsequent  mortgagees,  on  proof  merely  that  his  debt  is  amply 
secured  by  other  property  on  which  his  mortgage  is  a  lien,  no  mat- 
ter how  strong  or  apparently  conclusive  the  evidence  may  be  that 
such  other  property  is  sufficient  to  pay  his  claim.     The  court  can- 

'' Mickle  V.  Rambo,  1  N.  J.  Eq.  501.  common  fund,  distributing  to  all  of 

See,  also,  Frost  v.  Peacock,  4  Edw.  the  lienors  upon  the  lands  sold,  in 

678.  the    order   of   the    dates    when    they 

^^  Burchell   v.    Osborne,   119   N.    Y.  became  liens  upon  the  debtor's  prop- 

486,  23  N.  E.  Rep.  869,  affirming  6  N.  erty.    The  lien  of  each  junior  incum- 

Y.  Supp.  863,  modifying  5  N.  Y.  Supp.  brancer,  which  had  been  affixed  to 

404.     Gray,   J.,   delivering  the  judg-  the  land  sold  to  discharge  the  gen- 

ment  of  the  Court  of  Appeals,  said:  eral  lien  of  the  mortgage  foreclosed, 

"It  is  clear  enough  that,  in  such  a  would,  it  seems  to  me,  equitably  at- 

sale  by  separate  parcels  instead  of  tach  to  the  fund  resulting  from  the 

in  block,  each  parcel,  as  it  went  to  sale  of  the    lands,    in   the   order   in 

discharge    the       general    mortgage,  which  the  lien  had  been  originally 

contributed    to   relieve   the    last   lot  created.     Upon  such  a  sale  as  this, 

from     that      lien.        If,       therefore,  when   a  surplus  arises   as  the   final 

through   the   sale,    a   surplus   arose,  result,  the  liens  would  in  equity  be 

it  cannot  be  regarded  as  constitut-  transferred   from    the   land    sold    to 

ing  a  specific  fund,   subject  to  the  the  ultimate  fund  arising,  and  nat- 

specific  liens  upon  the  last  lot;  but,  urally  in  the  order  of  their  priority 

under    equitable    rules   in   the   mar-  as  such." 
shalling  of  the  debtor's  assets,  as  a 


047  DISPOSITION   OF   SURPLUS.  [§§    1G92,   1G93. 

not  release  a  lien  without  actual  payment,  merely  because  witnesses 
testify  and  the  referee  finds  that  the  holder  of  the  lien  has  other 
property  of  his  debtor  to  which  he  can  resort  for  the  satisfaction  of 
his  debt.^'^ 

§  1692.  A  prior  unrecorded  mortg'age  is  preferred  to  a  subse- 
quent judgment,  if  there  was  no  fraudulent  intent  on  the  part  of  the 
mortgagee  in  withholding  the  mortgage  from  record,  although  it 
was  given  to  secure  future  advances  or  liabilities.^^  It  is  also  held 
that  a  mortgage  which  is  equitable  only,  not  being  formally  exe- 
cuted, is  preferred  to  a  subsequent  judgment  if  given  for  a  present 
consideration.^^ 

§  1693.  Dower  and  homestead  in  surplus. — A  widow  who  as 
wife  had  joined  her  husband  in  a  mortgage  of  land  of  which  he 
was  seised  is  in  equity  entitled  to  dower  in  surplus  moneys  arising 
from  a  foreclosure  sale  of  the  propert}^,  after  satisfying  the  mort- 
gage deht.  To'  the  extent  of  the  debt  secured  by  the  mortgage 
in  which  she  released  her  rights,  her  dower  interest  is  extinguished, 
and  she  is  dowable  only  of  the  surplus. ^'^  The  surplus  stands  in 
the  place  of  the  equity  of  redemption  and  retains  all  the  properties 
of  realty,  and  does  not  become  personalty  for  the  purposes  of  dis- 
tribution among  the  next  of  kin.  While,  therefore,  a  widow  may 
claim  dower  in  the  surplus,  she  cannot  claim  the  surplus  as  personal 
property  under  a  statutory  exemption.®^  If  her  husband  die  after 
the  judicial  sale  and  the  distribution  of  the  surplus,  of  course  she 
cannot  claim  any  interest  in  it;  but  if  he  die  after  the  sale  and 
while  the  surplus,  or  even  a  part  of  it,  is  within  the  control  of  the 
court,   she   is   dowable  of   the   surplus   so   far   as  her   right  can   be 

"  Quackenbush  V.  O'llare,  121  N.  Y.  Blydenburgh   v.    Northrop,   13   How. 

485,  29  N.  E.  958,  16  N.  Y.  Supp.  33.  Pr.  289. 

^'^  See  §§  460,  461;   Thomas  v.  Kel-        New  Jersey:     Hinchman  v.  Stiles 

sey,  30  Barb.  268.  9  N.  J.  Eq.  454. 

'"See  §470.  South  Carolina:    Tilbetts  v.  Lang- 

"»  See  §  666.  ley  Manufacturing  Co.  12  S.  C.  465. 

Ohio:     Fox  v.    Pratt,   27   Ohio   St.        Indiana:      Leary     v.     Shaffer,     79 

512;    Culver  v.    Harper,  27  Ohio  St.  Ind.  567. 

464;   State  Bank  v.  Hinton,  21  Ohio        Illinois:    Dillman  v.  Will  Co.  Nat. 

St.  509;    Taylor  v.  Fowler,  18  Ohio,  Bank,    138    111.    282,    27   N.    E.    1090; 

567,    51    Am.    Dec.    469;     Rands    v.  Holden  v.  Dunn,  144  111.  413,  33  N.  E. 

Kendall,    15    Ohio,    671;     Unger    v.  413. 
Leiter,  32  Ohio  St.  210.  Mississippi:     Pickett    v.    Buckner, 

New  York:     Matthews   v.   Duryee,  45  Miss.  226. 
45  Barb.  69,  17  Abb.  Pr.  256;    Titus        Arkansas:    Hewitt  v.  Cox,  55  Ark. 

V.  Neilson,  5  Johns.  Ch.  452;   Haw-  225,  15  S.  W.  Rep.  1026. 
ley  V.   Bradford,  9   Paige,   200;    Bell        South  Dakota:    Laws  1893,  ch.  76. 
v.    Mayor    of    N.    Y.    10    Paige,    49;         Oregon:    Laws  1893,  p.  194. 

"  Beard  v.  Smith,  71  Ala.  568. 


§  1694.]        APPLICATION  OF  PROCEEDS  OF  SALE.  648 

equitably  paid  from  the  portion  remaining.*'-  If,  however,  some  of 
those  interested  in  the  surplus  have  received  their  portions  before  her 
claim  was  made,  they  can  not  be  called  upon  to  refund,  nor  can  the 
others,  who  have  not  received  their  shares,  be  called  iipon  to  suffer 
loss  by  reason  of  the  payments  made.  She  is  in  such  case  dowable 
only  of  the  surplus  remaining  undistributed,  and  not  of  the  whole  sur- 
plus.®^ 

Even  after  the  surplus  had  been  paid  under  order  of  the  court 
to  an  assignee  of  the  mortgagor,  the  widow,  who  had  neglected  to 
appear  in  the  foreclosure  suit,  and  was  not  notified  of  the  reference 
respecting  the  distribution  of  the  surplus,  was  allowed  to  maintain 
an  action  to  recover  her  dower  in  the  surplus  against  such  assignee.^* 

When  land  is  sold  under  a  mortgage  containing  a  waiver  of  home- 
stead exemption,  the  mortgagor  is  entitled  to  the  exemption  out  of 
the  surplus  as  against  subsequent  judgment  creditors.''^  And  so 
when  a  right  of  homestead  has  been  released  in  a  mortgage,  and 
this  is  foreclosed  against  the  widow  and  heirs  of  the  mortgagor,  and 
there  be  a  surplus,  this  is  payable  to  the  widow  to  the  extent  of  the 
homestead  exemption.^  When  homestead  land  is  sold  under  a  pre- 
existing mortgage,  the  homestead  exemption  attaches  to  the  money 
arising  from  the  sale  in  excess  of  the  amount  required  to  satisfy  the 
mortgage  debt.- 

§  1694.  Inchoate  right  of  dower. — In  some  cases  the  courts  have 
gone  so  far  as  to  protect  the  inchoate  interest  of  the  wife  during 
coverture  in  the  surplus  arising  from  a  mortgage  sale,  by  permit- 
ting her,  as  against  judgment  creditors,  to  have  one  third  of  the 
residue  invested  for  her  benefit,  and  kept  invested  during  the  joint 
lives  of  herself  and  her  husband,  and  the  interest  paid  to  her  during 
her  own  life,  in  case  of  her  surviving  her  husband. ''*'  But  it  would 
seem  doubtful  whetlier  a  court  of  equity,  in  the  exercise  of  its  ordi- 

"■  Pickett  v.  Buckner,  45  Miss.  226.        ''  Quinn's  Appeal,   86  Pa.   St.   447; 

In  England,  prior  to  the  statute  of  Hill    v.    Johnston,    29    Pa.    St.    362; 

.3  &  4  Wm.  IV.  ch.  105,  a  widow  was  Vermont    Sav.    Bank    v.    Elliott,    53 

not  dowable  of  an  equity  of  redemp-  Mich.   256,   18  N.   W.   805;    Smith  v. 

tion,  and  of  course  she  was  not  of  Rumsey,  33  Mich.  183;  Lozo  v.  Suth- 

the  surplus  after  a  foreclosure  sale,  erland,    38    Mich.    168;    Anderson    v. 

'^  State  Bank  v.  Hinton,  21  Ohio  St.  Odell,  51  Mich.  492,  16  N.  W.  870. 
509.  '  McTaggart    v.    Smith,    14    Bush. 

"  Matthews  v.  Duryee,  45  Barb.  69.  414,  7  Reporter,  369. 
Sutherland,    J.,    dissented,    saying:         =  People  v.  Stitt  7  Bradw.  294. 
"If    the    plaintiff    has    any    remedy,        "' §§    114,   1933;    Denton  v.  Nanny, 

it   appears   to   me   that   it   must  be  8  Barb.  618;  Vreeland  v.  Jacobus,  19 

by   a   motion   of   proceeding   to  va,-  N.  J.  Eq.  231;   Bowles  v.   Hoard,  71 

cate  or  modify  the  order  under  which  Mich.   150.  39  N.  W.   24.     See,  how- 

the  money  was  paid  to  the  defend-  ever,  Riddick  v.  Walsh,  15  Mo.  519. 
ant." 


649  DISPOSITION    OF   SURPLUS.  [§    1695. 

nary  jurisdiction,  has  the  power  to  enforce  such  a  doctrine;"'  and 
the  authority  is  against  allowing  the  wife  any  such  right  against 
her  husl)and's  creditors. *^^ 

In  a  recent  case  in  Indiana,  however,  where  a  wife  had  joined 
her  husl)and  in  executing  a  mortgage  of  his  lands  to  secure  his 
indebtedness,  and  he  was  adjudged  a  bankrupt,  whereby  her  in- 
choate third  of  his  lands  became  al:)Solute  under  the  statute,  it  was 
held  to  be  her  right,  upon  foreclosure  of  the  mortgage,  to  have  a 
decree  that  the  other  two  thirds  be  first  sold,  if  it  appear  that  such 
two  thirds  is  of  value  sufficient  to  discharge  the  debt.^^  The  wife 
in  such  case  does  not  occupy  the  position  of  a  surety  of  the  debt 
secured,  and  she  cannot  maintain  a  bill  to  charge  the  mortgagee 
with  the  proceeds  of  sales  of  crops  also  covered  by  the  mortgage, 
which  proceeds,  'by  arrangement  between  the  mortgagee  and  the 
mortgagor,  her  husband,  were  applied  to  the  payment  of  unsecured 
debts.^° 

§  1695.  The  surplus  of  a  sale  made  after  the  death  of  the  mort- 
gagor is  real  estate,  though  personal  if  the  sale  is  made  in  his  life- 
time.'^^  A  devise  of  the  property  in  trust  to  pay  debts  does  not  make 
personal  assets  of  the  surplus.'^-  The  rule  in  Massachusetts  is,  how- 
ever, different.  The  legal  title  to  the  proceeds  of  such  sale  is  held 
to  be  in  the  executor  or  administrator,  by  force  of  the  contract  of 
mortgage,  though  when  he  has  collected  the  money  he  holds  it  in 
trust  for  the  heirs  or  devisees,  as  the  case  may  be.'^^ 

•"  Scribner  on  Dower,  p.  480,  §  30.  refund    to    the    parties    making   re- 

'*  Dean  v.  Phillips,  17  Ind.  406.  demption  her  proportionate  share  of 

"^  Leary    v.    Shaffer,    79    Ind.    567;  the     amount     required     to     redeem, 

Crawford  v.  Hazelrigg,  117  Ind.  408,  according  to  the  dower  interest,  and 

18  N.  E.  603.  a    lien    attaches    in    equity    against 

'"  Creath  v.   Creath,  86  Tenn.   659,  such  dower  interest  in  favor  of  the 

8  S.  W.  847.  person  who  redeems  the  land.    Vir- 

"  Wright  v.  Rose,  2   S.  &  S.   323;  gin  v.  Virgin,  189  111.  144,  affirming 

Dunning  v.  Ocean  Nat.  Bank,  61  N.  91   111.   App.   188;    Cox  v.   Garst,   105 

Y.  497,  19  Am.  Rep.  295,  and  cases  111.    342;    Selb   v.   Montague,   102   111. 

cited;    Fliess    v.    Buckley,    22    Hun.,  446.      In    Indiana,    though    the    wife 

551;    Steinhardt    v.    Cunningham,    8  is  restricted  to  such  surplus  as  may 

N.  Y.  Supp.  627.  remain   for   payment   of   her   dower 

In  Illinois  a  wife  who  joins  in  the  interest,  she  is  entitled  to  have  her 

execution  of  a  mortgage  relinquish-  dower  computed  on  the  basis  of  the 

es    her    dower    right    so    far    as    is  amount  of  the  entire  proceeds  of  the 

necessary  to  satisfy  the  lien  of  the  sale    of    the     mortgaged     premises. 

mortgage,  and  if  the  lands  are  sold  Shobe  v.  Brinson,  148  Ind.  625,  47  N. 

after  the  husband's  death  to  satisfy  E.  625. 

the  mortgage  her  inchoate  right  of        "- §  1931;  Clay  v.  Willis,  1  B.  &  C. 

dower  becomes  consummate  only  in  364. 

the   excess   of   the   proceeds   of   the        "  Varnum  v.  Meserve,  8  Allen,  158, 

sale.     If  those   who  succeed   to  the  160.     It   may   be   observed   that  the 

husband's  title  redeem  the  land  from  contract  in  Wright  v.  Rose.  2  S.  & 

the  mortgage  sale  the  dowress  must  S.   323,   was  also  to  pay  the  mort- 


§§  1()9G-1()98.]   APPLICATION  OF  PROCEEDS  OF  SALE.  650 

§  1696.     A   lessee   for   years   of   the   mortgagor   is   not   entitled 

to  any  part  of  the  surplus  arising  from  the  sale.  The  lease  is  ex- 
tinguished by  the  foreclosure,  and  all  title  of  the  lessee  is  cut  off. 
His  only  claim  would  be  one  against  the  mortgagor  for  a  breach  of 
the  covenant  for  quiet  enjoyment,  if  the  lease  contained  such  a 
covenant.'^* 

§  1697.  An  attachment  of  the  proceeds  of  the*  foreclosure  sale  is 
subject  to  the  claims  of  mortgagees  or  other  incumbrancers  of 
record.'''^  If  the  mortgagor  after  the  maturity  of  the  mortgage  be 
summoned  as  garnishee  or  trustee  of  the  mortgagee,  the  latter  can- 
not defeat  the  lien  acquired  by  the  attaching  creditor  by  a  subse- 
quent assignment  of  the  mortgage.  If  the  assignee  by  such  assign- 
ment foreclose  the  mortgage,  the  lien  of  the  attaching  creditor  mvist 
be  first  satisfied.'^^  It  is  said  in  this  case  that  such  creditor  has  the 
same  right  to  enforce  the  mortgage  that  the  mortgagee  had. 

§  1698.  Upon  a  sale  under  a  junior  mortgage,  a  surplus  belongs 
to  the  mortgagor,  and  is  not  applied  to  the  satisfaction  of  a  prior 
mortgage;  for  the  equity  of  redemption  which  is  sold  belongs  to 
the  mortgagor,  and  the  presumption  of  law  is,  that  the  purchaser  of 
it  only  pays  for  it  its  worth  in  excess  of  the  prior  mortgage  debt.'^'^ 
But  sometimes  the  whole  estate  is  sold  under  the  decree  of  court,  or 
by  consent  of  the  parties  interested,  in  which  case  the  prior  par- 
ties in  interest  may  he  made  parties  to  the  proceedings  in  relation 
to  the  distribution  -J^  and  a  prior  mortgagee  who  has  been  in  posses- 
sion must  account  for  the  rents  and  profits  received  by  him.'^^ 

There  may  also  be  other  circumstances  under  which  equity  will 
require  the  mortgagee,  out  of  the  money  received  by  him  on  the 
sale  applicable  to  the  payment  of  his  demand,  to  pay  a  prior  in- 
cumbrance; as,  for  instance,  where  he  has  in  the  first  place  con- 
veyed the  land  to  the  mortgagor  with  covenants  against  all  incum- 

gagor,    his    "executors    or    adminis-  Civ.  Pro.  §  2798;  In  re  Stillwell,  139 

trators,"    so   that   the   cases    are    in  N.  Y.  .337,  34  N.  E.  777. 

conflict.     Dwight,  C,  in  Dunning  v.  '*  Burr  v.  Stenton,  52  Barh.  377,  43 

Ocean  Nat.   Banl^,   61  N.   Y.   497,   19  N.  Y.  462. 

Am.    Rep.    293,    observes    that    "the  "West  v.   Shryer,  29  Ind.   624. 

true  construction  of  tliose  words  un-  "  Campbell  v.  Nesbitt,  7  Neb.  300. 

doubtedly  is,  that  the  promise  is  to  ''  Western   Ins.   Co.   v.  Eagle  Fire 

pay  the  executors  or  administrators  Ins.    Co.      1    Paige,    284;    Hanger   v. 

whenever   it   might   have   been   col-  State,    27    Ark.    667;     Firestone    v. 

lected   by   the   mortgagor,   as.   e.   g.,  State,  100  Ind.  2'26. 

where  the  land  was  sold  in  his  life-  "  Porter    v.    Barclay,    18   Ohio   St. 

time."    See  chapter  xl.  div.  16.  546;   Dodge  v.  Silverthorne,  12  Wis. 

In    New   York   provision    is    made  644. 

for  depositing  the  surplus  with  the  '•'  Goring  v.  Shreve-,  7  Dana,  64. 
surrogate     for     distribution.      Code 


651 


PRIORITIES    BETWEEN    HOLDERS    SECURED.  [§    1G99. 


brances  and  taken  back  the  mortgage  for  the  purchase-money,  if 
there  be  a  prior  mortgage  upon  the  property  the  proceeds  will  be 
applied,  in  tlie  first  place,  to  the  discharge  of  that,  and  the  amount 
so  applied  deducted  from  his  claim  under  the  mortgage.**" 

III.     Priorities  beiiveen  Holders  of  several  Notes  secured. 


§  1699.  Priority  of  maturity. — It  is  the  settled  rule  in  several 
States  that  where  a  mortgage  has  been  given  to  secure  several  notes 
falling  due  at  various  times,  and  the  notes  are  assigTied  to  different 
holders,  the  one  first  maturing  is  to  be  first  paid  out  of  the  mort- 
gaged property;  the  mortgage,  as  to  the  several  notes,  being  equiv- 
alent to  so  many  successive  mortgages. *^^  The  rule  rests  upon  the 
fact  that  the  holder  of  the  note  first  maturing  may  foreclose  upon 
non-payment,  without  waiting  for  the  succeeding  notes  to  mature. 
The  power  to  do  so  implies  a  priority  of  lien  in  the  notes  first  falling 
due.®-    The  priority  arising  from  priority  of  maturity  is,  however,  gen- 


'"  §  1504;  Van  Riper  v.  Williams, 
2  N.  J.  Eq.  407;  Johnson  v.  Blyden- 
burgh,  31  N.  Y.  427;  Stiger  v.  Bacon, 
29  N.  J.  Eq.  442;  Woodruff  v.  Depue, 
14  N.  J.  Eq.  168;  Union  Nat.  Bank  v. 
Pinner,  2o  N.  J.'  Eq.  495;  Dayton  v. 
Dusenbiiry,  25  N.  J.  Eq.  110;  White 
v.  Stretch,  22  N.  J.  Eq.  76. 

"See  §§  606,  822,  1459,  1478,  1577, 
1939. 

Illinois:  Koester  v.  Burke,  81  111. 
436;  Herrington  v.  McCollum,  73  111. 
476;  Gardner  v.  Diederichs,  41  111. 
158;  Sargent  v.  Howe.  21  111.  148; 
Funk  v.  McReynold,  33  111.  481;  Van- 
sant  V.  Allmon,  23  111.  30;  Schultz 
V.  Plankinton  Bank,  141  111.  116,  30 
N.  E.  346,  affirming  40  111.  App.  462. 

Wisconsin:  Pierce  v.  Shaw,  51 
Wis.  316;  Marine  Bank  v.  Interna- 
tional Bank,  9  Wis.  57;  Wood  v. 
Trask,  7  Wis.  566,  76  Am.  Dec.  230. 

Indiana:  State  Bank  v.  Tweedy, 
8  Blackf.  447,  46  Am.  Dec.  486; 
Hough  v.  Osborne,  7  Ind.  140;  Crouse 
V.  Holman,  19  Ind.  30;  Murdock  v. 
Ford,  17  Ind.  52;  Stanley  v.  Beatty, 
4  Ind.  134;  Davis  v.  Langsdale,  41 
Ind.  399;  Minor  v.  Hilk  58  Ind.  176, 
26  Am.  Rep.  71;  People's  Savings 
Bank  v.  Finney,  63  Ind.  460;  Doss  v. 
Ditmars,  70  Ind.  451 ;  Gerber  v. 
Sharp,  72  In-d.  553;  Horn  v.  Bennett, 
135  Ind.  158,  34  N.  E.  321,  956. 

Iowa:  Hinds  v.  Mooers,  11  Iowa, 
211;  Massie  v.  Sharpe,  13  Iowa,  542; 


Walker  v.  Schreiber,  47  Iowa,  529; 
Leavitt  v.  Reynolds,  79  Iowa,  348, 
44  N.  W.  567. 

Ohio:  Winters  v.  Franklin  Bank, 
33  Ohio,  St.  250;  Kyle  v.  Thompson, 
11  Ohio  St.  616. 

West  Virginia:  Norris  v.  Beatv,  6 
W.   Va.   477,  483. 

Vermont:  Belding  v.  Manly,  21 
Vt.  550. 

Missouri:  Huffard  v.  Gottberg,  54 
Mo.   271. 

Kansas:  Richardson  v.  McKim, 
20  Kans.  346;  Aultman-Taylor  Co.  v. 
McGeorge,  31  Kan.  329,  2  Pac.  778; 
Robinson  v.  Waddell,  53  Kan.  402, 
36  Pac.   730. 

Virginia:  McClintic  v.  Wise,  25 
Gratt.  448,  IS  Am.  Rep.  694;  Gwath- 
meys  v.  Ragland,  1  Rand.  466. 

Alabama:  M'Vay  v.  Bloodgood,  9 
Port.  549. 

New  Hampshire:  Hunt  v.  Stiles, 
10  N.  H.  466. 

Florida:  Wilson  v.  Hay  ward,  6 
Fla.  171,  190. 

''-Thompson  v.  Field,  38  Mo.  320; 
Mitchell  v.  Ladew,  36  Mo.  526,  88 
Am.  Dec.  156;  Ellis  v.  Lamme.  42 
Mo.  153;  Wilson  v.  Hayward,  6  Fla. 
171.  And  see  Chew  v.  Buchanan,  30 
Md.  367,  where  the  question  was 
raised  but  not  decided.  See,  also, 
Burhans  v.  Mitchell,  42  Mich.  417,  4 
N.  W.  178. 

The  reason  given  for  this  rule,  as 


§  1700,]        APPLICATION  OF  PROCEEDS  OF  SALE.  65^ 

erally  subject,  as  against  the  assignor,  to  the  priority  arising  from  the 
assignment  of  one  or  more  of  the  mortgage  notes,  with  the  benefit  of 
the  mortgage  security;**^  but  as  between  the  assignees  of  different 
notes,  the  security  of  the  assignee  of  the  first  note  is  still  a  first 
mortgage  as  against  assignees  of  the  succeeding  notes,  though  the 
first  note  is  not  assigned  until  after  the  others.**  The  priority  of  the 
notes  is  fixed  and  governed  by  the  notes  themselves,  upon  their  face, 
and  not  by  any  contingency. 

This  rule  of  priority  according  to  maturity  is  not  affected  by  a 
provision  in  the  mortgage  whereby  all  the  notes  become  due  upon 
any  default.  To  hold  that  in  case  all  the  notes  mature  together 
under  such  a  provision  the  rule  of  priority  should  be  changed,  and 
the  holders  of  the  notes  should  share  pro  rata,  would  introduce  an 
element  of  uncertainty  whether  the  notes  first  maturing  by  their 
terms  should  be  first  paid  or  not,  and  consequently  their  value  would 
be  affected. ^^ 

§  1700.  Payment  of  notes  not  due- — The  surplus  cannot  be  paid 
to  the  holder  of  the  notes  not  due.  Courts  do  not  make  contracts 
for  parties,  nor  require  them  to  pay  their  debts  before  they  have 
agreed  to  pay  them.  The  prudent  method  in  taking  securities  of 
this  kind  is  to  provide  against  all  these  contingencies  by  the  express 
provisions  of  the  deed.  A  court  of  equity  will,  however,  save  the 
holder  of  subsequent  notes  from  the  loss  of  his  security,  through  the 
payment  of  the  surplus  to  the  mortgagor,  by  staying  payment,  and 
providing  that  it  be  held  to  meet  the  notes  not  due.*"     The  legal 

also  that  given  for  a  priority  found-  be  entitled  to  a  pro  rata  share  of  the 

ed  on  priority  of  assignment,   does  security.    .    .    .    One   of   the  grounds 

not  seem  to  be  convincing.     Penzel  upon    which    the    pro   tanto   rule   is 

V.  Brookmire,  51  Ark.  105,  10  S.  W.  supported  is,  that  making  the  notes 

15,  per  Battle,  J.  mature  at  different  times  evidences 

*' §  1701;   Parkhurst  v.  Steam  En-  an  agreement  that  they  are  to  have 

gine  Co.   107  Ind.   594,  8  N.  E.   635;  priority  in  the  order  in  which  they 

Horn    V.    Bennett,    135    Ind.    158,    34  fall    due.      Hence    cases    of    default 

N.  E.  321.  like  this  are  not  such  a  falling  due 

'*Horn  V.  Bennett,  135  Ind.  158,  34  as  expunges  from   the  contract  the 

N.  E.  321,  956;   Leavitt  v.  Reynolds,  agreement  as  to  priority.   .   .   .   Our 

79  Iowa,  348,  44  N.  W.  567;  Humph-  conclusion  is,  that  the  maturity  of 

reys  v.  Morton,  100  111.  592;  Koester  the    notes   by   reason    of   default   in 

v.  Burke,  81  111.  436.  making  prior  payment  is  not  such  a 

^^  The    Supreme    Court    of    Iowa,  falling  due  as  should  change  the  rule 

when  asked   to  adopt  this  qualified  for  the  application  of  the  security." 

rule,  said:     "The  rule  contended  for  Leavitt   v.    Reynolds,    79    Iowa,    348, 

would    render    it    possible    for    the  44  N.   W.   567,  followed  in  Horn  v. 

mortgagor  and  holder  of  the  notes  Bennett,  135  Ind.  158,  34  N.  E.  321; 

last  falling  due  to  defeat  the  holder  Doss  v.  Ditmars,  70  Ind.  451;  Gerber 

of  the  first  notes  of  his  priority  by  v.  Sharp,  72  Ind.  553. 

the  makers  failing  to  pay  the  inter-  ^''lowa:     Isett  v.   Lucas,    17   Iowa, 

est  on  the  last  note,  whereby  all  be-  503;    Grapengether    v.    Fejervary,    9 

came  due,  and  the  holder  of  the  last  Iowa,   163,  74  Am.   Dec.   336;    Sang- 


C53  PRIORITIES    BETWEEN    HOLDERS    SECURED.  [§    1701. 

effect  of  the  mortgage  cannot  be  varied  or  altered  by  parol  testi- 
mony. But  it  would  seem  that,  when  the  mortgagee  assigns  the 
notes  to  different  persons,  he  may,  by  agreement  with  them,  fix 
their  rights  of  priority  in  payment.^^ 

§  1701.  Priority  of  assig^nment — An  assignee  of  the  mortgage 
with  part  of  the  debt  is  generally  entitled  to  payment  in  preference 
to  the  mortgagee  who  retains  one  of  the  notes  ;*^  while,  as  between 
different  assignees  of  mortgage  bonds  or  notes,  priority  of  assign- 
ment generally  gives  no  preference,  though  the  cases  are  not  in  har- 
mony. The  equity  arising  from  priority  of  assignment,  where  this 
equity  is  held  to  give  a  preference,  is  generally  regarded  as  para- 
mount to  the  equity  arising  from  the  maturity  of  the  notes  as 
against  the  assignor;  yet,  as  between  different  assignees,  the  equity 
arising  from  priority  of  maturity  is  paramount.^*^  But  if  a  mort- 
gagee assigns  one  note  before  its  maturity,  together  with  the  mort- 
gage, with  an  agreement  or  intention  that  this  note  shall  have  pri- 
ority in  payment,  and  the  mortgagee  retaining  the  other  note,  which 
has  already  matured,  afterwards  assigns  such  other  note,  the  first 
assignee  is  entitled  to  priority  in  distribution  of  the  proceeds  of  a 
foreclosure  of  the  mortgage.''"  Generally,  however,  it  may  be  said 
the  effect  of  an  assignment  of  one  of  the  mortgage  notes  is  to  carry 
a  pro  rata  interest  in  the  security,  subject  to  the  paramount  claim 
of  notes  previously  due;^^  and  to  give  no  right  based  upon  priority 
of  assignment,  except  as  against  the  assignor.^^ 

The  fact  that  an  assignee  of  one  of  the  mortgage  notes  has  also 
an  assignment  of  the  mortgage  gives  him  no  priority  of  right  over 

ster  v.  Love,  11  Iowa,  580;  Reeder  v.  Salzman  v.  Creditors,  2  Rob.   (La.) 

Carey,     13     Iowa,     274;     Massie     v.  241;     Van    Rensselaer    v.     Stafford, 

Sharpe,     13     Iowa,     542;     Hinds     v.  jriopk.   569;    Clowes  v.   Dickenson,   5 

Mooers,    11    Iowa,    211;     Rankin    v.  Johns.    Ch.    235;    Pattison    v.    Hull, 

Major,    9    Iowa,    297;    Bank    of    the  9  Cow.  747;  Mechanics'  Bank  v.  Bank 

U.  S.  V.  Covert,  13  Ohio,  240.  of  Niagara,  9  Wend.  410;   Stevenson 

Indiana:     State   Bank  v.   Tweedy,  v.  Black,  1  N.  J.  Eq.  338;  Parkhurst 

8    Blackf.    447,    46    Am.    Dec.    486;  v.  Watertown  Steam  Engine  Co.  107 

Gerber   v.    Sharp,    72    Ind.    553;    Mi-  Ind.  594,  8  N.  B.  635. 

nor    V.    Hill,    58    Ind.    176,    26    Am.  »"  Winters    v.    Franklin    Bank,    33 

Rep.    71;    People's   Savings  Bank  v.  Ohio   St.    250;    Parkhurst  v.   Water- 

Finney,    63    Ind.    460;    Doss    v.    Dit-  town  Steam  Engine  Co.  107  Ind.  594, 

mars,  70  Ind.  451.  8  N.  E.  635;    People's  Sav.  Bank  v. 

«^  Grattan  V.  Wiggins,  23  Cal.  16.  Finney,    63    Ind.    460;    Doss   v.    Dit- 

*' §  822;  Bryant  v.  Damon,  6  Gray,  mars,  70  Ind.  451. 

564;  Warden  v.  Adams,  15  Mass.  233;  "^  Miller  v.  Washington  Sav.  Bank, 

Brewer    v.    Atkeison,    121    Ala.    410,  5  Wash.  St.  200,  31  Pac.  712. 

25  So.   992;    Knight  v.  Ray,  75  Ala.  "State  Bank  v.  Tweedy,  8  Blackf. 

383;    Preston    v.    Ellington,    74    Ala.  447,  46  Am.  Dec.  486. 

133;     Wallace    v.    Nichols,    56    Ala.  "Bank    v.    Covert,    13    Ohio,    240. 

321;    Cullum  v.   Erwin,   4   Ala.   452;  See  §  822. 


§  1701a.] 


APPLICATION  OF  PROCEEDS  OF  SALE. 


654 


the  assignee  of  another  note  separate  from  the  mortgage,  but  both 
are  equally  entitled  to  the  benefit  of  the  security. ^^ 

Where  a  holder  of  a  mortgage  assigns  a  part  of  it,  although  he 
warrants  only  the  existence  of  the  debt  at  the  time  of  the  transfer,  it 
would  be  contrary  to  good  faith  to  permit  him,  after  receiving  the 
money  for  this  part  of  the  claim,  to  come  into  competition  with  his 
assignee,  if  the  property  prove  insufficient  to  pay  the  claims  of  both.*** 
Unless  the  intention  be  plainly  declared  on  the  face  of  the  assign- 
ment that  the  assignee  is  to  share  pro  rata  in  the  security  with  the 
assignor,  the  equitable  construction  of  it  is  that  it  must  in  the  first 
place  be  applied  for  the  payment  of  the  part  of  the  debt  which  was 
assigned."^  A  proviso  in  the  assignment,  that  it  shall  not  be  so  con- 
strued as  to  prevent  the  mortgagee  from  receiving  or  disposing  of 
the  residue  of  the  mortgage,  does  not  entitle  him  to  participate 
with  the  assignee  in  the  proceeds  of  it  when  these  are  less  than  the 
debt.^« 

8  1701a.  Pro  rata  division. — The  prevailing  rule  is,  however,  that 
the  proceeds  of  the  mortgaged  property  should  be  divided  pro  rata 
among  all  the  notes  secured  by  the  mortgage,  without  regard  either  to 
the  times  of  their  falling  due  or  the  dates  of  their  assignment,  unless 
the  assignment  show  a  contrary  intention."    The  fact  that  one  of  the 

Tier,  13  Miss.  410,  43  Am.  Dec.  521; 
Henderson  v.  Herrod,  18  Miss.  631; 
Jefferson  College  v.  Prentiss,  29 
Miss.  46;  Bank  of  England  v.  Tarle- 
ton,  23  Miss.  173;  Pugh  v.  Holt,  27 
Miss.  461;  Davidson  v.  Allen,  36 
Miss.  419. 

Pennsylvania:  Donley  v.  Hays,  17 
S.  &  R.  400,  Gibson,  C.  J.,  dissent- 
ing; Betz  v.  Heebner,  1  Pa.  280; 
Perry's  Appeal,  22  Pa.  St.  43,  60 
Am.  Dec.  63;  Hancock's  Appeal,  34 
Pa.  St.  155;  Mohler's  Appeal,  5  Pa. 
St.  418,  420,  47  Am.  Dec.  413;  Hodge's 
Appeal,  84  Pa.  St.  359;  Fourth  Nat. 
Bank's  Appeal,  123  Pa.  St  473,  16 
Atl.  779,  per  Paxson,  C.  J. 

Tennessee:  Ewing  v.  Arthur,  1 
Humph.  537;  Smith  v.  Cunningham, 
2  Tenn.  Ch.  565,  569;  Andrews  v. 
Hobgood,  1  Lea,  693;  Ellis  v.  Roscoe, 
4  Baxter,  418. 

Texas:  Delespine  v.  Campbell,  52 
Tex.  4;  Paris  Exchange  Bank  v. 
Beard,  49  Tex.  358,  363;  Robertson 
V.  Guerin,  50  Tex.  317. 

Connecticut:  Lewis  v.  De  Forest, 
20   Conn.   427. 

Maine:  Johnson  v.  Candaga,  31 
Me.  28;  Moore  v.  Ware,  38  Me.  496. 


»' Waterman  v.  Hunt,  2  R.  I.  298. 

°*  Salzman  v.  Creditors,  2  Rob. 
(La.)  241;  Barkdull  v.  Herwig,  30 
La.  Ann.  618;  McCliutic  v.  Wise,  25 
Gratt.  448,  18  Am.  Rep.  694;  Ander- 
son V.  Sharp,  44  Ohio  St.  260,  quot- 
ing text;  Griggsby  v.  Hair,  25  Ala. 
327. 

°^  Waterman  v.  Hunt,  2  R.  L  298; 
Bryant  v.  Damon,  6  Gray,  564.  See, 
also,  Wright  v.  Parker,  2  Aik.  212; 
Richardson  v.  McKim,  20  Kans.  346. 

^^  Mechanics'  Bank  v.  Bank  of  Ni- 
agara, 9  Wend.  410. 

'--"S  822. 

California:  Phelan  v.  Olney,  6 
Cal.  478;  Grattan  v.  Wiggins,  23 
Cal.  16. 

Maryland:  Chew  v.  Buchanan,  30 
Md.  367,  Bartol,  C.  J.,  dissenting; 
Dixon  V.  Clayville,  44  Md.  575. 

Michigan:  English  v.  Carney,  25 
Mich.  178;  Cooper  v.  Ulmann,  Walk. 
Ch.  251;  McCurdy  v.  Clark,  27  Mich. 
445;  Shelden  v.  Bennett,  44  Mich. 
634,  7  N.  W.  223;  Wilcox  v.  Allen, 
36  Mich.  160;  Jennings  v.  Moore,  83 
Mich.  231,  47  N.  W.  127. 

Mississippi:  Parker  v.  Mercer,  7 
Miss.  320,  38  Am.  Dec.  438;   Cage  v. 


655  PRIOKITIKS   BETWEEN    HOLDERS   SECURED.     [g§    1702,    1703. 

notes  has  become  barred  by  tlie  statute  of  limitations  since  the  sale 
does  not  affect  the  right  of  the  holder  to  share  in  the  proceeds.'*** 

§  1702.  It  is  competent,  however,  for  the  parties  to  change  this 
general  rule  of  law  in  respect  to  priority,  by  an  express  agreement 
in  the  deed  that  the  note  last  falling  due  shall  have  priority  of  lien;'*'' 
or  by  a  subsequent  agreement  made  between  the  mortgagee  and  his 
assignee  upon  the  assignment  of  part  of  the  notes/'*'*  reserving  equal 
rights  to  the  holders  of  the  notes  not  assigned,^''^  or  otherwise  estab- 
lishing the  equality  or  inequality  of  lien  of  the  several  notes.  An 
agreement  in  the  mortgage  that  the  notes  secured  shall  have  pri- 
ority in  the  order  of  their  maturity  may  be  changed  by  an  agree- 
ment made  upon  the  assignment  of  the  notes  first  maturing  that  the 
assignee  shall  hold  them  subject  to  the  priority  of  the  other  notes 
secured  by  the  mortgage.^'*- 

§  1703.  When  the  mortgage  provides  that  upon  any  default  the 
whole  mortgage  debt  shall  become  due  and  payable,  then  there 
can  be  no  preference  given  to  the  holder  of  the  note  on  which  de- 
fault was  made  over  the  holder  of  the  note  not  then  due,  because 
by  such  default  the  whole  debt  became  due  at  the  same  time.  A 
pro  rata  distribution  should  then  be  made  between  the  holders  of 
different  parts  of  the  debt.^"^ 

Massachusetts:     Eastman   v.    Fos-  50  Am.  St.  565;  Commercial  Bank  v. 

ter,  8  Met.  19;  Browning  v.  Carson,  Jaclvson,  7  S.  D.  135,  63  N.  W.  548. 

163  Mass.  255,  39  N.  E.  Rep.  1037.  Washington:     First  Nat.   Bank  v. 

Georgia:     Russell   v.   Carr,   38  Ga.  Andrews,  7  Wash.  261,  34  Pac.  913 

459.  38  Am.  St.  885. 

Louisiana:     Ventress  v.   Creditors,  "*  Weaver  v.  Alter,  3  Woods,  152. 

20  La.    Ann.   359;    Lovell   v.   Cragin,  >"*  Ellis    v.    Lamme,    42    Mo.    153; 

136  U.  S.  130,  10  Sup.  Ct.  1024.  Rose    v.    Provident    Sav.    &c.    Asso. 

New  Jersey:    Collerd  v.  Huson,  34  28  Ind.  App.  25. 

N.  J.  Eq.  38.  '"» Grattan  v.  Wiggins,  23  Cal.  16. 

New  York:   Bank  v.  Moore,  112  N.  "^  Howard  v.  Schmidt,  29  La.  Ann. 

Y.  543,  20  N.  E.  357,  3  L.  R.  A.  302;  129. 

Jones  V.  Benedict,  83  N.  Y.  79.  "=  Anglo-American     Land     Mortg. 

North  Carolina:    Kitchin  v.  Gran-  &c.  Co.  v.  Bush,  84  Iowa,  272,  50  N. 

dy,  101  N.  C.  86,  7  S.  E.  603;  White-  W.    1063;    Robinson   v.    Waddell,    53 

head  v.  Morrill,  108  N.   C.  65,  12  S.  Kans.  402,  36  Pac.  730. 

E.  894.  '"''See   §§    1179-1183;    Bank  of  the 

South  Carolina:    Graham  v.  Jones,  U.  S.  v.  Covert,  13  Ohio,  240;  Bush- 

24  S.  C.  241.  field    v.    Meyer,    10    Ohio    St.    334; 

Minnesota:    Wilson  v.  E:genbrodt  Pierce  v.  Shaw,  51  Wis.  316,  8  N.  W. 

30  Minn.  4,  13  N.  W.  907.  209;  Whitehead  v.  Morrill,  108  N.  C. 

Arkansas:  Penzel  v.  Brookmire,  65,  12  S.  E.  894,  quoting  text. 
51  Ark.  105,  10  S.  W.  15.  Contra  in  Iowa:  Leavitt  v.  Rev- 
Nebraska:  Todd  V.  Cremer,  36  nolds,  79  Iowa,  348,  44  N.  W.  567. 
Neb.  430,  54  N.  W.  674;  Studebaker  Given,  J.,  said:  "Notes  of  this  de- 
Manuf.  Co.  v.  McCasgur,  20  Neb.  scription,  secured  by  mortgages  and 
500,  30  N.  W.  686:  State  Bank  v.  deeds  of  trust,  enter  largely  into  the 
Mathews,  45  Neb.  659,  63  N.  W.  930,  business   transactions   of  the  State, 


§§    1704-1706.]     APPLICATION  OF  PROCEEDS  OF  SALE.  656 

§  1704.  If  the  mortgagor  has  a  right  of  set-off  against  the 
mortgage  notes,  which  are  in  the  hands  of  various  assignees,  and 
the  offset  is  made  against  one  note,  the  proceeds  of  the  sale  should 
be  so  distributed  as  to  make  the  final  distribution  conformable  with 
their  equitable  rights  under  the  law;  as,  for  instance,  under  the 
rule  adopted  in  Kentucky,  to  make  all  the  assignees  contribute 
ratably  to  the  set-off.^°* 

§  1705.  When  the  mortgage  secures  debts  due  to  different  persons 
there  may  be  either  express  or  implied  priorities  between  them. 
An  agent,  with  the  assent  of  his  principal,  having  included  in  a 
mortgage  to  the  latter  a  debt  due  from  the  mortgagor  to  himself,  it 
was  held,  in  the  absence  of  any  agreement  as  to  preference,  that 
tlie  debt  due  the  principal  should  first  be  paid  out  of  the  proceeds 
of  a  foreclosure  sale.^"^ 

It  is  frequently  the  case  that  the  instrument  of  assignment  by  its 
terms  indicates  or  confers  a  preference  upon  the  assignee  as  to  the 
part  of  the  claim  assigned  to  him. 

§  1706.  Rights  of  sureties. — When  the  mortgage  secures  several 
debts,  for  some  of  which  there  are  sureties  who  are  not  parties  to 
the  mortgage,  the  mortgagee  becomes  a  trustee  for  the  sureties  to 
the  amount  of  the  funds  thus  provided  for  their  indemnity;  and  he 
must  see  that  the  proceeds  of  a  sale  of  the  property  are  applied  in 
just  proportions  to  the  discharge  of  the  debts  on  which  the  sureties 
are  bound.  Neither  the  mortgagor  nor  the  mortgagee  will  be  al- 
lowed to  defeat  the  rights  of  the  sureties,  who  have  a  right  to  be 
indemnified  out  of  the  property."" 

If  in  such  case  some  of  the  debts  include  usurious  interest,  the 
mortgagor  alone  can  avail  himself  of  this  defence.  A  surety  on  a 
debt  paying  legal  interest  cannot  complain.  He  gets  all  the  security 
that  he  bargained  for  when  the  mortgage  was  executed."' 

and  the  courts  should  hesitate  be-  the  several  notes  secured  is  not  im- 

fore  pronouncing  a  rule  that  would  paired    by    such    a    provision    in    a 

render    it    uncertain    whether    secu-  mortgage   or   deed   of  trust.     Hurck 

rity  for  such  notes  would  be  applied  v.   Erskine,   45  Mo.  484;    Mitchell  v. 

pro    rata    or    pro    tanto.     Our  con-  Ladew,  36  Mo.  526,  88  Am.  Dec.  156; 

elusion  is  that  the  maturity  of  the  Thompson  v.  Field,  38  Mo.  320. 

notes,  by  reason  of  default  in  mak-  ^"^  Campbell  v.   Johnston,  4  Dana, 

ing  prior  payment,  is  not  such  a  fall-  177. 

ing  due  as  should  change  the  rule  ^"'  Philips  v.  Belden,  2  Edw.  1. 

for  the  application  of  the  security."  "*  Bostick  v.  Jacobs,  133  Ala.  344, 

In   Missouri,    also,    it    is    held    that,  347,    32    So.    136;    Orleans  ^Co.    Nat. 

without    an    express    agreement    to  Bank   v.    Moore,    112   N.    Y.   543,   20 

that  effect,  the  priority  of  right  aris-  N.  E.  357,  3  L.  R.  A.  302. 

ing   from   the   time   of   payment   of  "'  Fielder  v.  Varner,  45  Ala.  429. 


657  COSTS  OF  SUBSEQUENT   MORTGAGES.    [§§    1T07,    1708, 

If  the  holder  of  one  of  the  notes  secured  l)y  the  mortgage  is  a 
surety  upon  the  others,  and  is  insolvent,  his  share  should  be  dis- 
tributed to  the  others.  The  assignee  for  the  benefit  of  creditors  of 
sucli  insolvent  surety  stands  in  the  latter's  shoes,  and  can  assert  no 
better  riglit  to  the  fund'  tlian  could  the  assignor.^"** 

If  the  payment  of  the  interest  on  the  mortgage  note  is  guaranteed  by 
a  third  person,  the  mortgagee  is  entitled  to  apply  the  proceeds  of  the 
sale  first  to  the  payment  of  the  principal  of  the  mortgage  debt,  leaving 
the  deficiency  in  the  payment  of  the  interest  to  be  made  good  by  the 
guarantor.^  °® 

§  1707.  Sale  for  instalment. — As  already  noticed,  when  a  sale  is 
made  of  the  entire  premises  for  the  non-payment  of  an  instalment 
of  the  mortgage,  and  there  is  a  surplus  after  paying  the  amount 
due  on  the  mortgage  at  the  time,  the  court  may  retain  this,  and 
apply  it  to  the  subsequent  instalments  as  fhey  become  due;^^''  or,  as 
some  courts  hold  or  statutes  provide,  may  immediately  apply  the 
surplus  to  the  payment  of  the  notes  not  yet  matured.^^'- 


IV.     Costs  of  Subsequent  Mortgagees. 

§  1708.  When  proceeds  of  the  sale  under  a  decree  in  equity  are 
insufficient  to  pay  all  the  incumbrances  in  full,  each  mortgagee  is  enti- 
tled to  be  paid  his  costs  as  well  as  his  debt,  according  to  his  priority 
whether  the  bill  be  filed  by  the  first  or  any  subsequent  mortgagee.  The 
rule  adopted  in  equity  under  a  creditor's  bill,  when  a  fund  is  in 
court  and  is  to  be  distributed  among  several  claimants  pro  rata,  or 
when  the  construction  of  a  will  is  in  doul)t,  and  the  rights  of  dif- 
ferent claimants  are  to  be  determined,  that  the  costs  of  all  the  parties 
shall  in  the  first  place  be  paid  out  of  the  fund,  has  no  application  in 
the  case  of  a  foreclosure  of  mortgages,  for  the  parties  have  priority 
according  to  fixed  rules  of  law.  Of  course,  it  may  happen  that  a  sub- 
sequent mortgagee,  after  having  incurred  costs  of  suit  and  of  sale,  may 
lose  these  as  well  as  his  demand  also,  as  where  the  proceeds  of  sale 
are  only  sufficient  to  pay  the  debt  and  costs  due  to  the  first  mortgagee ; 
but  this  was  the  risk  assumed  by  taking  the  subsequent  incumbrance. 
This  rule  seems  best  adapted  to  secure  the  rights  of  the  parties,  and  is 

1°' Fourth  Nat.  Bank's  Appeal,  123  ""  §   1459;    McDowell  v.   Lloyd,  22 

Pa.  St.  473,  16  Atl.  779.  Iowa,  448. 

"'■*  Simpson  v.   Ferguson,   112   Cal.  "'  Fowler    v.    Johnson,    26    Minn. 

180,  40  Pac.  104.  338,  3  N.  W.  986,  6  N.  W.  486. 


§  1708.]        APPLICATION  OF  PROCEEDS  OF  SALE,  658 

well  established  both  in  our  own  courts^^'  and  in  those  of  England.^^^ 
Where,  however,  a  first  mortgagee  having  a  mortgage  containing  a 
power  of  sale  lost  his  deed,  and  was  obliged  to  resort  to  a  suit  in 
equity  to  obtain  a  sale,  subsequent  incumbrancers  were  allowed  their 
costs,  although  the  proceeds  of  sale  were  not  sufficient  to  pay  the  plain- 
tiff in  full,^^*  apparently  because  there  should  have  been  no  occasion  to 
come  into  equity.  And  where  a  mortgagee  with  a  power  of  sale 
filed  a  bill,  Baron  Alderson  said  that  the  subsequent  incumbrancers, 
being  brought  into  court  without  necessity,  were  entitled  to  their 
costs,  although  the  proceeds  of  sale  were  insufficient  to  pay  the  first 
mortgage.^^^ 

"=  Mayer  v.  Salisbury,  1  Barb.  Ch.  "^  Upperton    v.    Harrison,    7    Sim. 

546;     Smack    v.    Duncan,    4    Sandf.  444,  and  cases  there  cited. 

Ch.    621;     Farmers'    Loan    &    Trust  ''^Wontner  v.  Wright,  2  Sim.  543. 

Co.   V.   Millard,   9   Paige,   620;    Boyd  "^  Cooke    v.    Brown,    4    Y.    &    C. 

V.  Dodge,   10  Paige,  42;   Lithauer  v.  Exch.  227. 
Royle,  17  N.  J.  Eq.  40. 


CHAPTEE  XXXVIII. 

JUDGMENT  IN  AN  EQUITABLE  SUIT  FOR  A  DEFICIENCY, 

§  1709.  Generally. — By  reference  to  the  statutory  provisions  of 
the  several  States  respecting  foreclosure,  it  will  be  observed  that,  in 
m'ost  of  the  States  in  which  forecloseure  is  effected  by  an  equitable 
action,  authority  is  given  to  the  court  to  adjudge  the  payment  by 
the  mortgagor,  or  any  other  person  liable  for  the  debt,  of  any  defi- 
ciency there  may  be  remaining  unsatisfied  after  a  sale  of  the  mort- 
gaged land.  The  codes  of  several  States  contain  a  provision,  to 
which  reference  only  is  made  in  the  statutes  relating  specifically  to 
the  subject  of  foreclosure,  as  follows:  "In  actions  to  foreclose  mort- 
gages, the  court  shall  have  power  to  adjudge  and  direct  payment  by 
the  mortgagor  of  any  residue  of  the  mortgage  debt  that  may  re- 
main unsatisfied  after  a  sale  of  the  mortgaged  premises,  in  cases  in 
which  the  mortgagor  shall  be  personally  liable  for  the  debt  secured 
by  such  mortgage;  and  if  the  mortgage  debt  be  secured  by  the 
covenant  or  obligation  of  any  person  other  than  the  mortgagor, 
the  plaintiff  may  make  such  person  a  party  to  the  action;  and  the 
court  may  adjudge  payment  of  the  residue  of  such  debt  remaining 
unsatisfied,  after  a  sale  of  the  mortgaged  premises,  against  such 
other  person,  and  may  enforce  such  judgment  as  in  other  cases." 
This  provision  exists  in  substantially  the  same  terms  in  the  States 
of  New  York,  Wisconsin,  Nebraska,  and  South  Carolina.^  Provi- 
sions differing  somewhat  from  the  foregoing  are  found  in  other 
States.2 

'  New  York:    Code  of  Civ.  Pro.  R.  the  repeal  of  this  provision  a  defi- 

S.    7th    ed.    §    1627.     See    Brewer   v.  ciency  judgment  may  be  had.     Pat- 

Longnecker,  15  N.  Y.  Supp.  937.  rick  v.  National  Bank,  63  Neb.  200, 

Wisconsin:    R.  S.  1878,  S  3156.  88  N.  W.  183. 

Nebraska:     Code    of    Civ.    Pro.    §§         South  Carolina:     G.   S.   1882,   Code 

847,   849;    Comp.   Stats.   1885,  p.   726.  of  Civ.  Pro.  §  188. 
See  Nebraska  Code  Civ.  Pro.  §  847.  -  In  Washing-ton  a  deficiency  judg- 

In  an  action  commenced  prior  to  ment  is  warranted  upon  foreclosure 

659 


§    1709a.]  JUDGMENT   IN    EQUITY    FOR   DEFICIENCY.  660 

The  Supreme  Court  of  the  United  States,  in  1864,  in  order  to 
assimilate  the  practice  in  the  circuit  courts  to  the  general  practice 
in  the  state  courts,  adopted  a  rule  that  in  all  suits  in  equity  for  the 
foreclosure  of  mortgages  in  the  circuit  courts,  or  in  any  of  the  courts 
of  the  Territories,  a  decree  may  be  rendered  for  any  deficiency 
found  due  after  applying  the  proceeds  of  the  sale.'*  This  rule 
applies  to  the  courts  of  the  District  of  Columbia.*  The  power 
vested  in  the  federal  courts  by  this  rule  is  a  discretionary  one,  and 
may  be  exercised  or  not,  as  the  court  deems  best.'  But  this  rule 
does  not  authorize  the  entry  of  a  decree  for  a  balance  due  the  mort- 
gagee over  and  above  the  proceeds  of  sale,  if  such  balance  has  not 
become  payable.*' 

§  1709a.  The  judgment  contemplated  is  one  for  the  balance  of  the 
debt  after  applying  the  proceeds  of  the  sale.  This  can  be 
rendered  only  when  there  are  proper  averments  in  the  bill  and  a 
prayer  for  this  relief.^  Then  the  first  step  is  to  ascertain  what  the 
amount  of  this  balance  is.  Therefore  a  judgment  for  a  deficiency  can 
be  had  only  when  the  sale  is  completed;  and  it  can  only  be  known 
what  the  deficiency  is  upon  the  coming  in  of  the  report  of  sale,  and  the 
confirmation  of  this.^  The  usual  practice  is  for  the  sheriff  or  referee 
to  state  the  amount  of  the  deficiency  in  his  report  of  the  sale.     The 

of  a  mortgage,  when  prayer  of  the  &   Sp.   150;    Tormey  v.   Gerhart,   41 

complaint  asks  for  judgment  against  Wis.    54;    Field    v.    Saginaw    Circuit 

defendant  for  the  sum  secured,  that  Judge,  124  Mich.  68,  82  N.  W.  798; 

the     mortgage     be     foreclosed,     the  Devries   v.    Squire,    55    Neb.    438,    76 

premises  sold    and  the  proceeds  ap-  N.  W.  16;   Parmele  v.  Schroeder,  61 

plied    upon    the    mortgage    and    for  Neb.  553,  85  N.  W.  562,  59  Neb.  553, 

general  relief     Rogers  v.  Turner,  19  81    N.    W.    506;    Brown   v.    Johnson, 

Wash    399,  53  Pac.  663.  58  Neb.  222,  78  N.  W.  515;  see  Code 

»1  Wall.   p.   v.;    Connecticut  Mut.  Civ.  Pro.    §   847,  Comp.   Stats.   1890; 

Life  Ins.   Co.   v.   Tyler,   8  Biss.   369.  Morris  v.  Linton,  61  Neb.  537,  85  N. 

It  had  previously  been  decided  that  W.     565;     Packard     v.     Kinzie     Av. 

such  a  decree  could  not  be  made  in  Heights  Co.  105  Wis.  323,  81  N.  W. 

the  absence  of  such  a  rule.     Noonan  488;    Mickle    v.    Maxfield,    42    Mich. 

V     Lee     2    Black,    499;    Orchard    v.  304,  3  N.  W.  961;   Crowley  v.  Hara- 

Hughes,  2  Black,  499,  1  Wall.  73.  der,  69  Iowa,  83,  28  N.  W.  446;  Hull 

*Freedman's  Savings  &  Trust  Co.  v.   Young,  29  S.  C.  64,  6  S.  E.  938" 

V.  Dodge,  7  Wash.  L.  R.  92,  affirmed  Presley    v.    McLean,    80    Ala.    309 

Dodge     V.     Freedman's     Savings     &  Winston   v.    Browning.    61    Ala.    80 

Trust  Co.  116  U.  S.  445;   Hayden  v.  Sayre  v.  Elyton  Land  Co.  73  Ala.  85 

Snow    9  Biss.  511.  Clapp   v.    Maxwell,   13   Neb.    542,   14 

'  Phelps  V.  Loyhed,  1  Dill.  512.  N.  W.  653. 

« Ohio    Cent.    R.    Co.    v.    Central         In  Utah,  however,  it  is  held  that. 

Trust  Co.  133  U.  S.  83,  10  Sup.  Ct.  where    a    mortgagor    has    conveyed 

235.  the    premises    to    another    by    war- 

'  Southward   v.    Jamison,    66    Ohio  ranty  deed,  who  is  made  co-defend- 

St.  290,  64  N.  E.  135;  Patrick  v.  Na-  ant    in    foreclosure,    the    court    has 

tional  Bank,  63  Neb.  200,  88  N.  W.  power  to  enter  a  personal  judgment 

183.  against  the  former,  and  require  exe- 

'Bank  of  Rochester  v.   Emerson,  cution  to  be  Issued   thereon  before 

10  Paige,   359;    Baird  v.   McConkey,  selling  the  mortga.eed  lands.     Brere- 

20  Wis.  297;  Bache  v.  Doscher,  9  J.  ton  v.  Miller,  7  Utah,  426,  27  Pac.  81. 


661  JUDGMEISTT   IN    EQUITY    FOR   DEFICIENCY.  [§    1709a. 

court  determines  who  of  the  defendants  are  liable  to  pay  the  same  to 
the  plaintiiT.  This  may  be  provided  for  in  the  original  decree.^  There 
can  generally  be  no  contingent  judgment  for  such  deficiency  entered 
beforehand  ;^°  at  any  rate  no  execution  can  be  issued  beforehand."  In 
some  States  an  execution  for  a  deficiency  should  not  be  issued  without 
special  application  to  the  court,  and  notice  to  the  defendant.^^  But 
when  the  person  liable  for  deficiency  does  not  appear  in  the  cause,  it 
is  the  practice,  after  calculation  of  the  amount,  to  award  execution 
for  the  deficiency  without  giving  him  notice  of  the  motion. ^^ 

No  notice  of  such  motion  need  be  given  to  the  respondent.  He  h^as 
notice  of  the  suit,  and  notice  of  the  complainant's  right  to  move  for  a 
decree  for  a  deficiency  of  the  mortgage  debt  left  after  application  of 
the  proceeds  of  sale,  just  as  he  has  notice  of  all  other  relief  the  com- 
plainant may  be  entitled  to.^* 

A  judgment  for  a  deficiency  can  be  rendered  by  a  court  of  equity 
only  by  virtue  of  a  statute.  A  conditional  decree  authorized  by 
statute  to  be  entered  in  advance  does  not  have  effect  as  a  judgment  or 
personal  money  decree,  "'but  only  to  establish  that  the  complainant 
is  entitled  to  a  personal  money  decree  against  the  parties  so  to  be 
charged,  for  such  amount  or  balance  of  money  as  may  therea,fter  be 
judiciously  ascertained  or  found  'to  be  due,'  of  the  sale  or  sales  of 
the  mortgaged  premises."^^ 

If  the  liability  for  a  deficiency  is  not  determined  by  ther  court  in 
the  decree  for  foreclosure  and  sale,  it  may  be  litigated  after  the 
coming  in  of  the  report  of  sale.^' 

Before  there  can  be  a  judgment  for  a  deficiency  in  an  equitable 
suit  for  foreclosure  there  must  be  a  decree  of  foreclosure.  If  the 
plaintiff  fails  to  establish  his  mortgage,  he  cannot  in  this  suit  have  a 
personal  judgment  for  the  debt.     "It  was  never  intended  to  permit 

'McCarthy    v.    Graham,    8    Paige,  v.  Lindler,  40  S.  C.  193,  18  S.  B.  636. 
480.  "  Howe  v.    Lemon,   37   Mich.    164; 

The  reference  is  to  ascertain  the  Ayers  v.  Rivers,  64  Iowa,  543,  21  N. 

unpaid    balance    of    the    foreclosure  W.  83;  Russell  v.  Hank,  9  Utah,  309, 

decree.     Other   accounts   and    trans-  34   Pac.   245;    Cotes   v.   Bennett'    183 

actions    outside    the    mortgage   debt  111.  82,  86,  55  N.  E.  661,  quoting  text, 
cannot     be     considered.     Perdue    v.        '^  Gies  v.  Green,  42  Mich.  107,  3  N. 

Brooks,  95  Ala.  611,  11  So.  282.  W.  Rep.  283;  Ransom  v.  Sutherland^ 

'"  Cobb   v.    Thornton,    8   How.    Pr.  46  Mich.   489,  9  N.  W.  530;    Prentis 

66;    Bache   v.    Doscher,    9    J.    &   Sp.  v.  Richardson,  118  Mich.  259,  76  N. 

150.     But    see    Moore    v.    Shaw,    15  W.  381. 

Hun,    428;    McCarthy   v.    Graham,    8        "  White  v.  Zust,  28  N.  J.  Eq.  107. 
Paige,    480;    Parmele    v.    Schroeder,        "Wells    v.    American    Mortg.    Co. 

61  Neb.  553,  85  N.  W.  562,  59  Neb.  123  Ala.  413,  26  So.  801. 
553,  81  N.  W.  506;  Devries  v.  Squire,        ^"^  Cotes  v.  Bennett,  183  III.  82    86 

55  Neb.  438,  76  N.  W.  16;   National  55  N.  E.   661,  affirming  84  111.  App! 

Life  Ins.  Co.  v.  Fitzgerald,  61  Neb.  33. 

692,  85  N.  W.  948;   Brown  v.  John-        "Brown  v.  Johnson,  58  Neb.  222, 

son,  58  Neb.  222,  78  N.  W.  515;  Parr  78  N.  W.  515. 


§    1709a.]  JUDGMENT    IN    EQUITY    FOR   DEFICIENCY. 


663 


tlie  joinder  in  the  same  complaint  of  two  separate  causes  of  action, 
— one  at  law  to  recover  a  personal  judgment  on  the  bond  for  the 
debt,  and  the  other  in  equity  to  procure  a  sale  of  the  land  covered 
by  the  mortgage  given  to  secure  the  same  debt  and  the  application 
of  the  proceeds  thereon.  .  .  .  The  established  rule  that,  when  equity 
has  obtained  jurisdiction  of  the  parties  and  the  subject-matter  of  the 
action,  it  may  adapt  the  relief  to  the  exigencies  of  the  case,  even  to 
the  extent  of  rendering  a  personal  judgment,  in  order  to  prevent  a 
failure  of  justice,  does  not  apply  here.  That  rule  applies  when  the 
general  basis  of  fact  upon  which  equitable  relief  was  sought  has  been 
made  out,  but  for  some  reason  it  tecomes  impracticable  to  grant 
such  relief,  or  where  it  would  be  insufficient;  and  not  to  a  case  like 
this,  where  it  appears  that  there  never  was  in  fact  any  ground  for 
equitable  relief  whatever,  but  the  sole  remedy  was  an  action  at 
law."" 

The  deficiency  may,  however,  be  ascertained  not  only  by  a  judg- 
ment to  foreclose  the  mortgage  under  which  it  is  sought  to  establish 
a  deficiency,  but  it  may  also  be  ascertained  in  an  action  to  foreclose 
a  prior  mortgage  to  which  the  defendant  was  a  party.  The  surplus 
arising  from  the  sale  under  the  prior  mortgage  is,  as  to  the  junior 
mortgagee,  for  the  purposes  of  the  lien  of  his  mortgage,  to  be  treated 
as  real  estate.  The  court  may  render  judgment  against  the  mort- 
gagor for  the  deficiency  due  on  the  junior  mortgage,  after  applying 
thereon  the  amount  received  from  the  sale  in  excess  of  the  prior 
mortgage.  ^^ 

"Dudley  v.  Congregation,  138  N.  a  mortgage,  was  not  supposed  to 
Y.  451,  34  N.  B.  281,  per  O'Brien,  J.;  have  jurisdiction  to  render  a  per- 
Beck  V  Allison,  56  N.  Y.  366.  And  sonal  judgment  against  the  mort- 
see  Bradley  v.  Aldrich,  40  N.  Y.  gagor  upon  his  bond  or  covenant 
504;  Wheelock  v.  Lee,  74  N.  Y.  495,  to  pay  the  mortgage  debt,  and  such 
500;  Hawes  v.  Dobbs,  137  N.  Y.  465,  a  judgment  could  only  be  obtained 
33  N.  E.  560;  Reichert  v.  Stilwell,  by  an  action  at  law.  Noonan  v.  Lee, 
172  N.  Y.  83,  affirming  57  App.  Div.  2  Black,  499;  Orchard  v.  Hughes,  1 
480.  See,  however,  American  Sav.  Wall.  73;  Dunkley  v.  Van  Buren,  3 
&  L  Asso.  V.  Burghardt,  19  Mont.  Johns.  Ch.  330;  Jones  v.  Conde,  6 
323,  48  Pac.  391,  61  Am.  St.  507.  Johns.    Ch.    77;     Globe    Ins.    Co.    v. 

In  Tennessee,  however,  it  is  held  Lansing,  5  Cow.  380;  Sprague  v. 
on  the  ground  of  the  maxim  that,  Jones,  9  Paige,  395;  Equitable  L. 
the  court  having  jurisdiction  for  one  Ins.  Soc.  v.  Stevens,  63  N.  Y.  341; 
purpose,  it  may  assume  it  for  all  Burroughs  v.  Tostevan,  75  N.  Y. 
purposes,  that  a  decree  for  a  defi-  567.  This  was  an  exception  to  the 
ciency  can  be  had  under  a  general  general  rule  that,  where  a  court  of 
prayer  for  relief.  Nolen  v.  Woods,  equity  obtains  jurisdiction  of  an  ao- 
12  Lea,  615.  tion,   it  will   retain   it,    and    admin- 

^«  Frank  v.  Davis,  135  N.  Y.  275,  Ister  full  relief,  both  legal  and  equit- 
31  N.  E.  1100.  Mr.  Chief  Justice  able,  so  far  as  it  pertains  to  the 
Earl,  delivering  judgment,  said:  same  transactions  or  the  same  siib- 
"In  England,  and  in  this  State  prior  ject-matter.  Lynch  v.  Met.  El.  Ry. 
to  the  Revised  Statutes,  the  court  of  Co.  129  N.  Y.  274,  29  N.  E.  315;  Mc- 
chancery,  in  an  action  to  foreclose    Gean  v.  Met.  El.  Ry.  Co.  133  N.  Y.  9, 


663  JUDGMENT    IN    EQUITY    FOR    DEFICIENCY.  [§    1709a. 

The  objection  to  a  judgment  for  deficiency  in  a  foreclosure  action, 
that  the  defendant  against  whom  it  was  recovered  was  prejudiced 
by  the  omission  to  serve  certain  other  defendants,  is  not  tenable,  when 
it  appears  that  the  unserved  defendants  had  in  fact  no  interest  in  the 
mortgaged  premises;  that  the  judgment  of  sale  was  entered  upon  the 
motion  of  the  defendant  against  whom  the  judgment  for  deficiency 
was  subsequently  recovered  and  that  his  attorney  attended  and  bid 
at  the  sale.^^ 

A  foreclosure  sale  made  before  the  date  fixed  by  the  decree  and 
without  notice  to  the  defendant  is  illegal,  and  no  judgment  of  de- 
ficiency can  be  founded  on  such  sale.'** 

The  sum  for  which  the  mortgaged  premises  were  sold  must,  so 
long  as  the  sale  stands,  be  talven,  as  between  the  parties  to  the  suit, 
as  a  conclusive  test  of  their  value;  and  the  amount  of  the  deficiency 
for  which  a  decree  shall  be  entered  is  ascertained  accordingly,  and 
not  by  taking  the  market  value  at  the  time,  in  case  this  happens  to 
exceed  the  amount  obtained  at  the  sale.^^ 

The  officer  making  the  sale  cannot  by  acknowledging  satisfaction 
of  the  decree,  bind  the  mortgagee,  unless  he  actually  receives  satis- 
faction in  lawful  money.  Thus  a  mortgage  covering  two  lots  was 
foreclosed  by  suit,  and,  upon  the  sale  of  one  of  the  lots  by  the  mar- 
shal, the  defendants  paid  to  the  marshal  the  difference  between  the 
sum  bid  and  the  amount  of  the  decree,  which  he  received  as  being 
"in  full  of  all  demands  as  deficiency."  The  bidder  failed  to  comply 
with  the  bid,  and  that  lot  was  sold  again  for  a  less  price,  leaving  a 
deficiency.  It  was  held  that  the  plaintiff  was  not  bound  by  the 
marshal's  receipt,  and  was  entitled  to  have  the  second  lot  sold  to 

30  N.  E.  647  (recently  decided  in  this  ciency  be  ascertained  by  a  sale  in 

court).   The  purpose  of  this  rule  was  the  action  in  which  the  judgment  is 

to  relieve  parties  from  the  expense  asked.     We    think    we    are    justified 

and  vexation  of  two  suits,  one  equit-  in  holding  that  that  rule  has  been 

able  and  the  other  legal,  where  the  entirely   swept   away,   and   that   the 

whole  controversy  could  be  adjusted  general  rule  in  equity  practice  above 

in  the  one  suit.     There  was    no  rea-  referred  to,  except  as  it  is  modified 

son,  so  far  as     we  can  perceive,  for  by  the  provisions  of  the  Code,  gov- 

taking  the  case  of  a  mortgage  fore-  erns   foreclosure  as  other  equitable 

closure   out   of  this   convenient  and  actions." 

beneficent  rule;  and  the  law-makers  See.    also,    Simons    v.    McDonnell, 

of    this    State    took    early    occasion  120  Mich.  621,  79  N.  W.  916. 

to  change  the    law  by  providing  that  '"  Wager   v.    Link,    150   N.    Y.    549, 

a  personal  judgment  for  a  deficiency  550,  44  N.  B.  1103. 

may  be  given  in  the  foreclosure  ac-  -'"  Shier   v.    Prentis,    55    Mich.    175, 

tion  against  any  party  liable  for  the  20  N.  W.  892. 

mortgage  debt.  .  .  .  We  are  asked  to  -^  Snyder  v.  Blair,  33  N.  J.  Eq.  208; 

hold   that  enough  of  the  old  chan-  Hollister  v.  Buchanan,  11  S.  D.  280, 

eery  rule  is  left  to  prevent  a  defi-  77  N.  W.  103. 

ciency    judgment,    unless    the    defi- 


1709b.]  JUDGMENT    IN    EQUITY   FOR   DEFICIENCY. 


664 


pay   the   deficiency,   though   third   persons   had   taken   a   mortgage 
thereon  on  the  faith  of  the  marshal's  receipt.^^ 

§  1709b.  The  deficiency  contemplated  is,  moreover,  such  as  has 
been  ascertained  by  a  sale  under  the  decree.  Therefore,  where 
a  second  mortgagee  commenced  a  suit  to  foreclose  his  mortgage, 
and  for  a  deficiency,  and  recovered  judgment,  and  subsequently 
obtained  an  order  vacating  the  judgment  and  allowing  him  to 
amend  by  bringing  in  an  additional  party,  and  pending  further 
proceedings  a  prior  mortgagee,  by  decree,  sold  the  property  for  a 
sum  only  sufficient  to  pay  the  first  mortgage  and  costs,  the  second 
mortgagee  was  not  allowed  to  have  the  order  setting  aside  his  judg- 
ment vacated,  and  a  judgment  for  a  deficiency  entered  for  the  full 
amount  due  on  his  mortgage.  His  only  remedy  was  by  an  action 
at  law  upon  the  mortgage  bond.^^ 

The  foreclosure  decree  fixes  the  amount  of  the  mortgage  debt, 
and  is  a  final  adjudication  of  this;  and  when  a  judgment  for  de- 
ficiency is  sought,  or  an  execution  for  a  deficiency,  no  objections  to 
the  amount  of  the  decree  can  be  considered  except  such  as  go  to  its 
discharge  and  have  arisen  since  the  confirmation  of  the  sale.-* 

A  second  mortgagee,  who  is  a  party  to  a  bill  to  foreclose  a  first 
mortgage,  cannot,  by  filing  a  cross-bill  against  the  mortgagor,  obtain 
a  decree  for  deficiency  on  his  own  mortgage.-^  A  second  mortgagee 
upon  his  own  bill  to  foreclose  his  mortgage  after  a  sale  subject  to 
the  first  mortgage  may  have  a  deficiency  judgment  for  the  balance 
due.  He  cannot  have  a  judgment  for  such  balance  and  the  amount  of 
the  first  mortgage.''' 

Persons  who  are  only  liable  for  the  debt  after  the  mortgaged 
property  has  been  applied  to  its  liquidation,  as,  for  instance,  mort- 
gagors who  have  sold  the  land  to   others   who   have   assumed  the 

"Kershaw   v.    Dyer,    6   Utah,   239,  Wend.   365;    Griffin  v.   Thompson,  2 

24  Pac.  621.     Chief  Justice  Zane,  for  riow.    244;     Bank    v.    Wakeman,    1 

the  court,   said:     "The   marshal,   as  Cow.    46,    and   note    a;    Mumford   v. 

we  have  said,  was  required  to  con-  Armstrong,  4  Cow.  553. 

vert  into  money  so  much  of  the  land  "  Loeb    v.    Willis,    22    Hun,    508; 

described    in    the    decree    as    would  Frank  v.  Davis,  16  N.  Y.  Supp.  369; 

pay  the  debt,  and  to  pay  it  to  the  Siewart  v.   Hamel,  33  Hun,  44,  dis- 

plaintiffs.     He  had  no  authority  to  approved. 

turn    over,    in    satisfaction    of    it,    a  =^  Haldane  v.  Sweet,  58  Mich.  429, 

promise  of  a  bidder  to  pay  a  law-  25  N.  W.  383;   Jehle  v.  Brooks,  112 

suit.     If  the  defendants  in  the  case  Mich.  131,  70  N.  W.  440;  Parmele  v. 

did    not    want    their    property    sold,  Schroeder,  61  Neb.  553,  85  N.  W.  562. 

they   should    have   paid   the   decree,  "  Sebring  v.  Conkling,  32  N.  J.  Eq. 

as   it   was   their   duty   to   do.     They  24;  Stover  v.  Tompkins,  34  Neb.  465, 

having  failed,  it  became  the  officer's  51  N.  W.  1040;    Patrick  v.  National 

duty  to  convert  their  property  into  Bank,  63  Neb.  200,  88  N.  W.  183. 

monev,  and   make  the  payment  for  -''  Kasson  v.   Tousey,  96  Wis.   511, 

them.'"     Citing    Colton    v.    Camp,    1  71  N.  W.  894. 


665  JUDGMENT   IN    EQUITY    FOR    DEFICIENCY.  [§    1709b. 

mortgage  debt,  have  a  right  to  require  the  sale  of  the  whole  equity 
of  redemption  for  that  purpose;  and  therefore  they  may  require 
the  joining  of  all  persons  who  have  any  interest  in  the  property,  so 
that  all  equities  in  it  may  be  extinguished.  Although  the  owner- 
ship is  in  doubt  or  disputed,  the  court  will  order  the  person  who 
appears  to  have  an  interest  in  the  land  to  be  brought  in.^'^ 

A  partner  may  properly  insist  that  a  mortgage  of  partnership 
property  to  secure  a  partnership  debt  shall  be  foreclosed  before  a 
personal  judgment  is  rendered  against  him  on  the  note^^ 

Upon  the  same  principle  it  has  been  held  that  a  defendant  who 
is  only  secondarily  liable  may  require  the  bringing  in  of  the  prin- 
cipal debtor,  if  within  the  jurisdiction  of  the  court,  for  the  purpose 
of  obtaining  against  him  a  judgment  for  deficiency.^" 

When  a  judgment  is  rendered  against  several  persons,  some  of 
whom  are  primarily  liable  and  others  only  secondarily,  the  judg- 
ment for  the  deficiency  should  provide  that  it  be  enforced  in  the 
first  place  against  the  principal  debtors,  and  then,  so  far  as  it  re- 
mains unsatisfied  only,  against  the  sureties  in  the  order  of  their 
liability,  which  should  also  be  fixed. ^°  The  decree  for  deficiency 
should  determine  the  order  of  liability  of  several  grantees  who 
have  successively  assumed  the  pajanent  of  the  mortgage  debt.^^ 

Where  there  are  several  makers  of  a  promissory  note  and  a 
deficiency  judgment  is  taken  against  one  of  them  only  and  the  case 
is  not  disposed  of  as  to  the  others  except  by  a  decree  for  foreclosure 
a  subsequent  suit  on  the  note  cannot  be  maintained  against  such 
others.^^ 

The  liability  of  the  payee  of  a  note,  who  indorses  it  and  gives 
a  mortgage  conditioned  for  its  payment  according  to  its  tenor,  is 
regarded  as  primary,  and  not  merely  that  of  an  indorser.^^ 

An  infant's  disaffirmance  of  his  bond  and  mortgage  does  not  re- 
lieve a  surety  on  his  bond  from  liability  for  a  deficiency  arising 
upon  a  sale  of  the  mortgaged  property.^* 

=''Kortright  v.  Smith,  3  Edw.  402.  »^  Robertson  v.  Cauble,  57  Ind.  420; 

^'  Warren    v.    Hayzlett,    45    Iowa,  Zekind  v.  Newkirk,  12  Ind.  544. 

234.  ^^Kyger  v.  Sipe,  89  Va.  507,  16  S. 

''Bigelow  V.  Bush,  6  Paige,  343.  E.    627.     Per    Lewis,    P.:     "In    such 

^^  Luce     v.     Hinds,     Clarice,     453;  a  case  the  disability  of  the  principal 

Leonard  v.  Morris,  9  Paige,  90.    And  may    be    the   very    reason    why    the 

see  Jones  v.  Steinbergh,  1  Barb.  Ch.  surety  was   required  and   consented 

250;    Farnham    v.    Mallory,    5    Abb.  to   become   bound."     Citing  Brandt, 

N.  S.  Pr.  380.  Sur.  §  128;   St.  Albans  Bank  v.  Dil- 

"  Youngs  V.  Public  Schools,  31  N.  Ion,  30  Vt.  122;  Weed  Sewing  Mach. 

J.  Eq.  290.  Co.   v.   Maxwell,   63   Mo.   486;    Davis 

"'  Travellers'  Ins.  Co.  v.  Mayo,  170  v.  Statts,  43  Ind.  103. 
III.  498,  48  N.  E.  917. 


§    1710.]  JUDGMENT    IN    EQUITY    FOR   DEFICIENCY.  6GG 

If  the  mortgage  covers  land  in  two  States,  a  judgment  for  a  defi- 
ciency may  be  liad  upon  a  foreclosure  in  one  State.  Thus,  when  a 
mortgage  on  land  partly  in  Xew  York  and  partly  in  another  State 
is  foreclosed  in  Xew  York  as  to  the  land  therein,  and  that  land  sold, 
plaintiff  can  have  judgment  for  deficiency  without  foreclosing  as  to  the 
land  in  another  State,  as  the  New  York  courts  cannot  order  a  sale  of 
that  land.^^ 

§  1710.     Third  persons  liable  for  the  mortgage  debt  may  be  joined 
as   defendants. 3<^     The    practice    codes    of    several    States    provide 
that  the  plaintiff  may  unite  in  the  same  complaint  several  causea 
of  action  belonging  to  one  class  of  actions,  as,  for  instance,  such 
as   arise   out  of  the  same    transaction,    or    transactions    connected 
with   the   same   subject   of   action,   but   with   the   qualification   that 
each  cause  of   action  so  united  must   affect  all   the  parties   to  the 
action.     In  the  States  above  named  an  exception  is  made  in  actions 
for  the  foreclosure  of  mortgages.     It  is   generally  considered  that, 
without  this  exception   and   a -special  provision   for  this   case,   the 
holder  of  a  mortgage  could  not  join  a  third  party  liable  for  the  debt 
with  the  mortgagor  in  an  action  of  foreclosure,  for  the  purpose  of 
obtaining  a  judgment  for  a  deficiency  against  him.    An  action  against 
the  mortgagor  alone  in  which  a  decree  is  sought  for  the  sale  of  the 
property,  and  as  well  a  judgment  against  him  for  a  deficiency,  would 
not  embrace  different  causes  of  action,  but  different  remedies  for  the 
same  cause;  but  when  a  third  person  is  joined  for  the  purpose  of 
obtaining  a  judgment  against  him  for  a  deficiency,  it  is  considered, 
in  the  absence  of  such  express  provision,  that  there  is  a  misjoinder 
of  causes  of  action.     This   seems  to  be  the  distinction   established 
by  the  authorities.     When,  therefore,  the  code  of  a  State  does  not 
contain  such  express  provision,  a  judgment  for  a  deficiency  cannot 
be  obtained  against  any  persons  liable  for  the  debt  other  than  the 
mortgagor  himself.^^     The  only  remedy  against  a  third  person  liable 
for  the  mortgage  debt  is  by  a  separate  ax;tion  after  the  deficiency 
has  been  ascertained.     Objection  to  a  complaint  which  improperly 
joins  these  different  causes  of  action  must  be  taken  by  answer  or 

'=  Clark  v.  Simmons,  8  N.  Y.  Supp.  v.   Wheeler,    14   Wis.    281 ;    Jesup   v. 

74  City  Bank,  14  Wis.  331;    Stilwell  v. 

'^«See  statutes  of  the  several  Kellogg,  14  Wis.  461;  Borden  v.  Gil- 
States  §§  1317-1366.  Also,  Palme-  bert,  13  Wis.  670.  See  McCarthy  v. 
ter  V.  Carey,  63  Wis.  426,  21  N.  W.  Garraghty,  10  Ohio  St.  438.  It  has 
793,  23  N.  W.  586;  Halbach  v.  Tres-  been  held,  however,  that  a  judg- 
ter.'  102  Wis.  530,  78  N.  W.  759.  ment    may    be    rendered    against    a 

"  Pomeroy's  Remedies.  8  459;  Doan  third  party  in  the  absence  of  an  ex- 

v     Holly     26    Mo.    186.    25   Mo.    357;  press    prohibition.     Hilton    v.    Otoe 

Faesi   v.'Goetz,   15   Wis.    231;    Gary  Co.  Nat.  Bank,  26  Fed.  202. 


667  JUDGMENT    IN    EQUITY    FOR    DEFICIENCY.  [§    1710. 

(lemin-rer,  or  it  will  be  deemed  to  be  waived  v'**  and  if  tliere  be  no 
such  objection,  a  judgment  for  the  cTcficiency  may  be  entered,  though 
not  expressly  authorized  by  any  statute.^'-*  Where  a  deficiency  decree 
is  taken  against  one  only  of  several  persons  jointly  liable,  the  others 
are  released.*" 

Mere  delay  on  the  part  of  the  mortgagee  to  foreclose,  when  he 
had  not  been  requested  to  do  so,  and  the  interest  has  been  paid, 
does  not  render  him  liable  for  a  loss  occasioned  by  a  fall  in  the 
market  value  of  the  property.'*^  But  if  the  delay  has  been  great, 
and  in  the  meantime  interest  and  taxes  have  been  allowed  to  ac- 
cumulate to  a  large  amount,  and  other  persons  personally  bound 
for  the  deficiency  have  become  insolvent  and  the  property  has  greatly 
depreciated,  an  application  for  leave  to  sue  at  law  for  a  deficiency 
after  foreclosure,  which  by  statute  is  addressed  to  the  discretion  of 
the  court,  will  be  denied.*^ 

A  personal  judgment  for  a  deficiency  may  be  had  against  one  who 
in  assigning  a  mortgage  has  made  a  guaranty  of  it,*^  or  who  in 
making  a  deed  of  the  property  has  covenanted  to  pay  a  mortgage  upon 
it.** 

If  judgment  is  prayed  for  against  all  the  makers  of  a  mortgage 
note,  but  judgment  is  entered  by  default  against  only  one  of  them, 
the  note  is  merged  in  the  judgment,  and  the  plaintiff  cannot  bring 
a  subsequent  action  against  the  other  makers.*^ 

Where  land  has  been  conveyed  to  several  persons  as  tenants  in 
common,  though  described  as  constituting  a  certain  firm,  and  they 
have  assumed  the  payment  of  an  existing  mortgage,  a  judgment 
for  a  deficiency  cannot  be  rendered  against  the  partnership,  but 
against  the  individuals  constituting  the  partnership.*^ 

In  a  suit  to  foreclose  a  mortgage  given  by  an  unincorporated 
association,  the  individual  members  of  which,  as  well  as  the  asso- 
ciation, are  made  defendants  to  the  suit,  a  deficiency  judgment  may 
be  entered  against  such  individual  members.*^ 

"'  Baird  v.  McConkey,  20  Wis.  297.  "  Lawrence    v.    Beecher,    116    Ind. 

''  Gary  v.  Wheeler,  14  Wis.  281.  312,  19  N.  E.  143. 

*"  Travelers'  Ins.  Co.  v.  Mayo,  170  ■"'  La    Societc'    Francaise   v.    Weid- 

111.  498,  48  N.  E.  917.  mann,  97  Cal.  507,  32  Pac.  583. 

*'  Merchants'   Ins.   Co.   v.   Hinman,  "  Flagg  v.    Investment   Co.    (Cal.) 

34  Barb.  410.  30  Pac.  579;   Goodlett  v.  Investment 

^-Collins's  Petition,   6   Abb.   N.   C.  Co.  94  Cal.  297,  29  Pac.  505.     If  the 

227.  decree  and  pleadings  do  not  clearly 

*'  §    1432;    Officer    v.    Burchell,    12  show  ^yho  were  the  members  of  the 

Jones  &  S.  575,  19  Alb.  L.  J.  57.  association     when     such     obligation 

**  Knener  v.   Smith,   108  Wis.   549,  was    incurred,    the    court    will    not 

84  N.  W.  850.  modify  the  decree,  but  remand  the 

cause  for  further  proceedings. 


§    1711.]  JUDGMENT    IN    EQUITY    FOR   DEFICIENCY.  668 

An  agreement  by  a  mortgagee  not  to  take  a  deficiency  judgment 
against  the  mortgagor  does  not  'prejudice  the  right  to  foreclose  the 
mortgage  and  sell  the  property .'''^ 

§  1711.  A  court  of  equity  cajinot  in  some  States,  independently  of 
any  provisions  of  statute  giving  the  authority,  decree  the  pay- 
ment of  the  balance  that  may  remain  of  the  mortgage  debt  after 
applying  the  proceeds  of  the  property  mortgaged,  unless  the  debt, 
without  the  mortgage,  was  such  that  a  court  of  chancery  would 
have  jurisdiction  of  it  and  could  enforce  it.*^  A  foreclosure  in 
equity,  though  not  a  proceeding  in  rem,  is  in  the  nature  of  such  a 
proceeding,  and  is  not  intended  ordinarily  to  act  in  personam. 
Without  the  aid  of  statute  or  of  circumstances  giving  equitable 
jurisdiction  over  the  demand,  the  only  proper  remedy  for  the  defi- 
ciency is  by  action  at  law  upon  the  bond  or  note.'^''  If,  however,  no 
note,  or  bond,  or  other  legal  obligation  was  given,  or  if  this  has 
been  lost,  the  court  may  enforce  the  demand  as  an  equitable  one 
against  the  mortgagor  by  a  personal  decree  for  the  balance  remain- 
ing unsatisfied.^^  When  the  mortgaged  premises  have  been  sold  to 
one  subject  to  the  mortgage,  which  he  agrees  to  pay,  his  obligation 
inures  in  equity  to  the  benefit  of  the  holder  of  the  mortgage,  who 
is  entitled  upon  foreclosure  to  a  decree  against  such  purchaser  for 
any  deficiency  there  may  be  after  applying  to  the  debt  the  proceeds 
of  the  sale.  The  right  to  such  a  decree  is  upon  the  ground  that  the 
claim  is  purely  an  equitable  one.^^ 

But  it  is  a  general  rule  that  a  court  of  equity,  having  obtained 
jurisdiction  to  foreclose  a  mortgage,  may  proceed  to  give  a  personal 
judgment  on  the  indebtedness  after  the  foreclosure  has  become  im 
possible,  the  property  having  been  exhausted  by  a  prior  mortgage." 
It  may  in  such  case  even  establish  legal  rights  and  grant  legal  rem- 

« Mentzer  v.  Abbott,  20  Wash.  708,  ''  Crutchfield     v.     Coke,    6     J.     J. 

54  Pac.  762.  Marsh.    89;    Waddell    v.    Hewitt,    2 

«  Fleming  v.  Sitton,  1  Dev.  &  Bat.  Ired.  Eq.  252. 

Eq    621;   Morgan  v.  Willtins,  6  J.  J.  "  Halsey    v.    Reed,    9    Paige,    446; 

Marsh    28-    McGee  v.  Davie,  4  J.  J.  Klapworth  v.  Dressier,  13  N.  J.  Eq. 

Marsh    70-    Dunkley  v.   Van  Buren,  62,   78  Am.   Dec.   69;    Hoy  v.   Bram- 

3  Johns.  Ch.  330;   Hunt  v.  Lewin,  4  hall,  19  N.  J.  Eq.  563,  97  Am.  Dec. 

Stew    &  Port    138;   Downing  v.  Pal-  687.     By  a  subsequent  statute   (Nix. 

mateer    1   T.   B.   Men.   64;    Stark  v.  Dig.  p.  119)  of  1866,  the  power  of  the 

Mercer     4    Miss.    377;     Orchard    v.  court    in    such    cases    is    recognized 

Hughes,  1  Wall.  73.  and    extended.     See,    also,    Stiger   v. 

=»  In  South  Carolina  a  practice  grew  Mahone,  24  N.  J.  Eq.  426. 

up  in  the  equity  courts  of  render-  "  Hayden    v.    Snow,    9    Biss.    511; 

ing    a    decree    for    the    deficiency,  Walters   v.   Farmers'   Bank,   76   Va. 

though  this  was  "confessedly  a  de-  12;    Beecher   v.    Lewis,   84   Va.   630, 

parture  from   the  procedure  of  the  6  S.  E.  367. 
English     Chancery."    Wightman    v. 
Gray,  10  Rich.  Eq.  518. 


53 


GG9  JUDGMENT   IN    EQUITY    FOR   DEFICIENCY.  [§    1712. 

edies.  Lord  Keeper  Xottingham  said :  "When  this  court  can  de- 
termine the  matter,  it  shall  not  he  the  handmaid  to  other  courts, 
nor  beget  a  suit  to  be  ended  elsewhere."^*  Though  the  equity  court 
has  acquired  jurisdiction  merely  to  enjoin  a  stay  of  sale  under  a 
trust  deed  until  certain  accounts  have  been  settled,  it  may  then 
proceed  to  give  full  relief,  and  may  render  a  personal  decree  for  a 
balance  due  above  the  amount  received  from  the  sale  of  the  prop- 
er ty.^^ 

Generally,  as  already  stated,  there  are  statutes  giving  authority 
to  render  judgments  for  the  deficiency  not  only  against  the  mort- 
gagor, but  also  against  any  other  person  who  has  assumed  the  pay- 
ment of  the  debt,  or  who  has  become  a  guarantor  or  surety  of  it,^'' 
or  has  made  any  collateral  undertaking  for  the  payment  of  it.^^ 
Such  a  statute  does  not  authorize  a  decree  against  a  person  who  has 
an  attachment  lien  on  the  mortgaged  premises,  and  who  has  prom- 
ised to  buy  the  mortgage.  The  breach  of  such  promise  only  renders 
the  promisor  liable  for  damages,  and  this  liability  cannot  be  liti- 
gated in  a  suit  to  foreclose  a  mortgage.^^ 

Any  defence  which  prevails  against  a  general  decree  of  fore- 
closure will  generally  be  equally  good  against  a  personal  decree  for 
the  debt;  and  there  may  be  defences  to  the  latter  which  are  not  good 
against  the  former.^'' 

§  1712.  One  who  has  bought  subject  to  the  debt  merely  is  not 
liable  for  it.-  A  decree  for  the  deficiency  cannot  be  rendered 
against  a  subsequent  purchaser  or  mortgagee  unless  he  has  as- 
sumed the  payment  of  the  mortgage  debt.^"  Whether  a  personal 
responsibility  is  assumed  is  in  all  cases  a  question  of  intention, 
and,  unless  the  parties  have  declared  this  intention  by  words  ap- 
propriate and  sufficient  to  express  it,  there  can  be  no  such  lia- 
bility. If  the  deed  simply  says  the  land  is  subject  to  a  certain 
mortgage,  then  the  cases  all  agree  that  the  purchaser  is  not  per- 
sonally bound  to  pay  it.^^  The  addition  of  the  further  words, 
"which  has  been  estimated  as  a  part  of  the  consideration  money  of 

"  Parker  v.  Dee,  2  Ch.  Cas.  200.  =**  Winsor   v.    Ludington,    77    Mich. 

»=  Beecher    v.    Lewis,    84    Va.    630,  215,  43  N.  W.  866 

6  S.  E.  367.  "-'■'  As  where  the  mortgage  is  void 

'^°  Jarman  v.  Wiswall,  24  N.  J.  Eq.  for  usury.     Mann  v.  Cooper,  1  Barb. 

267;   Bristol  v.  Morgan,  3  Edw.  Ch.  Ch.  185. 

142;    Jones    v.    Stienbergh,    1    Barb.  ""§§    735-738;    Mount  v.   Potts,   23 

Ch.    250;     Sauer    v.    Steinbauer,    14  N.  J.   Eq.   188;    Emley  v.  Mount,  32 

Wis.    70;     Corning    v.    Burton,    102  N.  J.  Eq.  470. 

Mich.    86,    62    N.    W.    1040;    Jehle  v.  '"Hull  v.  Al-exander,  26  Iowa,  569. 

Brooks,  112  Mich.  131,  70  N.  W.  440.  • 

"  Curtis  v.  Tyler,  9  Paige,  432. 


§    1713.]  JUDGMENT    IN    EQUITY    FOi;    DEFICIENCY.  .670 

this  com'cyance,  and  has  been  deducted  therefrom/'  does  not  import 
anything  more.*'^ 

A  decree  which  finds  the  snm  due  on  the  mortgage,  and  requires 
a  subsequent  purcliaser  to  pay  it  by  a  day  named,  and,  if  he  does 
not,  that  the  mortgaged  premises  be  sold,  is  not  a  personal  decree 
against  the  purchaser,  but  an  alternative  one,  giving  him  the  option 
to  pay  the  money  or  suffer  the  property  to  be  sold."^ 

The  mortgagee's  right  to  proceed  in  equity  against  one  who  has 
assumed  to  pay  his  mortgage  does  not  embrace  a  claim  to  the  pur- 
chase-money on  a  sale  of  the  mortgaged  premises  by  the  owner.^* 

§  1713.  If  there  are  words  in.  the  deed  importing  that  the  g^rantee 
is  to  pay  the  mortgage  to  which  the  land  is  subject,  he  is  deemed 
to  have  entered  into  an  express  undertaking  to  do  so  by  the 
mere  acceptance  of  the  deed  without  having  signed  it.  N'o  pre- 
cise or  formal  words  are  necessary.  If  they  show  an  intention 
that  the  grantee  shall  pay  the  debt,  he  thereby  becomes  personally 
liable  for  it;^^  and  his  liability  may  be  enforced  in  a  foreclosure 
suit  by  a  judgment  for  a  deficiency.^'^  If  the  agreement  to  pay  the 
debt  is  not  contained  in  the  deed  to  the  purchaser,  it  mtist  be  evi- 
denced by  some  writing  and  supported  by  a  good  consideration. 

But  a  judgment  cannot  be  rendered  against  such  grantee  unless  the 
plaintiff  alleges  his  liability,  and  serves  a  stimmons  upon  him  to  answei* 
such  allegation."^  If  a  personal  judgment  is  not  asked  for  and  only  a 
decree  of  foreclosure  is  entered,  this  can  be  amended  subsequently  only 
on  motion  and  notice  to  the  defendant.''^ 

No  judgment  for  a  deficiency  can  be  rendered  against  a  purchaser 
from  the  mortgagor,  where  the  defendant  in  his  answer  and  in  his 
testimony  has  denied  that  he  assumed  the  mortgage  debt,  and  the 
only  evidence  to  the  contrary  is  the  testimony  of  the  mortgagor 
that  in  purchasing  the  land  and  executing  the  mortgage  he  was  act- 
ing as  agent  for  such  purchaser,  and  with  the  purpose  of  conveying 

"'^  Belmont  V.  Coman,  22  N.  Y.  438,  v.    Monholland,    2    Sandf.    Ch.    478; 

78  Am.  Dec.  213.  Lawrence  v.  Fox,  20  N.  Y.  268;  Mil- 

"Gochenour  v.  Mowry,  33  111.  331;  ler  v.  Thompson,  34  Mich.  10. 
Glover  v.  Benjamin,  73  111.  42.  ""Palmeter  v.   Carey,  63  Wis.   426, 

"^Emley   v.    Mount,    32    N.    J.    Eq.  21  N.  W.  793,  23  N.  W.  586;   Cooper 

470.  V.  Foss.  15  Neb.  515,  19  N.  W.  506; 

•='§§    741,    748,   et   seq.;    Ricard   v.  Rockwell    v.    Blair    Sav.    Bank,    31 

Sanderson,    41    N.    Y.    179;    Belmont  Neb.  128,  47  N.  W.  641. 
v.  Coman,  22  N.  Y.  438,  78  Am.  Dec.         °'  Southward   v.   Jamison,   66   Ohio 

213;   Trotter  v.  Hughes,  12  N.  Y.  74,  St.    290,    64    N.    E.    135;    Brewer    v. 

62  Am.   Dec.   137;    Vail  v.   Foster,  4  Maurer,  38  Ohio  St.  543,  654;  Fisher 

N.  Y.  312;   Curtis  v.  Tyler,  9  Paige,  v.  White.  94  Va.  236,  26  S.  E.  573. 
432;    Halsey  v.   Reed,  9  Paige,   446;         "' Scamman    v.    Bonslett,    118    Cal. 

Marsh  v.  Pike,  10  Paige,  595;   Blyer  93,  50  Pac.  272,  62  Am.  Rep.  226. 


G71  JUDGMENT    IN    EQUITY    FOR    DEFICIENCY.  [§    1714. 

to  him,  as  he  afterwards  did;  that  he  had  purchased  other  land  for 
him  in  the  same  way,  and  he  had  always  assumed  the  mortgages 
thereon;  and  where  it  does  not  otherwise  appear  that  the  mortga- 
gor acted  in  this  particular  transaction  as  agent  for  such  purchaser."" 

When  such  grantee  is  not  made  a  party  to  tlie  foreclosure  suit, 
and  a  judgment  for  a  de-ficiency  is  recovered  against  the  grantor, 
he  is  entitled  to  recover  the  same,  with  costs  of  foreclosure  of  the 
grantee,  in  a  suit  at  law.  A  statute  such  as  exists  in  New  York,'" 
prohibiting  proceedings  at  law  without  leave  of  court  for  the  recov- 
ery of  the  deljt  after  a  decree  has  been  entered  in  a  suit  to  foreclose 
the  mortgage,  has  no  application  to  such  a  suit  by  the  grantor.  It 
applies  only  to  a  suit  by  the  holder  of  the  mortgage.'^^ 

If  the  mortgagee  does  not  ask  for  a  personal  judgment  against 
the  grantee,  it  may  be  inferred  that  he  is  satisfied  with  the  security 
upon  the  property  and  a  judgment  against  the  mortgagor,  and  that 
he  ahandons  his  claim  against  the  vendee.'^- 

If  a  mortgagee,  upon  assigning  the  mortgage,  has  guaranteed 
the  payment  of  it,  the  amount  of  his  liability,  in  case  he  has  re- 
ceived less  than  the  face  of  the  mortgage,  may  be  limited  to  the 
amount  he  received,  with  interest. '^^ 

If  the  grantee  upon  purchasing  a  part  of  the  mortgaged  prem- 
ises assumes  a  certain  part  of  the  mortgage  debt,  his  liability  is 
limited  to  the  sum  assumed.  If  upon  a  subsequent  foreclosure  of 
the  mortgage  he  purchases  the  same  part  of  the  premises  already 
conveyed  to  him,  the  mortgagee  can  claim  of  him  as  a  deficiency 
only  the  difference  between  the  sum  assumed  by  him,  with  intrest 
thereon  from  the  date  at  which  this  part  of  the  mortgage  became 
primarily  his  own  debt,  and  the  like  sum  paid  by  him  at  the  fore- 
closure sale.'^* 

§  1714.  Though  the  conveyance  was  merely  for  security. — 
It  does  not  matter,  as  regards  the  personal  liability  of  one  who  has 
assumed  to  pay  the  mortgage,  that  he  took  the  deed  of  the  equity 
of  redemption  merely  as  security  for  an  indebtedness  owing  to 
him  by  the  firm  of  which  the  mortgagor  was  a  member  ;'^^  though 
under   other   circumstances,    when   the   conveyance  "vvas    intended   to 

^^  Thomson  v.  Bettens,  94  Cal.  82,  "  Goldsmith    v.    Brown,    35    Barb. 

29  Pac.  336.  484;    Rapelye    v.    Anderson,    4    Hill, 

™2  R.  S.  191,  §  155.  472. 

^^  Campbell  v.  Smith,  71  N.  Y.  26,  '*  New  Jersey  Sinking  Fund  Com'rs 

27  Am.  Rep.  5;  Comstock  v.  Drohan,  v.  Peter,  32  N.  J.  Eq.  113. 

71  N.  Y.  9.  8  Hun,  373.  ''  Ricard    v.    Sanderson,    41    N.    Y, 

'-  Searing  v.  Benton,  41  Kans.  758,  179.     And    see    Campbell    v.    Smith, 

21  Pac.  800.  8  Hun,  6,  71  N.  Y.  26,  27  Am.  Rep.  5. 


§    1715.]  JUDGMENT   IN    EQUITY    FOR   DEFICIENCY.  672 

operate  merely  as  a  mortgage,  the  reservation  by  the  grantor  of  the 
right  to  pay  the  debt,  and  thereby  discharge  the  obligation  to  pay  the 
prior  mortgage,  has  been  held  to  be  inconsistent  with  the  idea  that 
the  assumption  was  for  the  benefit  of  the  prior  mortgagee.^** 

§  1715.     If  there  be  no  bond,  note,  or  other  separate  a^eement 

in  writing,  or  covenant  in  the  mortgage  for  the  payment  of  the 
mortgage  debt,^'^  or  the  mortgage  secures  the  notes  of  third  persons,^® 
there  can  ordinarily  be  no  personal  judgment  for  any  deficiency. 
But  if  the  defendant  appears  in  the  action  and  consents  to  such  a 
judgment,  it  is  valid.'^^  There  can  be  no  personal  judgment  in  case 
the  mortgagee  has  agreed  with  the  mortgagor  to  give  up  the  notes, 
and  to  look  to  the  property  only;*°  or  has  released  the  mortgagor 
from  all  personal  liability  ;^^  or  in  case  the  debt  is  barred  by  the 
statute  of  limitations.®^  A  decree  for  a  deficiency  cannot  be  entered 
where  there  are  several  mortgagees,  not  jointly  interested  in  the 
mortgage,  but  severally  interested  in  specific  amounts  payable  to 
each.*^ 

When,  however,  the  debt  exists  independently  of  the  mortgage, 
though  not  evidenced  by  any  writing,  the  deficiency  not  satisfied  by 
a  sale  of  the  land  may  be  recovered  by  action.®* 

The  fact  that  the  mortgagor  has  sold  the  property  to  another,  who 
has  agreed  to  pay  the  mortgage,  does  not  prevent  the  entry  of  a 
deficiency  decree  against  the  mortgagor,  unless  the  mortgagee  has 
released  him.®^ 

Where  by  oral  agreement  between  three  persons  to  purchase  certain 
real  estate  on  joint  account  as  a  speculation,  and  to  divide  the  profits 
in  proportion  to  the  amounts  contributed,  the  title  is  taken  in  the 
name  of  one  of  the  purchasers,  who  personally  gives  his  bond  and 
mortgage  to  secure  a  portion  of  the  purchase-money,  the  mortgagee 
cannot  recover  judgment  for  a  deficiency  arising  from  a  foreclosure 
sale  against  the  others  whose  names  did  not  appear  upon  the  papers.®*' 

76 1  757  s5  Connecticut  Mut.   L.   Ins.   Co.  v. 

"  §§  72,  678,  750;    Hunt  v.  Lewin,  Tyler,  8  Biss.  369. 

4   Stew.   &   P.   138;    Shelden  v.   Ers-  ""Williams    v.    Gillies,    75    N.    Y. 

kine,  78  Mich.  627,  44  N.  W.  14G.  197,  8  N.  Y.  Weekly  Dig.  12,  revers- 
•»Metz  v.  Todd,  36  Mich.  473.  ing  13  Hun,  422,  53  How.  Pr.  429; 
"Fletcher  v.  Holmes,  25  Ind.  458.  Reeves  v.  Wilcox,  35  Neb.  779,  53 
«"  Moore  v.  Reynolds,  1  Cal.  351.  N.  W.  978.  See  Webber  v.  Law- 
s'Brown  v.  Winter,  14  Cal.  31.  rence,  118  Mich.  630,  77  N.  W.  266. 
s=Wiswell  V.  Baxter,  20  Wis.  680;  The   case   of   Reynolds  v.   Dietz,   34 

Michigan  Ins.  Co.  v.  Brown,  11  Mich.  Neb.  265,  51  N.  W.  747,  does  not  con- 

265.  travene  this  principle.     In  that  case 

"  Shelden  v.  Erskine,  78  Mich.  627,  ten   persons  had   purchased   a  tract 

44  N.  W.  146.  of  land  for  ,$20,000,  and,  as  a  part 

^  Savage  v.  Stone,  1  Utah  T.  35.  of  the  consideraton,  had  assumed  a 


673  JUDGMENT    IN    EQUITY    EOK    DEFICIENCY.  [§    1716. 

In  several  States  it  is  provided  by  statute  that  no  mortgage  shall 
be  construed  as  implying  a  covenant  for  the  payment  of  the  sum 
intended  to  be  secured;  and  when  there  is  no  express  covenant  for 
such  pajmient  contained  in  the  mortgage,  and  no  bond  or  other 
separate  instrument  to  secure  the  payment  has  been  given,  the 
remedies  of  the  mortgagee  are  confined  to  the  lands  mentioned  in 
the  mortgage.^'^ 

If  there  is  an  understanding  that  the  mortgagee  shall  accept  the 
mortgaged  property  in  satisfaction  of  the  debt  in  consideration  of 
services  rendered,  and  to  be  rendered,  by  the  mortgagor,  and  the 
mortgagee  for  two  or  three  years  afterwards  accepts  such  services, 
knowing  that  the  mortgagor  was  giving  them  in  the  belief  that  he 
had  been  released,  the  mortgagee  is  estopped  thereafter  to  assert 
the  contrary,  and  to  claim  a  deficiency  upon  a  sale.^® 

A  mortgagor  who  has  received  a  discharge  in  bankruptcy  pending 
foreclosure  proceedings  is  not  liable  to  a  decree  for  deficiency.^^ 

§  1716.  A  judgment  for  a  deficiency  cannot  be  rendered  against  a 
non-resident  who  has  not  appeared,  nor  been  served  with  process 
within  the  State.  The  court  in  such  case  has  no  jurisdiction  of  the 
person,  and  the  remedy  is  confined  to  a  foreclosure  and  sale  of  the 
land.^°    When  so  provided  by  statute,  a  judgment  obtained  against  a 

mortgage  on  the  property,  the  title  Michigan:     2  Annot.  Stats.  1882,  § 

being  taken  in  the  name  of  a  trus-  5656. 

tee;   and  it  was  held  that  each  was  Oregon:      2    Annot.    Laws    1892,    § 

liable    for    his    proportionate    share  3008. 

of  the  mortgage  debt.     The  liability  Wisconsin:     1   Annot.    Stats.    1889, 

in  that  case  results  from  the  nature  §  2204. 

of  the  contract.  Wyoming:    R    S.  1887,  §  6. 

''California:      Civ.    Code    1885,    §  North  Dakota  and   South   Dakota: 

2928.  Comp.  Laws  1887,  §  4351. 

New  York:     4  R.  S.  1889,  p.  2452,  In  Tennessee  a  personal  decree  for 

§    139.     This  provision   is  construed  a   deficiency   is   valid    in   such   case, 

not  to  mean  that,  in  the  absence  of  Taylor  v.  Rountree,  15  Lea,  725. 

an  express  covenant  or  separate  ob-  **'  Keasebey  v.  Wilkinson,  51  N.  J. 

ligation  for  the  payment  of  the  debt,  Eq.  29,  27  Atl.  642. 

a  personal  action  cannot  be  main-  *^  Prentis  v.  Richardson,  118  Mich.' 

tained    for    a    mortgage    debt    when  259,  76  N.  W.  381. 

proved      by      competent      evidence,  ""  Pennoyer  v.  Neff,  95  U.  S.  714; 

whether    in   writing   or    parol;    but  Belcher   v.    Chambers,   53   Cal.    639; 

that   an    action   for   a   debt   secured  Anderson  v.  Goff,  72  Cal.  65,  13  Pac. 

by    mortgage    cannot    be    sustained  73;   Blumberg  v.  Birch,  99  Cal.  416, 

merely    by    the    production    of    the  34  Pac.  102 ;  Schwinger  v.  Hickok,  53 

mortgage,   when  it  contains  no  ex-  N.    Y.    280;     Lawrence    v.    Fellows, 

press    covenant    to    pay    the    debt."  Walk.    (Mich.)    468;   Bartlett  v.  Spi- 

Demond  v   Crary,  9  Fed.  750.     When  cer,  75  N.  Y.  528:   Williams  v.  Fol- 

the  covenant  does  not  amount  to  an  lett,  17  Colo.  51,  28  Pac.  330;  Dennv 

express   covenant   to   pay.   no   jndg-  v.  Ashley,  12  Colo.  165,  20  Pac.  33l'; 

ment  for  a   deficiency   can   be  had.  Carpenter  v.  Meacham,  111  Wis.  60, 

Mack  V.  Austin,  95  N.  Y.  513.  86  N.  W.  552. 

Indiana:     1  R.  S.  1888,  §  1094. 


§    1717.]  JUDGMENT    IN    EQUITY    FOR   DEFICIENCY.  67-1 

non-resident  upon  service  by  publication  might  be  enforced  against 
his  property  in  the  State.^^  Sach  a  judgment  would  generally  im- 
pose upon  him  no  personal  liability. 

One  who  gives  ^  mortgage* to  secure  the  payment  of  his  own 
liabilities  is  personally  and  directly  liable  at  law,  and  the  demand 
may  be  enforced  against  him  by  suit  in  any  jurisdiction  where  serv- 
ice can  be  had:  but  one  who  has  only  purchased  mortgaged  land 
subject  to  the  incimibrance  is  not  personally  liable,  though  if  he  has 
promised  to  pay  the  mortgage  he  may  be  made  a  defendant  in  fore- 
closure if  he  can  be  found  in  the  jurisdiction  where  the  land  lies, 
and  a  decree  may  be  rendered  against  him  for  any  deficiency  after 

sale.''^ 

A  judgment  for  a  deficiency  against  a  non-resident  intermediate 
purchaser  invalid  by  reason  of  failure  of  service  upon  him  is  a  bar  to  a 
subsequent  action  against  him  to  recover  the  deficiency.^^ 

§  1717.  Upon  the  decease  of  the  mortgagor,  though  the  admin- 
istrator or  executor  be  a  party  to  the  bill,  no  binding  judgment  can 
be  entered  against  him  for  any  deficiency  remaining  after  applica- 
tion of  the  proceeds  of  sale.  A  claim  for  the  deficiency  must  be 
presented  under  the  proceedings  for  the  administration  of  the 
estate."*  The  suit  can  be  prosecuted  against  executor  or  adminis- 
trator only  for  the  purpose  of  reaching  the  property  and  subjecting 
it  to  sale,  or  for  determining  the  amount  of  the  deficiency.  A  judg- 
ment for  deficiency  may  be  essential  as  the  basis  of  a  subsequent 
proceeding  to  enforce  pajonent  from  the  estate.*^^     "If  the  court  can 

»i  Martin  v.  Pond,  30  Fed.  15.  untarily  going  into  the  State  of  II- 

°-  Booth    V     Conn.    Mut.    Life    Tns.  linois  and  submitting  to  the  service 

Co    43  Mich    299    302,  5  N.  W.  381,  of  process  there,  none  exists  against 

per  Cooley,  J.:     ''In  order  to  enable  them  now,  either  presently  or  con- 

the  mortgagee  to  enforce  any  such  tingently,  in  this  State." 

equity  against  the  purchasers,  it  is  "'  Carpenter  v.  Meacham,  111  Wis. 

necessary   that   the   purchasers   and  60,  86  N.  W   552              ^    „,  ^  ,    „^ 

the   land    mortgaged   be  within   the  "  Pechaud  v.  Rinquet    21  Cal.  76, 

same  jurisdiction.     No  personal  de-  Cowell    v.    Buckelew     14    Cal     640; 

cree   can   be   made   in   one   jurisdic-  Fallon  v.  Butler,  21  Cal.  24.  81  Am. 

tion   against  parties  not  personally  Dec.  140;  Leonard  v  Morris  9  Paige, 

served     or    not    submitting    volun-  90;  Null  v.  Jones,  5  Neb.  500;  Mut. 

tarily     by     appearance.       There     is  Life  Ins.  Co.  v.  Howell,  32  N.  J.  Eq. 

therefore    in    this    case,    where    the  146.     If     the     claim     is     not     made 

purchasers    of    the    land    reside    in  against   the   estate  of   the   deceased 

Michigan  and  the  land  is  in  Illinois,  mortgagor  within  the  time  allowed, 

neither  a  direct  liability  of  the  pur-  and  the  claim  is  consequently  barred 

chasers    to    the    defendant,    nor    a  the    administration    is    not    entitled 

contingent  liability,  except  such  as  to    a    discharge    of    the    m"i-t|''i.^- 

depends  upon   the  voluntary  action  Bowen  v.  Julius,  141  Ind.  310,  40  N. 

of      the       purchasers       themselves.  E.  700.                                  ..     -,r,   tt„„ 

Whatever   liability   they   may  incur  '^  Lockwood   ^^  ^^^^^e"     ^7    Hun. 

at  some  fuutre  time,   when  the  in-  146;   Glacius  v.  Fagel,  88  N.  Y.  434, 

cumbrances  are  foreclosed,  by  vol-  Weir  v.  Field,  67  Miss.  zyz. 


675  JUDGMENT    IN    EQUITY    EOR    DEFICIENCY,  [§    1718. 

render  a  judgment  and  order  execution  against  the  jDroperty  of  the 
deceased  in  the  hands  of  the  administrator,  the  mortgagee  first  fore- 
closing would  in  effect  get  priority  of  payment  out  of  the  estate, 
not  only  as  against  general  creditors,  but  as  against  all  mortgagees 
later  in  foreclosing,  though  in  the  same  class  of  creditors.'"*"  If  no 
judgment  for  a  deficiency  is  taken,  and  no  claim  is  made  upon  the 
estate  of  the  deceased  mortgagor,  the  demand  is  barred  at  the  ex- 
piration of 'the  time  allowed  for  enforcing  debts  against  the  estate, 
and  the  administrator  cannot  afterwards  obtain  lea.ve  to  sell  land 
for  the  payment  of  such  deht."^ 

Neither  can  a  mortgagee  in  such  case  have  his  judgment  declared 
a  lien  upon  surplus  money  arising  from  the  foreclosure  of  a  mort- 
gage upon  other  lands  given  by  the  deceased  mortgagor  to  another 
mortgagor  ;^^  but  where,  as  in  New  York,  resort  may  be  had  to  the 
heirs  and  devisees  after  failure  to  collect  out  of  the  personal  estate, 
and  where,  too,  a  surplus  is  regarded  as  belonging  to  the  heirs  rather 
than  the  executor  or  administrator  of  a  deceased  mortgagor,  an  ac- 
tion may  be  maintained  against  the  heirs  or  devisees,  in  which, 
if  they  are  insolvent,  the  court  may  invest  such  surplus  moneys  to 
be  held  by  the  officer  and  applied  in  satisfaction  of  the  judgment.^^ 

No  judgment  can  be  had  against  a  purchaser  from  the  mortgagor 
■unless  he  has  assumed  the  payment  of  the  debt."**  Nor  can  such 
judgment  be  had  against  the  heir  or  devisee  of  a  deceased  mort- 
gagor,^"^ without  proof  that  he  has  voluntarily  incurred  a.  personal 
responsibility.^"^ 

§  1718.  A  personal  judgment  against  the  wife  is  erroneous  when 
the  mortgage  was  executed  by  her  with  the  husband  upon  his  own 
land  to  secure  his  own  debt.  She  is  properly  made  a  party  to  the 
suit  for  the  purpose  of  concluding  her  rights  of  dower,  but  is  not  a 
party  in   any  other   sense.^°^     Before   a  judgment  can   be   rendered 

"^  Per  Mr.  Justice  Perkins,  in  New-  amount    of    a    deficiency,  judgment 

kirk    v.    Burson,    21    Ind.    129.     And  directly    against    the    heir,    without 

see    Rhodes   v.    Evans,    Clarke,    1G8.  resorting  to  the  mortgagor's  estate. 

This  is  at  any  rate  the  rule  before  unless  the  mortgage  debt  is  directed 

the  expiration  of  the  period  limited  by    the    ancestor's    will    to    be    paid 

for  the  settlement  of  the  estates  of  from  his  estate.     Hauselt  v.  Patter- 

deceasea      persons.      Hathaway      v.  son,  11  N.  Y.  Supp.  105 

Lewis,  2  Disney  260.  ^"°  Burkham     v.     Beaver,     17     Ind. 

'■"Roberts  v.  Flatt,  142  111.  485,  32  367;   Carleton  v.  Byington    24  Iowa 

N.  E.  184.  172. 

'^  Pliess  V.   Buckley,   24   Hun,  514,  ""  Leonard  v.  Morris  9  Paige,  90. 

22  Hun,  551.  '"-  Reinig  v.  Hecht,  38  Wis.  212 

•"Fliess  v.   Buckley,  24  Hun,   514,  '"^  §  111;  O'Brian  v.  Fry.  82  111.274: 

22   Hun,   551.     In   New  York,   under  Wright  v.  Langley,  36  111.  381;  Key 

1    R.    S.    p.    749,    §    4,    the   mortga.ge  v.  Addicks.  8  Ind.  521;  Kirk  v.  Fort 

can    maintain    an    action    for    the  Wayne   Gas   Light   Co.    13   Ind.    56; 


§    1719.]  JUDGMENT    IN    EQUITY    FOR   DEFICIENCY. 


676 


against  her  on  her  bond  or  note  made  jointly  with  her  husband,  it 
must  appear  affirmatively  from  the  allegations  and  evidence  that 
the  debt  was  her  own  proper  debt,  or  related  to  her  separate  estate."* 
Neither  can  such  a  judgment  be  entered  against  a  widow  of  the 
mortgagor,  who  with  his  heirs  is  made  a  party  to  the  suit  after  his 
death  ;"^  nor  against  the  heirs."*'  But  if  a  married  woman  is  herself 
one  of  the  mortgage  debtors,  and  the  mortgage  was  for  the  benefit 
of  her  separate  estate,  and  she  is  possessed  of  separate  property 
other  than  that  mortgaged,  a  personal  judgment  may  properly  be 
rendered  against  her  for  the  deficiency."^  But  no  obligation  on  her 
part  can  be  implied  from  an  agreement  that  certain  lands  conveyed 
by  her  husband  and  herself  as  security  for  his  debt  shall  be  recon- 
veyed  to  her  alone  on  repayment  of  the  debt,  although  the  agree- 
ment purports  to  make  her  liable  for  the  advances ;  especially  where 
by  statute  no  covenant  for  the  payment  of  the  debt  secured  can  be 
implied  in  a  mortgage."^ 

A  judgment  against  the  husband,  upon  a  joint  note  of  himself 
and  wife,  does  not  merge  the  right  to  charge  the  wife's  separate 
estate  with  the  payment  of  the  note,  in  a  subsequent  action  against 
her,  especially  if  her  obligation  in  such  case  be  regarded,  not  as  a 
legal  one,  but  merely  an  obligation  enforcible  in  equity."^ 

§  1719.    No  judgment  can  be  rendered  for  such  parts  of  the  debt  as 

are  not  due.^"     The  court  can  only  direct  at  what  time  and  upon 
Avhat  default  any  subsequent  judgment  and  execution  may  issue."^ 

Patton  V.  Stewart,  19  Ind.  233;  Em-  "'Merchants'   Nat.   Bank  v.   Ray- 

mett  V    Yandes,  60  Ind.  548;  Neitzel  mond,   27   Wis.    567;    Jones   v.   Mer- 

V  Hunter  19  Kans.  221;  Knox  v.  ritt,  23  Hun,  184;  Payne  v.  Burn- 
Moser    69  Iowa,  341,  28  N.  W.  629;  ham,  62  N.  Y.  69,  74. 

Adams   v.    Fry,   29   Fla.   318,   10   So.        "'  Howe  v.  Lemon,  37  Mich.  164. 
559  "'Avery  v.  Vansickle,  35  Ohio  St. 

"*§  111;  Manhattan  Life  Ins.  Co.  270. 

V  Glover  14  Hun,  153;  Mack  v.  ""Packard  v.  Kinzie  Ave.  Heights 
Austin    29   Hun,   N.    Y.    534;    Avery  Co.  96  Wis.  114,  70  N.  W.  1066. 

V  Vansiclde,  35  Ohio  St.  270;  Franke        "^  Danf orth    v.    Coleman,    23    Wis. 

V  Neisler,  97  Wis.  364,  72  N.  W.  887.  528;  Skelton  'v.  Ward,  51  Ind.  46. 
In  People's  Build.  Asso.  v.  Billing,  The  case  of  Allen  v.  Parker,  11  Ind. 
104  Mich.  186,  62  N.  W.  373,  where  a  504,  in  which  it  was  said  that  judg- 
mortgage  was  upon  land  owned  by  ment  might  be  rendered  for  the 
husband  and  wife  as  tenants  by  the  amount  due,  and  to  become  due, 
entirety  and  both  executed  the  is  questioned  in  Thompson  v.  Davis, 
mortgage  and  the  bond,  a  decree  29  Ind.  264;  and  the  judgment  spo- 
against  the  husband  alone  was  al-  ken  of  was  not  a  personal  judg- 
lowed,  without  reforming  the  mort-  ment,  but  one  authorizing  a  sale. 
ga?e  or  bond  or  the  pleadings.  "It  is  only  so  far  as  the  sale  of  the 

"=  Brown  v    Orr    29  Cal.  120;   P11-  mortgaged    premises    is    concerned, 

low  v.  Sentelle,  49  Ark.  430,  5  S.  W.  when   the  premises   are   indivisible, 

783;  Randall  v.  Bourquardez.  23  Fla.  that  the  debt  can  be  collected  be- 

264,  2  So.  310,  11  Ara.  St.  Rep.  379.  fore    it    becomes    due."    Skelton    v. 

"« Alexander  v.  Frary,  9  Ind.  481.  Ward,  51  Ind.  46. 


677        JUDGMENT  IN  EQUITY  FOR  DEFICIENCY.  [§§  1719a,  1720. 

But  if  the  mortgage  provides  that,  upon  default  in  payment  of  any 
instalment  of  the  mortgage  debt  or  of  interest,  the  whole  debt  shall 
immediately  become  due  and  payable,  a  personal  judgment  may  be 
entered  for  the  whole  debt  upon  a  default  in  payment  of  the  first 
instalment  of  principal  or  interest.^^^ 

There  can  be  no  judgment  for  a  deficiency  when  an  action  upon 
the  debt  is  barred  by  the  statute  of  limitations.^^* 

§  1719a.  In  ascertaining  the  amount  of  the  deficiency,  unpaid 
taxes    and    assessments    upon    the    property    should    be    deducted 

from  the  proceeds  of  the  sale.  This  is  the  rule  even  when  it  is 
sought  to  collect  the  deficiency  from  the  mortgagor  after  he  has 
conveyed  the  property  subject  to  the  mortgage,  which  the  grantee 
has  assumed  to  pay,  and  such  grantee  has  allowed  the  premises  to 
become  incumbered  by  taxes  and  assessments.^^*  It  is  doubtful 
whether,  in  such  case,  a  notice  to  the  mortgagee  and  request,  after 
the  mortgage  has  fallen  due,  to  foreclose  it,  would  avail  to  impose 
upon  him  the  damages  resulting  to  the  mortgagor  from  the  accu- 
mulation of  taxes  and  other  liens  upon  the  property.  It  seems 
probable  that  the  mortgagor  has  no  remedy  except  to  protect  himself 
by  paying  the  mortgage  debt,  and  becoming  subrogated  to  the  rights 
of  the  mortgagee.^ ^^ 

In  rendering  a  judgment  for  a  deficiency,  the  owner  of  the  equity 
of  redemption  cannot  be  charged  with  rents  and  profits  collected 
by  him  previous  to  the  entry  of  the  mortgagee  or  the  appointment 
of  a  receiver,  on  the  ground  that,  having  the  possession  with  the 
rents  and  profits,  he  should  apply  these  to  keeping  down  the  taxes 
and  interest  on  the  mortgage.^^® 

§  1720.  "When  it  becomes  a  lien. — The  decree  for  a  deficiency 
of  proceeds  does  not  have  the  force  and  effect  of  a  judgment  at 
law  so  as  to  become  a  lien  until  the  deficiency  is  ascertained. ^^^  This 
deficiency  can  only  be  ascertained  from  the  sale,  and  the  judgment 
becomes  a  lien  upon  the  other  property  of  the  debtor  only  from  the 
time  it  is  docketed.^^^ 

"=Darrow  v.  Scullin,  19  Kans.  57.  "*  Cornell    v.    Woodruff,    77   N.    Y. 

But  it  is  not  an  error  of  which  the  203.     And  see  Fleishhauer  v.  Doell- 

mortgagor  can  complain  that  judg-  ner,  9  Abb.  N.  C.  372. 

ment  is  rendered  only  upon  the  first  "^  Marshall  v.  Davies,  78  N.  Y.  414. 

instalment.  "' Argall  v.  Pitts,  78  N.  Y.  239. 

"» Hulbert  v.  Clark,  11  N.  Y.  Supp.  "^  Mutual  Life  Ins.  Co.  v.  Southard, 

417,  57  Hun,  558;   Michigan  Ins.  Co.  25  N.  J.   Eq.   337;    Mutual   Life   Ins. 

V.  Brown,  11  Mich.  266;   Slingerland  Co.  v.  Hopper,  43  N.  J.  Eq.  387,  12 

V.    Sherer,   46   Minn.   422,   49   N.   W.  Atl.    528.     See    Fletcher   v.    Holmes, 

237.     See.  however.  Birnie  v.  Main,  25  Ind.  458. 

29  Ark.  591.  ^'^  Cormerais    v.    Genella,    22    Cal. 


§    1T21.]  JUDGMENT    IX    EQUITY    FOR   DEFICIENCY.  678 

By  the  practice  generally  adopted,  no  further  action  by  the  court 
is  necessary  after  the  amount  of  the  deficiency  is  reported,  but  the 
clerk  may  issue  an  execution  for  it  without  further  order."'^  In  some 
States  tlie  mortgagee  may  take  a  decree  fixing  the  amount  due,  and 
directing  a  sale,  and  then,  after  the  sale,  apply  for  a  further  decree 
fixing  the  deficiency  and  granting  an  execution  for  this;  or  he  may 
take  a  judgment  at  once  for  the  whole  amount  due,  from  which  the 
officer,  making  the  sale  deducts  the  proceeds  of  it,  and  in  that  way 
ascertains  the  deficiency  ;^^*'  and  no  further  proceedings  are  necessary 
on  the  part  of  the  court  to  ascertain  the  deficiency.  A  decree  that 
a  certain  sum  is  due  to  plaintiff,  and  that  the  mortgaged  property 
be  sold  and  applied  thereon,  there  being  no  provision  for  docketing 
a  judgment  for  any  deficiency,  is  not  a  personal  judgment  against 
defendant,^^^ 

Inasmuch  as  the  personal  decree  and  execution  cannot  precede  a 
sale  of  the  premises,  where  equity  required  that  the  remedy  against 
the  mortgagor  upon  his  bond  should  be  first  exhausted,  proceedings 
in  the  foreclosure  suit  were  suspended,  to  give  time  for  the  plain- 
tiff's bringing  a  suit  at  law  upon  the  bond.^-^ 

When  a  mortgage  upon  a  homestead  is  satisfied  by  a  foreclosure 
sale  and  there  is  a  subsequent  redemption  by  the  mortgagor,  the 
homestead  rights  again  attach  upon  the  property,  and  a  judgment 
for  a  deficiency  does  not  create  any  lien  upon  the  property  as  against 
the  homestead  exemption.^-^ 

§  1721.     The  personal  remedy  may  be  enforced  without  foreclosure 

against  one  who  has  made  himself  personally  liable  for  the  pay- 
ment of  a  mortgage  debt,  and  even  without  joining  the  mortgagor 
as  defendant.^^*  A  judgment  rendered  in  a  foreclosure  suit  against 
the  mortgagor  is  competent  evidence  of  the  amount  of  the  mort- 
gage debt,  and  of  the  amount  of  the  deficiency  remaining  after  a 
sale  of  the  property,  in  a  separate  suit  by  the  mortgagor  against  one 
who  has  assumed  the  debt,  and  was  not  a  party  to  the  foreclosure 

116;   Rollins  v.  Forbes,  10  Cal.  299;  And  see  Creighton  v.   Hershfield,  2 

Rowe  v.  Table  Mt.  Water  Co.  10  Cal.  Mont.  386. 

441;  Cotes  v.  Bennett,  18.3  111.  82,  87,  '=' Tolman    v.    Smith,    85    Cal.    280, 

55  N.  E.  661,  quoting  text;  Fuller  v.  24  Pac.  743. 

Hull,  19  Wash.  400,  53  Pac.  666.  ^^^  Vanderkemp  v.  Shelton,  Clarke, 

''-'  Baird  v.  McConkey,  20  Wis.  297.  321. 
See  Burdick  v.  Burdick,  20  Wis.  348.  '==  Martens  v.  Gilson,  13  Nev.  489: 
In   Michigan    the    complainant   may  Hershey  v.  Dennis,  53  Cal.  77;  Mar- 
take  out  execution  for  the  deficiency  lowe  v.  Benagh,  60  Ala.  323. 
at  any  time  within  ten  years.    W^al-  '''  Burr  v.  Beers.  24  N.  Y.  178,  80 
lace  V.  Field,  56  Mich.  3.  Am.  Dec.  327;    Lawrence  v.  Fox,  20 

^=»  Rowland  v.  Leiby,  11  Cal.  156.  N.    Y.    268;    Siewert    v.    Hamel,    33 

Hun,  44. 


G79  JUDGMEXT    IN    EQUITY    FOR    DEFICIENCY.  [§    1721. 

suit.^-'"'  But  under  the  codes  of  some  States,  as,  for  instance,  those 
of  New  York  and  Michigan,  when  the  mortgagee  has  voluntarily 
refrained  from  asking  in  his  foreclosure  suit  for  a  decree  for  any 
deficiency,  or  has  voluntarily  omitted  to  join  one  who  had  become 
liable  for  the  debt,  some  satisfactory  reason  should  be  given  for 
permitting  him  to  institute  a  separate  action  at  law  for  its  recov- 
ery.^-*^  Such  leave  will  not  be  granted  when  it  appears  that  the  de- 
ficiency has  been  created  in  part  or  wholly  by  interference  of  the 
holder  of  the  mortgage  to  prevent  others  from  bidding  at  the  fore- 
closure sale.^^^ 

In  some  States  a  personal  judgment  can  be  had  only  in  the  form  of 
a  judgment  for  a  deficiency. ^-^ 

'^^  Comstock  V.  Drohan,  8  Hun,  373,  ^^  Ines  v.  Stewart,  36  Mich.  285. 

71  N.  Y.  9.  '""  Duecker  v.  Goeres,  104  Wis.  29, 

""Comstock  v.  Drohan,  8  Hun,  373  80  N.  W.  91;  Laycock  v.  Parker,  103 

71  N.  Y.  9;    Equitable  Life  Ins.  Co.  Wis.  161,  79  N.  W.  327;   Stats.  1898. 

V.  Stevens,  63  N.  Y.  341;   In  re  Col-  §  2203. 
lins,  17  Hun,  289;   Innes  v.  Stewart, 
36  Mich.  285.    See  §  1223. 


CHAPTER  XXXIX. 

STATUTORY  PROVISIONS  RELATING  TO  POWER  OF  SALE    MORTGAGES  AND 

TRUST  DEEDS. 

I.  Introductory,  1722.  I  II.  Statutory  provisions  in  the  sev- 

I  eral  States,  1723-1763. 

I.     Introductory. 

§  1722.  In  England  a  mortgage  is  now  considered  incomplete 
without  a  power  of  sale;  and  in  fact  since  Lord  Cranworth's  Act/ 
in  1860,  and  the  Conveyancing  and  Law  of  Property  Act  of  1881, 
all  mortgages  are  in  effect  made  power  of  sale  mortgages,  for  these 
acts  provide  for  a  statutory  power  of  sale  in  all  mortgages,  if  and 
so  far  as  a  contrary  intention  is  not  expressed  by  the  terms  and  pro- 
visions of  the  mortgage  deed. 

The  general  object  of  these  statutes  cannot  be  too  highly  com- 
mended; and  it  is  to  be  hoped  that  statutes  in  similar  form,  but 
more  liberally  framed,  may  be  enacted  in  this  country.  A  power 
provided  by  statute,  while  it  would  prevent  the  cumbering  of  the 

^23  &  24  Vict.  ch.  145.    This  act,  though    the    fact    that    deeds    are 

it  is  said,  has  been  of  practical  use  charged  for  according  to  their  length 

only  in  some  few  cases,  where  the  is   supposed    by    an   English   writer 

mortgage  deed  contained  no  power  to  have  had  something  to  do  with 

of  sale;   for  a  special  power  of  sale  the  failure,  not  only  of  this  provis- 

is  almost  universally  given  by  the  ion,    but   of   others    made   w^ith    the 

deed,  even  since  this  act,  for  a  more  like   intent  to  shorten  papers  used 

expeditious    mode   of   obtaining   the  in  conveyancing. 

money  is  demanded.  So  far  as  the  In  a  subsequent  statute,  2.5  &  26 
act  was  intended  to  shorten  the  Vict.  ch.  53,  a  power  of  sale  in- 
mortgage  deed,  it  has  wholly  failed,  tended  to  operate  under  the  fore- 
Greenwood's  Prac.  of  Conveyancing,  going  statute  is  given  in  a  form 
55.  It  has  been  suggested  that  this  of  mortgage  annexed  to  the  act 
failure  of  the  statute  is  due  in  part  as  follows;  "C.  D.  shall  have  pow- 
to  the  intense  caution  and  deep-root-  er  to  sell  on  default  of  payment 
ed  conservatism  which  is  always  of  the  principal  or  interest,  or  any 
found     among     conve'"'anoers;      al-  part  thereof  respectively." 

G80 


681      STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1723. 

records  with  the  elaborate  provisions  in  common  use  for  enforcing  the 
security,  would  make  securities  more  certain,  and  therefore  more 
valuable  to  both  parties;  for  the  construction  of  such  a  power 
would  soon  be  settled,  and  settled  for  the  whole  community.  Some 
protection  might  be  afforded  the  mortgagor  at  the  same  time;  but 
too  much  legislation  in  this  respect  would  be  much  worse  than  none 
at  all,  for  the  efficacy  and  simplicity  of  this  remedy  might  be  easily 
destroyed.  Even  now  in  a  few  States  the  exercise  of  the  power  is 
so  restricted  and  hedged  about  with  provisions  in  regard  to  notice, 
the  conduct  of  the  sale,  and  redemption  afterwards,  that  this  rem- 
edy is  only  a  little  better,  perhaps,  than  the  cumbersome  and  expen- 
sive process  by  equitable  suit.  The  only  States  in  which  a  statutory 
power  of  sale  has  been  provided  are  Virginia  and  West  Virginia. 
The  statute  is  the  same  in  both  States,  the  latter  State  having 
adopted  the  statute  of  the  former.  This  statute  applies  to  trust 
deeds  only,  as  this  form  of  security  has  in  those  States  wholly  super- 
seded the  use  of  mortgages.  It  provides  in  a  few  simple  terms  for 
the  sale  of  the  property  by  the  trustee  whenever,  after  default,  the 
creditor  may  require  it;  and  for  the  application  of  the  proceeds  to 
the  payment  of  the  debt,  the  compensation  of  the  trustee,  and  the 
rendering  of  the  surplus  to  the  debtor.  In  its  brevity  and  sim- 
plicity this  statute  is  to  be  commended. 


II.     Statutory  Provisions  in  the  several  States. 

§  1723.  Alabama. — The  usual  form  of  mortgage  now  used  in 
Alabama  contains  a  power  of  sale  authorizing  foreclosure  without 
the  intervention  of  a  court,  by  publication  of  a  notice.  Deeds  of 
trust  are  also  in  use.  The  power  to  sell  is  part  of  the  security, 
and  may  be  executed  by  any  person  who,  by  assignment  or  other- 
wise, becomes  entitled  to  the  money  secured.^  Property  sold  under  a 
power  is  subject  to  redemption  for  two  years,  in  the  same  way  as 
when  sold  under  decree  of  foreclosure  in  chancery.^ 

^  Code  1886,  §   1844.     Code  1896,  §  the  right  of  redemption,  and  leaves 

1040.  the  mortgagor  merely  the  right  to 

An  administrator  may  sell  under  redeem  within  two  years,  though  no 
the  power,  though  by  its  terms  it  conveyance  has  been  made.  Mew- 
runs  only  to  the  mortgagee,  "his  burn  v.  Bass,  82  Ala.  622,  2  So. 
heirs  and  assigns."  Lewis  v.  Wells,  520;  Cooper  v.  Hornsby,  71  Ala.  62; 
50  Ala.  198.  Bailey   v.    Timberlake,    74    Ala.    221. 

^See   §    1322,   Code  1886,   §§    2877-  This  statutory  right  of  redemption 

2889.    Amended    Acts    1889,    p.    764,  must  be  exercised  within  two  years. 

Code  1896,  §§  3505-3519.     A  sale  un-  and  there  is  no  exception  in  favor 

der  a  power  regularly  made  cuts  off  of   persons   under   the   disability   of 


88  1723a-1725.]     pom^er  of  sale  mortCxAges  and  trust  deeds.  682 

§  1723a.  Arizona  T.-* — All  mortgages  of  real  property  with  powers 
of  sale  in  the  mortgage,  and  all  deeds  of  trust  in  the  nature  of  mort- 
gages, may,  at  the  option  of  the  mortgagees  or  cestui  que  trusts, 
as  the  case  may  be,  be  foreclosed  in  the  proper  courts  and  the  property 
sold  in  the  same  manner  in  all  respects  as  in  case  of  ordinary  mort- 
gages. 

All  sales  of  property  made  by  virtue  of  a  mortgage  with  a  power 
of  sale,  or  by  the  trustee  named  in  a  trust  deed,  in  pursuance  of  the 
provisions  of  such  mortgage  or  trust  deed,  shall  be  valid  and  binding 
on  the  mortgagors  and  grantors  in  such  trust  deed,  and  all  persons 
claiming  under  them,  and  shall  foreclose  all  right  and  equity  of  re- 
demption of  the  property  so  sold :  provided  that  the  right  and  equity 
of  redemption  shall  be  allowed  the  same  as  under  judicial  foreclosure. 

§  1724.  Arkansas. — Power  of  sale  mortgages  are  in  use  as  are  also 
trust  deeds  which  must  be  acknowledged  and  recorded  the  same  as 
mortgages.    Such  mortgages  may  also  be  enforced  by  a  suit  in  equity.^ 

§  1725.  California. — Neither  power  of  sale  mortgages  nor  trust 
deeds  are  in  very  general  use  in  this  State,  although  it  is  provided 
by  statute  that  a  power  of  sale  may  be  conferred  upon  a  mort- 
gagee or  other  person."  A  power  of  sale  contained  in  the  mort- 
gage is  merely  a  cumulative  remedy,  and  does  not  in  any  way  affect 
the  right  to  foreclose  in  chancery.'^  The  mortgagee  has  his  election 
to  foreclose  in  that  way,  or  under  the  power  of  sale  vested  in  him 
by  the  mortgage.  The  right  to  sell  rests  upon  the  contract  of  the 
mortgagor,  and  a  sale  fairly  made  passes  a  good  title  to  the  pur- 
chaser. It  is  provided  that  the  power  to  sell  is  to  be  deemed  a  part 
of  the  security,  and  that  it  shall  vest  in  and  may  be  executed  by 
any  person  who,  by   assignment  or   otherwise,  becomes  entitled   to 

infancy      coverture,     insanity,     etc.  §  5111.    The  appraisers  and  the  jus- 

Mewburn  v.  Bass,  82  Ala.  622,  2  So.  tice    appointing    them    must    reside 

520  within  the  county  where  the  land  is 

""R     S     1901     §§    3272,    3273.      The  situated    or    the    sale   will    be   void, 

power  may  be 'exercised  on  a  default  Kelley  v.   Graham,   70  Ark.   490,   69 

in  payment  of  interest.     Hooper  v.  S.  W.  551.  ,  .     ^ 

Stump   14  Pac.  799.  '  Civil  Code.  §  2932.     A  trust  deed 

■^  Martin  v    Ward    60  Ark.  510,  30  is   not   a   mortgage   requiring  a   ]u- 

S  W   1041.    The  Statute,  Dig.  §  5112,  dicial    foreclosure.    Grant    v.    Burr 

requires     an    appraisement     before  54    Cal.    298;     More    v.    Calkins,    95 

sale,  and  a  sale  without  it  is  void.  Cal.  435,  30  Paa  583. 
Kelley  v.    Graham,   70   Ark.    490,   69        '  Fogarty  v.   Sawyer,  17   Cal    589; 

S    W    551      At  the  first  offering  the  Cormerais    v.    Genella,    22    Lai.    lib. 

property  shall  not  be  sold  for  less  Whether  a  right  of  redemption  ex- 

than     two-thirds    of    its    appraised  ists  after  such  a  sale  was  a  question 

value       If    it    fails    to    bring    that  raised   but  not  decided   m  the  case 

amount,    it    shall    again    be    offered  of    Cormerais    v.    Genella,    22    Cal. 

after    twelve    months    and    sold    re-  116. 
gardless  of  price.     Dig.  of  Statutes 


683      STATUTORY  PROVISIONS  IX  THE  SEVERAL  STATES.       [§§1726-1731. 

the  money  so  secured  to  be  paid  whenever  the  assignment  is  duly 
acknowledged  and  recorded." 

§  1726.  Colorado." — Power  of  sale  mortgages  and  trust  deeds  are 
botli  in  use.  In  every  county  the  office  of  public  trustee  is  created, 
who  shall  be  named  as  trustee  in  all  deeds  of  trust  given  to  secure  in- 
debtedness of  any  kind.  Otherwise,  the  deed  of  trust  shall  be  deemed 
to  be  a  mortgage  merely  and  can  be  foreclosed  only  through  the 
courts  as  a  mortgage.  The  public  trustees  shall  exercise  all  the  powers 
conferred  on  them  by  the  deeds  of  trust,  such  as  making  sales  on 
default,  issuing  certificates  of  sale  and  of  redemption.  At  the  re- 
quest of  the  beneficiai7  the  trustee  shall  advertise  the  property  for 
sale  and  give  personal  notice  to  the  grantor  and  subsequent  encum- 
brancers. The  deed  may  prescribe  the  period  for  advertising  the 
sale,  but  the  publication  shall  not  in  any  case  be  for  less  than  four 
weeks  in  a  newspaper  of  general  circulation.  After  the  sale  the 
trustee  issues  a  certificate  of  sale  to  the  purchaser,  which  entitles 
him  to  a  deed  in  case  the  property  is  not  redeemed.  The  grantor, 
or  any  subsequent  encumbrancer,  or  any  judgment  creditor  may  re- 
deem. If  the  grantor  or  subsequent  encumbrancer  does  not  redeem 
within  six  months  after  the  sale,  there  is  then  a  right  in  any  judg- 
ment creditor  of  the  grantor  to  redeem  for  three  months. ^"^ 

§  1727.  Connecticut. — Power  of  sale  mortgages  and  trust  deeds  are 
not  in  general  use. 

§  1729-  Delaware. — Power  of  sale  mortgages  and  trust  deeds  are 
not  in  general  use. 

§  1730-  District  of  Columbia. — Deeds  of  trust  with  power  of 
sale  are  in  use  to  the  exclusion,  almost,  of  mortgages.  If  the  length 
of  notice  and  terms  of  sale  are  not  prescribed  by  the  deed  of  trust  or 
left  to  the  discretion  of  the  trustee,  any  interested  person  may  apply 
to  the  court  to  fix  the  terms  of  sale  and  determine  what  notice  shall 
be  given. ^^  The  debtor  or  other  person  owning  the  property  cannot 
bid ;  but  the  mortgagee  may  buy  in  the  property  at  his  own  sale.^^ 

§  1731.  Florida. — Neither  of  these  instruments  seems  to  be  in 
general  use. 

'Civil   Code,    §    858;    1   Codes  and  been  no  redemption.     Denver  B.   & 

Stats.   1876,   §§   5858,  5859.  M.  Co.  v.  McAllister,  6  Colo.  261. 

"When  a  trust  deed  is  foreclosed  >»  Mills  Ann.  St.    (Suppl.)   §§  4556- 

by  action  and  sale  under  a  decree,  4560;    Brewer  v.    Harrison,  27   Colo, 

this  must  be  the  usual  statutory  de-  349,  62  Pac.  224. 

cree   giving  a   right  of   redemption,  "  Code  1902,  §  539. 

though    if  sale  had   been   made   un-  '-Code  1902,  §§  542,  543. 
der    the    power,    there    would    have 


§§  1733-1733.]     POWER  of  sale  mortgages  and  trust  deeds.     684 

§1732.     Georgia. — Mortgages  with  powers  of  sale  are  valid.^^ 

§  1732a.  Hawaii  T. — Power  of  sale  mortgages  are  in  use.  When 
a  mortgage  has  been  foreclosed  imder  the  power  contained  therein 
and  under  the  statute  without  the  aid'  of  a  decree  of  a  court  of  equity, 
and  possession  is  withheld  from  the  purchaser  at  such  sale  by  the 
mortgagor  or  those  holding  under  him,  equity  has  no  jurisdiction  upon 
a  bill  brought  solely  for  the  purpose  to  issue  a  writ  of  possession  in 
favor  of  the  purchaser.^* 

§  1732b.  Idaho. — Deeds  of  trust  and  mortgages  with  power  of  sale 
cannot  be  foreclosed  by  notice  and  sale  under  the  power,  but  they 
must  be  foreclosed  by  judicial  sale  pursuant  to  decree  rendered  in  an 
action  brought  therefor  in  the  proper  court.^^ 

§  1733.  Illinois. — Prior  to  the  act  upon  this  subject  passed  in 
1879,  it  was  usual  for  mortgages  to  contain  a  power  of  sale;  and 
trust  deeds  were  generally  preferred  to  mortgages.  No  sale  could  be 
made  by  virtue  of  a  power  in  a  mortgage  or  trust  deed  after  the  death 
of  the  owner  of  the  equity  of  redemption;^®  but  foreclosure  might 
be  made  in  the  same  manner  as  of  mortgages  not  containing  a 
power  of  sale.  But  in  the  year  above  named  it  was  enacted  that 
no.  real  estate  within  this  State  shall  be  sold  by  virtue  of  any  power 
of  sale  contained  in  any  mortgage,  trust  deed,  or  other  conveyance 
in  the  nature  of  a  mortgage,  executed  after  the  taking  effect  of  this 
act;  but  all  such  mortgages,  trust  deeds,  or  other  conveyances  in 
the  nature  of  a  mortgage,  shall  only  be  foreclosed  in  the  manner 
provided  for  foreclosing  mortgages  containing  no  power  of  sale; 
and  no  real  estate  shall  be  sold  to  satisfy  any  such  mortgage,  trust 
deed,  or  other  conveyance  in  the  nature  of  a  mortgage,  except  in 
pursuance  of  a  judgment  or  decree  of  a  court  of  competent  juris- 
diction.^'^ 

The  statutes  allowing  redemption  upon  sale  of  mortgaged  prem- 
ises have  no  application  to  a  sale  under  a  trust  deed  or  power  in  a 
mortgage.  ^^ 

^'Calloway    v.    People's    Bank,    54  1889  and  1898  ch.  95,  §§  11,  15.    This 

Ga.  441;   Robenson  v.  Vason,  37  Ga.  provision  had  no  application  to  trust 

66;  McGuire  v.  Barker,  61  Ga.  339.  deeds    executed    before    enactment. 

^'  Carter     v.      Kaikainahaole,      14  Fisher  v.  Green,  142  111.  80,  31  N.  E. 

Hawaii,  515.  173. 

^^  Brown  v.  Bryan,  6  Idaho,  1,  51  ''Laws  1879,  p.  211,  §  1;  R.  S.  ch. 

Pac.  995.  95,  §  22;  R.  S.  1898,  §  22. 

"R.  S.  1898,  ch.  95,  §  22.     For  no  "Bloom  v.  Rensselaer,  15  111.  503; 

tice  of  sale  under  power,  see  R.  S.  Fitch  v.  Wetherbee,  110  111.  475. 


685  STATUTORY  TKOVISIONS  IN  THE  SEVERAL  STATES.  [§§  1733a-1740. 

§  1733a.  Indian  T. — Power  of  sale  mortgages  and  trust  deeds  are 
in  use,  but  they  may  be  foreclosed  by  a  suit  in  equity  as  in  Arkansas.^^ 

§  1734.  Indiana. — Power  of  sale  mortgages  are  not  in  use.  They 
are  not  invalid  by  reason  of  the  power,  though  they  must  be  fore- 
closed in  equity.^"  By  authority  given  the  mortgagee  independent 
of  the  mortgage,  he  may  act  as  the  agent  of  the  mortgagor  in  the 
sale  of  the  premises.-^  Trust  deeds  are  sometimes  used,  and  sales  by 
trustees  under  powers  in  such  deeds  are  authorized  by  statute.^^ 

§  1735.     Iowa. — Deeds   of  trust   and   mortgages   with   powers  of 

sale  made  since  April  1,  1861,  can  be  foreclosed  only  by  action  in 

court  by  equitable  proceedings.     Deeds  of  trust  may  be  executed  as 
securities,  but  are  foreclosed  like  mortgages.-'* 

§  1736.  Kansas. — As  mortgages  can  be  foreclosed  by  suit  only, 
powers  of  sale  are  of  no  practical  advantage.^'*  It  is  provided,  how- 
ever, that  where  a  power  to  sell  lands  or  other  property  shall  be 
given  to  the  grantee,  in  any  mortgage  or  other  conveyance  intended 
to  secure  the  payment  of  money,  the  power  shall  be  deemed  a 
part  of  the  security,  and  shall  vest  in  any  person  who  shall  become 
entitled  to  the  money  so  secured  to  be  paid.'^ 

§  1737.  Kentucky. — Power  of  sale  mortgages  and  trust  deeds 
must  be  enforced  by  a  court  of  equity;  but  in  making  sales  the 
terms  of  the  power  are  followed.-*'     Strict  foreclosure  is  forbidden." 

§  1738.  Louisiana. — Mortgages  and  deeds  of  trust  with  powers 
are  not  in  use. 

§  1739.  Maine. — Power  of  sale  mortgages  are  sometimes  used^ 
though  trust  deeds  are  not. 

§  1740.     Maryland.-^— Power  may  be  given  to  the  mortgagee,  or 

"See  §1724  '' G.    S.    889,    §§    5631,   7176;    G.    S 

""R.   S.   1888,   §  1088;    Rev.  1901,  §  1899,  §  7536. 

1101;    Rowe  v.  Beckett,  30  Ind.  154,  -'•Campbell    v.    Johnston,   4   Dana, 

95    Am.    Dec.    676;    Martin   v.   Reefl,  178. 

30  Ind    218  -'  Civil  Code  1889,  §  375. 

=' Farley  v.  Eller,  29  Ind.  322.  =«  Pub.  G.  L.  1888,  art.  66,  §§  6-22. 

"1  R.  S.  1876,  p.  915;  Act  of  June  These   proceedings   are  under  the 

17    1852.  general   common   law   and   chancery 

'-^  Ann'ot.  Code  1888,  §  4555;  Annot.  powers  of  the  court,  and  are  simply 

Code  1897,  §§  4284,  4287.     They  were  a   summary   mode   of   exercising  an 

in    use    before    that    date.     Pope    v  ordinary  jurisdiction.     Instead  of  a 

Durant,    26    Iowa,    233;    Crocker    v.  bill    in    equity    for    foreclosure,    the 

Robertson,  8  Iowa,  404;   Fanning  v.  agreement    of    the    parties,    as    ex- 

Kerr,  7  Iowa,  450.  pressed   in   the  power  contained   in 

-*  Samuel   v.    Holladay,   1   Woolw.  the   mortgage,   is   substituted   for  a 

400.  decree  of  sale;  and  upon  final  ratifi- 


1740.]       POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS. 


C86 


any  other  person  named  in  the  deed,-"  to  sell  the  mortgaged  prem- 
ises, upon  the  terms  and  contingencies  expressed  in  the  mortgage; 
and  when  the  interests  in  any  mortgage  are  held  under  one  or  more 
assignments,  or  otherwise,  the  power  of  sale  therein  contained  shall 
be  held  divisible,  and  he  or  they  holding  any  such  interest  who  shall 
first  institute  proceedings  to  execute  such  power  shall  thereby  acquire 
the  exclusive  right  to  sell  the  mortgaged  premises.  Before  making 
sale,  however,  the  person  authorized  to  sell  must  give  bond  to  the 
State,  in  such  penalty  and  security  as  shall  be  approved  by  the  judge 
or  clerk  of  a  court  of  equity  of  the  city  or  county  in  which  the  prem- 
ises lie,  to  abide  by  and  fulfil  any  order  or  decree  which  shall  be 
made  in  relation  to  the  sale,  or  the  proceeds  of  it ;  which  bond  is  for 
the  security  of  all  persons  interested  in  the  property  or  the  proceeds  of 
it.^"  Such  notice  of  the  sale  shall  be  given  as  is  provided  for  in  the 
mortgage;  or,  if  there  be  no  agreement  as  to  notice,  then  the  party 
offering  the  property  for  sale  shall  give  twenty  days'  notice  of  the  time, 
place,  and  terms,  by  advertisement  in  some  newspaper  printed  in  the 
county  where  the  premises  lie;  or,  if  there  be  no  such  newspaper, 
then  in  a  newspaper  having  a  large  circulation  in  the  county, 
and  also  by  advertisement  set  up  at  the  court-house  door  of  said 
county.^^ 


cation  by  the  court  of  the  report, 
the  sale  has  all  the  judicial  sanc- 
tion that  it  could  have  on  formal 
proceedings  in  equity.  Having  ju- 
risdiction independent  of  the  stat- 
ute, the  court  may  decide  upon  every 
question  which  occurs  in  the  cause 
and  its  judgment  is  binding  until 
reversed.  A  sale  ratified  by  the 
court  cannot  be  called  in  question 
in  a  collateral  proceeding.  Cockey 
v.  Cole,  28  Md.  276,  285,  92  Am. 
Dec.  684.  In  the  city  of  Baltimore, 
under  a  public  local  law,  a  decree 
for  sale  may  be  in  the  first  place 
obtained  from  the  court  of  equity; 
and  the  sale  is  made  by  a  trustee 
appointed  by  the  court,  after  giving 
bond  and  advertising.  He  reports 
the  sale  to  the  court,  and  if  every- 
thing is  properly  done,  an  order  is 
passed  ratifying  and  confirming  the 
sale.  Code,  vol.  2,  p.  307.  The  va- 
lidity of  such  sale  may  be  inquired 
into  at  any  time  before  the  final 
order  of  confirmation  is  passed. 
Black  V.  Carroll,  24  Md.  2.51.  In  re- 
gard to  foreclosure  sales  under  pow- 
ers of  sale  in  the  city  of  Baltimore, 
see  1  Public  Local  Laws.  1888,  p.  504. 
'^  Formerly,  under  this  and  sub- 
sequent   provisions     a    corporation 


could  not  exercise  a  power  of  sale; 
especially  as  the  depositary  of  the 
power  must  act  under  the  respon- 
sibility of  an  oath.  Therefore  a 
pov/er  to  a  corporation  or  its  at- 
torney, without  naming  him,  was 
void.  Queen  City  Building  Asso.  v. 
Price,  53  Md.  397. 

The  person  who  was  to  exercise 
the  power  must  have  been  named 
therein.  The  mortgagee  could  not 
delegate  the  power.  Prostburg  Mut. 
Build.  Asso.  V.  Lowdermilk,  50  Md. 
175.  See  I^amm  v.  Port  Deposit 
Homestead  Asso.  49  Md.  233,  33  Am. 
Rep.  246.  The  inconvenience  of  this 
was  such  that  the  law  was  changed 
by  statute,  and  general  power  given 
to  appoint  a  person  to  exercise  a 
poAver  of  sale  in  behalf  of  a  mort- 
gagee. Suppl.  to  Pub.  Laws  1890- 
1898,  p.  446. 

'"'  A  bond  filed  on  the  day  of  sale 
is  presumed  to  have  been  filed  be- 
fore the  sale.  Hubbard  v.  Jarrell, 
23  Md.  66. 

'^  As  to  publication  of  notice  where 
after  the  making  of  a  mortgage 
the  mortgaged  land  was  legally  an- 
nexed to  the  city  of  Baltimore,  see 
Chilton  V.  Brooks,  71  Md.  445,  18 
Atl.  868. 


(J87 


STATUTORY    PROVISIONS    IN    THE    SEVERAL   STATES.     [§    1740. 


All  such  sales  must  be  reported  under  oath  to  the  court,  and 
there  must  be  the  same  proceedings  on  such  report  as  if  the  same 
were  made  by  a  trustee  under  a  decree  of  court,  and  the  sale  may 
be  confirmed  or  set  aside.^^  If  set  aside  a  resale  may  be  ordered, 
and  if  justice  requires  it  the  court  may  appoint  a  trustee  to  sell  the 
same.^^  The  sale,  when  confirmed  by  the  court  and  the  purchase- 
money  is  paid,  passes  all  the  title  which  the  mortgagor  had  at 
the  time  of  the  recording  of  the  mortgage.^*  Any  person  having 
an  interest  in  the  equity  of  redemption  may  apply  to  the  court 
confirming  the  sale  to  have  the  surplus  of  the  proceeds  of  sale, 
after  payment  of  the  mortgage  debt  and  expenses,  paid  over  to 
such  person,  or  so  much  as  will  satisfy  his  claim,  and  the  court 
distributes  the  surplus  equitably  among  the  claimants.  After  the 
sale  has  been  confirmed,  the  person  making  the  eale  conveys  to 
the  purchaser,^'^  or,  if  the  vendor  and  purchaser  be  the  same  per- 
son, the  court,  in  its  order  confirming  the  sale,  appoints  a  trustee 
to  convey  the  property  to  the  purchaser  on  the  payment  of  the 
purchase-money.  The  mortgagee,  or  his  assignee  or  legal  repre- 
sentatives, may  purchase  at  the  sale.  All  sales  must  be  in  the 
county  or  city  where  the  premises  are  situated,  and  if  in  more 
than  one  county  the  sale  may  be  made  in  either.^^     The  purchaser 

'-  The  proper  time  to  take  advan-  and  manner  of  the  sale,  and  not  to 

tage  of  any  failure  to  comply  with  the    proceedings    under    which    the 

the  law  is  when  the  sale  is  reported,  property  was  sold.     A  party  has  no 

Gayle   v.    Fattle,    14   Md.    69.     When  right    to    except    to    the    ratification 

the  sale  is  confirmed,  it  has  all  the  of  sale  on  the  ground  that  the  mort- 

judicial  sanction  that  it  could  have  gage  or  debt  upon  which  the  dercee 

if  it  had  been  made  by  virtue  of  an  was  passed  was  fraudulent."     Patap- 

ordinary     decree,     and     cannot     be  sco  Guano  Co.  v.  Elder,  53  Md.  463, 

called  in  question  in  any  collateral  465. 

proceeding.     Cockey  v.  Cole,  28  Md.  ^^  When  the  decree  provides  for  a 

276,    285,    92    Am.    Dec.    684;    Morrill  credit   as   to   part  of   the   purchase- 

V.   Gelston,  34  Md.   413.     Exceptions  money,    and    the    sale    is    made    on 

may    be    taken    at   any   time   before  credit   and'  confirmed,   but   the   pur- 

the  sale  is  ratified.     Aukam  v.  Zant-  chaser   waives   the   credit  and   pays 

zinger,  94  Md.  421,  51  Atl.  93.  the  whole  purchase-money  at  once, 

^'  No  order  for  a  resale  should  be  no  objection  can  be   made  that  the 

made  without  notice  to  the  first  pur-  deed    is    executed    forthwith,    before 

chaser.     Schaefer  v.  O'Brien,  49  Md.  the  expiration  of  the  term  of  credit. 

253.  Morrill  v.  Gelston,  34  Md.  413. 

"  "The  object  of  this  provision  of  ^°  The    parties    cannot    bv    agree- 

the  Code  was  to  confer  upon  courts  ment    sell    outside    the    county    in 

the  same  jurisdiction,  and  to  direct  which     the     premises     are     situate, 

that  the  same  proceedings  should  be  Webb   v.    Haeffer,   53   Md.    187.     See 

had,   in   sales   made  under  a  power  Chilton    v.    Brooks,    71    Md.    445,    18 

in  a  mortgage,  as  if  such  sales  had  Atl.  868;   §  1849  a. 

been    made    under   a    decree   of    the  The  prohibition  does  not  applv  to 

court.     Parties    in    interest    may    of  deeds  of  trust,  but  only  to  technical 

course   come   in,   and   object  to   the  mortgages.      Harrison   v.    Annapolis 

ratification  of  the  sale,  but  such  oh-  &  Elk  Ridge  R.  Co.  50  Md.  400. 
jections    must    be    as    to    the    mode 


§    1741.]       POWER   OF    SALE    MORTGAGES    AND   TRUST   DEEDS.  688 

on  the  confirmation  of  the  sale  may  have  a  writ  of  possession 
against  the  mortgagor.  On  the  death  of  the  mortgagee  his  in- 
terest vests  in  his  executor  or  administrator,  who  may  release  in 
the  same  manner  as  the  mortgagee  could. 

If,  upon  a  sale  of  the  whole  mortgaged  property  by  virtue  of  a 
power  of  sale,  the  net  proceeds  shall  not  suffice  to  pay  the  mortgage 
debt  and  accrued  interest,  the  court  may,  upon  motion  after  due 
notice,  enter  a  decree  in  personam  against  the  mortgagor  or  other 
party  liable  to  the  debt,  for  the  amount  of  such  deficiency,  provided 
the  mortgagee  would  be  entitled  to  maintain  an  action  at  law  upon 
the  covenants  contained  in  the  mortgage  for  the  residue  of  said 
debt.  Such  decree  shall  have  the  same  effect  as  a  judgment  at 
law.^^ 

§  1741.  Massachusetts — Mortgages  with  powers  of  sale  are  al- 
most exclusively  i;sed  in  this  State.  When  a  power  of  sale  is  con- 
tained in  a  mortgage  and  a  conditional  judgment  has  been  entered, 
the  demandant  may,  instead  of  a  writ  of  possession,  have  a  decree 
entered  that  the  property  be  sold  pursuant  to  such  power  of  sale.^* 
The  party  selling  must  within  ten  days  thereafter  make  a  report 
under  oath  to  the  court,  and  the  sale  may  be  confirmed.  But  in- 
stead of  such  suit  and  decree  the  mortgagee  or  his  assignee  may 
give  notice,  and  sell  in  accordance  with  the  power  ;^^  and  within 
thirt}''  days  after  selling  he  must  file  a  copy  of  the  notice,  and  his 
affidavit  setting  forth  his  acts  in  the  premises  fully  and  particularly, 
in  the  office  of  the  registry  of  deeds  in  the  county  or  district  where 
the  property  is  situated.^"  If  it  appears  by  such  affiidavit  that  he 
has  in  all  respects  complied  with  the  requisitions  of  the  power,  the 
affidavit,  or  a  certified  copy  of  the  record  of  it,  is  admitted  as  evi- 
dence that  the  power  of  sale  was  duly  executed. ^^ 

All  statutes  authorizing  administrators,  guardians,  and  trustees 
to  mortgage  real  estate  are  construed  as  authorizing  the  giving  of 
a  mortgage  containing  a  power  of  sale.*^ 

''  Laws  1892,  ch.  Ill;  Supp.  to  Pub.  money.     Childs    v.    Dolan,    5    Allen, 

G.  L.  1898,  p.  447,  Art.  66,  §  24.  319. 

'*R.    L.    ch.    187,    §§    11-17;    P.    S.  "This     provision     respecting    the 

1882,  ch.  181,  §§  14-18;  G.  S.  ch.  140,  record  of  an  affidavit  of  the  sale  is 

§§  38-44.     And  see  St.  1868,  ch.  197.  held  to  be  merely  directory,  and  a 

Trust   deeds   are  very  seldom  used,  sale  is  good,  and  the  title  valid,  if 

^^  This  is  the  usual  mode  of  pro-  no  affidavit  is  ever  made  or  recorded, 

ceeding;    a    suit    and    decree    being  Learned    v.    Foster,    117    Mass.    365; 

very    rare    when    there    is    a    valid  Burns  v.  Thayer.  115  Mass.  89;  Field 

power  of  sale.  v.  Gooding.  106  Mass.  310. 

*"  The  affidavit  need  not  allege  the  •*=  Stat.    1873,   ch.   280;    P.   S.   1882, 

rendering    of    an    account,    nor    the  ch.  142,  §  6. 
disposition   made   of   the   purchase- 


689       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1742. 

No  sale  under  a  power  is  valid  and  effectual  to  foreclose  the  mort- 
gage unless  previous  notice  of  the  sale  shall  have  been  published 
once  a  week,  the  first  publication  to  be  not  less  than  twenty-one 
days  before  the  day  of  sale,  for  three  successive  weeks,  in  some 
newspaper,  if  there  be  any,  published  in  the  city  or  town  where  the 
mortgaged  premises  are  situated,  and,  if  no  newspaper  is  published 
in  such  city  or  town,  then  in  some  newspaper  published  in  the 
county  where  the  mortgaged  premises  are  situated;  but  this  require- 
ment does  not  avoid  the  necessity  of  also  giving  notice  of  such  sale 
in  accordance  with  the  terms  of  the  mortgage.*^ 

When  a  mortgage  is  foreclosed  by  a  sale  under  a  power  or  other- 
wise, and  the  person  having  a  valid  title  to  the  estate  is  kept  out  of 
possession  by  any  person  without  right,  he  m.ay  recover  possession 
by  the  summary  process  provided  for  the  recovery  of  lands  unlaw- 
fully held  by  tenants.**'* 

In  a  case  in  Massachusetts,  decided  in  1858,  it  was  held  that  an 
agreement  to  give  a  mortgage  does  not  require  the  giving  of  a  mort- 
gage with  a  power  of  sale,  because  such  power  was  declared  not  to 
be  an  ordinary  accompaniment  of  a  mortgage.*'^  But  since  the  time 
of  this  decision  this  form  of  mortgage  has  come  to  be  used  almost 
to  the  complete  exclusion  of  any  other,  and  it  seems  doubtful  at 
least  whether  this  decision  would  hold  good  at  the  present  time. 
There  is  no  reason  now,  it  would  seem,  why  a  power  of  sale  should 
not  be  regarded  here,  as  in  England,  a  necessary  incident  to  a  mort- 
gage; and  that  an  agreement  to  give  a  mortgage,  or  a  power  by 
will  or  otherwise  to  raise  money  by  a  mortgage,  implies  the  giving 
of  a  mortgage  with  a  power  of  sale. 

§  1742.     Michlg^an.'*° — A  mortgage  containing  a  power  of  sale  upon 

*^Acts    1877,    cli.    215;    P.    S.    1882,  Co.  11  Gray,  493.     And  see  Piatt  v. 

ch.  181,   §  17;    Acts  1882,  ch.  75;    R.  McClure,  3  Woodb.  &  M.  151. 

L.  ch.  187,  §  14.     A  trust  deed  could  *"  Annotated    Stats.    1882,    §§    8497- 

be  so  drawn  that  it  would  not  come  8515;    3  Comp.  Laws  1897,  §§  11133- 

within    the    terms    of    this    statute.  11151.     Trust  deeds  in  the  nature  of 

Judge  V.  Pfaff,  171  Mass.  195,  50  N.  mortgages  seem  not  to  be  in  use. 

E.  524.  The   statutory    foreclosure    is   not 

"Acts    1879,    ch.    237;    P.    S.    1882,  adapted    to    cases    where    there    are 

ch.  175,  §§  1-10;   R.  L.  ch.  182,  §  7.  conflicting  equities  which  can  only 

But  a  grantee  of  the  purchaser  can-  be   worked   out   and   protected   in   a 

not  recover  possession  of  the  land  by  court   of    chancery.     Olcott   v.    Crit- 

this  process.     Warren  v.  James,  130  tenden,  68  Mich.  230,  36  N.  W.  41. 

Mass.  540.  A  sale  under  a  power  which  does 

This  statute  is  ancillary  to  and  a  not  purport  to  be   made  under  the 

part   of   the   process   of  foreclosure,  statute   is    imperfect,   and    does   not 

and  the  use  of  the  process  must  be  cut    off    the    equity    of    redemption, 

limited  to  the  mortgagee  and  to  the  nor   give   a   right   of    entry.     Pierce 

purchaser  at  the  foreclosure  sale.  v.  Grimley,  77  Mich.  273,  43  N.  W. 

"Bravton    v.    N.    E.    Coal    Mining  932. 


§    17-i3.]       POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS. 


690 


default  may  be  foreclosed  by  advertisement.'''^  To  entitle  the  party 
to  give  notice  and  to  make  such  forclosure,  it  is  requisite :  1st. 
That  some  default  shall  have  occurred;  2d.  That  no  suit  shall  have 
been  instituted  at  law  to  recover  the  debt  or  any  part  of  it,  or,  if  in- 
stituted, that  it  has  been  discontinued,  or  that  execution  has  been 
returned  unsatisfied  in  whole  or  in  part;*^  and  3d.  That  the  mort- 
gage has  been  duly  recorded,  as  well  as  any  assignment  of  it;*^  4th. 
If  given  to  secure  the  payment  of  money  by  instalments,  each  in- 
stalment after  the  first  is  deemed  a  separate  and  independent  mort- 
gage, and  may  be  foreclosed  for  each  instalment  in  the  same  manner, 
and  with  like  effect,  as  if  given  for  each  separate  instalment.^"^ 


A  statutory  foreclosure  is  not 
proper  in  case  the  mortgage  has  al- 
ready been  the  subject  of  litigation 
and  the  mortgagee  has  been  enjoined 
from  foreclosing  until  he  has  com- 
plied with  certain  directions  of  the 
decree.  Strong  v.  Tomlinson,  88 
Mich.  112,  50  N.  W.  106. 

Equity  will  not  permit  one  tenant 
in  common  in  the  possession  of 
property,  for  the  use  of  which  he 
is  bound  to  account  to  his  co-owner, 
to  foreclose  by  separate  advertise- 
ments three  mortgages  which  he 
holds  upon  his  co-tenant's  interest, 
all  of  which  are  past  due.  The  fore- 
closure must  be  in  equity,  where 
all  the  rights  of  the  parties  can  be 
determined  and  protected.  Dohm  v. 
Haskin,  88  Mich.  144,  50  N.  W.  108. 

*'  Foreclosure  by  advertisement  is 
not  a  judicial  proceeding,  but  an  act 
of  the  mortgagee,  and  cannot  take 
place  unless  the  mortgage  contains 
a  power  of  sale.  Hebert  v.  Bulte, 
42  Mich.  489,  4  N.  W.  215. 

**  This  refers  to  suits  on  the  debt, 
and  not  to  previous  foreclosure  pro- 
ceedings. Lee  V.  Clary,  38  Mich. 
223.  Proving  the  mortgage  debt  be- 
fore commissioners  of  the  estate  of 
a  deceased  mortgagor  is  not  a  pro- 
ceeding at  law  within  this  prohi- 
bition. Larzelere  v.  Starkweather, 
38  Mich.  96. 

*'■'  An  assignment  of  a  mortgage 
executed  in  another  State,  and  ac- 
knowledged before  a  notary  public 
without  a  certificate  of  his  author- 
It}',  is  not  entitled  to  record,  and 
does  not  support  a  foreclosure  sale 
under  the  statute.  Dohm  v.  Has- 
kin, 88  Mich.  144,  50  N.  W.  108. 

■•-  Formerly  a  foreclosure  under  a 
power  of  sale  for  one  instalment  for- 
ever   discharged    the    land    of    the 


mortgage.  Kimmell  v.  Willard,  1 
Doug.  217.  Now  under  the  statute 
one  instalment,  by  reason  of  falling 
due  sooner,  has  no  preference  over 
the  others.  All  the  instalments 
stand  upon  the  same  basis,  in  like 
manner  as  several  mortgages  given 
at  the  same  time,  and  it  makes  no 
difference  whether  they  are  all 
owned  together  or  by  different  par- 
ties. If  the  sale  be  expressly  made 
subject  to  the  other  instalments, 
the  effect  is  to  charge  the  land  in 
the  hands  of  the  purchaser  with 
the  payment  of  these;  but  if  not  so 
made,  though  the  sale  may  bar  the 
equity  of  redemption  of  the  mort- 
gagor and  subsequent  purchasers,  it 
only  transfers  to  the  purchaser  one 
instalment  of  the  mortgage,  and 
leaves  the  others  unaffected.  There 
is  no  redemption  by  one  as  against 
the  other.  McCurdy  v.  Clark,  27 
Mich.  445;  Bridgman  v.  Johnson,  44 
Mich.  491,  7  N.  W.  83. 

The  statute  includes  instalments 
of  interest  as  well  as  principal,  and 
where  there  has  been  a  statutory 
foreclosure  and  sale  for  instalments 
of  interest,  and  a  redemption  by  the 
grantee  of  the  mortgagors,  the  mort- 
gage is  not  extinguished.  Edgar  v. 
Beck,  96  Mich.  419,  56  N.  W.  15, 
distinguishing  Miles  v.  Skinner,  42 
Mich.  181,  3  N.  W.  918.  In  the  for- 
mer case  it  was  said:  "It  certainly 
was  not  the  intention  of  the  legis- 
lature that,  in  a  proceeding  to  fore- 
close one  of  the  several  instalments 
of  principal,  past-due  interest  upon 
other  instalments  of  principal  not 
yet  due  should  be  excluded.  The 
language  referred  to  as  used  in  Miles 
V.  Skinner  was  not  necessary  to  the 
decision  of  that  case,  and  therefore 
must  be  disregarded."     If  the  fore- 


691 


STATUTORY    PROVISIONS    IX    THE    SEVERAL   STATES.     [§    1742. 


Notice  is  given  by  puhlisliini^-  the  same  for  twelve  successive 
wceks/'"'^  at  least  once  in  each  week,  in  a  newspaper  printed  in  the 
county  where  the  premises,  or  some  part  of  them,  are  situated,  if 
there  be  one;  and,  if  no  newspaper  be  printed  in  such  county,  then 
such  notice  shall  be  published  in  a  paper  printed  nearest  thereto. 
The  notice  must  specify :  1st.  The  names  of  the  mortgagor  and  ol" 
the  mortgagee,  and  assignee,  if  any;  ,2d.  The  date  of  the  mortgage, 
and  when  recorded;  3d.  The  amount  claimed  to  be  due  at  the  date 
of  the  notice;  and  4th.  A  description  of  the  mortgaged  i)remises, 
conforming  substantially  with  that  contained   in  the  mortgage. 

The  sale  must  be  at  public  vendue,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun,  at  the  place  of 
holding  the  circuit  court  M'ithin  the  county  in  which  the  premises 
to  be  sold,  or  some  part  of  them,  are  situated,  and  must  be  made 
by  the  person  ai)])ointed  for  that  purpose  in  the  mortgage,  or  by 
the  sheriff,  under-slieriff,  or  a  deputy  sheriff  of  the  county  to  the 
highest  1)i(ldor.  The  sale  may  be  postponed  from  time  to  time,  by 
inserting  a  notice  of  such  postponement  as  soon  as  practicable  in 
the  newspaper  in  which  the  original  advertisement  was  published, 
and  continuing  such  publication  until  the  time  to  which  the  sale  is 
postponed  at  the  expense  of  the  party  requesting  such  postpone- 
ment.^'^  If  the  premises  consist  of  different  farms,  tracts,  or  lots, 
not  occupied  as  one  parcel,  they  must  be  sold  separately,  and  no 
more  can  be  sold  than  may  be  necessary  to  satisfy  the  amount  due 
on  the  mortgage  at  the  date  of  the  notice  of  sale,  with  interest,  and 
the  costs  and  expenses  allowed  by  Jaw.-^^  But  if  distinct  lots  be 
occupied  as  one  parcel,  they  may  in  such  case  be  sold  together.^* 
The  mortgagee,  his  assigns,  or  his  or  their  legal  representatives,  may 
fairly  and  in  good  faith  purchase  the  premises  so  advertised,  or  anv 
part  thereof,  at  such  sale.  The  officer  or  person  making  the  sale 
must  forthwith  execute  and  deliver  to  the  purchaser  a  deed  of  the 
premises,  specifying  the  precise  amount  for  which  such  parcel  was 
sold,  and  must  indorse  thereon  the  time  when  such  deed  will  become 

closure  sale  be  made  for  an  instal-  first  publication  should  be  excluded 

ment  of  interest  or  of  principal,  the  and  the  day  of  sale  included.    Gantz 

sale  should  be  made  expressly  sub-  v.  Toles,  40  Mich.  725. 

ject  to  the  principal   debt  or  other  »- A  deputy  sheriff  may  make  the 

Instalments  of  the  principal.     Miles  sale.     Heinmiller    v.    Hatheway,    60 

V.    Skinner,   42    Mich.    181,   3   N.    W.  Mich.  .391,  27  N.  W.  558. 

918.  "  The    deed    in    such    case    must 

''  Only  twelve  weeks'  interval  can  show  the  price  of  each  parcel,  and 

be  required  between  the  publication  not  one  sum  for  all.     Lee  v.  Mason, 

of  the  notice  and  the  sale  itself.     In  10  Mich.  403. 

computing  the  time,  the  day  of  the  ''  See  Grover  v.  Fox,  36  Mich.  461. 


§    1742.]       POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  692 

operative  in  case  the  premises  are  not  redeemed  according  to  law, 
and  must  deposit  the  same  with  the  register  of  deeds  of  the  county 
in  which  the  land  is  situated,  as  soon  as  practicable  and  within 
twenty  days  after  such  sale.^^ 

Unless  the  premises  are  redeemed  within  the  time  limited  for 
such  redemption,  as  hereinafter  provided,  such  deed  thereupon  be- 
comes operative  and  may  be  recorded,  and  vests  in  the  grantee  all 
tlie  right,  title,  and  interest  which  the  mortgagor  had  at  the  time 
of  the  execution  of  the  mortgage,  or  any  time  thereafter,  except  as 
to  any  parcels  redeemed;  but  prior  liens  are  not  in  any  way  preju- 
diced or  affected.  The  premises  may  be  redeemed  within  one  year 
from  the  time  of  the  sale,  by  paying  to  the  purchaser  or  his  assigns, 
or  to  the  register  of  deeds  for  the  benefit  of  such  purchaser,  the  sum 
which  was  bid,  with  interest  for  the  time  of  the  sale,  at  the  rate  per 
cent,  borne  by  the  mortgage,  not  exceeding  ten  per  cent,  per  annum, 
whereupon  the  deed  becomes  void;  but  in  case  any  distinct  lot  or 
parcel  separately  sold  is  redeemed,  leaving  a  portion  of  the  premises 
imredeemed,  then  the  deed  is  inoperative  merely  as  to  the  parcel  or 
parcels  so  redeemed,  and  as  to  those  not  redeemed  is  valid.  Upon 
the  payment  of  the  entire  sum  bid  at  the  sale  and  interest  to  tha 
register  of  deeds,  or  upon  delivering  to  such  register  a  certificate 
signed  and  acknowledged  by  the  person  entitled  to  receive  the  same, 
setting  forth  that  such  sum  and  interest  ha^'e  been  paid,  the  register 
thereupon  destroys  the  deed,  and  enters  in  the  margin  of  the  record 
of  such  mortgage  a  memorandum  that  the  mortgage  is  satisfied;  or, 
in  case  one  or  more  parcels  are  redeemed,  it  is  the  duty  of  the  reg- 
ister to  enter  upon  the  face  ol  the  deed  a  memorandum  that  the 
same  is  inoperative  as  to  the  parcels  redeemed,  and  to  enter  in '  the 
margin  of  the  record  of  the  mortgage  a  memorandum  that  the  same 
is  satisfied  as  to  the  parcels  redeemed.  Any  surplus  must  be  paid 
to  the  mortgagor,  his  personal  representatives  or  assigns,  unless  a 
claim  for  it  shall  have  been  filed  with  the  officer,  whereupon  the 
officer  is  required  to  pay  the  surplus  to  the  register  of  the  circuit 
court  in  chancery  for  the  county,  and  the  claim  is  thereupon  heard 
and  adjudged  in  that  court.^*' 

Any  party  desiring  to  perpetuate  the  evidence  of  any  sale  may 
procure:     1st.  An  affidavit  of  the  publication  of  the  notice,  to  be 

"  See  Grover  v.  Fox,  36  Mich.  461.  ^^  An  attorney's  fee  is  provided  for 

When    the    deed    is    filed    immedi-  by    statute.     Laws    1885,    p.    133,    3 

ately  after  sale,  the  year  for  redemp-  Annot.    Stats.    Siipp.    1890,    §    8515  a; 

tion    runs   from   the    date    of   filing.  3  Comp.  Laws  1897,  §  11152. 

Lilly  v.  Gibbs,  39  Mich.  394. 


693'  STATUTORY    PROVISIONS    IN    THE    SEVERAL    STATES.     [§  1743. 

made  by  tlic  printer  of  the  newspaper  in  which  it  was  inserted,  or  by 
some  one  in  his. employ;  3d.  An  affidavit  of  the  fact  of  sale  by  the 
auctioneer,  stating  the  time  and  place  of  it,  the  sum  bid,  and  the 
name  of  the  purchaser.  Such  affidavits  must  be  recorded;  and 
the  original  affidavits  or  the  records  of  them,  and  certified  copies, 
are  presumptive  evidence  of  the  facts  therein  contained.^^ 

When  any  person  continues  in  possession  of  any  premises  after 
the  expiration  of  the  time  limited  by  law  for  redemption,  summary 
proceedings  may  be  had  to  recover  possession.^* 

§  1743  Minnesota.^^ — Every  mortgage  of  real  estate  containing  a 
power  of  sale,  upon  default  being  made,  may  be  foreclosed  by  ad- 
vertisement within  fifteen  years  after  the  maturity  of  such  mort- 
gage or  the  debt  secured.®"  And  said  fifteen  years  shall  not  be  en- 
larged or  extended  by  reason  of  any  non-residence  nor  by  reason  of 
any  payment  or  payments  made  or  applied  upon  the  debt  secured  by 
such  mortgage  after  the  maturity  of  such  debt.®^  To  entitle  any  party 
to  make  such  foreclosure  it  is  requisite:  First,  that  some  default 
in  a  condition  of  such  mortgage  has  occurred,  by  which  the  power  to 
sell  has  become  operative;  second,  that  no  action  or  proceeding  has 
been  instituted  at  law  to  recover  the  debt  then  remaining  secured 
by  such  mortgage  or  any  part  thereof,  or,  if  the  action  or  proceeding 
has  been  instituted,  that  the  same  has  been  discontinued,  or  that 
an  execution  upon  the  judgment  rendered  therein  has  been  re- 
turned  unsatisfied   in  whole  or   in   part;   third,   that   the  mortgage 

"  An  affidavit  made  seven  or  eight  its    passage.     O'Brien    v.    Krenz,    36 

years  after  the  sale  is  not  such  pre-  Minn.   136,  30  N.   W.  458.     A  power 

sumptive  evidence.     Mundy  v.  Mon-  of  sale   mortgage   made  before   this 

roe,    1    Mich.    68.     Proof   of    sale    is  statute  is  in   itself  a  complete  and 

allowed  to  be  recorded,  but  not  re-  valid  common-law  power,  capable  of 

quired  to  be.    Lee  v.  Clary,  38  Mich,  being   executed   without   the   aid   of 

223.  any    statute.     "Powers    of    sale    are 

="3  Comp.  Laws  1897,  §  11152.  not  the  creatures  of  statute,  but  of 

="0.    S.    1891,    S§    5344-5379;    G.    S.  .the     convention     of     the     parties." 

1894,  §§  6028-6056.     When  land  is  in  There  being  nothing  in  the  statute 

two    counties,    see    Balme    v.    Warn-  as    to    the    mode    of    exercising   the 

baugh,    16    Minn.    116.     Where    the  power     which     conflicts     with     the 

mortgaged  land  consists  of  various  terms   of  the   mortgage,   or   impairs 

parcels   lying   in   different   counties,  its  obligation  as  a  contract,  a  sale 

advertisement  in  a  newspaper  pub-  under   the   power   made   in   1879,   in 

lished   in   the  county  where  one  of  accordance    with    this    statute,    was 

the  parcels  is  situated  is  sufficient,  valid.     Webb  v.  Lewis    45  Minn   285 

Paulle   v.    Wallis,    58    Minn.    192,    59  47  N.  W.  803! 

N.  W.  999.     The  statute  1877,  chap-  ""  See  Cobb  v.  Bord,  40  Minn.  479, 

121,     abolishing    foreclosure     under  42  N.  W.  396. 

power  of  sale  mortgages,  is  not  ap-  "  Laws  1903,  ch.  15. 
plicable  to  mortgages  made  before 


§    1743.]       POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  694 

containing  such  power  of  sale  has  been  duly  recorded/^  and,  if  it 
has  been  assigned,  that  all  the  assignments  have  been  recorded.*^^ 

Xotice  that  such  mortgage  will  be  foreclosed  by  sale  of  the  mort- 
gaged premises,  or  some  part  of  them,  is  given  by  publishing  the 
same  for  six  successive  weeks,  at  least  once  in  a  week,  in  a  news-  , 
paper  printed  and  published  in  the  county  where  the  premises  in- 
tended to  be  sold,  or  some  part  thereof,  are  situated,  if  there  is 
one;*'*  if  not,  then  in  a  newspaper  printed  and  published  in  an  ad- 
joining county,  if  there  is  such  a  newspaper;  if  there  is  not  then 
in  a  newspaper  printed  and  published  in  the  county  to  which  the 
county  in  which  the  premises  are  located  is  attached  for  judicial 
purposes,  if  there  be  such  a  newspaper;  if  there  is  not,  then  m  a 
newspaper  printed  and  published  at  the  capital  of  the  State.  In 
all  cases  a  copy  of  such  notice  must  be  served,  in  like  manner  as  a 
summons  in  civil  actions  in  the  district  court,  at  least  four  weeks 
before  the  time  of  sale,  on  the  person  in  possession  of  the  mort- 
gaged premises,  if  the  same  are  actually  occupied.''^  Proof  of  such 
service  may  be  made,  certified,  and  recorded  in  the  same  manner  as 
proof  of  publication  of  a  notice  of  sale  under  a  mortgage.  Every 
notice  must  specify :  First,  the  names  of  the  mortgagor  and  of  the 
mortgagee,  and  the  assignee,^*'  if  any;  second,  the  date  of  the  mort- 
gage, and  when  and  where  recorded;"  third,  the  amount  claimed  to 

"Where   the    land    is    situated    in  N.  W.  1117;   Russell  v.  Lumber  Co. 

two  counties,  but  in  recording  it  in  45  Minn.  376,  48  N.  W.  3,  followed, 

one    county    the    description    of   the  '^  This    has    reference    merely    to 

land  situated  in  the  other  county  is  the    mode    of    making    the    service, 

omitted,    such    record    is    not    suffi-  and  not  to  the  persons  by  whom  it 

cient    to    authorize    a    sale,    in    the  may  be  made.     The  mortgagee  him- 

county    where    such    imperfect   rec-  self    may    serve    the    notice.     Kirk- 

ord  was  made,  of  the  land  situated  patrick  v.    Lewis,   46   Minn.    164,   47 

in    the   other   county,    although    the  N.  W.  970. 

mortgage  was  duly  recorded  in  such  Where    there    is    no    actual    occu- 

other  county.     Van  Meter  v.  Knight,  pancy,   within   the   meaning   of   the 

32  Minn.  205,  20  N.  W.  142      Or  reg-  law,    but    mere    acts    of    ownership, 

istered      Laws  1903,  ch.   87.  the  statutory  notice  is  not  required. 

"^  Lowry  v.  Mayo,  41  Minn.  388,  43  Moulton   v.    Sidle,    52    Fed.    616.     As 

N     W     78-    Hathorn    v.    Butler,    73  to    what    constitutes    actual     occu- 

Minn    15    75  N.   W.   743.     Or  regis-  pancy,  see  Cutting  v.  Patterson,  82 

tered.    Laws  1903,  ch.  87.  Minn.  375.  85  N.  W.  172. 

"*2  G    S    1894,  §  6054;   G.  S.  1891,  This  notice  is  not  for  the  exclusive 

§S  5362-536'3;  Laws  1883,  ch.  112,  pro-  benefit  of  the  occupant,  and  any  one 

vide  that  when  a  foreclosure  is  in-  else    having    an    interest    may    take 

valid  by  reason  that  the  notice  was  advantage   of   the   omission.     Swain 

not     published     for     the     requisite  v.  Lynd,  74  Minn.  72,  76  N.  W.  958. 

length  of  time,  suit  to  set  aside  the  '■"'  Hathorn  v.  Butler,  73  Minn.  15, 

sale    must    be    brought    within    five  75  N.  W.  743. 

years    from    the    date    of    the    sale.  "  Martin  v.  Baldwm,  30  Mmn.  537, 

Mogan  V.   Carter,   54  Minn.   141,   55  16  N.  W.  449. 


695       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1743. 

be  due  thereon,*'**  and  taxes,""  if  any,  paid  by  the  mortgagee  at  the 
date  of  the  notice;  fourth,  a  description  of  the  mortgaged  premises, 
conforming  substantially  to  that  contained  in  the  mortgage;  fifth, 
the  time  and  place  of  sale. 

The  sale  is  at  public  vendue,  between  the  hour  of  nine  o'clock  in 
the  forenoon  and  the  setting  of  the  sun,  in  the  county  in  which  the 
premises  to  be  sold,  or  some  part  thereof,  are  situated,  and  is  made 
by  the  sheriff  of  said  county,  or  his  deputy,  to  the  highest  bidder. 
Such  sale  may  be  postponed  from  time  to  time,  by  inserting  a  no- 
tice of  such  postponement,  as  soon  as  practicable,  in  the  newspaper 
in  which  the  original  advertisement  was  published,  and  continu- 
ing such  publication  until  the  time  to  which  the  sale  is  postponed, 
at  the  expense  of  the  party  requesting  such  postponement.  If  the 
mortgaged  premises  consist  of  separate  and  distinct  farms  or  tracts, 
they  must  be  sold  separately,  and  no  more  farms  or  tracts  shall  be 
sold  than  are  necessary  to  satisfy  the  amount  due  on  such  mort- 
gage at  the  date  of  notice  of  such  sale,  with  interest,  taxes  paid, 
and  costs  of  sale.  The  mortgagee,  his  assignee,  or  his  or  their  legal 
representatives,  may  fairly  and  in  good  faith  purchase  the  premises 
so  advertised,  or  any  part  thereof,  at  such  sale.'^° 

The  officer  is  required  to  make  and  deliver  to  the  purchaser  a 
cejtificate,  under  his  hand  and  seal,  containing  a  description  of  the 
mortgage  under  which  such  sale  is  made;  first,  a  description  of  the 
real  property  sold;  second,  the  price  paid  for  each  parcel  sold  sep- 
arately; third,  the  date  of  the  sale  and  the  name  of  the  purchaser; 
fourth,  and  the  time  allowed  by  law  for  redemption.'^^  Said  certificate 
must  be  executed,  proved,  or  acknowledged,  and  recorded  as  required 
by  law  for  a  conveyance  of  real  estate,  within  twenty  days  after  such 
sale.  Such  certificate,  so  proved,  acknowledged,  and  recorded  upon 
the  expiration  of  the  time  for  redemption,  operates  as  a  conveyance 
to  the  purchaser  or  his  assignee  of  all  the  right,  title,  and  interest 
of  the  mortgagor  in  and  to  the  premises  named  therein  at  the  date  of 
such  mortgage,  without  any  other  conveyance  whatever.^^ 

'*  Trafton  v.  Cornell,  62  Minn.  442,  24  Minn.  161.     As  to  description  of 

64  N.  W.  1148.  the  mortgage,  see  Cable  v.  Minneap- 

""  Hamel   v.   Corbin,   69  Minn.   223,  oils    Packing    Co.    47    Minn.    417,    50 

72  N.   W.  106,  and  cases  cited.  N.  W.  528;  Lee  v.  Fletcher,  46  Minn. 

'"  There  are   provisions   as   to   the  49,  48  N.  W.  456. 

surplus    money,   foreclosure   in   firm  '-  The    sheriff's    certificate    of   any 

name,    and    the    validity    and    effect  sale  is  prima  facie  evidence  that  all 

of  the   sale.     2   G.    S.    1894,    §    6046;  the  requirements  of  law  in  that  be- 

2  G.  S.  1891,  §S  5853-53.57.  half  have  been  duly  complied  with, 

"  As   to   what  is   sufficient   in   re-  and  prima  facie  evidence  of  title  in 

gard    to    stating    the    time    of    re-  fee  thereunder  in   the  purchaser  at 

demption,    see    Wells    v.    Atkinson,  such  sale,  his  heirs  or  assigns,  af- 


§    1743.]       POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.  696 

When  a  mortgage  is  given  to  secure  the  payment  of  money  by 
instahnents,  each  of  the  instalments,  either  of  principal  or  interest, 
mentioned  in  such  mortgage,  may  be  taken  and  deemed  to  be  a 
separate  and  independent  mortgage;  may  be  foreclosed  in  the  same 
manner,  and  with  like  effect,  as  if  such  separate  mortgage  was 
given  for  each  of  such  subsequent  instalments;  and  a  redemption 
of  any  such  sale  by  the  mortgagor  has  the  like  affect  as  if  the  sale 
for  such  instalment  had  been  made  upon  an  independent  mortgage. 
In  such  case,  if  the  mortgaged  premises  consist  of  separate  and 
distinct  farms  or  tracts,  only  such  tract  or  tracts  are  sold  as  are 
sufficient  to  satisfy  the  instalment  then  due,  with  interest  and  costs 
of  sale;"  but  if  said  premises  do  not  consist  of  such  separate  ^nd 
distinct  farms  or  tracts,  the  whole  is  sold;  and  in  either  case  the 
proceeds  of  such  sale,  after  satisfying  the  interest  or  instalment  of 
the  principal  due,  with  interest  and  costs  of  sale,  must  be  applied 
towards  the  payment  of  the  residue  of  the  sum  secured  by  said 
mortgage,  and  not  due  and  payable  at  the  time  of  such  sale;  and 
if  such  residue  does  not  bear  interest,  such  application  is  made  with 
a  rebate  of  the  legal  interest  for  the  time  during  which  the  residue 
shall  not  be  due  and  payable;  and  the  surplus,  if  any,  is  paid  to 
the  mortgagor,  his  legal  representatives  or  assigns. 

The  mortgagor,  his  heirs,  executors,  administrators,  or  assigns, 
whose  real  property  is  sold,  may,  within  twelve  months  after  such 
sale,  redeem  such  property,  as  hereinafter  provided,  by  paying  the 
sum  of  money  for  which  the  same  was  sold,  together  with  interest 
on  the  same  from  the  time  of  such  sale.'^*     No  redemption  can  be 

ter  the  time  for  redemption  there-  register   of   deeds   an   authenticated 

from  has  expired;   and  no  such  sale  copy  of  the  appointment  of  his  as- 

shall   be  held   invalid  by  reason   of  signer    as    administrator.     Cone    v. 

any    defect,    unless    the    action    in  Nimocks,    78    Minn.    249,    80    N.    W. 

which  the  validity  of  such  sale  shall  1056. 

be  called  in  question  be  commenced,  "  If   the    mortgage    is    in    effect   a 

or  the  defense  alleging  its  invalidity  separate  mortgage  upon  several  sep- 

be  interposed,  within  five  years  af-  arate  tracts  to  secure  distinct  sums, 

ter  the  date  of  such  sale.     2   G.   S.  though  consolidated  in  one  writing, 

1894,   §§   6054-6056;    2  G.   S.  1891,   §8  a  sale  of  all  the  tracts  together  for 

5262-5364.     See    Smith    v.    Buse,    35  a   gross   sum   is   irregular.     Hull   v. 

Minn.   234,   28   N.   W.   220;    Burke   v.  King,   38   Minn.    349,   37    N.   W.   792. 

Lacock,  41  Minn.  250,  42  .N.  W.  1016.  All   the   lots   may  be   advertised   by 

As    to    perpetuating   the   evidence  one  notice,  but  this  must  state  the 

of  notice  and  sale,  see  2  G.  S.  1894,  amount  due  on  each  lot.     Mason  v. 

§  6047;   G.  S.   1891,  §§  536.5-5370.     As  Goodnow,  41  Minn.  9,  42  N.  W.  482. 

to   foreclosure    by    foreign    executor  ''*  If    the    mortgage    be    foreclosed 

or   administrator,   see  2   G.   S.    1894,  for  more  than  is  actually  due,  tlie 

§   6053;    §§   5373-5375.     The  assignee  court  may,  upon  a  proper  showing, 

of  a  foreign  administrator  may  ex-  allow   the   mortgagor  to  redeem   on 

ercise  a  power  of  sale  contained  in  paying    what    was    justly    due;    but 

a  mortgage  without  filing  with  the  he    must    show    an    excuse   for   not 


697  STATUTORY    I'ROVISIONS    IX    THE    SEVERAL    STATES.    [§    17-J:3. 

made  for  real  property  sold  when  the  mortgage  foreclosed  contains 
a  distinct  rate  of  interest,  more  than  seven  per  cent,  per  annum, 
unless  the  part}^  entitled  to  redeem  shall  pay,  within  the  time  pro- 
vided, the  sum  for  which  said  property  was  sold,  together  witli 
interest  thereon  from  date  of  sale  to  the  time  of  redemption,  at 
the  rate  specified  in  the  mortgage,  not  to  exceed  10  per  cent,  per 
annum.  AVhen  no  rate  of  interest  is  specified  in  the  mortgage,  tlie 
rate  of  interest  after  sale  is  seven  per  cent,  per  annum  on  the 
amount  for  which  the  property  was  sold.'^^ 

Eedemption  is  made  as  follows:  The  person  desiring  to  redeem 
is  required  to  pay  to  the  person  holding  the  right  acquired  under 
such  sale,  or  for  him  to  the  sheriff!  who  made  the  sale,  or  his  suc- 
cessor in  office,  the  amount  required  by  law  for  such  redemption, 
and  to  produce  to  such  person  or  officer:  First,  a  certified  copy  of 
the  docket  of  the  judgment,  or  the  deed  of  conveyance  or  mortgage, 
or  of  the  record  or  files,  evidencing  any  other  lien  under  which  he 
claims  a  right  to  redeem,  certified  by  the  officer  in  whose  custody 
such  docket,  record,  or  files  shall  be;  second,  any  assignment  neces- 
sary to  establish  his  claim,  verified  by  the  affidavit  of  himself  or  the 
subscribing  witness  thereto,  or  of  some  person  acquainted  with  the 
signature  of  tlie  assignor;  third,  and  an  affidavit  of  himself  or  his 
agent,  showing  the  amount  then  actually  due  on  his  lien.'^°  The 
person  or  officer  from  whom  such  redemption  is  made  is  required 
to  make  and  deliver  to  the  person  redeeming  a  certificate  under 
his  hand  and  seal,  containing:  First,  the  name  of  the  person  re- 
deeming, and  the  amount  paid  by  him  on  such  redemption;  second, 

applying   to   the  court  before   fore-  "Within   twenty-four  hours  after 

closure  to  prevent  a  sale  for  more  such  redemption  is  made,  the  party 

than. was  due.     Dickerson  v.  Hayes,  redeeming    shall     cause    the     docu- 

26  Minn.  100,  1  N.  W.  834.  ments,   so  required   to  be  produced, 

A  junior  mortgagee  is  not  an  "as-  to  be  filed  in  the  office  of  the  reg- 

sign"    who    is    entitled    to    redeem  ister  of  deeds  of  the  county  in  which 

within   the   year.     Cuilerier  v.   Bru-  the    mortgaged    lands    are    situated, 

nelle,  37  Minn.  71,  33  N.  W.  123.  and  the   register  of  deeds  shall   in- 

•'  The  foreclosure  sale  attaches  dorse  thereon  the  date  and  hour  of 
this  condition  to  his  title — that  it  receiving  the  same:  provided  that  in 
will  pass  at  the  end  of  a  year  from  case  such  redemption  shall  be  made 
the  sale,  unless  he,  his  heirs,  exec-  at  any  place  other  than  the  county 
utors,  administrators,  or  assigns  re-  seat,  it  shall  be  deemed  a  sufficient 
deem.  Buchanan  v.  Reid,  43  Minn,  compliance  herewith  to  forthwith 
172,  45  N.  W.  11.  Redemption  after  deposit  such  documents  in  the  near- 
sale  can  be  exercised  only  as  pre-  est  post-office,  addressed  to  such 
scribed  by  statute.  Dickerson  v.  register  of  deeds,  with  the  postage 
Hayes,  2G  Minn.  100,  1  N  W.  834.  thereon  prepaid.  2  G.  S.  1894,  § 
A  purchaser  of  a  part  may  redeem  6042  et  seq.;  Supp.  to  Stats.  1888, 'eh 
the  whole  when  the  entire  tract  has  81,  §  14. 
been  '  sold  together.  O'Brien  v. 
Krenz,  36  Minn.  136,  30  N.  W.  458. 


g    1744.]       POWER  OF  SALE  MORTGAGES  AND  TRUST  DEEDS.  698 

a  description  of  the  Scale  for  which  such  redemption  is  made,  and 
of  the  property  redeemed;  and,  third,  stating  upon  what  claim  such 
redemption  is  made:  and,  if  upon  a  lien,  the  amount  claimed  to 
be  due  thereon  at  the  date  of  redemption.  Such  certificates  must 
be  executed  and  proved,  or  acknowledged  and  recorded,  as  pro- 
vided by  law  for  conveyances  of  real  estate ;  and  if  not  so  recorded 
within  ten  days  after  such  redemption,  such  redemption  and  cer- 
tificate are  void  as  against  any  person  in  good  faith  making  re- 
demption from  the  same  person  or  lien.  If  such  redemption  is 
made  by  the  owner  of  the  property  sold,  his  heirs  or  assigns,  such 
redemption  annuls  the  sale;  if  by  a  creditor  holding  a  lien  upon  the 
property  or  any  part  thereof,  said  certificate,  so  executed  and  proved, 
or  acknowledged  and  recorded,  operates  as  an  assignment  to  him  of 
the  right  acquired  under  such  sale,  subject  to  such  right  of  any 
other  person  to  redeem  as  is  or  may  be  provided  by  law.  If  no 
such  redemption  is  made,  the  senior  creditor  having  a  lien,"  legal 
or  equitable,  on  the  real  estate,  or  some  part  thereof,  subsequent  to 
the  mortgage,  may  redeem  within  five  days  after  the  expiration  of 
the  said  twelve  months;  and  each  subsequent  creditor  having  such 
lien,  within  five  days  after  the  time  allowed  all  prior  lien-holders 
as  aforesaid,  may  redeem  by  paying  the  amount  aforesaid,  and 
all  liens  prior  to  his  own  held  by  the  party  from  whom  redemption 
is  made.^®  But  no  creditor  is  entitled  to  redeem  unless,  within  the 
year  allowed  for  redemption,  he  files  notice  of  his  intention  to  re- 
deem in  the  office  of  the  register  of  deeds  where  the  mortgage  is  re- 
cordedJ^ 

§  1744.  Mississippi. — Power  of  sale  mortgages  and  trust  deeds 
are  in  use.  At  first  it  was  thought  that  the  power  could  not  be 
exercised  without  the  aid  of  a  court  of  chancery;^"  but  this  aid  was 

"  The  purchaser  at  the  foreclosure  for  instance,  a  second  mortgage,  to 
of  a  junior  mortgage  may,  within  it  for  the  purposes  of  redemption, 
the  year  from  the  foreclosure  sale,  must  place  himself  in  the  line  of 
redeem  from  the  foreclosure  of  a  redemptioners,  with  respect  to  such 
prior  mortgage  as  "a  creditor  hav-  subsequent  lien,  by  complying  witt- 
ing a  lien."  Buchanan  v.  Reid,  43  the  statute  followed.  Pamperin  v. 
Minn.  172,  45  N.  W.  11.  Scanlan,  28  Minn.  345,  9  N.  W.  868, 

The   purchaser   is   not  entitled   to  and    Parke   v.    Hush,    29   Minn.    434, 

the    rents    during   the   year    for   re-  13  N.  W.  668;  Buchanan  v.  Reid,  43 

demption.     Pioneer  Sav.  &  Loan  Co  Minn.  173,  45  N.  W.  11. 

V.  Farnham,  50  Minn.  315,  52  N.  W.  '"  For  proceedings  when  mortgage 

897;  McDowell  v.  Hillman,  50  Minn,  is   foreclosed   pending  an  action  by 

319,'  52  N.  W.  897.  the   mortgagor   for   redemption,   see 

'^The  holder  of  the  purchaser's  in-  Laws  1893,  ch.  82. 

terest   upon    a   foreclosure    sale,    in  **"  Ford   v.    Russell,    1   Freem.    Ch. 

order  to  tack  a  subsequent  lien,  as,  42. 


G99       STATUTORY  rHOVISIOXS  IX  THE  SEVERAL  STATES.  [§  1745. 

very  soon  dispensed  with,  and  sales  under  tlie  power  held  effectual 
to  bar  the  equity  of  redemption.**^ 

If  a  deed  of  trust,  or  mortgage  with  a  power  of  sale,  be  silent  as 
to  the  place  and  terms  of  sale  and  mode  of  advertising,  a  sale  may 
be  made  after  condition  broken,  for  cash,  upon  such  notice  and  at 
such  time  and  place  as  is  required  for  sheriff's  sale  of  like  property, 
tliat  is,  at  the  court-house  of  the  county,  on  the  first  Monday  of 
any  month,  or  on  the  first  ]\Ionday  or  Tuesday  of  the  term  of  the 
circuit  court  of  the  coimty,  and  shall  be  advertised  in  a  newspa- 
per published  in  the  county  once  in  each  week  of  three  successive 
weeks, '^^ 

Under  the  act^^  providing  that  sales  under  deeds  of  trust  by  sub- 
stituted trustees  shall  not  convey  the  title  of  the  grantor  until  the 
substitution  appears  of  record,  the  writing  appointing  the  substi- 
tuted trustee  must  be  of  record  before  a  valid  sale  under  the  deed  of 
trust  can  be  made  by  him.^* 

§  1745.  Missouri. — A  deed  of  trust  is  the  usual  form  of  giving 
security  upon  real  estate;  but  a  mortgage  with  a  power  of  sale  in 
the  mortgagee  or  his  agent  is  a  form  of  security  often  used,  and 
has  been  repeatedly  recognized  by  the  courts  as  valid.  Such  a 
power  may  be  conferred  upon  a  county  as  mortgagee,  and  may  be 
enforced  by  it.^^  Deeds  of  trust  in  the  nature  of  mortgages,  at  the 
option  of  the  cestuis  que  trust,  their  executors,  or  administrators, 
or  assigns,  may  be  foreclosed  by  them,  and  the  property  sold  in  the 
same  manner,  in  all  respects,  as  in  the  case  of  mortgages;^*'  and  all 
real  estate  which  may  be  sold  by  the  trustees,  or  any  one  represent- 
ing them  in  any  deed  of  trust,  according  to  the  terms  of  said  deed, 
without  the  said  deed  of  trust  having  been  first  foreclosed,  and 
which  shall  be  bought  in  at  said  sale  by  the  cestui  que  trust  or  his 
assignee,  or  by  any  other  person  for  them  or  either  of  them,  shall 
be  subject  to  redemption  by  the  grantor  in  said  deed,  or  his  execu- 
tors, administrators,  or  assigns,  at  any  time  within  one  year  from 
the  date  of  said  sale,  on  payment  of  the  debt  and  interest  secured 
by  said  deed  of  trust,  and  all  legal  charges  and  costs  incurred  in 

'^^  Sims  V.  Hundly,  3  Miss.  896.  ^'  Laws  1896,  105. 

'"'Annot.  Code,  1892,  §§  2484,3484-  "^  Wlaite  v.  Jenldns,  79  Miss.  57,  28 

3486.     This    statute    does    not    apply  So.  570. 

when  the  deed  authorizes  the  trustee  -^  Mann  v.  Best,  62  Mo.  491,  495. 

to  sell  "at  Jackson  or  any  suitable  '^'■•2  R.  S.  1889,  §S  7079,  7080,  7091- 

place,"   after  giving  a  specified  no-  7093;    1    R.    S.    1899,    §S    4343,    4344, 

tice.     Williams  v.  Dreyfus,  79  Miss.  4355.     "Deeds  of  trust  as  used  in  this 

245,    30    So.    633;    Goodman    v.    Du-  State    are    of    comparatively    recent 

rant  Build.   &   Loan  Asso.   71   Miss,  origin."    McKnight  v.  Wimer,  38  Mo. 

310,  14  So.  146.  132. 


1745.]       POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS. 


700 


making  said  sale  up  to  the  time  of  redemption;  and  at  such  sale 
the  purchaser  shall  receive  a  certificate  of  purchase,  setting  forth 
the  property  sold  and  amount  of  purchase-money  received,  which 
certificate  shall  be  delivered  to  the  trustee,  upon  the  application  for 
a  deed,  at  the  expiration  of  twelve  months.  No  party  shall  have 
the  benefit  of  the  right  of  redemption  so  provided  until  he  shall 
have  given  security  to  the  satisfaction  of  the  circuit  court  for  the 
payment  of  the  interest  to  accrue  after  the  sale,  and  for  all  damages 
and  waste  that  may  be  occasioned  or  permitted  by  the  party  whose 
property  is  sold.^'^ 

Mortgages  with  powers  of  sale  in  the  mortgagee,  and  sales  made 
in  pursuance  of  them,  are  valid  and  binding  upon  the  mortgagors 
and  all  persons  claiming  under  them,  and  forever  foreclose  all  right 
and  equity  of  redemption  of  the  property  sold.  But  the  right  of  a 
tenant  to  the  growing  and  unharvested  crops  on  land  foreclosed, 
to  the  extent  of  his  interest  under  his  lease,  shall  not  be  affected  in 
any  way.^^ 

All  sales  of  real  estate  under  a  power  of  sale  contained  in  any 
mortgage  or  deed  of  trust  shall  be  made  in  the  county  where  the 
land  to  be  sold  is  situated,  and  not  less  than  twenty  days'  notice 
of  such  sale  shall  be  given,  whether  so  provided  in  such  mortgage 
or  deed  of  trust  or  not.  Such  notice  shall  set  forth  the  date,  and 
book,  and  page  of  the  record  of  such  mortgage  or  deed  of  trust,  the 
grantors,  tlie  time,  terms,  and  place  of  sale,  and  a  description  of  the 
property  to  be  sold,  and  shall  be  given  by  advertisement  inserted 
for  at  least  twenty  times,  and  continued  to  the  day  of  sale,  in  some 
daily  newspaper  in  counties  having  cities  of  twenty  thousand  inhab- 
itants or  more,  and  in  all  other  counties  such  notice  shall  be  given 
by    advertisement    in    some    weekly    newspaper    published    in    such 

"  A    reasonable    time    is    allowed  should    be    diligent   and    prompt   in 

for  giving   the   security.     If  this   is  taking    steps    to    secure    the    right, 

not    done    within    such    reasonable  and  should  notify  the  trustee  on  the 

time    the  right  to   redeem  is  gone,  day  of  sale  of  his  intention  to  give 

or  rather  does  not  spring  into  ex-  the  security;    otherwise  the  trustee, 

istence,   and  the  trustee  may  prop-  in  the  discharge  of  his  duty,  could 

erly  make  a  deed,  instead  of  giving  make     a     deed     to     the     purchaser, 

a  certificate  of  sale.     A  bond  given  These   views    were    declared    m    the 

four    months   after   the    sale   is   not  recent  case  of  Van  Meter  v.  Darrah, 

in   time  to  secure  the   right   of  re-  115  Mo.  153,  22  S.  W.  30.     But  after 

demption.     Updike    v.    Elevator    Co.  giving  such   notice   a   delay   of  two 

96  Mo   160   8  S.  W.  779.     This  ruling  days  in  giving  the  security  does  not 
was  adhered  to  in  Dawson  v.  Egger,  affect  the  right  of  redemption     God- 

97  Mo.  36,  11  S.  W.  61,  in  which  the  frey  v.  Stock,  116  Mo.  403,  22  b.  W. 
facts  show  that  the  sale  was  made  733. 

September  15th,  and   the  bond   was        >*«  Laws  1893,  p.  210;   1  K.  b.  isaa, 
not  given  until  the  28th  of  Novem-     §  4355. 
ber.     The  person  entitled  to  redeem 


701      STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES,       [§§    1746-1749. 

county  for  three  successive  weeks,  the  hist  insertion  to  be  not  more 
than  .one  week  prior  to  the  day  of  sale;  and  if  there  be  no  news- 
paper published  in  such  county  or  city,  such  notice  shall  be  pub- 
lished in  the  nearest  newspaper  thereto  in  this  State;  but  the  giving 
of  any  shorter  notice  than  that  required  by  such  mortgage  or  deed 
of  trust  is  not  authorized. 

Whenever  any  real  estate  within  this  State  shall  have  been  or 
shall  hereafter  be  sold  by  any  trustee  or  mortgagee,  or  sheriff  or 
other  person  acting  as  trustee,  under  a  power  of  sale  given  in  any 
mortgage  or  deed  of  trust,  the  recitals  in  the  trustee's  or  mortgagee's 
deed  concerning  the  default,  advertisement,  .sale,  or  receipt  of  the 
purchase-money,  and  all  other  facts  pertinent  •  thereto,  shall  be  re- 
ceived as  prima  facie  evidence  in  all  courts  of  the  truth  thereof.**^ 

§  1746.  Montana. — A  power  of  sale  in  a  mortgage  or  deed  of 
trust  is  valid  and  may  be  exercised. '*°  When  a  mortgage  confers  a 
power  of  sale,  either  upon  the  mortgage  or  any  other  person,  to  be 
executed  after  a  l:»reach  of  the  obligation  for  which  the  mortgage  is 
a  security,  either  an  action  may  be  maintained  to  foreclose,  or  pro- 
ceedings ma}^  be  had  under  the  provisions  of  the  mortgage. ^^ 

§  1747.  Nebraska. — Power  of  sale  mortgages  and  trust  deeds 
can  be  foreclosed  only  by  action,  as  other  mortgages  are.^^ 

§  1748.  Nevada. — Power  of  sale  mortgages  and  trust  deeds  are 
not  in  general  use,  foreclosure^^  by  action  being  almost  universally 
the  remed3^     But  a  power  of  sale  without  foreclosure  is  operative.^* 

§  1749.  New  Hampshire. — Power  of  sale  mortgages  and  trust 
deeds  are  valid,  though  not  much  used  previous  to  the  recent  statutes."^ 

When  a  power  of  sale  is  contained  in  a  mortgage  and  a  conditional 
judgment  is  entered,  the  demandant  may,  instead  of  a  writ  of  pos- 
session, have  a  decree  entered  that  the  property  be  sold  pursuant  to 
such  power,  and  thereupon  the  demandant  shall  give  such  notices 
and  do  all  such  acts  as  are  authorized  and  required  by  the  power  or 
by  the  court  in  its  decree.     The  party  selling  shall  within  ten  days 

^'R.  S.  1899,  §  4371;   R.  S.  1889,  §  Neb.    386;    Comstock  v.    Michael,   17 

7103.     For  compensation  of  trustees  Neb.  288,  298,  22  N.  W.  549;  Wheeler 

selling  under  trust  deeds,  see  R.  S.  v.  Sexton,  34  Fed.  154. 

1899,  J  43G9;  R.  S.  1889,  §§  7101,  7102.  »'' §   1348. 

*»  First  Nat.  Bank  v.  Bell  S.  &  C.  "*  Evans  v.   Lee,   11  Nev.   194. 

Min.  Co.  8  Mont.  32,  19  Pac.  403.  "'  §    1749.     Very  v.   Russell,  65   N. 

"^2  Code  &  Stats.  1895,  Code  Civ.  H.    646,   23   Atl.    522.     Perley,   J.,   in 

Pro.  §  1293.  Bell   v.   Twilight,   22  N.   H.   500,   515, 

"'Webb  V.   Hoselton,   4   Neb.    308;  had  expressed  a  doubt  of  the  validity 

19  Am.  Rep.  638;  Hurley  v.  Estes,  6  of  such  mortgages. 


§    1750,    1751.]       POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.    702 

after  the  sale  make  the  court,  under  oath,  a  report  of  the  sale  and 
of  his  doings,  and  tile  the  same  in  the  clerk's  office,  and  the  same  may 
be  confirmed  and  allowed,  or  set  aside  and  new  sale  ordered,  as  to 
the  court  scorns  just  and  lawful.  Any  person  interested  may  in- 
tei-vcne  or  be  summoned  and  heard  on  such  proceedings,  and  the 
order  of  the  court  confirming  the  sale  shall  be  conclusive  evidence 
as  against  aJl  persons,  that  the  power  was  duly  executed. 

Instead  of  such  suit  and  decree  of  sale  the  mortgagee  or  person 
having  his  estate  in  the  premises,  or  any  person  authorized  by  the 
power  of  sale,  may,  upon  breach  of  the  condition,  give  such  notices 
and  do  all  such  acts  as  are  authorized  or  required  by  the  power; 
but  no  sale  under  and  by  virtue  of  a  power  of  sale  in  a  mortgage 
of  real  estate  shall  be  valid  and  effectual  to  foreclose  such  mort- 
gage, unless  previous  to  such  sale  notice  thereof  has  been  published 
once  a  week  for  three  successive  weeks  in  some  newspaper,  if  there 
is  any,  published  in  the  city  or  town  where  the  mortgaged  premises 
or  some  part  thereof  is  situated,  and  if  no  newspaper  is  published 
in  such  city  or  town,  then  in  some  newspaper  published  in  the  town 
in  which  the  registry  of  deeds  for  the  county  is  situated,  the  first 
publication  of  such  notice  in  either  case  to  be  not  less  than  twenty- 
one  days  before  the  day  of  sale.'"' 

§  1750.  New  Jersey. — Power  of  sale  mortgages  and  trust  deeds 
are  unusual,  but  sales  made  by  virtue  of  the  powers  in  these  instru- 
ments are  fully  sustained  .^^ 

§  1751.  New  York."** — A  mortgage  containing  a  power  to  the 
mortgagee  or  any  other  person  to  sell  the  mortgaged  property, 
upon  default,  may  be  foreclosed  in  the  manner  hereafter  prescribed 
where  the  following  requisites  concur:  1st.  Default  has  been  made 
in  a  condition  of  the  mortgage  whereby  the  power  to  sell  has  be- 

'"  Acts  1899,  ch.   19,  P.  S.  1901,  ch.  To   make  a  sale   valid   under  the 

139,  §§  1-5.     '  statute  it  must  be  strictly  followed, 

'"Clark  v.  Condit,  18  N.  J.  Eq.  358.  as  the  effect  of  it  is  to  deprive  the 

"^  Bliss'  Code  of  Civil  Procedure  holder  of  the  equity  of  his  title, 
of  1890,  S§  2387-2400,  2424.  Bliss'  Sherwood  v.  Reade,  7  Hill,  431,  re- 
Code  of  Civil  Pro.  1902,  §§  2387-  versing  8  Paige,  633;  Hubbell  v.  Sib- 
2404.  ley,  5  Lans.  51;   Cohoes  Co.  v.  Goss, 

Tliese  provisions  do  not  apply  to  13  Barb.  137.     If  the  power  contains 

mortgages    made    upon    real    estate  provisions  inconsistent  with  statute, 

not  situated  in  this  State.    So  far  as  as  by  providing  for  a  private  sale, 

concerns     the    jurisdiction    of    this  the  statute  regulations  must  be  fol- 

State,  the  parties  may  agree  in  such  lowed.   Lawrence   v.    Farmers'   Loan 

mortgages  upon  such  terms  of  sale  &  Trust  Co.  13  N.  Y.  200.     The  pro- 

under    the    power    as    they    please,  ceedings  must  be  had  in  the  name  of 

Elliott  V.  Wood,  45  N.  Y.  71,  53  Barb  the  actual   holder  of  the  mortgage. 

9g5  Cohoes   Co.    v.   Goss,    13   Barb.    137. 


703       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES,  [g  1751. 

come  operative.  2(1.  An  action  lias  not  been  brought  to  recover  tlie 
debt  secured  by  the  mortgage  or  any  part  thereof;  or,  if  sucli  an 
action  has  been  brought,  it  has  been  discontinued,  or  final  judgment 
has  been  rendered  therein  against  the  plaintiff,  or  an  execution 
issued  upon  a  judgment  rendered  therein  in  favor  of  the  plaintiff 
has  been  returned  wholly  or  partly  unsatisfied,  od.  Tlie  mortgage 
has  been  recorded  in  the  proper  book  for  recording  mortgages  in 
the  county  wherein  the  property  is  situated.^'' 

The  person  entitled  to  execute  the  power  of  sale  must  give  notice 
in  the  following  manner  that  the  mortgage  will  be  foreclosed  bv  a 
sale  of  the  mortgaged  property,  or  a  part  thereof,  at  a  time  and 
place  specified  in  the  notice :  1st.  A  copy  of  the  notice  must  be  pub- 
iished  at  least  once  in  each  of  the  twelve  weeks^°°  immediately  pre- 
ceding the  day  of  sale,  in  a  newsj^aper  published  in  the  county 
wherein  the  property  to  be  sold,  or  a  part  thereof,  is  situated. ^"^ 
2d.  A  copy  of  the  notice  must  be  fastened  up,  at  least  eighty-four 
days  before  the  day  of  sale,  in  a  conspicuous  place  at  or  near  the 
entrance  of  the  building  where  the  county  court  of  each  county 
wherein  the  property  to  be  sold  is  situated  is  directed  to  be  held;^°- 
or,  if  there  are  two  or  more  such  buildings  in  the  same  county,  then 
in  a  like  place  at  or  near  the  entrance  of  the  building  nearest  to  the 
property;  or,  in  the  city  or  county  of  New  York,  in  a  like  place  at 
or  near  the  entrance  of  the  building  where  the  court  of  common 
pleas  for  that  city  and  county  is  directed  by  law  to  be  held.  3d.  A 
copy  of  the  notice  must  be  delivered  at  least  eighty-four  days  be- 
fore the  day  of  sale,  to  the  clerk  of  each  county  wherein  the  mort- 
gaged property  or  any  part  thereof  is  situated.     4th.  A  copy  of  the 

^'  Where  judgment  was  recovered  tion  is  eighty-five  days,  and  the  last 

on  a   debt  payable   by   instalments,  eight  days,  before  the  sale.     Howard 

and  execution  was  issued  on  the  first  v.  Hatch,  29  Barb.  297.     If  the  first 

instalment  but  afterwards  satisfied,  publication  be  defective,  there  may 

it  was  held  that  there  could  be  no  be  a  republication  for  the  required 

statute  foreclosure  on  a  second  in-  time.      Cole   v.    Moffit,    20   Barb.    18. 

stalment    for    which    no    execution  The    publication    is    a    good    service 

had  been  issued.     Grosvenor  v.  Day,  upon  an  unknown  party  though  an 

Clarke,  109.  infant.     Wheeler  v.  Scully,  50  N.  Y. 

If    the    premises    are    situated    in  667. 
more  than  one  county,  the  mortgage        '"'  In   New   York    City,    under    au- 

must  be  recorded  in  each.     Wells  v.  thority  of  an  act  passed  in  1874,  ch. 

Wells,  47  Barb.  416.     The  recording  656,  the  Daily  Register  has  been  des- 

Is  for  the  benefit  of  the  purchaser,  ignated  by  the  judges  of  the  courts 

and  objection  cannot  be  made  by  tHe  of  record  as  the  paper  in  which  legal 

mortgagor.    Wilson  v.  Trouo.  2  Cow.  notices  are  to  be  published. 
195,    14    Am.    Dec.    458;    Jackson    v.        ^"- If  the  land  lies  in  several  coun- 

Colden,  4  Cow.  2G6.  ties,    the   notice   must  be   posted   in 

^"^  A  publication  once  in  each  week  each    county.      Wells    v.    Wells,    47 

is  sufficient,  though  the  first  publica-  Barb.  416. 


§    1751.]       POWER   OF    SALE    MORTGAGES   AXD   TRUST   DEEDS.  704 

notice  must  be  served  as  prescribed  in  the  next  section  upon  the 
mortgagor,  or,  if  he  is  dead,  upon  his  executor  of  administrator.^"^ 
A  copy  of  the  notice  may  also  be  served  in  like  manner  upon  a  sub- 
sequent grantee^"'*  or  mortgagee  of  the  property,  whose  conveyance 
was  recorded  in  the  proper  office  for  recording  it  in  the  county,  at 
the  time  of  the  first  publication  of  the  notice  of  sale,^*^  upon  the 
wife  or  widow  of  the  mortgagor,  and  the  wife  or  widow  of  each 
subsequent  grantee,  whose  conveyance  was  so  recorded,  then  having 
iin  inchoate  or  vested  right  of  dower,  or  an  estate  in  dower,  subor- 
dinate to  the  lien  of  the  mortgage  ;^''^  or  upon  any  person  then 
having  a  lien  upon  the  property  subsequent  to  the  mortgage  by  vir- 
tue of  a  judgment  or  decree  duly  docketed  in  the  county  clerk's 
office,  and  constituting  a  specific  or  general  lien  upon  the  property.^*'^ 
The  notice  specified  in  this  section  must  be  subscribed  by  the  per- 
son entitled  to  execute  the  power  of  sale,  unless  his  name  distinctly 
appears  in  the  body  of  the  notice,  in  which  case  it  may  be  sub- 
scribed by  his  attorney  or  agent. 

Service  of  notice  of  the  sale,  as  prescribed  in  subdivision  fourth 
of  the  last  section,  must  be  made  as  follows:  1st.  Upon  the  mort- 
gagor, his  wife,  widow,  executor,  or  administrator,  or  a  subsequent 
grantee  of  the  property  whose  conveyance  is  upon  record,  or  his 
wife  or  widow,  by  delivering  a  copy  of  the  notice,  as  prescribed  for 

^°^  Notice  should  be  given  to   the  notice.     Raynor  v.  Raynor,  21  Hun, 

executor  or  administrator,  not  to  the  36. 

heirs  or  devisees.    Anderson  v.  Aus-  '°^  In  case  the  mortgage  was  exe- 

tin,   34  Barb.  319;    Low  v.  Purdy,  2  cuted  by  husband  and  wife,  the  no- 

Lans.  422.  tice  of  sale  after  the  death   of  the 

^°*  An    assignee    in    bankruptcy    is  husband  must  be  served  on  the  wife 

such  a  grantee.     Ostrander  v.  Hart,  as  surviving  mortgagor,  though  not 

130  N.  Y.  406,  30  N.  E.  504.  necessary  to  bar  her  dower  in  a  pur- 

^"=  An  assignee  of  a  junior   mort-  chase-money     mortgage.       King     v. 

gage  is  entitled  to  notice.     Winslow  Duntz,  11  Barb.  191.    And  see  Brack- 

V.    McCall,    32   Barb.    241;    Wetmore  ett  v.  Baum,  50  N.  Y.  8.     "Personal 

v.  Roberts,  10  How.  Pr.  51.  representatives"  means  executors  or 

Only  such  mortgagees  or  assignees  administrators,  and  not  heirs.     An- 

whose  mortgages  or  assignments  are  derson  v.  Austin,  34  Barb.  319;   Low 

recorded     are     entitled     to     notice,  v.  Purdy,  2  Lans.  422. 

Decker  v.  Boice,  19  Hun,  152.  '"'  The  lien  of  a  judgment  perfect- 

A  party  in  interest  who  is  not  ed  after  the  first  publication  of  no- 
served  with  notice  is  not  affected  or  tice,  and  before  sale,  is  not  cut  off 
barred  by  the  sale.  Wetmore  v.  Rob-  unless  notice  is  served  upon  the 
erts,  10  How.  Pr.  51;  Root  v.  Wheel-  judgment  creditor  as  here  provided, 
er,  12  Abb.  Pr.  294;  Northrup  v.  Groff  v.  Morehouse,  51  N.  Y.  503. 
Wheeler,  43  How.  Pr.  122.  See,  also,  Klock  v.  Cronkhite,  1  Hill, 

If  the  owner  of  the  equity  of  re-  107;    Winslow   v.    McCall,    32    Barb, 

demption  be  not  served  with  notice,  241.     Though  one  judgment  creditor 

qurere,    whether    the    foreclosure    is  has  no  notice,  the  sale  is  not  there- 

not  a  nullity  as  to  all  parties.    Mick-  fore    invalidated    as    to    others    who 

les  V.  Dillaye,  15  Hun,  296.     It  is  so  were  served  with  notice.    Hubbell  v. 

as  to   the  persons  not  served   with  Sibley,  5  Lans.  51. 


705       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1751. 

delivery  of  a  copy  of  a  summons,  in  order  to  make  personal  service 
thereof  upon  tlie  person  to  be  served;  or  by  leaving  such  a  copy, 
addressed  to  the  person  to  be  served,  at  his  dwelling-house,  with  a 
person  of  suitable  age  and  discretion,  at  least  fourteen  days  before 
the  day  of  sale.  If  said  mortgagor  is  a  foreign  corporation,  or, 
being  a  natural  person,  he,  or  his  wife,  wddow,  executor,  or  admin- 
istrator, or  a  subsequent  grantee  of  the  property  whose  conveyance 
is  upon  record,  or  his  wife  or  widow,  is  not  a  resident  of  or  within  the 
State,  then  service  thereof  may  be  made  upon  them,  in  like  manner 
without  the  State  at  least  twenty-eight  days  prior  to  the  day  of 
sale.  2d.  Upon  any  other  person  either  in  the  same  method,  or  by 
depositing  a  copy  of  the  notice  in  the  post-office,^"^  properly  enclosed 
in  a  postpaid  wrapper,  directed  to  the  person  to  be  served,  at  his 
place  of  residence,  at  least  twenty-eight  days  before  the  day  of 
sale."" 

A  county  clerk  to  whom  a  copy  of  a  notice  of  sale  is  delivered,  as 
prescribed  in  subdivision  third  of  the  last  section  but  one,  must 
forthwith  affix  it  in  a  book  kept  in  his  office  for  that  purpose ; 
must  make  and  subscribe  a  minute,  at  the  bottom  of  the  copy,  of 
the  time  when  he  received  and  affixed  it;  and  must  index  the  notice 
to  the  name  of  the  mortgagor. 

The  notice  of  sale  must  specify:^"  1st.  The  names  of  the  mort- 
gagor, of  the  mortgagee,  and  of  each  assignee  of  the  mortgage."^ 

^"^  The   notice   may   be    mailed   at  ders,  32  Hun,  515.    Service  upon  one 

any  place  in  the  State.     Stanton  v.  named  in  a  will  as  executor  is  suffl- 

Kline,  11  N.  Y.  196;  Bunce  v.  Reed,  cient,  though  letters  have  not  been 

16  Barb.  347.    The  twenty-eight  days  isued  to  him.    Van  Schaack  v.  Saun- 

are  to  be  counted  from  the  time  of  ders,  32  Hun,  515. 

aeposit    in    the    post-office,    without  The  three  modes  of  giving  notice 

reference   to   the   mailing.     Hornby  must   be   used   together.     If  one  of 

V.  Cramer,  12  How.  Pr.  490.     A  mis-  them  b-   omitted  the  foreclosure  is 

take    in    addressing    a    party    at    a  void.     Cole  v.   Moffitt,  20  Barb.   18; 

place  other  than  his  residence  ren-  Stanton  v.   Kline,  16  Barb.  9;    King 

ders  the  sale  void  as  to  him.     Rob-  v.  Duntz,  11  Barb.  191;  Van  Slyke  v. 

inson  v.  Ryan,  25  N.  Y.  320.  Shelden,  9  Barb.  278;  Low  v.  Purdy. 

'""A  notice  addressed  to  A.  B.,  ad-  2  Lans.  422;    Mowry  v.  Sanborn,  62 

ministrator,     is     sufficient,     without  Barb.  223. 

naming  the  estate  of  the  deceased.  ^"^  It  need  not  state  that  the  mort- 

George  v.  Arthur,  2  Hun,  406,  4  T.  &  gage  will  be  foreclosed;  Leet  v.  Mc- 

C.  635.    If  it  does  not  appear,  except  Master,    51   Barb.    236;    or    that   the 

on  information  and  belief,  that  the  sale  is  for  the  purpose  of  foreclos- 

mortgagors  resided  at  the  place  to  ure.     Judd  v.  O'Brien,  21  N.  Y.  186. 

which    the    notices    were    addressed  "^  The    omission    by    the    mortga- 

and  mailed,  the  proceedinsrs  are  de-  gees  to  state  in  the  notice  the  name 

fective.     Mowry  v.  Sanborn,  7  Hun,  of  an  assignee  renders  the  sale  in- 

380.  valid,    though    the    assignment    was 

Notice  to  the  heirs  at  law  is  suffi-  not  recorded  and  the  omission  may 

cient   if   no   personal    representative  not    have    injured    the    mortgagor, 

is  appointed.    Bond  v.  Bond,  51  Hun,  Weir  v.  Birdsall,  50  N.  Y.  Supp.  275, 

507.     Contra,  Van  Schaack  v.  Saun-  27  App.  Div.  404. 


1751.]       POWER   OF    SALE    MORTGA(iES   AND   TRUST   DEEDS. 


70G 


2d.  The  date  of  the  mortgage,  and  the  time  when,  and  the  place 
where,  it  is  recorded.^^-  3d.  The  sum  claimed  to  be  due  upon 
the  mortgage  at  the  time  of  the  first  publication  of  the  notice;^" 
and,  if  any  sum  secured  by  the  mortgage  is  not  then  due,  the  amount 
to  become  due  thereupon.  4th.  A  description  of  the  mortgaged 
property  conforming  substantially  to  that  contained  in  the  mort- 
gage."* 

The  sale  may  be  postponed  from  time  to  time.  In  that  case  a 
notice  of  the  postponement  must  be  published  as  soon  as  practi- 
cable thereafter  in  the  newspaper  in  which  the  original  notice  was 
published;  and  the  publication  of  the  original  notice,  and  of  each 
notice  of  postponement,  must  be  continued  at  least  once  in  each 
week  until  the  time  to  which  the  sale  is  finally  postponed."^ 

The  sale  must  be  at  public  auction,"^  in  the  daytime,  on  a  day 
other  than  Sunday  or  a  public  holiday,  in  the  county  in  which  the 
mortgaged  property,  or  a  part  thereof,  is  situated;  except  that, 
when  the  mortgage  is  to  the  people  of  the  State,  the  sale  may  be 
made  at  the  capital.  If  the  property  consists  of  two  or  more  dis- 
tinct farms,  tracts,  or  lots,  they  must  be  sold  separately;  and  as 
many  only  of  the  distinct  farms,  tracts,  or  lots  shall  be  sold  as  it 
is  necessary  to  sell  in  order  to  satisfy  the  amount  due  at  the  time 
of  the  sale,  and  the  costs  and  expenses  allowed  by  law."^  But 
where  two  or  more  buildings  are  situated  upon  the  same  city  lot, 
and  access  to  one  is  obtained  through  the  other,  they  must  be  sold 
together. 

"=  The  place  of  record  is  sufficient-  inserted  by  mistake  merely,  and  a 
ly  specified  by  stating  the  clerk's  correction  is  published  with  the  no- 
office  and  the  date  of  record,  though  tice  before  it  could  be  presumed  that 
the  number  of  the  book  in  which  it  persons  wishing  to  bid  would  be 
is  recorded  is  erroneously  stated.  5  misled,  the  error  would  not  vitiate 
Waite's  Practice,  253;  Judd  v.  the  sale.  Such  an  error  was  the 
O'Brien,  21  N.  Y.  186,  188.  statement  of  a  prior  incumbrance  at 

"^  A  mistake  as  to  the  amount  due  twice  its  actual  amount.    Hubbell  v. 

does  not  invalidate  the  sale.     Klock  Sibley,  5  Lans.  51.    And  see  Klock  v. 

V.  Cronkhite,  1  Hill,  107;    Jencks  v.  Cronkhite,    1    Hill,    107;    Burnet    v. 

Alexander,   11    Paige,  619;    Bunce  v.  Denniston,  5  Johns.  Ch.  35,  42.     For 

Reed,  16  Barb.  347;   Mowry  v.  San-  form   of  notice,   see  5  Wait's   Prac. 

born,  62  Barb.  223.  254. 

If  only  a  part  of  the  debt  is  due,  it  "^  It  is  not  necessary  to  serve  no- 
is  well  to  state  both  the  amount  due  tice  of  postponement;  the  publica- 
and  the  whole  amount  also.  Jencks  tion  is  sufficient.  Westgate  v.  Hand- 
v.  Alexander,  11  Paige,  619,  626.  lin.  7  How.  Pr.  372. 

"*  The    statute    does    not    require  ""  A  private  sale,  though  expressly 

any  reference  in  the  notice  of  sale  authorized  by  the  mortgage,  would 

to    incumbrances.      If    matters    not  not   bar   the    equity   of   redemption, 

called  for  by  the  statute  are  stated,  Lawrence  v.  Farmers'  Loan  &  Trust 

which  are  calculated  to  mislead  the  Co.  13  N.  Y.  200,  642. 

public    and    prevent    persons    from  "'  See    Cox   v.    Wheeler,    7    Paige, 

bidding,  the  sale  will  be  void;  but  if  248. 


(07 


STATUTORY    I'UOVISIOXS    IX    TIIK   SEVERAL   STATES.     [§    1751. 


The  mortgagee,  or  liis  assignee,  or  the  legal  representative  of 
either,  may,  fairly  and  in  good  faith,  purchase  the  mortgaged  prop- 
erty, or  any  part  thereof,  at  the  sale. 

A  sale  made  and  conducted  as  prccsribed,  to  a  purchaser  in  good 
faith,  is  equivalent  to  a  sale  pursuant  to  judgment  in  an  action 
to  foreclose  the  mortgage,  so  far  only  as  to  be  an  entire  bar  of  all 
claim  or  equity  of  redemption,  upon,  or  with  respect  to,  the  property 
sold,  of  each  of  the  following  persons:  1st.  The  mortgagor,  his 
heir,  devisee,  executor,  or  administrator.  2d.  Each  person,  claim- 
ing under  any  of  them  by  virtue  of  a  title,  or  of  a  lien  by  judg- 
ment or  decree  subsequent  to  the  mortgage,  upon  whom  the  notice 
of  sale  was  served  as  prescribed  in  this  title."^  3d.  Each  person 
so  claiming,  whose  assignment,  mortgage,  or  other  conveyance  was 
not  duly  recorded  in  the  proper  book  for  recording  the  same  in  tlie 
county  or  whose  judgment  or  decree  was  not  duly  docketed  in  the 
county  clerk's  office  at  the  time  of  the  delivery  of  a  copy  of  the 
notice  of  said  sale  to  the  clerk  of  this  county,  and  the  executor, 
administrator,  or  assignee  of  such  a  person.  4th.  Every  other 
person  claiming  under  a  statutory  lien  or  incumbrance,  created  sub- 
sequent to  the  mortgage,  attaching  to  the  title  or  interest  of  any 
person  designated  in  either  of  the  foregoing  subdivisions  of  this 
section.  5th.  The  wife  or  widow  of  the  mortgagor,  or  of  a  sub- 
sequent grantee,  upon  whom  notice  of  the  sale  was  served  as  pre- 
scribed in  this  title,  where  the  lien  of  the  mortgage  was  superior  to 
her  contingent  or  vested  right  or  dower  or  her  estate  in  dower. 

An  affidavit  of  the  sale,  stating  the  time  when  and  the  place 
where  the  sale  was  made,  the  sum  bid  for  each  distinct  parcel 
separately  sold,  and  the  name  of  the  purchaser  of  each  distinct 
parcel,  may  be  made  by  the  person  who  officiated  as  auctioneer 
upon  the  sale.  An  affidavit  of  the  publication  of  the  notice  of 
sale,  and  of  the  notice  or  notices  of  postponement,  if  any,  may  be 
made  by  the  publisher  or  printer  of  the  newspaper  in  which  they 
were  published,  or  by  his  foreman  or  principal  clerk.  An  affidavit 
of  the  affixing  of  a  copy  of  the  notice,  at  or  near  the  entrjince 
of  the  proper  court-house,  may  be  made  by  the  person  Avho  so  af- 
fixed it,  or  by  any  person  who   saw  it  so   affixed,  at  least  eighty- 

"•*  Demarest  v.  Wynkoop,  3  Johns,  to  it,  a  sale  under  the  power  is  a  bar 
Ch.  129,  8  Am.  Dec.  467;  Mowry  v.  to  the  right.  It  may  be  regarded  as 
Sanborn.  G2  Barb.  223;  Klock  v.  claiming  under  him.  Brackett  v. 
Cronlvhite,  1  Hill,  107.  A  mortgage  Baum,  50  N.  Y.  8.  Notice  must  be 
for  the  purchase-money  not  being  served  upon  her.  Service  upon  her 
subject  to  the  dower  right  of  the  husband  alone  is  not  enough.  North- 
mortgagor's  wife,  though  not  a  party  rup  v.  Wheeler,  43  How.  Pr.  122. 


8    1751.]       POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS. 


708 


four  days  before  the  day  of  sale.  An  affidavit  of  the  affixing  of  a 
copy  of  the  notice  in  the  book  kept  by  the  county  clerk  may  be 
made  by  the  county  clerk,  or  by  any  person  who  saw  it  so  affixed, 
at  least  eighty-four  days  before  the  day  of  sale.""  An  affidavit  of 
the  service  of  a  copy  of  the  notice  upon  the  mortgagor,  or  upon  any 
other  person  upon  whom  the  notice  must  or  may  be  served,  may  be 
made  by  the  person  who  made  the  service.^^°  Where  two  or  more 
distinct  parcels  are  sold  to  different  purchasers,  separate  affidavits 
may  be  made  with  respect  to  each  parcel,  or  one  set  of  affidavits 
may  he  made  for  all  the  parcels. 

The  matters  required  to  be  contained  in  any  or  all  of  the  affida- 
vits specified  in  the  last  section  may  be  contained  in  one  affidavit, 
-vvhere  the  same  person  deposes  with  respect  to  them.  A  printed 
copy  of  the  notice  of  sale  must  be  annexed  to  each  affidavit,  and  a 
printed  copy  of  each  notice  of  postponement  must  be  annexed  to 
the  affidavit  of  publication  and  to  the  affidavit  of  sale. 

The  affidavits  specified  in  the  last  two  sections  may  be  filed  in 
the  office  for  recording  deeds  and  mortgages  in  the  county  where 
the  sale  took  place.  They  must  be  recorded  at  length  by  the  officer 
with  whom  they  are  filed,  in  the  proper  book  for  recording  mort- 
gages. The  original  affidavits  so  filed,  the  record  thereof,  and  a 
certified  copy  of  the  record,  are  presimiptive  evidence  of  the  mat- 
ters of  fact  therein  stated,  with  respect  to  any  property  sold  which 
is  situated  in  that  county.^-^     Where  the  property  sold  is  situated  in 

"» A  notice  once  affixed  is  pre-  notice,  though  he  be  the  purchaser, 
sumed  to  remain,  and  the  affidavit  Hubbell  v.  Sibley,  5  Lans.  51. 
may  be  made  by  one  who  saw  it  "'  The  affidavits  are  not  conclu- 
posted  twelve  weeks  prior  to  the  sive;  they  may  be  disproved.  Bunce 
sale.  It  is  not  necessary  that  he  v.  Reed,  16  Barb.  347;  Sherman  v. 
should  have  seen  it  each  week.  Willet,  42  N.  Y.  146;  Mowry  v.  San- 
Hornby  v.  Cramer,  12  How.  Pr.  490.  born,  62  Barb.  223,  72  N.  Y.  534. 

^-"  An  affidavit  on  inform.ation  and  For  form  of  affidavit  see  5  Wait's 
belief,  as  to  the  place  of  residence  Prac.  258,  261.  The  recording  of  the 
of  the  mortgagors,  to  whom  notice  affidavits  is  not  essential  to  the  pass- 
was  mailed,  is  sufficient,  in  the  ab-  ing  of  title.  Howard  v.  Hatch,  29 
sence  of  proof  that  they  did  not  re-  Barb.  297;  Frink  v.  Thompson,  4 
ceive  the  notices,  or  that  they  re-  Lans.  489,  overruling  the  dictum  in 
sided  elsewhere.  Mowry  v.  Sanborn,  Cohoes  Co.  v.  Goss,  13  Barb.  137; 
62  Barb.  223.  Such  affidavit  does  not  also  dictum  in  Tuthill  v.  Tracy,  31 
furnish  presumptive  evidence  of  ser-  N.  Y.  157.  See,  also.  Bryan  v.  Butts, 
vice,  but  other  evidence  is  competent  27  Barb.  503.  But  the  affidavits  must 
to  show  the  fact  of  service.  Youker  show  a  full  compliance  with  the 
V.  Treadwell,  4  N.  Y.  Supp.  674.  statute;   and  the  omission  of  a  fact 

Insufficiency   of   service   of  notice  which    the    statute    requires    to    be 

renders  the  sale  invalid  only  as  to  shown   by   affidavit   cannot  be  sup- 

the  party  without  notice.    Youker  v.  plied    by   amendment   of   it,   though 

Treadwell,  4  N.   Y.  Supp.  674.     The  perhaps     new     affidavits    might    be 

holder  of  the  mortgage  may  give  the  filed.     Dwight  v.  Phillips,  48  Barb. 

116. 


709       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1751. 

two  or  more  counties,  a  copy  of  the  affidavits  certified  by  the  officer 
with  whom  the  originals  are  filed  may  be  filed  and  recorded  in  each 
other  county  wherein  any  of  the  property  is  situated.  Thereupon 
the  copy  and  the  record  thereof  have  the  like  efi'ect,  with  respect 
to  the  property  in  that  county,  as  if  the  originals  were  duly  filed 
and  recorded  therein. 

A  clerk  or  register  who  records  any  affidavits  or  a  certified  copy 
thereof,  filed  with  him,  must  make  a  note  upon  the  margin  of  the 
record  of  the  mortgage  in  his  office,  referring  to  the  book  and  page, 
or  the  copy  thereof,  where  the  affidavits  are  recorded. 

The  purchaser  of  the  mortgaged  premises  upon  a  sale  conducted 
as  prescribed  in  this  title  obtains  title  thereto  against  all  persons 
bound  by  the  sale,  without  the  execution  of  a  conveyance.^^-  Ex- 
cept where  he  is  the  person  authorized  to  execute  the  power  of 
sale,  such  a  purchaser  also  obtains  title  in  like  manner  upon  pay- 
ment of  the  purchase-money,  and  compliance  with  other  terms  of 
sale,  if  any,  without  the  filing  and  recording  of  the  affidavits  pre- 
scribed. But  he  is  not  bound  to  pay  the  purchase-money  until 
the  alfidavits  specified  in  that  section,  with  respect  to  the  property 
purchased  by  him,  are  filed  or  delivered,  or  tendered  to  him  for 
filing. 

An  attorney  or  other  person,  who  receives  any  money  arising 
upon  a  sale  made  as  prescribed  in  this  title,  must,  within  ten  days 
after  he  receives  it,  pay  into  the  Supreme  Court  the  surplus  exceed- 
ing the  sum  due  and  to  become  due  upon  the  mortgage,  and  the 
costs  and  expenses  of  the  foreclosure,  in  like  manner  and  with  like 
ellect  as  if  the  proceedings  to  foreclose  the  mortgage  were  taken  in 
an  action  brought  in  the  Supreme  Court  and  triable  in  the  county 
where  the  sale  took  place.^-^ 

'"Jackson  v.  Golden,  4  Cow.  266;  But  if  the  mortgagee  receive  the 

Slee  V.  Manhattan  Co.  1  Paige,  48.  surplus,   he   is   liable  to   subsequent 

The  affidavits  in  such  case  stand  lien-holders,  though  not  for  interest 

in  place  of  a  deed,  and  are  conclu-  on  it  until  demand.     Russell  v.  Duf- 

sive  as  against  the  mortgagor  and  Ion,  4  Lans.  399;   Bevier  v.  Schoon- 

those    claiming    under    him.      Arnot  maker,   20    How.    Pr.    411.      Code   of 

v.  McClure,  4  Denio,  41;  Cohoes  Co.  Civil   Procedure   1880,    §§    2401-2403; 

V.  Goss,  13  Barb.  137,   144;   Layman  Laws  N.  Y.  1880,  pp.  312,  313. 

V.  Whiting,  20  Barb.  559;  Mowry  v.  The  following  costs  are  allowed  in 

Sanborn,  68  N.  Y.  153.  proceedings   taken   as   prescribed   in 

'-^  The    mortgagee    himself    is    not  the  title:  1st.     For  drawing  a  notice 

responsible  to  subsequent  lien  cred-  of  sale,  a  notice  of  the  postponement 

itors  for  a  surplus  left  in  the  hands  of  a  sale,   or  an  affidavit,   made  as 

of  a  purchaser.     Russell   v.   Duflon,  prescribed    in    this    title,    for    each 

4  Lans.  399.     For  proceedings  in  re-  folio,  twenty-flve  cents;  for  making 

lation  to  surplus,  see  5  Wait's  Prac.  each    necessary    copy    thereof,    for 

264.                  .  each  folio,  thirteen  cents.     2d.  For 


§  1752,  1752a.]   power  of  sale  mortgages  and  trust  deeds.   710 

§  1752.  North  Carolina. — Power  of  sale  mortgages  "have  long 
been  in  general  use  unquestioned."^-*  Deeds  of  trust  are  also  in 
use.  It  is  provided  that  upon  the  death  of  the  mortgagee  all  his 
rights,  powers,  and  duties  shall  devolve  upon  his  executor  or  ad- 
ministrator.^^^  The  sale,  whether  advertised  in  some  paper  or  other- 
wise, shall  also  be  advertised  by  posting  a  notice  in  some  conspic- 
uous place  at  the  court-house  door  in  the  county  where  the  prop- 
erty is  situated,  such  notice  to  be  posted  for  at  least  twenty  days 
before  the  sale,  unless  a  shorter  time  be  expressed  in  the  con- 
tract.i2° 

§  1752a.  North  Dakota^"  and  South  Dakota.^'^— A  power  of  sale 
may  be  conferred  by  a  mortgage  upon  the  mortgagee  or  any  other 
person,  to  be  exercised  after  a  breach  of  the  obligation  for  which 
the  mortgage  is  a  security.  The  power  is  a  part  of  the  security, 
and  passes  by  an  assignment.  Such  power  of  sale  is  a  trust,  and 
can  be  executed  only  in  the  manner  prescribed.  Before  a  foreclosure 
can  be  made  by  advertisement  a  default  must  have  occurred,  and 
it  is  further  requisite  that  there  be  no  suit  pending  for  the  recovery 
of  the  debt;  that  any  execution  that  may  have  been  rendered  shall 
have  been  returned  unsatisfied;  and  that  the  mortgage  and  any  as- 
signment of  it  shall  have  been  recorded.     Each   instalment  of   the 

serving  each  copy  of  the  notice  of  expense  of  any  person  interested  in 

sale  required  or  expressly  permitted  the  payment  thereof.     Each  provis- 

to  be  served   by  this  title,   and  for  ion  of  this  act  relating  to  the  taxa- 

afflxing  each   copy   thereof  required  tion  of  costs  in  the  Supreme  Court 

to  be  affixed  upon  the  court-house,  and    the    review    thereof   applies    to 

as  prescribed  in  this  title,  one  dollar,  such  a  taxation. 

3d.  For  superintending  the  sale  and  '-*  Hyman   v.    Devereux,    63    N.    C. 

attending    to    the    execution    of    the  624,  628;   Blount  v.  Carroway,  67  N. 

necessary  papers,  ten  dollars.  C.  396;   Paschal  v.  Harris,  74  N.  C. 

The  sums  actually  paid  for  the    fol-  335;    Olcott  v.  Bynum,  17  Wall.   44. 

lowing   services,    not    exceeding   the  A    "stay    law,"    providing    that    no 

fees  allowed  by  law  for  those  ser-  property  should  be  sold  under  a  deed 

vices,    are    allowed    in    proceedings  of  trust  or  mortgage  until  the  debts 

taken    as    prescribed    in    this    title:  secured  in  the  deed  are  reduced  to 

1st.    For    publishing    the    notice    of  judgments,  was  held  unconstitution- 

sale,    and    the   notice   or   notices   of  al,  as  not  only  impairing  the  obliga- 

postponement   if   any,   for   a   period  tion  of  a  contract,  but  altering  it  by 

not    exceeding    twenty-four    weeks,  adding     a     condition.       Latham     v. 

2d.    For   the   services   specified   in   §  Whitehurst,  69  N.  C.  38. 

2390  of  this  act.     3d.  For  recording  '"  Laws  1887,  ch.  147. 

the    affidavits,    and    also    where    the  '-''Laws  1889,  ch.  70. 

property  sold  is  situated  in  two  or  '-''  North  Dakota  Codes  1895,  Code 

more  counties,  for  making  and  re-  Civ.  Pro.  §S  5844-5864. 

cording  the  necessary  certified  cop-  '-**  South  Dakota  Codes  1903,  Code 

ies  thereof.  4th.  For  necessary  post-  Civ.  Pro.  §S  636-654.     The  statutory 

age  and  searches.  right    of    redemption    applies    to    a 

The   costs  and   expenses   must  be  trust  deed  or  mortgage  with  power 

taxed,    upon    notice,    by    the    clerk  of  sale.     Kent  v.  Laffan,  2  Cal.  595; 

of  the  county  where  the  sale  took  Levy  v.  Burkle,  14  Pac.  564. 

place,  upon  the  request  and  at  the  , 


711      STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  17o2a. 

mortgage  is  deemed  to  be  a  separate  mortgage  so  far  as  to  entitle 
the  holder  of  it  to  a  foreclosure. 

Notice  of  the  foreclosure  sale  must  be  given  by  publishing  the 
same  for  six  successive  weeks,  at  least  once  in  each  week,  in  a  news- 
paper of  the  county  where  the  premises  or  some  part  of  them  are 
situated,  if  there  be  one;^^'*  if  not,  then  in  the  nearest  paper  pub- 
lished in  the  State  The  notice  must  specify  the  names  of  the 
mortgagor  and  mortgagee,  and  the  assignee,  if  any;  the  date  of  the 
mortgage;  the  amoimt  claimed  to  be  due  at  the  date  of  the  notice; 
a  description  of  the  premises  substantially  as  in  the  mortgage; 
and  the  time  and  place  of  sale. 

The  sale  must  be  at  public  auction,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun  on  that  day,  in 
the  county  in  which  the  premises  to  be  sold,  or  some  part  of  them, 
are  situated,  and  must  be  made  by  the  person  appointed  for  that 
purpose  in  the  mortgage,  or  by  the  sheriff  or  deputy  sheriff  of  the 
county,  to  the  highest  bidder. 

The  sale  may  be  postponed  by  inserting  a  notice  of  the  postpone- 
ment, as  soon  as  practicable,  in  the  newspaper  in  which  the  orig- 
inal advertisement  was  published,  and  continuing  this  until  the  time 
of  the  postponed  sale,  at  the  expense  of  the  party  requesting  the  post- 
ponement. If  the  premises  consist  of  distinct  farms  or  lots  they 
must  he  sold  separately,  and  no  more  can  be  sold  than  is  sufficient 
to  satisfy  the  amount  due  at  the  date  of  the  notice  of  sale,  with  in- 
terest and  costs.  The  mortgagee  may  fairly  and  in  good  faith  pur- 
chase at  the  sale.  The  officer  making  the  sale  gives  to  the  purchaser 
a  certificate  stating  a  particular  description  of  the  property  sold, 
the  price  bid  for  each  distinct  lot,  and  the  whole  price  paid,  and 
files  a  duplicate  in  the  registry  of  deeds. ^^" 

Eedemption  may  be  made  within  one  year  after  the  sale.^'^  If 
not  redeemed,  the  officer  executes  a  deed  of  the  premises  to  the 
purchaser.^^^  Any  surplus  there  may  be  must  be  paid  over  by  the 
officer  to  the  mortgagor,  his  representatives  or  assigns. ^^^ 

"^  Grandin   v.    Emmons,    10   N.   D.  mandatory.     Johnson  v.  Day,  2  N.  D. 

223,  86  N.  W.  723;  McDonald  v.  Nor-  295,  50  N.  W.  701. 

dyke  Marman  Co.  9  N.  D.  290,  83  N.  ^"  As  to  redemption  in  North  Da- 

W.  6.     It  is  not  necessary  that  there  kota  see  Codes  1895,  Code  Civ.  Pro. 

should  be  a  publication  for  full  six  §  5854;  in  South  Dakota:  Codes  1903, 

weeks  if  made  once  a  week   in  six  Code  Civ.  Pro.  S  375-383. 

successive  weeks.    McDonald  v.  Nor-  "=  Nichols   v.    Tingstad,    10    N.    D. 

dyke  Marman  Co.  9  N.  D.  290,  83  N.  172,  86  N.  W.  694.     The  deed  by  the 

W.    6.      Otherwise    under    previom  rheriff  is  ??ood  even  though  he  fails 

statute.  Finlaysen  v.  Peterson,  5  N.  to   endorse   the   amount   of   the  bid 

D.  587.  67  N.  W.  953,  33  L.  R.  A.  532.  uuon  the  note  and  mortgage.  Karch- 

"» The  requirement  to  file  a  dnpli-  er  v.  Cans.  13  S.  D.  383,  83  N.  W.  431. 

cate     certificate     is     directory,     not  "» The  complaint  by  its  avermenta 


§  1753-1756.]    POWER  of  sale  mortgages  and  trust  deeds.      712 

The  evidence  of  the  sale  may  be  perpetuated  by  an  affidavit  of 
the  publication  of  the  notice  made  by  the  printer;  an  affidavit  of 
the  fact  of  sale,  of  the  time  and  place  of  the  sale,  of  the  sum  bid, 
and  the  name  of  the  purchaser,  made  by  the  person  who  acted  as 
auctioneer.  Such  affidavits  are  recorded  in  the  registry  of  deeds  for 
the  county,  and  are  presumptive  evidence  of  the  facts  set  forth. 
The  party  foreclosing  a  mortgage  by  advertisement  is  entitled  to 
his  costs  and  disbursements  out  of  the  sale,  in  addition  to  any  at- 
torney's fee  agreed  upon  in  the  mortgage. 

§  1753.  Ohio. — Power  of  sale  mortgages  and  trust  deeds  are  seldom 
used. 

§  1754.  Oregon. — Power  of  sale  mortgages  and  trust  deeds  are  sel- 
dom used, 

§  1755.  Pennsylvania. — Power  of  sale  mortgages  and  trust  deeds 
were  seldom  used  until  quite  recently,  but  have  now  become  a  com- 
mon mode  of  creating  marketable  securities  on  which  to  raise  loans 
for  corporations.^^* 

§  1756.  Rhode  Island. — Mortgages  generally  contain  a  power  of 
sale.    Trust  deeds,  being  less  effectual,  are  not  in  common  use. 

At  any  sale  by  public  auction  made  according  to  the  provisions 
of  any  mortgage,  or  other  conveyance  by  way  of  mortgage,  or  of 
any  power  of  sale  contained  in  it  or  annexed  to  it,  the  mortgagee, 
his  heirs  or  assigns,  or  any  person  for  him,  may  fairly  and  in  good 
faith  bid  for  and  purchase  the  property  or  any  part  of  it,  in  the 
same  manner  as  other  persons  may  bid  for  and  purchase  it.^^^ 

Whenever  any  mortgagee,  or  any  person  acting  imder  a  power 
of  sale,  shall  sell  any  real  estate  the  title  to  which  will  in  any 
manner  depend  upon  notice  of  sale  to  be  published  in  any  news- 
paper, the  person  causing  such  sale  to  be  made  shall  cause  a  copy 
of  the  advertisement,  in  pursuance  of  which  such  sale  is  made, 
to  be  attached  to  the  deed  given  thereunder,  together  with  his, 
her,  or  their  affidavit,  stating  when,  how  many  times,  and  in  what 
newspaper   or   newspapers,    such   advertisement   was    published,    and 

must  show  a  cause  of  action.     Ault-  Baccastow,   84  Pa.   St.   363,   5   N.   Y. 

man  v.  giglinger,  2  S.  D.  442,  50  N.  W.  R.  204. 

W.    911.      The    word    "assigns"    in-  '"P.  S.   1882,  ch.  176,  §  15;    G.   L. 

eludes  a  subsequent  mortgagee.  Nop-  1896,  c.  207,  §  16,  A.  N.  1836-7,  c.  325. 

son  v.  Horton,  20  Minn.  268;  Nichols  If  the  mortgagor  has  conveyed  the 

v.  Tingstad,  10  N.  D.  172,  86  N.  W.  equity  of  redemption,  the  notice  pre- 

694.  scribed   must  be  given   to   the  pur- 

"*  Bradley  v.  Chester    Valley  R.  Co.  chaser.     McLaughlin   v.    Hanley,   12 

36    Pa.    St.    141,    151;    Corpman    v.  R.  I.  61. 


713   STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.   [§§  1757-lTGl. 

the  manner,  time,  and  place  of  making  snch  sale.  Such  copy  and 
affidavit  shall  be  recorded  with  the  deed  to  which  they  arc  attached, 
and  the  record  thereof  shall  be  prima  facie  evidence  of  the  truth 
of  the  matters  and  things  therein  stated.^^° 

§  1757.  South  Carolina. — Trust  deeds  seem  to  be  in  use.  Power 
of  sale  mortgages,  though  not  in  very  common  use,^^''  are  valid, 
and  the  equity  of  redemption  ma}'  be  barred  by  a  sale  in  compliance 
with  the  terms  of  the  power.^"^ 

§  1758.  Tennessee. — Power  of  sale  mortgages  and  trust  deeds  are 
in  use.  Real  estate  sold  under  them  by  virtue  of  the  power  is  sub- 
ject to  redemption  at  any  time  within  two  years,  in  the  same  man- 
ner as  when  sales  are  made  under  judicial  decree,^^**  unless  the 
right  of  redemption  is  expressly  waived  or  surrendered  in  the  deed 
or  mortgage.^***  But  if  the  mortgagee  does  not  exercise  a  power 
of  sale  free  from  the  equitj''  of  redemption  contained  in  a  mort- 
gage, and  the  sale  be  not  made  under  a  decree  of  court,  the  right  of 
redemption  will  still  exist.  The  statute  cutting  off  the  equity  of 
redemption  must  be  strictly  pursued."^ 

§  1759.  Texas. — Trust  deeds  are  in  common  use,  and  power  of 
sale  mortgages  are  also  sometimes  used.^^^ 

§  1760.  Vermont. — A  power  of  sale  in  a  mortgage  is  unusual  if 
not  unkno\\Ti,  and  there  is  no  statute  regulating  its  exercise.^*^ 
Xeither  are  trust  deeds  in  use  as  a  mode  of  securing  debts. 

§  1761.  Virginia. — Trust  deeds  are  used  to  the  exclusion,  almost, 
of  all  other  forms  of  security  upon  real  estate.     It  is  provided  that 

^^''P.  S.  1882,  ch.   173,  §   11;    G.   L.     tee  was  not  bound  to  make  the  prop- 

1895,  c.  202,  §  15.  erty  bring  that  price  unless  he  made 
'"Mitchell  V.  Bogan,  11  Rich.  686,     the  sale  free  from  the  equity  of  re- 

per  Withers,  J.:  "Not  familiar  in  our  demption.     Ordway  v.  White,  3  Lea, 

obeervation."  537. 

-'''■^  Robinson   v.    Amateur   Asso.    14  "■-"■  Frierson    v.    Blanton,    57    Tenn. 

S.  C.  148.  272.     If  such  mortgage  be  foreclosed 

"^  See  §  1358.  by  suit  waiving  the  right  of  redemp- 

"^Code   1884,   §§   2947,   2948;    Code  tion,    it   may   be   foreclosed   by   suit 

1896,  3811,  3812.  and  the  court  may  order  a  sale  with- 
Where  the  grantor  in  a  trust  deed  out  redemption.     Hamilton  v.  Fow- 

stipuiated  that  "in  the  event  a  sale  ler,   99   Fed.   Rep.   IS;    Knox  v.   Mc- 

is  made,  I  hereby  waive  the  right  of  Clain,   13  Lea,   197. 

redemption  given  me  by  law;  and  in  '*'- Robertson  v.  Paul,  16  Tex.  472; 

the  event  a   sale  is   made  the   said  Morrison  v.  Bean,  15  Tex.  267;    Bu- 

grantee   agrees,   in   consideration   of  chanan  v.  Monroe.  22  Tex.  537;   Mc- 

the  waiving  of  the  right  ot  redemp-  Lane  v.  Paschal,  47  Tex.  375.     See  § 

tion  to  make  the  land  bring  as  much  1792. 

as  $4,000,"  it  was  held  that  the  gran-  "'  Wing  v.  Cooper,  37  Vt.  169. 


§    17G2.]       POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  714 

the  trustee  in  such  deed/"  except  so  far  as  may  be  therein  other- 
wise provided,  shall,  whenever  required  by  any  creditor  secured  or 
any  surety  indemnified  by  the  deed,  of  the  personal  representative 
of  any  such  creditor  or  surety,  after  the  debt  due  to  such  creditor, 
or  for  which  such  surety  may  be  liable,  shall  have  become  payable, 
and  default  shall  have  been  made  in  the  payment  thereof,  or  any 
part  thereof,  by  the  grantor,  sell  the  property  conveyed  by  the  deed, 
or  so  much  thereof  as  may  be  necessary,  at  public  auction,  for 
cash,  having  first  given  reasonable  notice  of  the  time  and  place  of 
sale,  and  shall  apply  the  proceeds  of  sale,  first,  to  the  payment  of 
expenses  attending  the  execution  of  the  trust,  including  a  commis- 
sion to  the  trustee  of  five  per  cent,  on  the  first  three  hundred  dol- 
lars, and  two  per  cent,  on  the  residue  of  the  proceeds,  and  then  pro 
rata  (or  in  the  order  of  priorit}^,  if  any,  prescribed  by  the  deed) 
to  the  payment  of  the  debts  secured  and  the  indemnity  of  the  sure- 
ties indemnified  by  the  deed,  and  shall  pay  the  surplus,  if  any,  to 
the  grantor,  his  heirs,  personal  representatives,  or  assigns."^ 

§  1762.  West  Virginia."" — The  form  of  trust  deed  is  the  same  as 
that  prescribed  by  the  Code  of  Virginia.  The  trustee  in  any  such 
deed  shall,  whenever  required  by  any  creditor  secured  or  any  surety 
indemnified  by  the  deed,  or  the  personal  representative  of  any  such 
creditor  or  surety,  after  the  debt  due  to  such  creditor,  or  for  which 
such  surety  may  be  liable,  shall  have  become  payable  and  default 
shall  have  been  made  in  the  payment  thereof,  or  any  part  thereof, 
by  the  grantor,  sell  the  property  conveyed  by  the  deed,  or  so  much 
thereof  as  may  be  necessary,  at  public  auction,  upon  such  terms  as 
are  mentioned  in  said  deed,  and,  if  no  terms  are  therein  mentioned, 
then  upon  the  following  terms,  to  wit:  If  the  property  to  be  sold 
be  real  estate,  one  third  of  the  purchase-money  cash  in  hand,  one 
third  thereof  with  interest  in  one  year,  and  the  residue  thereof  with 
interest  in  two  years,  from  the  day  of  sale,  taking  from  the  pur- 
chaser his  notes,  with  good  security,  for  the  deferred  payments,  and 
retaining  the  legal  title  as  further  security,  the  legal  title  may  be 

"*"A  deed  of  trust  to  secure  debts  property  (here  describe  it).  In  trust 
or  indemnify  sureties  may  be  in  the  to  secure  (here  describe  the  debts  to 
following  form,  or  to  the  same  ef-  be  secured  or  the  sureties  to  be  in- 
fect:— demnified,    and    insert   covenants   or 

"  'This  deed,  made  the          day  of  other    provisions    the    parties    may 

,  in  the  year          ,  between  agree  upon).    Witness  the  following 

(the  grantor)    of  the  one  part,  and  signatures    and    seals    (or   signature 

(the  trustee)  of  the  other  part,  and  seal),  '"  Code  1887,  §  2441. 

witnesseth:    that   the    said           (the  "^  Code  1887,  §  2442. 

grantor)  doth  (or  do)  grant  unto  the  ""  Code  1891,  ch.  72,  §§  5-7;   Code 

said           (the  trustee)   the  following  1899,  ch.  72,  §§  5-7. 


715       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1762. 

conveyed,  reserving  in  tlic  deed  a  lien  for  the  deferred  purchase- 
money,  or  otherwise  securing  the  same;  and  if  the  property  to  be 
sold  be  personal  estate,  then  for  cash,  having  first  given  notice  of 
sucli  sale  as  hereinafter  prescribed ;  and  shall  apply  the  proceeds  of 
sale,  first,  to  the  payment  of  expenses  attending  the  execution  of  the 
trust,  including  a  commission  to  the  trustee  of  five  per  centum  on 
the  first  three  hundred  dollars,  and  two  per  centum  on  the  residue 
of  the  proceeds,  then  pro  rata  (or  in  the  order  of  priority,  if  any, 
prescribed  by  the  deed)  to  the  payment  of  the  debts  secured  and 
the  indemnity  of  the  sureties  indemnified  by  the  deed;  and  shall 
pay  the  surplus,  if  any,  to  the  grantor,  his  heirs,  personal  repre- 
sentatives, or  assigns. ^■'^ 

Every  such  notice  of  sale  shall  show  the  following  particulars: 
1.  The  time  and  place  of  sale;  2.  The  names  of  the  parties  to  the 
deed  under  which  it  will  be  made;  3.  The  date  of  the  deed;  4. 
The  office  and  book  in  which  it  is  recorded;  5.  The  quantity  and 
description  of  the  land  or  other  property,  or  both,  conveyed  thereby; 
6.  The  terms  of  the  sale."« 

When  any  property  is  about  to  be  sold  under  a  deed  of  trust,  the 
trustee  shall,  unless  it  be  otherwise  provided  in  the  deed  of  trust, 
or  in  the  opinion  of  the  trustee  the  property  to  be  sold  be  of  less 
value  tJian  three  hundred  dollars,  publish  a  notice  of  such  sale  in 
some  newspaper  published  in  the  county,  if  there  be  one  which  will 
publish  the  notice  at  the  rates  prescribed  by  law.  Such  notice  shall 
be  published  at  least  once  a  week  for  four  successive  weeks  preced- 
ing the  day  of  sale,  and  a  copy  of  such  notice  shall  be  posted  at  the 
front  door  of  the  court-house  for  a  like  period ;  but  if  there  be  no 
newspaper  published  in  the  county,  or  if  there  be  none  that  will 
publish  such  notice  at  the  rates  prescribed  by  law,  or  if,  in  the 
opinion  of  the  trustee,  the  property  be  of  less  value  than  three 
hundred  dollars,  such  a  notice  of  sale  shall  be  posted  at  least  thirtv 
days  prior  thereto  on  the  front  door  of  the  court-house  of  the  county 
in  which  the  property  to  be.  sold  is,  and  at  three  other  public  places 
at  least  in  the  county,  one  of  which  shall  be  as  near  the  premises 
to  be  sold   (in  case  the  sale  be  of  real  estate)   as  practicable;  and  in 

^"  The   trustee   must  give   a   bond  ground  for  setting  aside  a  sale.    San- 

before    selling,    provided    he    is    re-  dusky  v.  Faris,  49  W.  Va.  150,  38  S. 

quired  to  by  the  grantor  or  the  ces-  B.  563. 

tui  que  trust;  in  the  absence  of  such  "''Where  the  debtor  conveys  all 
requirement  no  bond  is  necessary,  his  property  to  a  trustee  for  the  ben- 
Thompson  V.  Halstead,  44  W.  Va.  efit  of  his  creditors,  the  trustee  must 
390,  29  S.  W.  991.  Failure  to  append  settle  his  accounts  before  a  commis- 
clerk's  certificate  of  giving  of  bond  sioner. 
to  the  notice  of  sale  is  not  sufficient 


§    1763.]       POWER   OF    SALE   MORTGAGES   AND   TRUST   DEEDS.  716 

all  cases,  whether  the  notice  be  published  or  not,  a  copy  of  such 
notice  shall  be  served  on  the  grantor  in  the  deed,  or  his  ag-eut  or 
personal  representative,  if  he  or  they  be  within  the  county,  at  least 
twenty  days  prior  to  the  sale.^*® 

§  1763.  WiscoTisin.^^" — A  mortgage  containing  a  power  of  sale 
may  upon  default  be  foreclosed  by  advertisement,  within  twenty 
years  after  maturity  of  such  mortgage;  provided  no  action  has 
been  instituted  at  law  to  recover  the  debt,  or  if  instituted  that  it  has 
been  discontinued,  or  that  an  execution  upon  the  judgment  has  been 
returned  unsatisfied  in  whole  or  in  part;  and  provided  the  mort- 
gage containing  such  power  has  been  duly  recorded,  and  that  all  as- 
signments of  it  have  been  recorded.^"''^  If  the  mortgage  be  payable  by 
instalments,  each  instalment  after  the  first  is  deemed  a  separate 
mortgage,  and  may  be  foreclosed  for  each  instalment  as  if  a  separate 
mortgage  were  given  for  each. 

Notice  is  given  by  publishing  the  same  for  six  successive  weeks, 
at  least  once  a  week,  in  a  newspaper  printed  in  the  county  where 
the  premises  or  some  part  of  them  are  situated,  if  there  be  one; 
otherwise  in  a  newspaper  published  in  an  adjoining  county,  if  there 
be  one;  but  if  not,  then  in  a  paper  published  at  the  seat  of  govern- 
ment. The  notice  must  specify  the  names  of  the  mortgagor  and  of 
the  mortgagee,  and  of  the  assignee  if  any;  the  date  of  the  mort- 
gage and  when  recorded;  the  amount  claimed  to  be  due  at  the  date 
of  the  notice;  a  description  of  the  premises  substantially  as  in  the 
mortgage;  and  the  time  and  place  of  sale.^^^ 

The  sale  must  be  at  public  auction,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun,  in  the  county  in 
which  the  premises  or  some  part  of  them  are  situated,  and  must  be 
made  by  the  person  appointed  for  that  purpose  in  the  mortgage,  or 
by  the  sherifE  or  his  deputy,^'^  to  the  highest  bidder.  The  sale  may 
be  postponed  from  time  to  time  by  inserting  a  notice  of  such  post- 
ponement, as  soon  as  practicable,  in  the  newspaper  in  which  the 
original  advertisement  was  published,  and  continuing  such  publica- 

'*"  As  to  giving  of  notice  see  San-  Hayes  v.  Frey,  54  Wis.  503,  11  N.  W. 

dusky  v.  Faris,  49  W.  Va.  150,  38  S.  695. 
-^   5g3  ^''-  The  notice  need  not  recite  the 

"'^"Annot     Stats.    1889,    ch.    152,    §§  words  of  the  statute,  that  the  mort- 

3523-3543.    See  S.  1898,  ch.  152.    This  gage    "will    be   foreclosed   by    sale 

statute  does  not  prevent  a  foreclos-  Nau  v.  Brunette,  79  Wis.  664,  48  N. 

ure  by  bill.     Byron  v.  May,  2  Finn.  W.  649. 
443_  '»3  Morrissey  v.  Dean,  97  Wis.  302, 

^"  This   provision    does   not   apply    72  N.  W.  873. 
to    an    executor    or    administrator. 


717       STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1763, 

lion  to  the  time  of  sale.^^'*  If  the  premises  consist  of  distinct  farms 
or  lots,  they  must  be  sold  separately ;  and  no  more  shall  be  sold  than 
may  be  necessar}'  to  satisfy  the  amount  due,  with  interest  and  costs. 
The  mortgagee,  his  assigns,  or  his  or  their  representatives,  may 
fairly  and  in  good  faith  purchase  the  premises,  or  any  part  thereof, 
at  the  sale. 

The  officer  or  other  person  making  the  sale  gives  the  purchaser  a 
certificate  in  writing  under  seal,  setting  forth  a  description  of  each 
tract  sold,  the  sum  paid  therefor,  and  the  time  when  the  purchaser 
will  be  entitled  to  a  deed,  unless  redeemed  ;^^^  and  within  ten  days 
files  in  the  office  where  the  deed  is  recorded  a  duplicate  of  such  cer- 
tificate. 

The  premises  may  be  redeemed  within  one  year  after  such  sale, 
on  payment  of  the  sum  bid,  with  interest  at  the  rate  of  ten  per  centum 
per  annum  from  the  time  of  sale;  but  the  mortgagor  may  retain 
full  possession  until  the  title  vests  absolutely  in  the  purchaser.  If 
not  redeemed,  the  officer,  or  some  person  appointed  by  the  court  for 
the  purpose,  executes  a  deed  of  the  premises  to  the  purchaser,  or 
to  the  assignee  of  the  certificate.^^''  Any  surplus  remaining  after 
satisfying  the  mortgage  is  paid  tb  the  mortgagor  or  his  assigns. 

The  evidence  of  sale  may  be  perpetuated  by  an  affidavit  of  the 
publication  of  the  notice  to  be  made  by  the  printer,  or  by  some  per- 
son in  his  employ  knowing  the  facts,  and  an  affidavit  of  the  fact  of 
the  sale  to  be  made  by  the  auctioneer,  stating  the  time  and  place  of 
sale,  the  sum  bid,  and  the  name  of  the  purchaser;  and  such  affi- 
davits, when  recorded,  are  presumptive  evidence  of  the  facts.^^'^  The 
record,  of  the  affidavits,  and  of  the  deeds  executed,  pass  the  title, 
and  the  conveyance  is  a  bar  of  all  equity  of  redemption;  but  no 
title  accruing  prior  to  the  execution  of  the  mortgage  is  affected. 

A  subsequent  mortgagee  is  entitled  to  the  same  privilege  of  re- 
demption that  the  mortgagor  might  have  had,  or  may  satisfy  the 
prior  mortgage,  and  thereby  acquire  all  the  rights  of  the  prior  mort- 
gagee. 

When  the  premises,  or  any  part  of  them,  are  purchaser  by  the 

1"  This  right  of  redemption  cannot  pired,  or  by  his  successor  in  office, 

he  abrogated  by  a  court  of  equity  so  Hayes  v.   Frey,   54  Wis.   503,   11   N. 

as  to  allow  redemption  by  payment  W.  695. 

of  a  less  sum  on  the  ground  that  the  '''"  McLean  v.  Hoehle,  98  Wis.  359, 

solicitor's    fees    were    unreasonable.  74  N.  W.   120.     Failure  to  attach  a 

Schroeder   v.    Richardson,    101   Wis.  seal  to  the  certificate  is  not  a  fatal 

529,  78  N.  W.  178.  defect.     Hayes  v.  Frey,  54  Wis.  503, 

'■^^  The   deed    may  be   executed   by  11  N.  W.  695. 

the     officer     who     made     the     sale,  '"  Bond  v.  Carroll,  71  Wis.  347,  37 

though   his   term   of  office   has   ex-  N.  W.  91. 


§  1763a.]    POWER  OF  sale  mortgages  and  trust  deeds.  718 

mortgagee,  his  representatives,  or  his  or  their  assigns,  the  affida- 
vits of  publication,  and  of  the  circumstances  of  sale,  are  evidence 
of  the  sale,  and  of  the  foreclosure  of  the  equity  of  redemption,  with- 
out any  conveyance  being  executed,  in  the  same  manner,  and  with 
like  effect,  as  a  conveyance  executed  by  a  mortgagee  upon  a  sale 
to  a  third  person. 

When  notice  of  the  sale  is  published  in  other  than  the  county 
in  which  th^  premises  are  situated,  a  copy  of  such  notice  must  be 
served  at  least  four  weeks  l)efore  the  time  of  sale  on  the  person 
in  possession  of  the  premises,  in  all  cases  where  the  same  are  occu- 
pied; and  where  they  are  not  occupied,  then  upon  the  mortgagor, 
his  heirs  or  personal  representatives,  if  he  or  they  reside  in  the 
county  where  such  premises  lie.  Proof  of  the  service  of  such  no- 
tice may  be  made,  certified,  and  recorded  in  the  same  manner,  and 
with  the  like  effect,  as  proof  of  the  publication  of  a  notice  of  sale 
under  a  mortgage. 

§  1763a.  Wyoming. ^•'''^ — Power  of  sale  mortgages  are  in  use  and 
are  foreclosed  by  advertisement.  To  make  such  foreclosure  it  is 
requisite  that  some  default  shall  have  occurred ;  that  no  suit  at  law 
shall  have  been  instituted  to  recover  the  debt,  or  if  any  suit  has  been 
instituted  that  the  same  has  been  discontinued,  or  that  an  execution 
upon  the  judgment  therein  has  been  returned  unsatisfied  in  whole  or  in 
part;  and  that  the  mortgage  and  any  assigimients  thereof  have  been 
recorded.  iSTotice  must  be  given  by  publishing  the  same  for  six  con- 
secutive weeks  at  least  once  in  each  week  in  a  newspaper  printed  in 
the  county,  and  if  no  newspaper  be  printed  in  the  county,  then  in  a 
paper  printed  in  the  State  and  of  general  circulation  in  the  county. 
The  notice  must  specify  the  names  of  the  mortgagor  and  the  mort- 
gagee and  of  the  assignee  of  the  mortgage,  if  any;  the  date  of  the 
mortgage  and  when  recorded ;  the  amount  claimed  to  be  due ;  a  descrip- 
tion of  the  mortgaged  premises;  and  the  time  and  place  of  sale. 
The  sale  must  be  at  public  vendue  between  the  hours  of  nine  o'clock 
in  the  forenoon  and  five  o'clock  in  the  afternoon  at  the  front  door  of 
the  court  house  in  the  county  in  which  the  premises  or  some  part  of 
them  are  situated,  and  shall  be  made  by  the  person  appointed  in  the 
mortgage  or  bv  the  sheriff  or  his  deputy  to  the  highest  bidder.  The 
sale  may  be  postponed  by  publishing  a  notice  as  soon  as  practicable  in 
the  same  paper  and  continuing  such  publication  until  the  time  to 
which  the  sale  is  postponed. 

"«R.   S.    1899,    §5   2774-2801. 


719      STATUTORY  PROVISIONS  IN  THE  SEVERAL  STATES.  [§  1763a. 

If  the  premises  consist  of  distinct  tracts  or  lots  they  shall  be  sold 
separatel}',  and  no  more  shall  be  sold  than  shall  be  necessary  to  satisfy 
the  amount  due  with  interest,  costs  and  expenses.  The  mortgagee 
may  fairly  and  in  good  faitli  purchase  at  such  sale.  The  mortgagor, 
his  heirs  or  representatives  may  redeem  in  the  manner  prescribed  for 
land  sold  by  execution.  If  the  land?  sold  be  not  redeemed  within  the 
time  limited,  the  officer  making  the  sale  shall  execute  a  deed  to  the 
purchaser,  specifying  the  amount  for  which  the  property  was  sold; 
the  time  and  place  of  record;  the  names  of  the  parties;  the  amount 
due  on  the  mortgage;  that  notice  was  given  as  required  by  law;  and 
the  time  and  place  of  sale.  Any  surplus  money  shall  be  paid  over 
to  the  mortgagor  or  his  representatives  or  assigns.  Evidence  of  the 
sale  may  be  perpetuated  by  affidavits  which  shall  be  recorded. 

Deeds  of  trust  are  foreclosed  by  notice  published  for  thirty  davs 
in  some  newspaper  printed  in  the  county.  The  form  of  the  trustee's 
deed  is  prescribed. 


CPIAPTER  XL. 


rOWER  OF   SALE   MORTGAGES  AND   TRUST   DEEDS. 


I.  The  nature  and  use  of  powers 

of  sale,   1764-1772. 
n.  The  power  of  sale  is  a  cumula- 
tive remedy,  1773-1776. 
ill.  Construction    of    power,    1777- 

1791. 
IV.  Revocation    or    suspension    of 

the  power,  1792-1800. 
V.  When  the  exei'cise  of  the  pow- 
er   may    be    enjoined,    1801- 
1820. 
VI.  Personal  notice  of  sale,  1821- 

1826. 
VII.  Publication     of     notice,     1827- 
1838. 


VIII.  What   the  notice   should   con- 
tain, 1839-1856. 
IX.  Sale  in  parcels.  1857-1860. 
X.  Conduct    of    sale,    terms,    and 
adjournment,    1861-1875. 
XI.  Who  may  purchase  at  sale  un- 
der power,  1876-1888. 

XII.  The  deed  and  title,  1889-1903. 

XIII.  The   affidavit,    1904,    1905. 

XIV.  Setting  aside  and  waiving  sale, 

1906-1922. 
XV.  Costs  and  expenses,  1923-1926. 
XVI.  The  surplus,   1927-1940. 


The  Nature  and  Use  of  Powers  of  Sale. 


§  1764.  In  general. — The  delay  and  expense  incident  to  a  fore- 
closure and  sale  in  equity  have  brought  power  of  sale  mortgages 
and  trust  deeds  into  general  favor  both  in  England  and  America; 
and  although  their  general  use  is  now  confined  to  a  part  only  of 
our  States,  the  same  influences  which  have  already  lead  to  their  par- 
tial adoption  and  use  are  likely  to  lead  to  their  general  use  every- 
where at  an  early  day.^  It  is  true  that  recent  codes  and  statutes 
have  done  something  to  simplify  the  remedy  by  bill  in  equity;  but 
at  best  the  process  of  foreclosure  by  suit  is  cumbersome  and  expen- 
sive as  compared  with  the  remedy  afforded  by  a  power  of  sale. 
Preliminary  to  a  bill  in  equity,  or  to  a  petition  or  suit  authorized 
by  codes  which  adopt  a  bill  in  equity  as  the  basis  of  the  proceed- 
ing, is  an  investigation  to  ascertain  who  have  become  interested  in 
the  property  since  the  taking  of  the  mortgage.     All   such  parties, 

1  First  Nat.  Bank  v.  Mining  Co.  8  text,  affirmed  156  U.  S.  470,  15  Sup. 
Mont    32,    53,    19    Pac.    403,    quoting    Ct.  440,  also  quoting  text. 

720 


721 


THE   NATURE   AXD    USE    OF    POWERS    OF   SALE.         [§     1764. 


sometimes  quite  numerous,  must  be  made  parties  to  the  suit  and 
must  be  served  with  process,  else  the  foreclosure  will  not  be  com- 
plete. The  decree  of  sale  may  be  rendered  only  after  a  long  delay. 
The  sale  is  made  through  a  sheriff  or  officer  of  the  court,  who 
must  report  his  proceedings  to  the  court.  Orders  must  be  obtained  for 
the  confirmation  of  the  sale,  and  perhaps  for  the  distribution  of 
the  proceeds  of  it.  There  may  also  be  attendant  references  to 
ascertain  the  amount  of  the  mortgage  debt,  or  to  determine  whether 
the  whole  property  shall  be  sold  together  or  in  separate  parcels;  or 
to  determine  in  what  order  different  parcels  shall  be  sold  in  conse- 
quence of  the  equities  of  subsequent  purchasers;  or,  after  the  sale 
is  made,  to  determine  whether  the  title  is  such  that  the  sale  can  be 
enforced  against  the  purchaser.  It  is  true  that  all  these  proceed- 
ings are  designed  for  the  protection  of  the  mortgagor  and  others 
who  may  be  interested  in  the  property;  but  while  such  protection 
is  occasionally  not  without  its  use,  in  almost  all  cases  the  parties  in- 
terested in  the  property  are  equally  well  protected  by  the  remedy 
out  of  court  afforded  by  a  power  of  sale,  and,  as  will  be  presently 
noticed,  when  protection  is  needed  in  exceptional  cases  the  courts 
can  be  effectually  appealed  to. 

A  poAver  of  sale,  whether  vested  in  the  creditor  himself  or  in  a 
trustee,  affords  a  prompt  and  effectual  security.  Although  it  may 
press  harder  upon  the  debtor  in  point  of  time,  it  is  not  without  its 
advantages  to  him.  The  delay  and  expense  incident  to  a  foreclosure 
suit  he  is  obliged  to  pay  for  in  some  way,  and  it  is  generally  in  the 
way  of  paying  a  higher  rate  of  interest  for  the  loan.^  It  is  prob- 
ably safe  to  say  that  in  its  practical  operation  the  power  of  sale  is 
not  used  to  oppress  or  injure  the  debtor  more  frequently  than  is  the 
process  of  foreclosure  by  suit.  There  is  undoubtedly  some  preju- 
dice against  this  form  of  security  still  remaining.  This  is  more 
especially  the  case  where  it  is  little  used,  and  in  those  parts  of  the 
country  where  capital  is  scarce  and  the  difficulty  of  obtaining  largo 
sums  of  money  without  delay  is  a  serious  one.  But  both  the  fan- 
cied and  real  objections  to  powers  of  sale  in  mortgages  and  trust 
deeds  are  likely  soon  to  give  way  under  the  real  advantages  they 
afford  to  both  the  debtor  and  creditor;  and  their  general  adoption, 
to  the  exclusion  of  other  forms  of  security  upon  real  property,  may  be 
looked  for  at  an  early  day. 

§  1765.     In  some  of  the  early  cases  both  in  Eng"land  and  America, 

the  validity  of  powers  of  sale  in  mortgages  was  much   questioned. 

==  First  Nat.  Bank  v.  Mining  Co.  8    Mont.  32,  19  Pac.  403,  quoting  text. 


§    1764.     POWER   OF    SALE    MORTGAGES    AND   TRUST    DEEDS.  722 

The  case  of  Croft  v.  PowelP  was  for  a  considerable  time  considered 
as  authority  against  mortgages  of  this  description,  although  their 
validity  was  not  involved  in  the  decision.  This  was  a  mortgage  made 
by  a  deed  and  separate  defeasance,  which  provided  that,  if  the  loan 
was  not  paid  within  the  time  agreed,  then  the  mortgagee  should  mort- 
gage or  absolutely  sell  the  same  lands  free  from  redemption,  and  out 
of  the  money  raised  by  such  mortgage  or  sale  pay  the  loan  and  inter- 
est, and  be  accountable  for  the  overplus  to  the  mortgagor  or  his  heirs. 
The  money  not  being  paid  at  the  time,  the  mortgagee  agreed  to  con- 
vey the  estate  to  a  third  person,  and  in  the  agreement  and  conveyance 
an  exception  was  made,  and  the  defeasance  was  mentioned.  For  this 
reason  it  was  considered,  that  it  was  not  the  intention  of  the  mort- 
gagee to  give  the  purchaser  an  absolute  and  indefeasible  estate,  for  it 
was  not  conveyed  to  him  absolutely  and  free  from  the  equity  of  re- 
demption, but  subject  to  the  defeasance. 

When  Mr.  Powell  wrote  his  Treatise  on  Mortgages*  he  consid- 
ered the  validity  of  powers  of  sale  "of  too  doubtful  a  complexion 
to  be  relied  upon  as  the  source  of  an  irredeemable  title."  Even  so 
late  as  1825,  although  such  powers  had  been  sustained  in  the  few 
cases  in  which  they  had  been  the  subject  of  adjudications  during 
the  early  part  of  the  nineteenth  century,  Lord  Eldon,  then  Chancellor 
of  England,  while  not  denying  the  validity  of  a  mortgage  in  this 
form,  strongly  objected  to  it,  saying:  "Here  the  mortgagee  is  him- 
self made  the  truste'p.  It  would  have  been  more  prudent  for  him 
not  to  have  taken  upon  himself  that  charaeter.  But  it  is  too  much 
to  say  that  if  the  one  party  has  so  much  confidence  in  the  other  as 
to  accede  to  such  an  arrangement,  this  court  is  for  that  reason  to 
impeach  the  transaction.     It  is  next  provided  that  if  the  mortgage i- 

^2    Comyn     603    (1738).      In    The  the  estate  mortgaged,  or  where  the 

King  v  Edington,  1  East,  288  (1801),  interest  is  likely  to  run  in  arrear. 

Lord  Kenvon,  speaking  of  a  clause  A    mortgage   of    this    description    is 

"sometimes     introduced"     allowing  certainly  a  prompt,  powerful  secur- 

the  mortgagee  to  repay  himself  by  ity     compared     with     the     common 

sale    of    the     mortgaged     premises,  mode  of  mortgaging  ....  The  evil  of 

adds    "but  a  court  of  equity  would,  the  former  mode  of  mortgaging  is, 

I  believe  control  the  exercise  of  that  that    the    mortgagee,    in    proceeding 

power  "  '  for   the   recovery   of   his    money,    is 

*  Powell  on  Mortg.  19.  liable  to  be  delayed  for  an  indefinite 

"Their  validity,"  says  Mr.  Covent-  time  in  chancery.    The  new  mode  is 

ry    "was  at  first  much   questioned;  framed  with  a  view  to  a  settlement 

and    when    the    doubts    surrounding  out  of  court,  so  that  a  large  portion 

their     introduction     were    removed,  of    chancery    practice    will    be    ab- 

they  were  for   a  considerable  time,  stracted  from  court  if  this  mode  of 

and  are  even  now  in  some  degree,  mortgaging  becomes,  as  it  bids  fair 

viewed  as  a  harsh  measure,  and  only  to  do,  the  only  acknowledged  mode 

to  be   used   where   the   money   lent  of     mortgaging     in     general     use.  ' 

approaches  very  nearly  the  value  of  Mortg.  Prac.  p.  150. 


723  THE    NATURE   AXD    USE    OF    POWERS    OF   SALE.  [§    1766. 

sliall  make  default  in  paying  the  sum  stated  at  tlio  appointed  time,  the 
mortgagee  may  ma-ke  sale  and  absolutely  dispose  of  the  premises 
conveyed  to  him.  This  is  an  extremely  strong  clause;  but  perhaps 
it  may  be  one  of  the  ma.ny  new  improvements  in  conveyancing  which 
make  conveyancing  so  different  from  what  it  was  when  I  was  in 
practice  in  that  part  of  law."  Here  he  inquired  of  Mr.  Sugden  how 
the  practice  was  in  that  respect.  Mr.  Sugden  admitted  that  the  clause 
was  usually  inserted  in  deeds  like  the  present.  Lord  Eldon:  "How 
can  it  be  right  that  such  a  clause  should  be  introduced  into  a  deed 
under  which  the  party  is  a  trustee  for  himself?  Then  there  is  a 
clause  that  it  shall  not  be  necessary  for  the  purchaser  to  inquire 
whether  a  sale  was  proper,  etc.  Here,  too,  it  must  be  recollected 
that  this  is  a  clause  to  be  acted  upon,  not  by  a  middle  person,  who 
is  to  do  his  duty  between  the  castuis  que  trust,  but  the  mortgagee 
is  himself  made  trustee  to  do  all  these  acts.  Upon  the  whole,  I 
must  say  that  this  deed  seems  to  me  of  a  very  extraordinary  kind, 
and  that  there  are  clauses  in  it  upon  wliich  it  would  be  difficult  to 
induce  a  court  of  equity  to  act."^  It  seems,  however,  that  his  ob- 
servations were  made  without  deliberation,  and  were  not  called  for 
in  the  case  before  him.  By  general  accord,  power  of  sale  mortgages 
were  about  this  time  adopted  into  general  use  in  England,  and  they 
have  always  been  fully  sustained  and  approved.*'  At  the  present 
time  every  mortgage  has  a  power  of  sale;  for  when  not  inserted 
in  the  deed,  as  is  usually  the  case,  a  power  of  sale  is  supplied  by 
statute.'^ 

§  1766.  The  powers  generally  inserted  in  mortgages  used  in 
England  are  much  more  complete,  and  give  a  more  speedy  remedy 
after  a  default  than  the  statute  power,  so  that  it  is  now  the  general 
understanding  that  there  must  be  a  power  of  sale,  else  the  money 
is  hardly  obtainable  upon  the  mortgage.  For  these  reasons  it  is 
now  held,  contrary  to  the  opinion  formerly  entertained,^  that  trus- 

°  Roberts    v.    Bozon,    Chan.    (Feb.  that  the  practice  of  conveyancers  is 

1825)   MS.  cited  in  Coventry's  Prac.  to  treat  a  power  of  sale  as  a  neces- 

Mort.  p.  150;  1  Powell's  Mortg.  (Am.  sary  incident  to  a  mortgage;   to  in- 

ed.)  9  a,  note.  troduce  it  imiversally  ....  I  admit 

0  Ashton  v.  Corrigan,  L.  R.  13  Eq.  that  it  is  much  more  frequent  than 

76  (1871);   Hormann  v.  Hodges,  L.  R.  it  used  to  be  thirty  or  forty  years 

16  Eq.  18  (1872).  ago.     But  it  is  by  no  means  an  imi- 

'  See  §  1722.  versal    practice;     and    many    mort- 

« In  Saunders  v.  Richards,  2  Coll.  gages  may  be  seen  at  this  day  in 
568,  it  was  held  that  an  executor  which  no  power  of  sale  is  intro- 
had  no  right  to  give  a  mortgage  with  duced."  But  waiving  this,  he  held 
a  power  of  sale.  This  is  overruled  that  a  special  power  to  a  trustee  to 
in  the  cases  cited  in  the  following  mortgage  does  not  give  him  author- 
note.  In  Clarke  v.  The  Royal  Pan-  ity  to  sell,  and  a  fortiori  does  not 
opticon,  4  Drew.  26,  Vice-Chancellor  give  him  a  right  to  give  another  per- 
Kindersley   remarked:      "It   is   said  son  power  to  sell. 


§    1767.]     POWER  OF   SALE  MORTGAGES  AND  TRUST  DEEDS.  734 

tees,  under  a  direction  in  a  will  to  raise  money  by  mortgage,  are 
authorized  to  give  the  mortgagee  a  power  of  sale  in  case  of  default 
in  repayment  of  the  money  or  the  interest  of  it.  In  a  recent  case** 
Sir  E.  Malins,  V.  C,  said:  "I  am  of  opinion  that  a  power  of  sale 
is  a  necessary  incident  to  a  mortgage,  and  that,  when  a  testator 
says  that  a  sum  of  money  is  to  be  raised  by  mortgage,  he  means  it 
to  be  raised  in  the  way  in  which  money  is  ordinarily  raised  by  mort- 
gage, and  therefore  that  the  mortgage  may  contain  what  mort- 
gages in  general  do  contain,  namely,  a  power  of  sale."  This  is 
further  illustrated  by  another  case  where  a  mortgage  was  made  by 
a  deposit  of  title  deeds,  with  a  written  agreement  by  the  mortgagor 
"to  execute  a  mortgage"  when  called  upon  to  do  so."  He  then 
sold  and  conveyed  the  estate  subject  to  the  mortgage;  and  after- 
wards executed  a  power  of  sale  mortgage  to  his  mortgagee,  who  sub- 
sequently sold  the  estate  under  the  power.  It  was  held  that  the 
purchaser  was  bound  by  the  power  of  sale;  the  Master  of  the  Eolls 
saying  the  "mortgage  very  properly  contains  a  power  of  sale." 

§  1767.  It  is  not  possible  to  say  wheoi  powers  of  sale  in  mort- 
gagees were  first  used  in  this  country;  but  it  appears  from  a 
th  statute  enacted  in  Xew  York  in  the  year  177-i^^  that  they  were  al- 
ready in  use  at  that  time.  The  provisions  of  that  statute  were  re- 
enacted  in  the  first  revision  of  the  statutes  of  that  State,  and  under 
various  modifications  they  have  been  continued  to  the  present  day. 
In  Massachusetts,  in  1826,  Chief  Justice  Parker^^  g^ia  that  a  power 
to  sell  executed  to  one  who  relies  upon  such  power,  and  expects  and 
intends  to  purchase  an  absolute  estate,  would  without  doubt  pass 
an  unconditional  estate  to  the  purchaser;  yet  he  says  "this  form  of 
conveyance  is  rare  in  this  country ;"  and  he  cites  the  case  of  Croft  v. 
Powell,  decided  almost  a  hundred  years  before,  to  the  effect  that  if  the 
purchaser  knows  the  original  nature  of  the  transaction,  and  appears 

^  In  re  Chawner's  Will,  L.  R.  8  Eq.  the  person  to  whom  the  power  was 

569  (1869).     In  Bridges  v.  Longman,  granted,  would  extinguish  the  equity 

24  Beav.  27,  the  Master  of  the  Rolls  of    redemption.      After    reciting    the 

held  that  a  power  of  sale  is  incident  inconvenience  of   allowing  them   to 

to  a  power  to  raise  money  by  mort-  be    impaired,    it    declares    that    the 

gage.    See,  also,  to  same  effect,  Selby  rights  of  bona  fide  purchasers  shall 

v.  Cooling,  23  Beav.  418;   Russell  v.  not  be  debated.     See,  also,  as  to  the 

Plaice,  18  Beav.  21;  Cook  v.  Dawson,  early  use  of  powers  of  sale  in  New 

29  Beav    123    128;    Vane  v.  Rigden,  York,   Bergen   v.   Bennett,   1   Caines 

L   R    5  Ch.  663;  Cruikshank  v.  Duf-  Cas.  1,  3,  2  Am.  Dec.  281;   Doolittle 

fin    L.  R.  13  Eq.  555,  560.  v.   Lewis,   7  Johns.    Ch.    45.   11   Am. 

1"  Leigh  V.   Lloyd,  35  Beav.   455.  Dec.   389;    Slee   v.   Manhattan   Co.    1 

"Act    of    19    March,    1774.      From  Paige,  48,  69;   Lawrence  v.  Farmers' 

this  statute  it  appears  that  doubts  Loan  &  Trust  Co.  13  N.  Y.  200. 

were  then  entertained  whether  sales  '-  In    Eaton    v.    Whiting,    3    Pick, 

under   powers,   by   the   mere   act  of  484. 


725  THE   NATURE   AND    USE   OF    POWERS    OP   SALE.  [§    1768. 

not  to  have  purchased  wholly  without  reference  to  the  conditional 
character  of  the  title,  ho  will  be  compelled  in  equity  to  sun-ender  it  on 
receiving  the  money  he  has  advanced. 

In  some  early  cases  it  has  been  contended  that  the  power  of  sale 
so  altered  the  character  of  the  conveyance  as  to  deprive  it  of  the 
qualities  of  a  mortgage;  but  in  Eaton  v.  Whiting  it  was  said  that 
without  doubt  the  power  Avhile  unexecuted  left  the  estate  as  it  would 
have  been  if  no  power  had  been  given. ^^ 

Fifty  years  ago  power  of  sale  mortgages  were  not  in  general  use 
anywhere  in  this  coimtry;  and  although  considerable  use  was  made 
of  them  at  an  earlier  time  than  any  corresponding  use  was  made 
of  them  in  England/*  they  have  been  adopted  in  the  latter  country,  to 
the  exclusion  of  other  forms  of  security,  while  they  have  not  been 
so  adopted  here.  Within  the  past  half  century,  however,  the  use 
of  them  has  rapidly  extended,  so  that  in  several  States  any  other 
form  of  mortgage  is  exceptional.  The  validity  of  these  powers  of 
sale  is  everywhere  recognized,  and  the  use  of  them,  either  in  mort- 
gages or  trust  deeds,  is  becoming  general. ^^  One  of  the  latest 
decisions  on  the  validity  of  mortgages  in  this  form  is  one  of  the 
best,  because  it  declares  such  validity  to  be  grounded  in  the  common 
law  right  of  all  men  to  contract  for  the  sale  of  their  land  in  such 
form  as  they  may  deem  best.  "We  are  unable  to  see  upon  what 
ground,"  say  the  Supreme  Court  of  New  Hampshire,  "in  the  absence 
of  legislative  prohibition,  the  court  can  put  a  restriction  upon  the 
freedom  of  the  citizen  to  contract  for  the  sale  of  his  land  upon  terms 
and  in  a  mode  stipulated  in  a  mortgage,  any  more  than  upon  his 
liberty  to  contract  for  its  sale  in  any  other  way,  or  by  stipulations 
contained  in  any  other  instrument."^'^ 

§  1768.  The  use  of  power  of  sale  mortgages,  however,  has  not 
yet  become  so  universal  here  as  to  lead  to  their  being  regardeil 
generally  as  a  necessary  incident  of  a  mortgage.  In  New  York  it 
is  true  that  as  early  as  1823  Chancellor  Kent  decided  that  a  power 

"Taylor    v.    Chowning,    3    Leigh,  G86;    Longwith  v.   Butler,   8   111.   32; 

654;  Turner  v.  Bouchell,  3  Har.  &  J.  Kinsley  v.  Ames,  2  Met.  29;  Lydston 

"  In  Jackson  v.   Henry,  10  Johns,  v.  Powell,  101  Mass.  77. 
185,    196,   6   Am.   Dec.    328    (1813),   a        ^^  Very  v.  Russell,  65  N.  H.  646,  23 

case  upon  a  power  of  sale  mortgage,  Atl.    522,   per   Foster,   J.;    Bowen   v. 

Chief  Justice  Kent  remarked:  "There  Kendall,   Fed.    Cas.   No.   1,724.     And 

is  no  case  precisely  like  this  in  the  see  Webb  v.  Lewis,  45  Minn.  285.  47 

English  books,  because  these  powers  N.  W.  803.    The  Nevada  Court  said  in 

are  not  in  use  in  Great  Britain."  1876:    "We  understand  it  to  be  well 

1' Turner  v.  Johnson,  10  Ohio,  204;  settled  that  a  power  to  sell  without 

Brisbane  v.  Stoughton,  17  Ohio,  482;  foreclosure    is    operative    when    the 

Hyman   v.   Devereux,   63   N.    C.    624,  intention  to  confer  it  is  clearly  ex- 

628;   Mitchell  v.  Bogan,  11  Rich.  L.  pressed."    Evans  v.  Lee,  11  Nev.  194. 


§    1769.]      POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  726 

of  attorney  to  execute  a  mortgage  authorized  tl)e  making  of  it  with 
a  power  of  sale,  because  such  a  power  was  then  one  of  the  customary 
and  lawful  remedies  given  to  a  mortgagee;  that  it  had  become  an 
incident  to  the  power  to  mortgage,  and  was  of  course  included  under 
the  authority  to  mortgage,  unless  specially  excluded. ^^  But  if  else- 
where the  usage  has  become  so  established  as  to  warrant  a  similar 
declaration,  the  question  has  not  since  been  presented  to  the  courts 
for  judicial  determination.  In  Massachusetts,  where  the  use  of  this 
form  is  now  more  nearly  universal,  probably,  than  in  any  other  part 
of  the  country,  it  was  held,  in  1858,  that  a  stipulation  "to  give 
a  mortgage"  was  complied  with  by  giving  one  without  a  power  of 
sale ;  and  that  a  power  of  sale  was  not  then  a  usual  accompaniment 
of  a  mortgage.^^  Since  that  time,  however,  there  can  be  no  doubt 
that  a  power  of  sale  has  become,  not  merely  a  usual  accompaniment 
of  a  mortgage,  but  almost  an  invariable  one;  and  it  may  be  antici- 
pated that,  when  the  occasion  arises,  the  courts  will  hold,  as  have 
the  courts  in  England,  that  a  power  of  sale  is  a  necessary  incident 
to  a  mortgage. 

Although  in  several  States  a  mortgage  is  by  statute  or  judicial 
interpretation  declared  to  be  a  mere  security  for  the  payment  of  a 
debt,  and  not  a  conveyance  of  the  legal  title,  yet  this  view  of  the 
nature  of  the  security  does  not  in  any  way  interfere  with  or  impair  the 
doctrine  of  powers  to  sell.^^ 

§  1769.  Deeds  of  trust,  as  has  already  been  noticed,  are  in  legal 
effect  mortgages.- -  A  power  to  execute  a  mortgage  includes  a  power  to 
execute  a  deed  of  trust,  where  such  a  conveyance  is  in  common  use.-^ 
The  word  "mortgages"  in  a  statute  has  been  held  to  include  deeds  of 
trust.^^  Where  a  mortgage  is  regarded  in  accordance  with  the  com- 
mon law  doctrine,  as  a  conveyance  of  the  legal  estate,  a  deed  of  trust  is 
of  course  none  the  less  a  conveyance  of  the  legal  estate  ;^^  the  only 

"  Wilson  V.  Troup,  7  Johns.  Ch.  25.  izes  him  to  convey  to  a  purchaser 

'^Capron    v.    Attleborough    Bank,  though  by  the  terms  of  the  deed  of 

11    Gray,    492;    Piatt   v.    McClure,    3  trust  the  legal  title  is  in  the  bene- 

Woodb.  &  M.  151.  ficiary.    McNeill  v.  Lee,  79  Miss.  455, 

'■'  Calloway    v.    People's    Bank,    54  30  So.  821. 

Ga.    441,   449.  -'  Middletown  v.  Parke,  3  App.  D. 

-' S   62;    Shillaber  v.   Robinson,  97  C.   149;    Pershing  v.   Wolfe,   6   Colo. 

U.   S.   68;    Southern  Pac.   Ry.  Co.  v.  App.    410,   416. 

Doyle,  11  Fed.  253;  Bartlett  v.  Teah,  "Walton   v.    Fudge,    63   Mo.    App. 

1  McCrary,  176,  1  Fed.  768;  Herbert  52;   Brown  v.  Bryan,  5  Ida.   145,  51 

Craft    Co.    V.    Bryan    (Cal.)    68    Pac.  Pac.  995. 

1020;    McLane    v.    Paschal,    47    Tex.  "Newman  v.   Jackson,  12  Wheat. 

365,    369;    Blackwell    v.    Barnett,    52  570. 

Tex.  326;  De  Wolf  v.  Sprague  Manuf.  In  Ohio,  under  a  deed  of  trust  as 

Co.  49  Conn.  282.  collateral  security  or  in  the  nature 

A  power  in  a  trustee  to  sell  author-  of  a  mortgage,  the  grantor  in  pos- 


727  THE    NATURE    AXD    USE    OF    POWERS    OF   SALE.  [§    1769. 

difference  of  opinion  on  this  j^oint  is,  whether  in  those  States  in  which 
a  mortgages  is  regarded  as  a  mere  lien,  and  not  a  conveyance  of  the 
legal  estate,  a  deed  of  trust  shall  be  held  to  vest  the  legal  estate  in  the 
trustees.  Generally  a  deed  of  trust  is  in  this  respect  held  to  have 
only  the  same  effect  as  a  mortgage;  such  being  the  decision  in  lowa,^* 
Nebraska,^^  Kansas,^"  Nevada,^^  and  Texas.^®  But  on  the  other  hand, 
in  California,  Colorado,  and  Florida,  it  is  held  that,  although  a  mort- 
gage does  not  vest  the  legal  estate  in  the  mortgagee,  a  deed  of  trust  is 
a  conveyance  which  does  vest  the  legal  title  in  the  trustee.-**  And  in 
the  first  named  State  such  a  deed  is  not  a  mortgage  requiring  ju- 
dicial foreclosure.^" 

As  a  general  rule,  upon  the  payment  of  a  deed  of  trust  satisfac- 
tion is  entered  on  the  margin  in  the  same  way  tliat  it  is  in  the  case 
of  a  mortgage,  and  a  reconveyance  is  not  necessary.  The  statutes 
upon  this  subject,  although  relating  in  terms  to  mortgages,  embrac(; 
deeds  of  trust.^^  In  like  manner  statutes  relating  to  the  recording 
of  mortgages  embrace  deeds  of  trust  without  special  mention  of 
them.^- 

So  substantially  alike  are  a  mortgage  and  a  deed  of  trust  given 
as  security,  that  a  railroad  authorized  to  mortgage  its  property  may 
do  this  by  means  of  a  deed  of  trust  ;^^  and  a  bank  authorized  to 

session  retains  the  legal  estate,  and  "  First  Nat.  Bank  v.  Kreig,  21  Nev. 

a  subsequent  judgment  against  him  404,  32  Pac.  641. 

becomes    a   lien    upon    the   property  -"  McLane  v.  Paschal,  47  Tex.  365, 

subject  to  the  mortgage.     Martin  v.  369. 

Alter,  42  Ohio  St.  94.  ''  Soutter    v.    Miller,    15    Fla.    625. 

In  Louisiana,  a  deed  of  trust  will  And  see  authorities  cited  by  Judge 

not  be  given  the  effect  of  an  act  of  Dillon  in  2  Am.  L.  Reg.  (N.  S.)  665; 
mortgage  binding  on  third  persons,  '  Bateman  v.  Burr,  57  Cal.  480;  Grant 

although  properly  recorded,  and  al-  v.    Burr,    54    Cal.    298;    Stephens    v. 

though   it  might   be   considered   be-  Clay,  17  Colo.  489,  30  Pac.  42. 

tween    the    parties    as    intended    by  '''Grant  v.  Burr,  54  Cal.  298;  Koch 

them  to  secure  the  payment  of  a  debt  v.  Briggs,  14  Cal.   256,  73  Am.  Dec. 

as  therein  mentioned.     A  mortgage  651. 

in    this    State    must    conform    with  '>  Ingle  v.  Culbertson,  43  Iowa,  265; 

the   forms   prescribed    by    the    local  Woodruff    v.    Robb,    19    Ohio.    212; 

law  and  customs,  and  must  announce  Smith  v.  Doe,  26  Miss.  291;    Crosby 

clearly  the  purpose  of  the  act..  Thi-  v.   Huston,  1  Tex.  239;    M'Gregor  v. 

bodaux  V.  Anderson,  34  La.  Ann.  797.  Hall,  3  St.  &  P.  397.     Contra,  Wilk- 

"*  Newman    v.    Samuels,    17    Iowa,  ins  v.  Wright,  6  McLean,  340. 

528,  535.  ^'^Fogarty  v.  Sawyer,  23  Cal.  570; 

-'  Webb  V.  Hoselton,  4  Neb.  308,  19  Magee  v.  Carpenter,  4  Ala.  469.     See 

Am.    Rep.    638;    Kyger    v.    Ryley,    2  further  on  this  subject  an  article  by 

Neb.  20,  28.  Judge  Dillon,  2  Am.  L.  Reg.  (N.  S.) 

="  Lenox  v.  Reed,  12  Kans.  223.    In  641;    Wilkins  v.  Wright,  6  McLean, 

this  State  the  person  for  whose  ben-  340;  Bank  of  Commerce  v.  Lanahan, 

efit  a  trust  deed  is  made  may  main-  45   Md.    396;    Woodruff  v.    Robb,   19 

tain  an  action  in  his  own  name  to  Ohio,  212. 

recover  the   debt  and   foreclose  the  •'''Wright    v.    Bundy,    11    Ind.    398, 

mortgage.     Hutchison   v.   Myers,   52  404. 
Kan.  290,  34  Pac.  742. 


§    1770,]      POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  728 

take  a  mortgage  of  lands  may  take  a  deed  of  trust  for  its  use  to 
trustees.^*  "The  attributes  of  a  deed  of  trust  for  such  purposes/' 
says  Mr.  Justice  Walker,  of  Arkansas,  in  a  recent  case,^^  "and  a 
mortgage  with  power  of  sale,  are  the  same:  botli  are  intended  as 
securities,  and  in  a  legal  sense  are  mortgages;  in  both,  the  legal 
title  passes  from  the  grantor;  but  in  equity  he  is,  before  foreclosure, 
considered  the  actual  owner  in  both,  and  as  broadly  in  one  as  the 
other ;  the  grantor  has  the  right  to  redeem,  in  other  words  the  equity  of 
redemption,  which  can  only  be  barred  by  a  valid  execution  of  the 
power." 

§  1770.     A  deed  of  trust  is  often  preferred  to  a  mortgage  on 

account  of  the  intervention  of  a  disinterested  person  as  trustee.  It 
has  already  been  noticed  that  Lord  Eldon  thought  it  quite  objec- 
tionable that  a  mortgagee  should  himself  be  made  the  trustee  to 
sell  under  the  power.  But  Mr.  Coventry,  after  quoting  his  re- 
marks, expressed  his  own  preference  for  a  mortgage  with  a  power  of 
sale  in  the  mortgagee.  He  thought  the  intervention  of  a  trustee  is 
in  all  cases  a  serious  inconvenience;  and  that,  even  if  he  does  not 
become"  hostile  to  the  creditor,  he  may,  by  his  inexperience  or 
squeamishness,  subject  him  to  much  trouble;  and  he  recommended 
that  the  mortgagee  retain  in  his  own  hands  absolute  power  over  his 
own  property.  The  objections  to  the  intervention  of  a  trustee  are 
apt  to  come  from  the  mortgagee,  and  he  is  generally  in  position  to 
have  his  own  choice  in  the  matter.  The  mortgagor  is  apt  to  sup- 
pose that,  in  placing  the  exercise  of  the  power  in  the  hands  of  a 
disinterested  third  party,  whose  position  in  relation  to  it  is  merely 
that  of  a  trustee,  he  secures  for  himself  the  protection  of  fair  deal- 
ing. It  generally  happens,  however,  that  the  debtor  has  to  pay  for 
the  services  of  a  trustee,  whose  disinterestedness  is  no  more  than  that 
of  the  creditor  himself.  The  trustee  is  obliged  to  act  when  the 
creditor  secured  by  the  deed  has  a  legal  right  to  call  for  the  exer- 
cise of  the  power,  and,  if  he  neglects  or  refuse's  to  act,  he  may  be 
compelled  to  do  so  or  to  give  up  the  trust.  The  trustee  may,  when  in 
doubt  about  his  duty,  apply  to  the  court  in  equity  to  direct  him. 

This  form  of  security  has  come  into  very  general  use  in  several 
States,  and  in  Virginia  and  West  Virginia,  in  particular,  has  come 
intO'  universal  use  in  securing  debts  upon  real  estate.^*' 

"Bennett      v.      Union      Bank,      5  Mr.    Justice   Rives,   in    the   oourse 

Humph.  612.  of  an  able  opinion  holding  unconsti- 

'°  Turner  v.  Watkins,  ?>1  Ark.  429,  tutional,   as  applied   to  trust  deeds, 

437.  a  law  staying  the  collection  of  debts 

»"  Taylor  v.  Stearns,  18  Gratt.  244,  for  a   limited   period,   spoke   of  the 

278  (1868).  nature    and    use    of    this    security. 


729  THE    NATURE   AND    USE    OF    TOWERS    OF   SALE.  [§    1771. 

§  1771.     The  trustee  in  a  deed  af  trust  is  the  agent  of  both  parties, 

and  he  should  perform  his  duties  with  the  strictest  impartiality.'" 
Inasmuch  as  the  trustee  acts  for  both  parties,  and  the  law  requires 
of  him  the  utmost  good  faith  and  the  strictest  impartiality,  he  should 
have  no  personal  interest  to  subserve,  and  the  beneficiaries  should  not 
be  relatives  or  friends  whom  he  might  feel  called  upon  to  accommo- 
date. Certainly  no  one  interested  in  the  debt  secured,  and  no  one 
who  is  a  near  relative  of  the  beneficiary,  should  be  a  trustee.^^  A 
failure  to  use  reasonable  diligence,  or  an  abuse  of  his  dicretionary 
powers,  renders  him  personally  liable  to  the  party  injured  for  the 
damage  done.^*^  Thus,  if  without  authority  he  releases  any  part  of 
the  security,  or  after  a  sale  of  the  property  under  the  power  im- 
properly releases  the  purchaser  from  his  bid,  and  subsequently  sells  for 
B,  less  sum,  he  is  liable  to  the  beneficiary  in  an  action  at  law  for  the 
iamages  sustained.*"  A  sheriff  or  other  officer  acting  in  lieu  of  a 
trustee,  under  authority  of  a  statute,  acts  in  his  official  capacity,  and 
for  a  breach  of  trust  or  failure  of  duty  is  liable  upon  his  bond.*^ 

The  fact  that  the  trustee  named  in  a  deed  of  trust  has  acted  as 
the  attorney  in  fact  of  the  creditor  in  selling  the  property  to  the 
mortgagor  does  not  disqualify  him  to  act  in  the  execution  of  the 
trust.*^  An  employee  of  the  creditor  may  be  authorized  to  act  as 
trustee  and  a  sale  by  him  will  not  be  void  merely  because  he  acts  by 

"What  is  a  deed  of  trust?     It  is  a  "  Hinton  v.  Pritchard,  120  N.  C.  1, 

form  of  security  which  has,  in  our  26  S.  E.  627;  Lane  v.  Tidball,  Gilmer 

practice,    superseded    the    mortgage,  (Va.)    130;    Anchor   Stove  Works  v. 

and   doubtless  for    the   very   reason  Gray,  9  W.  Va.  469;  Wilson  v.  Wall, 

that  it  does   not  require   the  inter-  99  Va.  353,  38  S.  E.  181;    Axman  v. 

vention  of  the  courts.    The  introduc-  Smith,    156   Mo.    286,    57   S.    W.    105. 

tion  of  trustees,  as  impartial  agents  Sherwood  v.  Saxton,  63  Mo.  78,  and 

of   the  creditor   and   debtor,   admits  cases  cited. 

of  a  convenient,  cheap,  and  speedy  "'  Long  v.  Long,  79  Mo.  644. 

execution  of  the  trust,  and  involves  "  Murrell    v.    Scott,    51    Tex.    520; 

none  of  the  expenses  and  delays  at-  Harlin  v.  Nation,  126  MJ.  97,  27  S. 

tendant  upon  mortgages.  W.     330.      But     the     trustee,     even 

"At  an  early   period  it  met  with  though  appointed  by  the  beneficiary, 

some  resistance  from  the  court  and  does  not  become  so  far  his  agent  as 

the  bar,  though  feeble  and  ineffect-  to    make    the    beneficiary    liable    for 

ual.     It  was  deprecated  as  an  engine  injury  to  the  grantor  by  the  neglect 

of  oppression   in   the   hands   of   the  of  the  trustee.     Hull  v.  Pace,  61  Mo. 

creditor.      It    was    denounced    as    a  App.  117;    Murrell  v.  Scotc,  51  Tex. 

pocket  judgment It  is  now  a  520. 

favorite  security  for  the  payment  of  *°  Sherwood  v.   Saxton,  63  Mo.   78. 

money,  closely  interwoven  with  the  "State  v.  Griffith,  63  Mo.  545;    §§ 

transaction   of  business,   and   firmly  1745,  1785. 

established    by   the    practice   of   the  ■"-  Sternberg    v.    Valentine,    6    Mo. 

country    and    the    sanction    of    the  App.  176.     But  an  officer  of  a  corpo- 

courts.     It  has,  doubtles,  aided  cred-  ration  may  act  as  trustee  in  a  deed  of 

it,  facilitated  the  collection  of  debts,  trust    in    which    the    corporation    is 

and  saved  to  the  debtor  the  costs  of  beneficiary.     Hamill  v.  Copeland,  26 

legal  proceedings."  Colo.  178,  56  Pac.  901. 


§§  1771a-1772.]  power  of  sale  mortgages  and  trust  deeds.  730 

direction  of  his  employer.*^  But  a  trustee  may  be  removed  by  a  court 
of  equity  ou  account  of  personal  ill-will  between  him  and  the  cestui 
que  trust.** 

§  1771a.  The  trustee  may  divest  himself  of  the  legal  title  by  a 
conveyance  to  another  without  compliance  with  the  conditions  of 
the  trust;  but,  without  compliance,  a  sale  and  deed  do  not  pass 
the  trustor's  equitable  estate.  The  grantee  takes  only  the  trustee's 
title,  subject  to  the  equitable  right  of  the  grantor  in  the  trust  deed, 
Tlie  trustee's  deed  is  not  void,  but  transfers  to  the  grantee  the  legal 
title  with  the  trust,  which  equity  may  compel  the  grantee  to  exe- 
cute, or  to  transfer  the  title  to  a  new  trustee,  upon  whom  will  de- 
volve the  execution  of  the  power.  A  trustee  who  has  conveyed 
the  trust  property  cannot  exercise  the  power  originally  vested  in 
him.  His  second  deed  is  wholly  void,  though  made  upon  a  read- 
vertisement  and  resale  in  accord  with  the  conditions  of  the  trust.*'^ 

There  are,  however,  some  cases  which  hold  that  a  trustee's  irreg- 
ular sale  and  conveyance  are  void,  and  that  he  may  reassume  his 
duty  as  trustee  and  proceed  to  make  a  formal  and  effectual  sale  and 
conveyance.*^ 

§  1772.  The  debt  secured  by  a  deed  of  trust  belongs  prima  facie 
to  the  beneficiary  named  in  the  deed.  When  this  is  claimed  by  thje 
trustee  himself,  the  presumption  against  him  derived  from  the  deed 
must  be  overcome  by  the  clearest  proof;  and  the  fact  that  the  note 
and  deed  have  been  left  in  his  possession  is  of  little  importance, 
especially  when  the  beneficiary  is  a  woman  and  a  near  relative.*'' 
Though  the  trustee  is  the  owner  of  the  note  secured  by  the  deed  of 
the  trust  at  the  time  of  its  execution,  the  beneficiary  named  in  it 
being  his  clerk,  the  deed  and  a  sale  under  it  are  not  for  this  reason 
void.    The  trustee  in  such  case  is  in  effect  a  mortgagee  with  a  power 

"  Randolph   v.    Allen,    73   Fed.    23,  States,    such    has    always    been    the 

19  C.   C.  A.   353,  41  U.   S.   App.   117.  holding  in  this  State  since  the  de- 

"  McPherson  v.  Cox,  96  U.  S.  404.  cision  in  Thayer  v.  Campbell,  9  Mo. 

*'^  Stephens  v.  Clay,  17  Colo.  489,  277.  The  distinction  which  prevails 
30  Pac.  43,  citing  Koester  v.  Burke,  in  some  States  between  the  legal  and 
81  111.  436;  Wells  v.  Cay  wood,  3  Colo,  equitable  title  has  never  found  rec- 
487;  Doe  v.  Robinson,  24  Miss.  688;  ognition  here,  citings  Joerdens  v. 
Huckabee  v.  Billingsly,  16  Ala.  414;  Schrimpf,  77  Mo.  383."  Pullis  v. 
Taylor  v.  King,  6  Munf.  358:  Crans-  Kalb,  62  Mo.  App.  27,  per  Rom- 
ton  V.  Crane,  97  Mass.  459;  Fulton  v.  bauer,  P.  J. 
Johnson,  24  W.  Va.  95.  *''  Ohnsburg  v.  Turner,  87  Mo.  127, 

Missouri:     "A  mortgagee,  or  trus-  affirming  13  Mo.   App.   533;    Enochs 

tee  in  a  deed  of  trust,  has  no  legal  v.   Miller,   60  Miss.    19;    Botineau  v. 

title  in  the  premises  which  he  can  JFAna  Ins.   Co.   31   Minn.   125,   16   N. 

convey   to   any   one   as   against   the  W.  849. 

owner  of  the  mortgage  debt.  What-  *'  Gimbee  v.  Pignero,  62  Mo.  240. 
ever    has    been    the    rule    in    other 


731  POWER   OF   SALE   IS   A    CUMULATIVE   REMEDY.  §[    1773. 

of  sale/*  But  where  a  trust  deed  is  by  mistake  made  to  the  beneficiary 
instx?ad  of  tlie  trustee,  a"nd  purports  to  be  to  secure  the  trustee  and  not 
the  beneficiary,  a  subsequent  sale  of  the  land  by  the  intended  trustee, 
and  purchase  of  it  by  the  beneficiary,  are  void,  and  the  maker  of 
the  note  secured,  having  paid  it,  is  entitled  to  receive  his  property 
clear  of  the  cloud  cast  on  it  by  the  pretended  conveyance  and  pur- 
chase.*'' 

A  trustee  who  has  advertised  the  property  for  sale  is  entitled  to 
compensation  for  his  services  and  to  reimbursement  of  expenses  paid 
by  him ;  and  if  the  sale  does  not  take  place  and  the  debt  is  paid  to 
the  beneficiary,  and  payment  of  compensation  and  expenses  of  the 
trustee  is  refused,  he  may  readvertise  and  sell  the  property  to  pay 
the  same.^'' 


II.     The  Power  of  Sale  is  a  Cumulative  Remedy.    ' 

§  1773.  Generally  a  power  of  sale  does  not  affect  the  right  to 
foreclose  in  equity,  either  by  a  strict  foreclosure,'^^  or  by  a  judicial 
sale,^^  or  to  foreclose  in  any  way  provided  by  statute  for  the  ordi- 
nary foreclosure  of  mortgages,  as  by  entry  and  possession,  or  b}' 
suit  at  law.  The  power  is  merely  a  cumulative  remedy.  It  is  one 
species  of  foreclosure,  but  it  does  not  exclude  jurisdiction  in  equity.^"' 
The  option,  however,  to  proceed  in  equity,  lies  wholly  with  the 
mortgagee.^*  A  resort  to  a  court  of  equity  is  not  necessary,  except 
where  made  so  by  statute;  it  can  be  effectually  exercised  without 
the  aid  of  the  courts. ^^  If  the  power  proves  to  be  defective,  a 
resort  to  a  suit  in  equity  is  rendered  necessary.^*^     Even  after  the 

^'Cassady  v.  Wallace,  102  Mo.  575,  Cal.  116;   Brickell  v.  Batchelder,  62 

15  S.  W.  138.  Cal.  623;   Atwater  v.  Klnman,  Harr, 

^^  McMeel  v.  O'Connor,  3  Colo.  App.  (Mich.)    243;    Morrison   v.   Bean,   15 

113,  32  Pac.  182.  Tex.  267,  269;  Blackwell  v.  Barnett, 

^"Niolon    v.    McDonald,    71    Miss.  52  Tex.  326;   Frierson  v.  Blanton,  1 

337;    Shirley    v.    Shattuck,    28    Miss.  Bax.    272;    McDonald    v.    Vinson,    56 

13.  Miss.  497;  Green  v.  Gaston,  56  Miss. 

=^  Wayne  v.   Hanham,   9   Hare,  62,  748;    Charleston   v.    Caulfield,    19    S. 

20  L.  J.  530;   Slade  v.  Rigg,  3  Hare,  C.  201;   Denver  B.  &  M.  Co.  v.  Mc- 

35;  Cormerais  v.  Genella,  22  Cal.  116.  Allister,   6   Colo.   261,   266;    Knox  v. 

'^^Hutton  v.  Sealy,  4  Jur.  N.  S.  450;  McCain,    13    Lea,    197;     First    Nat. 

McGowan  v.  Branch  Bank  at  Mobile,  Bank  v.  Bell  Mining  Co.  8  Mont.  32, 

7  Ala.  823;  Marriott  v.  Givens,  8  Ala.  19   Pac.   403,   quoting  text. 

694;  Vaughan  v.  Marable,  64  Ala.  60;  ^=' Dupee  v.  Rose,  10  Utah,  305,  37 

Carradine  v.  O'Connor,  21  Ala.  573;  Pac.  567. 

Martin  v.  Ward.  60  Ark.  510,  .30  S.'W  ''  Lang  v.  Stansel,  106  Ala.  389,  17 

1041;     Green     v.     Gaston,     56    Miss.  So.  519. 

748,   751;    Wofford   v.    Police  Board,  "  Hyde  v.  Warren.  46  Miss.  13. 

44  Miss.  579;  McAllister  v.  Plant,  54  ''"Webb    v.    Haeffer,    53    Md.    187; 

Miss.    106;    Fogarty    v.    Sawyer,    17  State    Bank    v.    Chapelle,    4j0    Mich. 

Cal.   589;    Cormerais  v.   Genella,   22  447. 


§    1774.]      POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  732 

filing  of  a  bill  in  equity  to  foreclose  such  a  mortgage,  and  while  the 
bill  is  pending,  a  sale  may  be  made  under  the  power.^^ 

A  resort  to  proceedings  in  equity  is  more  frequent  under  deeds 
of  trust  than  with  mortgages.  The  creditor  may  sometimes  l^e 
compelled  to  do  this  in  order  to  control  the  adverse  action  of  the 
trustee;  and  a  trustee  may  sometimes  do  so  in  order  to  obtain  the 
direction  of  the  court  as  to  his  duties.  A  trustee  may  resort  to  a 
bill  in  equity  in  order  to  prevent  the  bar  of  the  statute  of  limita- 
tions which  would  occur  before  a  sale  could  be  advertised  under  the 
deed.'^®  When  a  trustee  under  a  trust  deed  enters  into  a  collusive 
arrangement  with  the  grantor  in  the  deed  and  declines  to  execute  the 
trust,  and  after  instituting  an  action  of  ejectment  to  recover  pos- 
session of  the  premises  dismisses  it  against  the  wish  of  the  benefi- 
ciary, a  foreclosure  may  be  had  in  chancery  and  a  receiver  may  be 
appointed,  upon  shoM'ing  the  inadequacy  of  the  security  for  the 
payment  of  the  debt.^'^  A  court  of  equity,  whenever  a  contingency 
arises  which  gives  it  jurisdiction  and  occasion  to  interfere,  will,  at 
the  instance  of  a  cestui  que  trust,  control,  restrain,  and  direct  the 
exercise  of  the  power.^" 

§  1774.  The  court  will  appoint  a  new  trustee  upon  the  death, 
inability,  or  declination  of  the  trustee  named  in  the  deed  of  trust, 
or  on  his  abandonment  of  the  trust,  upon  the  application  of  the 
persons  interested  in  the  execution  of  the  trust,  and  of  the  author  of 
the  trust  as  well ;"  but  they  are  all  necessary  parties  to  a  bill  to  obtain 
such  appointment.  Although  the  person  who  made  the  trust  deed 
has  conveyed  to  another  his  interest  in  the  premises,  so  long  as  he 
remains  liable  for  the  payment  of  the  note  secured  by  the  deed  he 
is  interested  in  the  appointment  of  a  proper  person  to  sell  the  prop- 
erty in  such  manner  as  not  unnecessarily  to  cause  a  deficiency.  The 
purchaser  from  him  is  directly  interested  in  the  sale  of  the  property, 
and  is  also  a  necessary  party.*'- 

So,  also,  when  a  trustee  removes  to  a  foreign  country  and  there 
becomes  a  permanent  resident,  he  incapacitates  himself  from   dis- 

=■  Brisbane  v.  Stoughton,  17  Ohio,  '^  Clark   v.   Wilson,   53   Miss.    119; 

482;   First  Nat.  Banlv  v.  Mining  Co.  Ready  v.  Hamm,  4G  Miss.  422;   Con- 

8  Mont   32   19  Pac.  403,  quoting  text;  verse  v.  Davis,  90  Tex.  462.  39  S.  W. 

Dupee  V.  Rose,  10  Utah,  305,  37  Pac.  277;   Davis  v.  Converse  (Tex.)   46  S. 

567-    Mavhall  v.   Eppinger,   137   Cal.  W.  910;  Smissaert  v.  Prudential  In- 

5,  69  Pac.  489.  surance    Co.    15    Colo.    App.    442,    62 

'  '^^  McDonald  v.  Vinson,  56  Miss.  497.  Pac.  967. 

"  Myers  v.  Estell,  48  Miss.  372.  "  Holden    v.    Stickney,    2    MacAr- 

«°  Youngman    v.    Elmira    &    Will-  thur,  141. 
iamsport  R.  Co.  65  Pa.  St.  278;  Clark 
V.  Jones,  93  Tenn.  639,  27  S.  W.  1009. 


733  THE  rowER  of  sale  is  a  cumulative  remedy.     [§  1774. 

charging  the  duties  of  his  trust  and  vacates  his  office.''^  A  new  trus- 
tee may  thereupon  be  appointed.  Where  a  railroad  mortgage  pro- 
vides tliat  upon  the  death,  removal,  or  incapacity  of  a  trustee  the 
majority  of  the  bondholders  may  designate  in  writing  a  person  to 
fill  the  vacancy,  and  the  bondholders  select  a  new  trustee  in  place 
of  one  who  has  permanently  removed  from  the  State,  the  courts  will 
recognize  the  new  trustee,  and  restrain  the  other  from  acting.®* 

A  trustee  who  has  once  accepted  the  trust  is  not  allowed  to  lay  it 
down  without  the  assent  of  the  beneficiary,  or  the  decree  of  a  court 
of  equity;*'^  but  if  within  the  jurisdiction  of  the  court,  may  be  com- 
pelled to  discharge  the  trust.''*' 

It  is  only  by  virtue  of  an  express  power,  conferred  in  the  deed  that 
the  cestui  que  trust  can  make  a  new  appointment  where  the  trustee 
dies,  resigns  or  declines  to  perform  his  duty.®^ 

The  trust  deed  often  makes  provision  for  the  filling  of  any  va- 
cancy that  may  occur  in  the  office  of  trustee;  and  if  the  person  who 
is  to  execute  the  trust  and  the  event  upon  which  he  may  execute  it 
are  distinctly  described  he  may  act,  and  his  acts  will  be  valid. ''^  But 
if  a  power  to  appoint  a  new  trustee  be  conferred  by  the  deed  upon 
the  cestui  que  trust,  his  assignee  cannot  make  a  valid  appointment, 
for  this  power  of  appointment  is  personal  or  in  gross;  is  a  con- 
fidence reposed  in  him  which  he  cannot  delegate  to  another,  unless 
expressly  authorized  by  the  donor.''^ 

The  mode  prescribed  for  making  the  appointment  must  be  com- 
plied with  and  an  appointment  in  writing  merely  is  invalid  when  it 
should  have  been  "by  deed  duly  executed  and  recorded."'^''  A  written 
instrument  exercising  a  power  to  appoint  a  new  trustee  to  fill  a  va- 
cancy is  an  instrument  entitled  to  be  recorded. '^^     But  where  a  cor- 

•'^Barston  v.  Stone,  10  Colo.  App.  Thimble  (Tenn.)  48  S.  W.  125,  where 
396,  52  Pac.  48;   Carey  v.  Fulmer,  74  the  power  of  appointment  was  con- 
Miss.  729,  21  So.  752.  ferred  upon  the  holder  of  the  debt. 
"  Farmers'  Loan    &    Trust    Co.    v.  If  by  the  terms  of  a  deed  of  trust  the 
Hughes,  11  Hun,  130.  cestui  que  trust  be  authorized  to  ap- 
"'^Drane  v.  Gunter,  19  Ala.  731.  point    a    substitute    trustee    in    the 
""  Sargent  v.  Howe,  21  111.  148.  event  of  the  death,  refusal,  or  fail- 
"'  Ready  v.  Hamm,  46  Miss.  422.  ure   of  the   original    trustee   to   act, 
"^  Scott    V.    Wood,    14    Colo.    App.  and   the   trustee   decline   to   execute 
341,  59  Pac.  844.    No  written  convey-  the  trust  unless,  in  addition  to  his 
ance   need    be   made   to   the   substi-  commissions,  he  is  paid  lor  his  ser- 
tuted    trustees    to    entitle    them    to  vices,  such  refusal  constitutes  such 
make  a  valid  exercise  of  the  power,  a  failure  as  authorizes  the  appoint- 
Craft  V.   Indiana,   D.    &  W.    R.   Co.,  ment  of  a  substitute.    Klein  v.  Glass, 
166  111.  580,  4G  N.  B.  1132.  53  Tex.  37. 

<=»  Clark    V.    Wilson,    53    Miss.    119;  '"  Polle  v.  Rouse,  73  Miss.  713,  19 

Equitable   Trust   Co.    v.    Fisher,    106  So.  481. 

111.  189;    Keith  v.  Harbison    (Tenn.)  "  Gooch   v.   Addison,   13   Tex.   Civ. 

52    S.   W.    1109.     But   see   Perrin   v.  App.  76,  35  S.  W.  83. 


§    1774.]      POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  734 

poration  which  was  the  beneficiary  under  a  deed  of  trust  was  author- 
ized to  appoint  a  new  trustee  by  resolution  of  its  board  of  directors, 
it  was  not  necessary  to  the  validity  of  a  transfer  from  the  old  to  the 
new  trustee  that  a  copy  of  such  resolution  should  be  affixed  to  the 
deed  of  transfer."^ 

Where  a  deed  of  trust  appoints  the  sheriff  of  the  county  or  any 
other  person  to  act  in  case  of  the  death  or  absence  of  the  trustee 
named  in  the  deed,  the  holder  of  the  obligation  secured  cannot,  by 
an  ex  parte  proceeding,  have  a  third  person  appointed  trustee.''^ 

A  deed  of  trust  provided  that,  in  the  event  the  trustee  named 
should  be  unwilling  or  unable  to  act  in  carrying  out  the  trust, 
he  should  appoint  a  substitute  trustee;  and  in  the  event  the  trustee 
should  refuse  to  appoint  a  substitute  trustee,  then  it  should  be 
lawful  for  the  holder  of  the  note,  due  and  unpaid,  to  appoint  a  sub- 
stitute trustee  under  his  hand  and  seal,  and  that  his  acts  should  be 
effectual  and  binding.  Prior  to  any  action  being  taken  under  the 
deed  of  trust,  the  original  trustee  died  without  appointing  a  substi- 
tute, and  afterwards  the  holder  of  the  note  appointed,  in  writing 
not  under  seal,  a  substitute  trustee,  by  whom  the  land,  after  de- 
fault, was  advertised,  sold,  and  conveyed.  In  a  controversy  involv- 
ing the  validity  of  the  sale,  it  was  held  that,  the  original  trustee 
being  rendered  unable  to  act  by  death,  though  there  was  technically 
no  refusal  to  appoint  a  substitute,  there  existed  what  was  in  effect 
equivalent  to  a  refusal,  and  that,  the  execution  of  the  power  being 
in  other  respects  valid,  the  omission  of  a  seal  in  the  appointment  of 
the  substitute  trustee  did  not  invalidate  it.'^* 

Where  a  trust  deed  empowers  the  beneficiary  to  appoint  a  substi- 
tuted trustee  in  case  the  original  trustee  refuses  or  fails  to  act, 
the  appointment  of  a  substituted  trustee  while  the  original  trustee 
is  advertising  the  property  for  sale  under  the  trust  deed  confers  no 
title  on  the  substituted  trustee.  Until  the  original  trustee  refuses  to 
act  in  the  performance  of  his  duties  as  trustee,  there  is  no  power 
in  any  one  to  appoint  a  substitute.''^     Moreover,  the  beneficiary  can- 

"  Balfour-Guthrie      Inv.      Co.      v.  Stone,    10    Colo.    App.    396,    52    Pac. 

Woodworth,  124  Cal.  169,  56  Pac.  891.  48. 

"  Bacigalupo  v.   Lallement,   7   Mo.        "'  Chestnutt  v.   Gann,  76  Tex.  150, 

App.   595.     The  power  to  appoint  a  13    S.    W.    274;    Bemis    v.    Williams 

substitute     must     be    strictly     exer-  (Tex.),  74  S.  W.   332.     A  sale  by  a 

cised.     McNeill  v.  Lee,  79  Miss.  455,  substituted    trustee   when    the   orig- 

30    So.    821.     For   a   construction    of  inal  one  is  present  and  willing  to  act 

such  a  clause  see  Reynolds  v.  Kroff,  is   void.     McNeill    v.    Lee,    79    Miss. 

144  Mo.  433,  46  S.  W.  424.  455,   30   So.   82;    Kelsay  v.   Farmers' 

''Jacobs    V.    McClintock,    53    Tex.  &    Traders'    Bank,    166    Mo.    157,    65 

72.     See  as  to  failure  of  trustee  to  S.  W.   1007.     In  the  latter  case  the 

perform     his    duties.      Barstow    v.  court  considers   the   question  as   to 


735 


THE    rOWER   OF    SALE   IS   A    CUMULATIVE    REMEDY.   [§    1774a. 


not  substitute  another  trustee  in  case  he  has  never  asked  the  original 
trustee  to  make  the  sale,  since  the  trustee  could  not  be  said  to  "fail" 
to  act  until  he  had  been  requested  to  act,  and  has  omitted  to  do  so.^" 

A  foreclosure  sale  by  a  substituted  trustee  whose  appointment  is 
shown  only  by  recital  in  his  deed  to  the  purchaser  when  the  deed 
of  trust  provided  for  the  appointment  of  a  substitute  by  a  deed 
duly  executed  by  the  beneficiary,  is  void.^^ 

The  administrator  of  a  deceased  trustee  has  no  authority  to  make 
a  sale  under  the  power  contained  in  the  deed  of  trust,  and  if  he 
attempt  to  do  so,  he  could  be  restrained  by  injunctions^  But  such 
a  poM^er  may  be  conferred  by  express  stipulation  in  the  trust  deed. 
Even  though  both  the  grantor  and  the  trustee  be  dead,  a  sale  by  the 
trustee's  administrator,  made  in  strict  conformity  with  the  terms 
of  the  power,  would  be  valid  and  would  operate  to  divest  the  title 
which  had  passed  to  the  heirs  at  law  of  the  trustee. '^'^  For  at  the 
death  of  a  sole  trustee  the  legal  title  vests  es  instanti  in  his  heirs." 

§  1774a.  A  trust  reg-arding  realty  will  be  enforced  regardless 
of  the  situation  of  the  property.  Thus  where  a  deed  of  trust  of 
land  has  been  executed  in  California,  by  persons  residing  there, 
of  land  in  another  State,  a  court  of  California,  having  jurisdiction  of 
the  parties,  may  appoint  a  new  trustee  in  place  of  one  incompetent 
to  act,  and  direct  him  to  carry  out  the  trust.^^  The  lex  rei  sita; 
governs  as  to  questions  affecting  the  title  to  real  property.  Land  is 
held  and  the  title  determined  by  the  laws  of  the  country  or  State 
where  it  is  situated,  and  the  tribunals  administering  those  laws  are 
the  proper  forums  in  which  titles  to  realty  should  be  litigated.  The 
effect  of  a  court's  decree  is  necessarily  limited  by  the  boundary  lines 
of  its  jurisdiction.  Thus,  where  a  court  of  Pennsylvania  adjudged 
a  conveyance  of  land  in  New  Jersey  to  be  a  mortgage,  and  cancelled 
the  same,  all  the  parties  living  in  Pennsylvania,  the  Supreme  Court 
of  New  Jersey  said :  "The  decree  cainot  operate  ex  proprio  vigore 
upon  the  lands  in  another  jurisdiction  to  create,  transfer,  or  vest  a 
title.     The  courts  of  one  State  or  countiy  are  without  jurisdiction 

what  is  a  failure  to  act.     Where  a  "^  Polle  v.  Rouse,  73  Miss.  713,  19 

creditor  was  given  the  right  to  ap-  So.  481. 

point    a    substitute    trustee    in    case  "  Ready  v.  Hamm,  46  Miss.  422. 

the  original  one  refused  to  act,  and  "  Sulphur    Mines    Co.    v.    Thomp- 

the   creditor   requested    the   original  son,  93  Va.  293,  25  S.  E.  2o2. 

trustee  not  to  act  and  then  appoint-  **"  Davis    v.    Lusk,    191    111.    620,    61 

ed  a  new  one,  such  appointment  was  N.  E.  483. 

without  authority  and  void.     Brack-  ^^  Smith    v.    Davis,    90    Cal.    25,    27 

en  V.   Bounds    (Tex.)    71   S.   W.   547.  Pac.     26.     And     see     Poindexter     v. 

"Stallings     v.     Thomas,    55     Ark.  Burwell,     82     Va.     507;     Bar.ger     v. 

326,  18  S.  W.  184,  Buckland,   28   Gratt.   850;    Massie  v. 

Watts,  6  Cranch,   148. 


§§  1775,  1776.]  POWER  OF  sale  mortgages  and  trust  deeds.  736 

over  title  to  lands  in  another  State  or  country."^-  But  a  court  of 
equity  has  jurisdiction  of  matters  of  trust,  and,  "whenever  jurisdic- 
tion over  the  parties  has  been  acquired,  administer  full  relief,  with- 
out regard  to  the  nature  or  situation  of  the  property  in  which  the 
controversy  had  its  origin,  and  even  where  the  relief  sought  con- 
sists in  a  decree  for  the  conveyance  of  property  which  lies  beyond 
the  control  of  the  court,  provided  it  can  be  reached  by  the  exercise 
of  its  powers  over  the  person,  and  the  relief  asked  is  of  such  nature 
as  the  court  is  capable  of  administering."*^  In  the  language  of 
Chief  Justice  Marshall,  in  such  a  case,  "the  circum.stance  that  a 
question  of  title  may  be  involved  in  the  inquiry,  and  may  even  con- 
stitute the  essential  point  on  which  the  case  depends,  does  not  seem 
sufficient  to  arrest  that  jurisdiction."*'* 

§  1775.  The  sale  is  by  virtue  of  the  power  and  not  of  the  decree 
"when  the  court  enforces  the  power.  Upon  the  death  of  the  trustee 
named  in  the  a  deed  of  trust,  a  court  of  equity  has  power  to  appoint 
a  new  trustee  to  execute  the  power  of  sale,  and  to  determine  the 
amount  of  the  debt  secured  by  the  trust;  but  a  sale  by  such  trustee 
professedly  by  virtue  of  the  trust  deed,  made  in  pursuance  of  such 
decree,  is  not  a  sale  made  under  a  decree  of  foreclosure,  but  one  made 
by  virtue  of  the  power  in  the  trust  deed.*^  A  sale  made  by  decree  of 
a  court  of  equity  varying  substantially  in  its  terms  from  the  pro- 
visions of  the  power  is  a  judicial  sale,  and  not  a  sale  imder  the 
power.*® 

It  has  been  held  in  Virginia  that  the  trustee  cannot  sell  until  the 
amount  of  the  debt  secured  is  ascertained,  and  that  either  party  in 
interest  may  resort  to  a  court  of  equity  for  this  purpose."  After  as- 
certaining the  amount  the  court  may,  in  its  discretion,  dismiss  the 
bill  and  leave  the  trustee  to  sell  under  the  power,  or  may  retain 
the  case  and  have  the  trust  executed  under  its  own  supervision.  The 
court  may  also  appoint  a  commissioner  to  make  the  sale  instead  of 
the  trustee;  but  he  must  pursue  the  provisions  of  the  deed  as  to 
the  terms  and  mode  of  sale.  The  court  cannot  set  aside  the  deed 
of  trust  in  any  respect.*® 

§  1776.  When  debt  is  unliquidated. — If  the  amount  secured  by 
the  mortgage  can  be  ascertained  by  calculation,  there  is  no  objec- 

^^Lindley  v.  O'Reilly,  50  N.  J.   L.  Doolittle  v.  Lewis,  7  Johns.  Ch.  45, 

636,  15  Atl.  379.  11  Am.   Dec.   389;    Beatie   v.   Butler, 

«^Wimer  v.  Wimer,   82  Va.    890.  21  Mo.  313,  64  Am.  Dec.  2-34. 

"Massie  v.  Watts,  6  Cranch,  148.  *"  Chew  v.  Hyman,  7  Fed.  7. 

*'Rice  v.  Brown,  77  111.  549;   Hoi-  »^  Wilkins  v.  Gordon,  11  Leigh,  547. 

den   v.    Stickney,    2   Mc Arthur,   141;  ^'Crenshaw  v.  Seigfried,  24  Gratt. 

Staats  V.  Bigelow,  2  McArthur,  367;  272. 


737  CONSTRUCTION  OF  POWER.       [§§  1777,  1777a, 

tion  to  a  foreclosure  under  the  power  ;^''  neither  is  tliere  if  it  is  con- 
ditioned for  the  delivery  of  certain  specified  articles,  when  a  specified 
sum  is  authorized  to  be  retained  from  the  proceeds  upon  a  breach  of 
the  condition.'"  It  is  then  equivalent  to  a  mortgage  to  secure  the 
payment  of  a  definite  sum.  But  a  mortgage  given  to  secure  and 
cover  unliquidated  damages  cannot  be  foreclosed  in  this  manner'-" 
until  the  amount  due  under  the  mortgage  has  been  ascertained.  It 
has  been  held  also  that  under  a  deed  of  trust,  if  the  amount  of  the 
debt  secured  be  unliquidated  and  uncertain,  a  sale  cannot  be  made 
under  the  poM^er  until  the  amount  of  the  debt  has  first  been  deter- 
mined in  a  court  of  equity.®- 

The  objection  that  the  sum  secured  is  uncertain  or  unliquidated 
has  particular  force  in  those  States  in  which  there  are  statutory  pro- 
visions that  only  so  much  of  the  estate  as  may  be  necessary  to  satisfy 
the  mortgage  debt  shall  be  sold. 


III.     Construction  of  Power. 

§  1777.  The  power  to  sell  may  not  only  be  made  by  an  instrument 
separate  from  the  mortgage,^^  but  it  may  be  to  a  third  person,  in- 
stead of  the  mortgage  creditor;  for  instance,  it  may  be  in  the  form 
of  a  power  of  attorney  to  a  third  person;  and  such  power,  v/hen 
executed  according  to  its  terms,  effectually  cuts  off  the  equity  of 
redemption.^*  Moreover,  a  power  in  the  mortgage  or  deed  may 
be  changed  by  a  writing  subsequently  executed  by  the  parties  under 
seal."^  A  power  of  sale,  though  it  should  be  expressly  and  fuUj" 
conferred,  may  sometimes  arise  by  necessary  implication  from  the 
terms  of  the  instrument."'' 

§  1777a.  A  power  of  sale  may  in  general  be  conferred  by  any 
owner  of  lands  who  has  the  legal  capacity  to  convey  them.  A 
statute  which  provides  that  any  married  woman  above  the  age  of 
eighteen  years,  joining  with  her  husband,  may  make  a  valid  mort- 

«' Lewis  V.   Duane,  141  N.   Y.   302,  »=  Alexander   v.    Caldwell,    61    Ala. 

36  N.  B.  322,  69  Hun,  28;   Mowry  v.  543. 

Sanborn,  62  Barb.  223,  68  N.  Y.  153.  "'Brisbane  v.  Stoughton,  17  Ohio, 

See  §  1812.  482.     It    is    valid    for    thp.    mortgage 

^  Jackson  v.  Turner,  7  Wend.  458.  deed  to  confer  the  power  upon  the 

"  Ferguson    v.    Kimball,    3    Barb,  "holder"  of  the  note  secured  by  the 

Ch.     616;     Mowry    v.     Sanborn,     62  mortgage.    Ray  v.  Home  &  Foreign, 

Barb.    223;    Mosby  v.    Hodge,   76   N.  etc.  Co.  98  Ga.  122,  26  S.  E.  56. 

C.  387.  "'Baldridge  v.  Walton,  1  Mo.  520. 

''^Wilkins    v.    Gordon,    11    Leigh,  ""  Purdie  v.  Whitney,  20  Pick.  25; 

547.     See    Riggs    v.    Armstrong,    23  Mundy  v.  Vawter,  3  Graft.   518. 
W.  Va.  760. 


§    1777b.]     POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  738 

gage  or  other  conveyance  of  her  real  estate,  or  of  any  interest 
therein,  authorizes  such  married  woman  executing  a  mortgage  or 
deed  of  trust  in  the  manner  provided  to  confer  a  power  of  sale,  the 
exercise  of  which  will  effectually  bar  her  equity  of  redemption.^^ 
Such  a  power  is  an  irrevocable  authority  to  aid  in  the  alienation 
of  the  estate,  and  bears  no  analogy  to  covenants  declared  by  the 
common  law  to  be  inoperative  in  the  deed  of  a  married  woman.^* 

§  1777b.  The  mortgage  must  provide  upon  what  event  the  power 
may  be  exercised.''^  -In  general  it  is  provided  that  a  sale  under  the 
power  may  be  had  upon  any  default  in  the  conditions  of  the  mort- 
gage. A  default  in  the  payment  of  any  instalment  of  the  principal 
or  of  the  interest  of  the  mortgage  debt  is  a  default  which  authorizes 
the  exercise  of  the  power."*'  The  mortgagee  in  such  case  may  proceed 
to  foreclose  without  giving  the  mortgagor  notice  of  his  intention 
to  do  so.^"^  But  a  sale  for  an  alleged  breach  caused  by  the  mort- 
gagor's failure  to  pay  usurious  interest  is  premature  and  void.^°^ 

Under  a  deed  of  trust  securing  several  notes  due  at  different  times 
which  authorizes  the  trustee  to  sell  in  case  the  debtor  fails  to  pay 
"said  notes  on  or  before  the  maturity  thereof,"  the  trustee  or  the 
beneficiary  has  the  right  to  enforce  a  sale  of  the  land  for  the  pay- 
ment of  one  or  more  of  the  notes  not  paid  at  maturity,  without 
waiting  for  the  maturity  of  all  the  notes."^  The  same  construction 
is  given  to  a  power  to  sell  in  the  event  that  "the  said  notes  should 
not  be  well  and  truly  paid.""*     But  where  a  mortgage  was  given  to 

'^Barnes  v.  Ehrman,  74  111.  402.  lips  v.  Bailey,  82  Mo.  639;   Wheeler 

«8  Barnes    v.    Ehrman,    74    111.    402,  v.  McBlair,  5  App.  D.  C.  375. 

per  Scott,  J.  In   Jouett    v.    Gunn,    13    Tex.    Civ. 

""  Where    the    words    "In    case    of  App.  84,  failure  to  pay  three  instal- 

non-payment"   were   omitted   before  ments    of    interest   was    the    default 

the  words  "of  the  principal  sum  or  upon  which  the  property   might  be 

of  the  interest  thereof"  in  the  pro-  sold.     In  Harrold  v.  Warren  (Tex.), 

vision    of   a   mortgage   by   which    a  46    S.    W.    657,    sale    could    not    be 

power    of    sale    was    sought    to    be  made     till     the     maturity     of     both 

conferred,  foreclosure  by  advertise-  principal    and    interest.     Where    the 

ment    was    unauthorized.     Lariverre  note     was     not     payable     till     six 

v.    Rains,   112   Mich.    276,    70   N.   W.  months  after  demand,  there  was  no 

583.     But  it  is  valid  to  give  a  trus-  default  authorizing  a  sale  under  the 

tee  general  power  to  deal  with  the  power    till    a    demand    for    payment 

property    without    waiting    for    any  had   been   uncomplied    with   for   six 

default.    Judge   v.   Pfaff,   171   Mass.  months.     Fenley  v.  Cassidy   (R.  I.), 

195,  50  N.  E.  524.  43  Atl.  296. 

^'"'§§      1177,       1178;      Hooper      v.  ^"  Hawes  v.  Detroit  F.   &  M.   Ins. 

Stump      (Arizona),     14     Pac.      799;  Co.    109   Mich.    324,    67    N.    W.    329: 

Brickell  v.  Batchelder,  62  Cal.  623;  Kansas  L.  &  T.  Co.  v.  Gill,  2  Kans. 

Gustav.     Adolph.     Build.     Asso.     v.  App.  488,  43  Pac.  991. 

Kratz,  55  Md.  394;  Dal  ton  v.  Eaves,  ^«=  Duncan  v.  Hough   (Tex.),  27  S. 

92    Mo.    App.    72;    Potomac    Manuf.  W.  945. 

Co.  v.  Evans,  84  Va.  717,  6  S.  E.  2.  ^"^  Bridges  v.  Ballard,  62  Miss.  237. 

Cured  by  tender  before  sale.    Phil-  '"*  Reddick    v.    Gressman,    49    Mo. 

389;   Hunt  v.  Harding,  11  Ind.  245. 


739  CONSTRUCTION   OF  POWER.         [§§    1777c,   1778. 

secure  the  prompt  payment  of  two  notes  on  a  ^aven  day,  a  default 
authorizing  a  sale  did  not  occur  till  the  designated  day,  even  though 
one  of  the  notes  fell  due  before  that  time.^°^  A  sale  made  before  the 
debt  or  any  part  of  it  is  due  is  absolutely  void  and  passes  no  title. ^°^ 
A  trust  deed  given  to  secure  a  debt  which  was  already  secured  by 
a  trust  deed  on  other  property  ga.ve  the  trustee  a  power  to  sell  in 
case  the  debt  was  not  paid  within  sixty  days  after  maturity  or  satisfied 
out  of  the  property  covered  by  the  prior  trust  deed.  It  was  held  that 
the  power  of  the  trustee  under  the  second  deed  to  sell  was  not  con- 
tingent upon  a  sale  under  the  earlier  deed.^"^ 

§  1777c.  The  payment  of  taxes  may  be  made  a  condition,  for 
breach  of  which  foreclosure  may  be  had,  Wliere  a  mortgage  con- 
tained a  power  of  sale  authorizing  a  sale  for  any  breach  of  conditions, 
and  there  was  a  breach  of  the  condition  to  pay  taxes  and  assess- 
ments, the  fact  that  the  principal  debt  and  interest  are  tendered  or 
paid  to  the  mortgagee  does  not  defeat  or  render  invalid  the  power 
of  sale.^"^  But  a  mere  covenant  to  pay  the  taxes  when  not  made  a 
part  of  the  condition  for  breach  of  which  a  foreclosure  may  be  had, 
does  not  give  the  mortgagee  the  right  to  foreclose  in  case  of  non- 
payment.^^^ 

§  1777d.  A  condition  attached  to  a  power  of  sale  that  the  trustee 
shall  sell  only  by  and  with  the  consent  of  the  grantor,  to  be  mani- 
fested by  his  uniting  in  the  conveyance,  is  valid.  It  is  an  essential 
condition  and  cannot  be  dispensed  with.  If  under  such  a  power  no 
provision  is  made  for  the  execution  of  the  power  in  case  of  the  death 
of  the  grantor,  it  is  extinguished'  by  such  death. ^^^ 

§  1778.  The  parties  may  also  make  such  provisions  and  reg^ula- 
tioHs  abovit  the  sale  of  the  property  under  the  trust  as  they  may 
choose;  and  the  sale  must  be  in  accordance  with  the  provisions  of 
the  power  given.  No  particular  form  of  words  is  necessary  to  con- 
stitute the  power.  The  essential  provisions  of  it  should  be  clearly 
and  fully  expressed,  for  the  title  of  the  purchaser  under  the  power 
rests  upon  the  authority  there. given."^  When  in  a  trust  deed  the 
powers  of  the  trustee  are  not  strictly  defined,  they  rest  largely  in 

"'  Keith   V.   McLaughlin,   105   Ala.  solute.     Jaclcson    v.    Lawrence,    117 

339,  16  So.  886.  U.  S.  679,  6  Sup.  Ct.  915. 

'""Long    V.     Long,     79     Mo.     644;  >"  Swan  v.  Morehouse,  6  D.  C.  225. 

Eitelgeorge  v.  Mut.  House  Building  "^''  Silva  v.   Turner,   166  Mass.   407, 

Asso.     69     Mo.     55;      Koehring     v.  44  N.  E.  532. 

Muemminghoff,    61    Mo.    403.     Parol  '''>  Heller  v.    Neeves,   93   Wis.   637. 

evidence     is     admissible     to     show  67  N.  W.  923,  68  N.  W.  412. 

when  the  power  of  sale  bocame  ab-  ""  Kissam  v.  Dierkes,  49  N.  Y.  602. 

'"  Gramme  v.  Cullen,  23  Gratt.  266. 


§§  1779,  1780.]  POWER  OF  sale  mortgages  and  trust  deeds.  740 

his  discretion,  and  it  is  presumed  that  he  will  exercise  them  for  the 
best  interests  of  the  cestui  que  trust.^^-  Thus  the  deed  usually  des- 
ignates the  place  of  sale  and  the  character  of  the  notice  of  it  to  be 
given;  but  if  the  deed  leaves  these  matters  to  the  discretion  of  the 
trustee,  a  sale  by  him  in  the  honest  exercise  of  his  judgment  will  be 
sustained.^  ^^ 

Under  a  trust  deed  made  to  secure  a  loan,  with  authority  to  the 
trustee  to  take  possession  of  the  property  and  sell  it  upon  thirty 
days'  notice,  the  authority  to  sell  is  for  the  benefit  of  the  creditor, 
and  may  be  exercised  at  the  discretion  of  the  trustee.  He  is  not 
bound  to  sell  within  the  time  named,  or  at  all,  unless  by  direction 
of  a  court  of  equity.  In  the  mean  time  it  is  his  right  and  duty  to 
take  possession,  and  to  apply  the  rents  and  profits  to  the  pa3Tiient 
of  the  debt.  The  object  of  the  trust  is  to  enable  the  creditor  to 
m.ake  his  money  out  of  the  property,  and  therefore  its  provisions  are 
to  be  construed  and  applied  with  a  view  to  that  end.^^* 

§  1779.  What  is  a  sufficient  power. — A  provision  in  a  mortgage 
that,  if  the  mortgagor  "shall  fail  to  make  the  payment,  the  said 
mortgagee  shall  advertise  twenty  days,  and  sell  enough  of  the  estate 
herein  conveyed  to  him  to  pay  said  amount  then  due,  and  the  said 
mortgagor  shall  have  the  right  to  direct  what  shall  be  sold,"  is  a 
sufficient  power  of  sale,  and  may  be  executed  without  the  aid  of 
a  court  of  equity.^^^  The  power  of  sale  may  even  be  contained  in  a 
deed  of  the  land  to  the  debtor,  A  stipulation  in  such  deed  that,  if 
the  grantee  fail  to  pay  the  notes  given  for  the  purchase-money  when 
due,  the  sheriff  of  the  county  acting  at  the  time  of  default  shall  sell 
the  land,  give  title  to  the  purchaser,  and  pay  the  money  tO'  the 
grantor,  or  to  the  assignee  or  holder  of  any  of  the  notes,  confers  a 
valid  power  of  sale  upon  the  sheriff,  although  the  title  to  the  land 
is  in  the  grantee.^^'' 

^  1780.  Acceptance  of  trust. — It  is  not  requisite  to  the  validity 
of  a  power  in  a  trust  deed  that  the  person  who  is  to  execute  the 
power  shall  signify  his  wdllingness  to  do  so  by  joining  in  the  deed, 
or  by  any  formal  writing.^^^  Although  the  deed  be  delivered  to  the 
cestui  que  trust,  and  the  trustee  never  has  possession  of  it,  yet  his 

"'  Ingle   V.    Culbertson,  43    Iowa,        ""  Moore  v.  Lackey,  53  Miss.  85. 
265.  ^"  Leffler    v.    Armstrong,    4    Iowa, 

^'' Ingle  v.  Culbertson,  43  Iowa,  482,  68  Am.  Dec.  672;  Hipp  v.  Hu- 
265  chett,    4   Tex.    20;    Flint    v.    Clinton 

"^  Walker  v.  Teal,  7  Sawyer,  39.         Co.  12  N.  H.  430,  432. 

"'  Hyman   v.    Devereux,  63    N.    C. 
624. 


741  CONSTRUCTION   OF   POWER.  [§§    1781-1784. 

acting  under  the  trust  by  advertising  the  property  for  sale  is  an 
acceptance  of  the  trust  by  him.^^**  Neither  is  it  necessary  that  the 
cestui  qub  trust  should  signify  his  assent  by  any  formal  writing. 
The  deed  being  for  his  benefit,  his  assent  is  presumed."" 

§  1781.  An  obvious  error  on  the  face  of  the  power,  such  as  a 
recital  that  "the  party  of  the  first  part,"  who,  according  to  the 
phraseology  of  the  deed,  was  the  mortgagor,  should  proceed  to  sell, 
does  not  invalidate  the  power,  when  it  appears  from  the  whole  in- 
strument that  the  intention  was  to  confer  a  power  of  sale  on  the 
mortffairee.^^" 


"'ti"t-'^ 


§  1782.  Tinder  a  power  in  default  of  payment  to  "enter  and 
take  posession  of  said  premises  immediately,  and  sell  and  dispose 
of  the  same,"  the  entry  and  possession  are  not  generally  considered 
a  condition  precedent  to  the  exercise  of  the  power  of  sale,^^^  though 
it  has  been  held  that  under  such  a  provision  a  sale  cannot  be  made 
without  a  previous  entry  and  taking  possession,  or  at  least  a  demand 
for  possession  and  a  refusal  ;^^^  but  it  is  not  necessary  that  the 
mortgagee  should  enter  upon  the  premises  at  any  other  time,  or 
in  any  other  manner  than  at  the  time  of  the  sale,  and  for  the  pur- 
poses of  the  sale.  Such  entry  is  authorized  to  enable  the  sale  to  be 
made  upon  the  premises. ^-^ 

§  1783.  The  fact  that  a  mortgagee  has  made  an  entry  for  fore- 
closure, and  taken  rents  and  profits  which  are  insufficient  to  dis- 
charge the  debt,  does  not  prevent  his  making  a  valid  sale  under  a 
power  of  sale  in  the  mortgage.  The  rents  and  profits  received  go 
to  reduce  the  amount  of  the  mortgage  debt.^^* 

§  1784.  As  against  the  mortgagor  a  sale  under  a  power  is  good 
although   the   mortgage   or   the   power   has   not   been   recorded  ;^^^ 

though  now,  in  several  States  in  which  the  exercise  of  the  power  of 
sale  is   regulated   by   statute,   it   is   provided   that   the  mortgage   or 

"^  Crocker    v.    Lowenthal,    83    111.  followed    in    Foster    v.    Boston,    133 

579  Mass.    143.     If   the   deed   makes   en- 

'1"  Shearer  v.  Loftin,  26  Ala.  703.  try  and  possessi-on  a  condition  pre- 

1=°  Gaines   v.    Allen,    58   Mo.    537.  cedent,   this   cannot  be    satisfied   by 

1-1  Vaughn  v.  Powell,  65  Miss.  401,  a  demand  for  possession.     Vaughan 

4  So.  257;  Tyler  v.  Herring,  67  Miss.  v.    Powell,   65   Miss.   401,   4    So.    257, 

169,  6  So.  840,  19  Am.  St.  263;  Ham-  per  Campbell,  J. 

llton  V.    Haplin,   68  Miss.    99,   8   So.  '-■'  Cranston  v.  Crane,  97  Mass.  459, 

739;    Williams  v.    Dreyfus,   79   Miss.  93  Am.  Dec.  106. 

245,  30  So.   633:    Kiley  v.   Brewster,  '-'Montague    v.    Dawes,    12    Allen, 

44  'ill.    186:     Clark    v.    Harvey,    16  397.     And  see  §  1268. 

Ontario,    159:    Jones    v.    Hagler,    95  '==  Wilson    v.    Troup,    2    Cow.    195, 

Ala.  529,  citing  text.  14  Am.  Dec.  458;  Jackson  v.  Golden, 

"-Roarty  v.  Mitchell,  7  Gray,  243,  4  Cow.  266. 


§    1785.]        POWER   OF    SALE   MORTGAGES   AND    TRUST    DEEDS.  742 

power  shall  be  recorded.  Under  such  provisions,  if  the  premises 
consist  of  distinct  lots  situated  in  two  or  more  counties,  the  mort- 
gage must  be  recorded  in  each  county,  or  the  sale  will  be  invalid  as 
to  the  part  in  the  county  in  which  there  was  no  record.^-®  A  valid 
sale  may  be  made  by  the  assignee  of  a  mortgage  containing  a  power 
of  sale,  although  the  assignment  is  not  recorded  till  after  the  sale, 
if  nobody  is  thereby  misled,  unless  othcTwise  provided  by  statute.^^^ 

§  1785.  Who  may  exercise  the  power. — In  general  any  person 
of  legal  capacity  in  whom  the  legal  estate  or  title  under  the  mortgage 
is  vested  may  sell  under  the  power.  The  person  exercising  the  power 
must  hold  the  legal  title,^^^  save  in  exceptional  cases,  as  where  the 
title  is  in  an  executor  or  administrator.^^^  So  long  as  the  mortgagee 
retains  the  mortgage  the  power  must  be  exercised  by  him ;  and  when  it 
has  been  wholly  assigned  the  assignee  must  exercise  it.^^** 

To  create  a  valid  power,  or  to  make  a  valid  execution  of  it,  one 
must  have  a  legal  capacity  to  act  and  contract,  and  one  under  any 
legal  disability,  such  as  minority,  can  do  neither."^  A  married  woman 
may  make  a  good  power,  or  a  valid  execution  of  one."^ 

A  corporation,  to  which  as  a  mortgagee  a  power  of  sale  is  given, 
may,  as  a  genei-al  rule,  exercise  the  power.  A  corporation  reincor- 
porated under  a  different  name  may  exercise  a  power  of  sale  in  a 
mortgage  given  to  the  first  corporation  by  force  of  the  statute  au- 
thorizing the  reincorpoTation,  or  the  power  may  be  exercised  by  an 
individual  assignee  of  the  latter  corporation.^^^  In  Maryland,  how- 
ever, as  the  person  exercising  the  power  must  act  under  oath,  a  power 
of  sale  cannot  be  exercised  by  a  corporation,  though  it  may  be  exer- 
cised by  a  natural  person  designated  in  the  mortgage  as  the  attorney  of 
the  corporation.^^*  Formerly  it  was  necessary  in  Maryland  for  the 
natural  person  to  be  designated  by  name  in  the  mortgage,  but  this 

i=«  Wells  v.  Wells,  47  Barb.  416.  ""  Cohoes    Co.    v.    Goss,    13    Barb. 

1^' Montague    v.    Dawes,    12    Allen,  137;    McGuire   v.   Van   Pelt,   55   Ala. 

397-   Western  Md.  R.  Land,  &c.  Co.  344;    Woodruff    v.    Adair,    131    Ala. 

v    Goodwin,  77  Md.  271,  26  Atl.  319.  530,  32  So.  515. 

'■^  Backus  v.  Burke,  48  Minn.  260,  "'  Burnet    v.    Denniston,    5    Johns. 

51  N.  W.  284;   Burke  v.  Backus,  50  Ch.   35;    Rocks  v.    Cornell,   21   R.    I. 

Minn     174,    53    N.    W.    458;    Solberg  532,  45  Atl.  552. 

v    Wright    33  Minn.   224,   22   N.   W.  '''  Demarest  v.  Wynkoop,  3  Johns. 

381-    Lee 'v.    Clary,    38    Mich.    223;  Ch.    129,   8   Am.   Dec.   467;    Doolittle 

Miller  v.  Clark,  56  Mich.  337,  23  N.  v.   Lewis,   7   Johns.    Ch.    45,   11    Am. 

W    35;    Morris   v.    McKnight,    1    N.  Dec.  389;  Young  v.  Graff,  28  111.  20. 

Dak.    266,  47  N.   W.    375;    Brown  v.  "' Erb    v.    Grimer,    94    Md.    92,    50 

Delaney,  22  Minn.  349;    Dameron  v.  Atl.  397. 

Eskridge,  104  N.  C.  621,  10  S.  E.  700.  ^=' §    1740;    Chilton   v.    Brooks,    71 

'=»  Baldwin  v.  Allison,  4  Minn.  25,  Md.  445,  18  Atl.  868;   Frosburg  Mut 

Morris  v.  McKnight,  1  N.  Dak.  266,  Build.  Asso.  v.  Lowdermllk,  50  Md. 

47   N    W.    375;    Stevens   v.    Shanna-  175;     Queen    City    Build.     Asso.    v. 

han,  160  111.  330,  43  N.  E.  350.  Price,  53  Md.  397. 


743  CONSTRUCTION  OF  POWER.  [§  1785. 

has  been  changed  by  statute.^^^  So  that  today  in  thLs  State  a  mort- 
gagee corporation  has  plenary  powers  in  appointing  an  attorney  to 
exercise  in  its  behalf  a  power  of  sale  in  the  mortgage. 

Upon  the  death  of  a  trustee  in  a  deed  of  trust,  the  power  of  sale 
cannot  be  exercised  without  the  appointment  of  a  new  trustee,  though 
there  may  be  a  foreclosure  in  equity  without  such  appointment.^^" 

A  deed  of  trust  with  a  power  of  sale  made  to  a  sheriff  and  his 
successors  in  office  is  construed  as  conferring  a  power,  not  upon 
the  sheriff  in  his  individual  capacity,  but  in  his  official  capacity,  and 
his  successors  in  office  may  execute  it."''  But  a  trust  deed  to  L.  S., 
secretary,  passes  legal  title  to  him  individually  and  not  in  his  repre- 
sentative capacity."^  Even  if  a  deed  conveyed  a  power  of  sale  to 
a  treasurer  as  such,  his  successor  in  office  could  not  execute  it  with- 
out complying  with  a  statute  which  necessitated  the  record  in  the 
clerk's  office  of  the  appointment  of  substitute  trustees."^ 

A  trust  deed  may  properly  provide  for  a  successor  in  the  trust 
who  may  exercise  the  power  of  sale  in  the  absence  of  the  trustee 
first  named,  or  in  case  of  his  refusel  to  act,  and  in  such  case  a  suc- 
cessor appointed  in  the  manner  provided  is  clothed  with  all  the 
power  to  make  the  sale  which  the  trustee  first  named  was  invested 
with."" 

A  mortgage  was  made  to  secure  a  debt  to  a  partnership,  one  of 
the  partners  in  which  had  died,  and  the  other  partner  was  then  his 
administrator.  The  consideration  was  stated  to  be  paid  by  the  sur- 
viving partner  and  the  estate  of  the  deceased  partner,  and  the  same 
form  was  used  in  designating  the  grantees;  and  a  power  of  sale  was 
given  to  "said  grantees."  It  was  held  that  the  surviving  partner 
as  administrator  was  sufficiently  designated  as  one  of  the  grantees; 

i^^Suppl.    to    Code    of    Pub.    Gen.  124,   46   N.   E.   197,   affirming  61   111. 

Laws  of  Md.  Art.  66,  §  23.     In  Mad-  App.  252. 

igan    v.    Workingmen's    Permanent,  '"  Beal    v.    Blair,    33    Iowa,    318; 

etc.  Ass'n,  73  Md.  317,  this  act  was  White    v.    Stephens,    77    Mo.    452;    § 

held    to    be    retroactive    in    its    ef-  1771. 

fects.     Under  the  former  statute  it  "'^  Sangston   v.    Gordon,   22   Gratt. 

had    been    held   that   a   power   to    a  755. 

corporation  and  to  no  one  else,  its  ''"  Shipp    v.    New    South    Building 

assigns  not  being  named,  was  void,  and  Loan  Asso.  (Miss.)  32  So.  904. 

Frostburg  Mut.  Build.  Asso.  v.  Low-  ""  Irish  v.  Antioch  College,  126  111. 

dermilk,    50    Md.    175;    Queen    City  474,  18  N.   B.   768;    Lake  v    Brown, 

Build.    Asso.    v.    Price,    53    Md.    397.  116    111.    83;    McConnell    v.    Day,    61 

Yet    an    assignee    of    the    mortgage  Ark.   464,  33   S.   W.   731.     In  Woods 

who  was  a  natural  person  could  ex-  v.  Rozelle,  75  Miss.  782,  23  So.  483, 

ercise    the    power    when    it    had    in  the  sheriff  was  to  succeed  the  trus- 

express  terms  been  given  to  the  cor-  tee  in  case  of  his  disability,  but  was 

poration    and    its    assigns.     Chilton  only   empowered   to   sell   the   prop- 

v.   Brooks,   71  Md.   445,   14   Atl.   868.  erty,    and    so    could    not    execute    a 

See  §    1787.  conveyance  to  the  purchaser. 

136-waughop    V.    Bartlett,    165    111. 


§    1786.]        POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  744 

that  the  whole  legal  title  was  vested  in  him,  one  half  to  his  own 
use,  and  the  other  as  administrator;  and  that  his  omission  to  de- 
scribe himself  as  administrator  in  a  deed  given  in  execution  of  the 
power  to  sell  did  not  invalidate  the  deed.^"*^ 

Upon  the  death  of  a  mortgagee  holding  a  mortgage,  it  can  only 
be  foreclosed  by  his  executor  or  administrator.  An  attempted  sale  of 
land  under  a  mortgage  by  the  heir  of  the  mortgagee  is  without  au- 
thority and  conveys  no  estate."^  A  foreclosure  by  a  notice  of  sale 
purporting  to  be  in  the  name  of  the  deceased  mortgagee,  or  by  his 
authority,  is  void,  and  the  notice  cannot  be  made  effectual  by  proof 
that  it  was  really  the  act  of  a  person  who  had  purchased  the  note  and 
mortgage,  although  the  mortgagee  had  not  indorsed  the  note  nor  as- 
signed the  mortgage.^*^ 

§  1786.  A  power  of  sale  may  be  executed  by  the  -executor  or 
administrator  of  the  mortgagee,  although  in  terms  the  power  is 
given  only  to  him,  "his  heirs  or  assigns."^**  The  power  being  coupled 
with  an  interest  parses  to  any  one  in  whom  the  mortgagee's  estate 
becomes  vested,  whether  by  assignment  in  fact  or  in  law.  It  does  not 
matter  that  the  appointment  of  the  executor  or  administrator  is 
made  in  another  State,  as  the  power  is  a  matter  of  contract  and  not 
of  jurisdiction,  though  no  evidence!  of  their  appointment  is  of 
record  in  the  county  where  the  mortgaged  premises  are  situated.^*^ 
For  the  purpose  of  making  the  record  title  complete,  an  appoint- 
ment in  the  State  where  the  land  is  situated  is  essential."^  A  sur- 
viving executor  or  administrator,  if  he  retains  authority  under  the 
will  or  by  law  to  go  on  with  the  administration  of  the  estate,  may 
sell  under  the  power. 

"^Look  V.  Kenney,  128  Mass.  284.  ercise  the  power,  and  in  that  case 

"^Atkins  V.    Grumpier,    118   N.    C.  the  provision  of  the  mortgage  suf- 

532    24  S    E.  367.  ficiently  designates  the  person  to  be 

i^^Bausman    v     Kelley,    38    Minn,  charged    with    this    duty.     Yount   v. 

197    36   N    W    338,   8   Am.    St.   Rep.  Morrison,  109  N.  C.  520,  13  S.  E.  892. 

66l'-  Welsh  V.  Cooiey,  44  Minn.  446,  '"  Morris  v.  McKnight,  1  N.  Dak. 

46  N   W   908  266,   47  N.  W.   375;    Hayes  v.   Frey, 

^"  Lewis  V.  Wells,  50  Ala.  198;  54  Wis.  503,  11  N.  W.  695;  Miller 
Harnickell  v.  Orndorff,  35  Md.  341;  v.  Clark,  60  Mich.  162,  26  N.  W. 
Berry  v  Skinner,  30  Md.  567,  573;  872;  Lee  v.  Clary,  38  Mich.  223; 
Collins  V  Hopkins:,  7  Iowa,  463;  Holcombe  v.  Richards,  38  Mmn.  38, 
Demarest  v.  Wynkoop,  3  Johns.  Ch.  35  N.  W.  714;  Thurber  v.  Carpenter, 
129  145,  8  Am.  Dec.  467;  Johnson  18  R.  L  782,  31  Atl.  5. 
v  Turner  7  Ohio,  568;  Mervin  v.  '*°Doolittle  v.  Lewis.  7  Johns.  Ch. 
Lewis  90  111.  505.  So  in  Horth  45,  11  Am.  Dec.  389;  Averill  v.  Tay- 
Carolina:  Acts  1887,  ch.  147.  This  lor,  5  How.  Pr.  476;  Sloan  v.  Froth- 
statute  applies  to  cases  Avhere  the  ingham,  65  Ala.  593;  Hayes  v.  PYey, 
executor  is  not  mentioned  in  the  54  Wis.  503,  11  N.  W.  695;  Hol- 
power.  The  mortgage  may  itself  comb^  v.  Richards,  38  Mmn.  38,  ^5 
provide  that  the  executor  shall  ex-  N.  W.  714. 


745 


CONSTRUCTION    OF    POWER. 


[§    1787. 


§  1787.  A  legal  assignment  of  the  mortgage  passes  the  power 
of  sale  unless  there  are  words  of  restriction.^*^  it  does  not  matter 
that  the  assignment,  though  absolute  in  form,  is  in  fact  a  collateral 
security  for  a  debt  due  from  the  mortgagee;^**'  but  although  such 
assignee  may  foreclose  in  the  same  way  as  any  assignee,  yet,  if  he 
purchases  at  the  sale,  the  mortgagee  may  redeem.^'*'*  If  by  concur- 
rence of  the  mortgagor  the  time  of  payment  is  extended,  or  the 
terms  are  otherwise  changed, ^^°  the  power  remains  unimpaired.  The 
assigmnent  of  the  note  does  not  prevent  a  foreclosure  in  the  name 
of  the  mortgagee  for  the  use  of  the  assignee.^-"*^  But  if  the  mortgagee 
commences  the  advertisement  under  the  power,  and  before  the  sale 
assigns  the  mortgage  to  a  third  person,  wiio  continues  the  advertise- 
ment in  the  mortgagee's  name  instead  of  advertising  anew,  the  sale 
is  irregular  and  void.^^^  An  assignment  which  is  not  effectual  eithej* 
at  common  law  or  by  statute,  as,  for  instance,  one  made  by  an  in- 
formal indorsement  without  any  transfer  of  the  note,  does  not  operate 
to  pass  the  pow-er  of  sale  to  the  assignee,  but  leaves  it  still  in  the 
mortgagee.^^^ 


"'Bush  V.  Sherman,  80  111.  160; 
echoes  Co.  V.  Goss,  13  Barb.  137; 
Slee  V.  Manhattan  Co.  1  Paige, 


gage  to  another,  the  assignment  be- 
ing duly  recorded,  as  were  also  two 
subsequent     assignments,     and     the 


by  advertisement,   it  was  held  that 
the   record    did    not    show    that    the 


Bergen  v.  Bennett,  1  Caines  Cas.  1,  last  assignee  proceeded  to  foreclose 
11  Am.   Dec.  281;    Wilson  v.   Troup, 
2   Cow.   195,   236,   14   Am.    Dec.    458; 

Pease    v.    Pilot    Knob    Iron    Co.    49  legal     title    to     the     mortgage     had 

Mo.    124;    Pickett   v.    Jones,    63    Mo.  never     passed     from     "Beecher     & 

195;    Harnickell  v.  Orndorff,  35  Md.  Dean,"    and    such    foreclosure    was 

341;    McGuire   v.   Van   Pelt,   55   Ala.  void  on  the  face  of  the  record.     The 

344;    Ward    v.    Ward,    108    Ala.    278,  use  of  a  firm  name  is  not  in  itself 

19   So.   354;    Woodruff  v.   Adair,   131  sufficient    to    establish    the    identity 

Ala.  530,  32  So.   515.  of  the   individual   partners.     Morris 

In  Michigan,  §  1742;  Minnesota,  §  v.   McKnight,   1   N.   Dak.   266,   47   N. 

1743;    North   Dakota  and   South  Da-  W.  375;   Morrison  v.  Mendenhall,  18 

kota,  §  1752a;   Comp.  Laws,  S  5412;  Minn.  232. 

and  Wisconsin,  §  1763,  the  record-  "The  assignments  which  are  re- 
ing  of  a  mortgage  and  assignment  quired  to  be  recorded  are  those 
of  it  ai«  made  a  condition  prece-  which  are  executed  by  a  voluntary 
dent  to  a  foreclosure  by  advertise-  act  of  the  party  and  this  does  not 
ment.  See,  also,  Morris  v.  Mc-  apply  to  cases  where  title  is  trans- 
Knight,    1    No.    Dak.    266,   47   N.   W.  ferred   by   operation   of  law."     Mil- 


375;  Backus  v.  Burke,  48  Minn.  260, 
51  N.  W.  284;  Burke  v.  Backus,  51 
Minn.  174,  53  N.  W.  458. 

Where  an  assignment  of  a  mort- 
gage had   been   executed   by   an  at- 


ler  V.  Clark,  56  Mich.  337,  341,  23 
S.  W.  35. 

'"  Holmes  v.  Turner's  Falls  Lum- 
ber Co.  150  Mass.  535,  23  N.  E.  305. 

"'^  Slee  V.  Manhattan  Co.  1  Paige, 


torney,   it  is   not   necessary   for  his    48. 

letters'  of   attorney   to   be   recorded, 

because    the    statute    only    requires 

the    mortgage    and    assignments    to 

be  recorded.     Benson  v.  Markoe,  41    51  Am.  Dec.  95;  Bausman  v.  Kelley, 


''"  Young  V.  Roberts,  15  Beav.  558. 
^^Bourland  v.  Kipp,  55  111.  376. 
'=Niles  V.   Ransford,  1  Mich.  338, 


Minn.  112,  42  N.  W.  787. 


38  Minn.  971,  36  N.  W.  333,  8  Am.  St. 


Where   a   mortgage   was   executed     Rep.  6G1. 


to  "Beecher  &  Dean,"  and  subse- 
quently one  Charles  R.  Dean  a.s- 
signed    his    interest    in    such    mort- 


=^  Hamilton  v.  Lubukee,  51  111.  415, 
99  Am.  Pe"..  562:  Dameron  v.  Esk- 
ridge,  104  N.  C.  C21,  10  S.  E.  700. 


§    1787.]        POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  746 

The  power  of  sale  is  usually  vested  in  the  mortgagee,  "his  ex- 
ecutors, administrators,  or  assigns."  If  it  is  not  given  to  his  "as- 
signs," some  cases  hold  that  one  who  has  taken  a  transfer  of  the  mort- 
gage cannot  exercise  it,^^*  although  the  deed  empowers  the  "assigns," 
amongst  others,  to  give  a  receipt  for  the  purchase-moneys  ohtained  by- 
such  sale.^"'^  Where  the  power  is  to  "assigns,"  a  devisee  of  the  mort- 
gagee can  exercise  it,  though  he  cannot  if  these  words  are  omitted."* 
The  word  "assigns"  is  not  regarded  as  meaning  merely  the  persons 
whom  the  mortgage  may  during  his  lifetime  make  such,  but  as 
meaning  as  well  those  whom  he  or  his  transferee  may  make  such 
by  will."^ 

The  more  liberal  and  better  construction  is  that  a  power  of  sale 
conferred  by  a  mortgage  upon  the  mortgagee,  being  intended  to  af- 
ford him  a  means  of  promptly  collecting  his  debt,  is  a  power  coupled 
with  an  interest  and  is  therefore  appurtenant  to  the  estate  and  passes 
w^ith  it  as  part  of  the  mortgage  security  to  an  assignee  of  the  mortgage 
or  even  of  the  mortgage  debt."® 

An  assignee  of  part  of  the  mortgage  notes  with  an  assignment 
of  the  mortgage,  or  so  much  thereof  as  secures  the  payment  of  the 
notes  assigned,  has  an  implied  right  to  avail  himself  of  the  power 
of  sale  to  collect  the  notes  assigned.""- 

An  assignee  to  whom  a  mortgage  has  been  assigned  solely  for 
the  purpose  of  collecting  the  mortgage  debt  may  exercise  the  power 
of  sale."'*     So  long  as  the  power  be  exercised  by  the  legal  holder  of 

"*  Dolbear  v.  Norduft,  84  Mo.  619.  power  nor  because  of  special  con- 

1^^  Bradford  v.  Belfield,  2  Sim.  264;  fidence    reposed     it    him     by     such 

Townsend  v.  Wilson,  1  Barn.  &  Aid.  grantor  as  a  suitable  person  to  exe- 

608;    Woonsocket   Inst,    for    Sav.    v.  cute  the  power.     It  passes  to  him  as 

Am'.  Worsted  Co.  13  R.  I.  255.  an  incident  of  the  estate,  conveyed 

In  England   it  is  now  a  common  to   him   just  as   a   right  of   way   or 

precaution  to  vest  the  power  of  sale  other  easement  or  appurtenance  used 

also  in  all  persons  entitled  to  give  a  or  enjoyed  therewith  would  pass  to 

receipt  for  the  mortgag-e  debt   Fish-  him.    No    delectus   personae   by   the 

er's  Mortg.  p.  504.  grantor  is  involved  in  the  transmis- 

""  Cooke  V.  Crawford,  13  Sim.  91;  sion  of  such  a  power,  as  is  the  case 

Macdonald  v.  Walker,  14  Beav.  556 ;  with  a  power  in  gross  or  a  collateral 

Wilson  V.  Bennett,  5  De  G.  &  S.  475.  one,  which  can  be  exercised  only  by 

^^'  Titley  v.  Wolstenholme,  7  Beav.  the   persons    designated    on    the   in- 

425.  strument  creating  the  power."     See 

i^'Maslin  v.  Marshall,  94  Md.  480,  also   Erb   v.   Grimes,   94   Md.   92,   50 

485,  51  Atl.  85,  citing  Berry  v.  Skin-  Atl.  397. 

ner  30  Md.  567;  Dill  v.  Satterfield,  34  -=°  Brown  v.  Delaney,  22  Mmn.  349. 

Md!    52;    Mackubin  v.    Boarman,    54  ^"^  Russum  v.  Wanser,  53  Md.  92; 

Md.  384,  387;  Barrick  v.  Hooner,  78  Buell  v.  Underwood,  65  Ala.  285.  But 

Md.  253^  255.     Schmucker,  J.,  deliv-  it  has  been  held  that  the  executor  or 

ering    the    opinion,    said:       "When  administrator  of  such  assignee  can- 

a   power  is   appurtenant   to  an   es-  not    exercise    the    power    after    his 

tate    it    passes    to    the    assignee    of  death.     He  "acquired  a  special  title 

the    estate,     not     because    he     was  for  purposes  of  foreclosure  only,  by 

designated     in     the     grant  of     the  the  assignment  of  the  mortgage  in 


747  CONSTRUCTION   OF  POWEE.  [§§   1788,   1789. 

the  mortgage,  it  is  not  material  whether  he  exercises  it  for  his  own 
benefit  or  that  of  some  other  party  in  interest. ^*'^  If  upon  the  face 
of  the  assignment  it  appears  that  it  has  been  assigned  only  in  part, 
the  mortgagee  and  assignee  should  join  in  the  sale.^^^ 

§  1788.  In  respect  to  the  assig^unent  of  deeds  of  trust  a  dif- 
ferent rule  prevails,  however.  The  trustee  is  a  mere  instrument 
to  execute  the  purpose  of  the  grajitor,  and  he  is  clothed  with  the 
legal  estate  merely  for  this  purpose.  The  trust  is  a  confidence 
which  cannot  be  delegated  except  as  provided  by  the  persons  who 
created  the  trust;  and  a  provision  for  this  purpose  must  be  express 
and  beyond  question.  Therefore  it  has  been  held  that  a  trust  deed 
to  two  persons,  or  the  survivor  of  them,  and  the  heirs  and  assigns 
of  the  survivor,  could  not  be  executed  by  another  to  whom  the  sur- 
vivor conveyed  the  property,  as  the  word  "assigns"  does  not  with 
certainty  mean  a  person  whom  the  trustee  might  make  such  by  his 
own  act  during  his  life.^*^ 

§  1789.     An  equitable  assignee  cannot  execute  the  power.^^*     The 

power  must  be  strictly  pursued,  and  it  is  presumed  that  the  delega- 
tion of  the  power  is  induced  by  trust  and  confidence  in  the  trustee 
or  mortgagee.  If  the  mortgage  does  not  provide  that  an  assignee 
may  execute  the  power,  the  law  does  not  confer  it  upon  the  assignee, 
and  it  can  only  be  exercised  by  the  mortgagee.^®^  It  may  be  exer- 
cised by  an  assignee  if  the  power  so  provides,  and  the  assignee  is 

tnis  case,  and  as  he  took  no  bene-  of,  and  the  note  assigned  by  indorse- 

ficial    interest    or    property    in    the  ment.    A  more  formal  assignment  of 

mortgage,  none  could  vest  in  or  de-  the    mortgage    was    executed    a   few 

volve  upon  his  administrator."  Tay-  days  later  and  recorded.    It  was  held 

lor    V.    Carroll,    89    Md.    32,    42    Atl.  that  such  assignee  either  as  the  suc- 

920.  cesser  of  the  former  trustee,  or  in 

"'  Lee   V.    Clary,    38   Mich.    223.  virtue  of  the  assignment  of  the  mort- 

"^  Wilson    V.    Troup,    2    Cow.    195,  gage  debt  to  him,  was  fully  author- 

231,  14  Am.  Dec.  458.  ized   to  exercise  the  pov/er  of  sale. 

"="  Missouri:  Whittlesey  v.  Hughes,  Western    Md.    R.    Land,    etc.    Co.    v. 

39  Mo.  13;    McKnight  v.  Wimer,  38  Goodwin,  77  Md.  271,  26  Atl.  319. 

Mo.  132.    And  see  Picket  v.  Jones,  63  See     act     validating     sales    under 

Mo.  195,  199.  powers  of  sale  made  by  persons  not 

South  Carolina:   Johnson  v.  John-  authorized  by  the  terms  of  the  pow- 

son,  27  S.  C.  309,  3  S.  E.  606.  er.    Laws  1890,  ch.  187. 

In  Maryland,  however,  a  different  '"*  Dameron  v.  Eskridge,  104  N.  C. 

rule   prevails.     Property   was   mort-  621,  10  S.  E.  700;  Williams  v.  Teach- 

gaged  to  a  trustee  to  secure  a  debt  ey,  85  N.  C.  402;   Bradford  v.  King, 

evidenced  by  a  note,   the   mortgage  18  R.   I.  743,  31  Atl.  166;    Atkins  v. 

containing  a  power  of  sale  in.  favor  Grumpier,  118  N.  C.  532;   Hussey  v. 

of    the    trustee,    his    successors    and  Hill,    120    N.    G.    .'^12,   26    S.    E.    919; 

assigns,   in   case  of  default.     Subse-  Northern    Cattle    Go.    v.    Munro,    83 

quently  the  trustee  wishing  to  be  re-  Minn.  37,  85  N.  W.  919. 

leased,    another   was    appointed    his  ""^Flower   v.   Elwood,    66   111.    438; 

successor,  the  mortgage  assigned  to  Wilson  v.  Spring,  64  111.  14. 
him  by  a  writing  on  the  back  there- 


§    1790.]        POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  748 

the  legal  assignee  of  the  debt  and  mortgage.^*"'  In  some  States, 
where  the  mortgage  is  regarded  merely  as  a  lien,  a  legal  assignee 
of  the  debt  without  a  formal  assignment  of  the  mortgage  may  ex- 
ercise the  power  of  sale  in  his  own  name.  But  if  the  debt  be  not 
evidenced  by  an  instrument  assignable  by  law,  nor  in  any  way  ex- 
cept by  the  mortgage  itself,  which  is  not  assignable  except  in  equity, 
then  the  mere  assignment  of  the  mortgage  passes  only  an  equitable 
title  to  the  debt,  and  the  power  does  not  pass  to  the  assignee,  and 
can  be  executed  only  by  the  mortgagee  himself.^"  An  assignee  of 
the  note  alone  cannot  execute  the  power."*  If  the  debt  is  of  such 
a  character  that  it  may  be  legally  assigned,  so  as  to  vest  the  legal 
title  in  the  assignee,  then  the  assignee  himself  must  execute  the 
power."**  The  legal  assignee  may  make  the  sale  in  his  own  name, 
but  the  equitable  assignee  cannot.^'"  Such  assignee  can  avail  him- 
self of  his  assignment  only  by  proceedings  in  equity.^^^  Equitable  in- 
terests in  beneficiaries,  such  as  would  be  recognized  and  protected 
in  foreclosure  proceedings  in  court,  cannot  be  given  effect  under  a 
power  of  sale.^^^ 

§  1790.  A  power  in  a  mortgage  or  a  trust  deed  to  two  or  more 
jointly  must  be  executed  by  all  the  donees.  But  if  it  provide 
that  the  gTantees  "or  either  of  them"  may  sell,  then  the  power 
may  be  exercised  by  one  alone.i'=*     It  is  the  better  practice,  however, 

"'Heath  v.  Hall,  60  111.  344;  Dill  v.  14  Am.  Dec.  458;  Vansant  v.  Allmon, 

Satterfield,  34  Md.'52;  Berry  v.  Skin-  23  111.30. 

ner    30   Md.   573;    Dameron  v.   Esk-  i'"  Cushman   v.    Stone,    69    111.    51b. 

ridge    104  N.  C.  621,  10  S.  E.  700.  In  Alabama,  Code,  S  1844,  a  power 

In  Alabama  the  Code,  S  1844,  pro-  of  sale  is  declared  to  be  a  part  of 

vides  that  the  assignee   of  a  mort-  the  security,  and  may  be  executed  by 

gage,  in  which  is  given  the  grantee  any  person  who,   by  assignment  or 

the  power  to  sell,  may  execute  the  otherwise,    becomes    entitled    to   the 

mortgage    notwithstanding    the    as-  money  thereby  secured.     Under  this 

signment  may  not  contain  apt  words  provision,  apt  words  of  conveyance 

to  convey  the  legal  title.    Johnson  v.  are  not  necessary  to  entitle  the  as- 

Beard  S3  Ala.  96,  9  So.  535;  Martinez  signee    of    a    mortgage    to    exercise 

V    Lindsay    91   Ala.   334,   8  So.   787;  a  power  of  sale.     Martinez  v.  Lind- 

Wildsmith    v.    Tracy,    80    Ala.    2.58;  say,  91  Ala  334,  8  So.  787;  Wildsmith 

Buell  V  Underwood,  65  Ala.  285;  Mc-  v.  Tracy,  80  Ala.  258;  Buell  v.  Under- 

Guire  v.  Van  Pelt,  55  Ala.  344;  New  wood,  65  Ala.  285;   McGuire  v.  Van 

England  Mortg.  Sec.  Co.  v.  Clayton,  Pelt,  55  Ala.  344. 

119  Ala.  361,  24  So.  362.  ^"  Olds  v.    Cummings,   31   Ilh   188; 

^•^  Mason  v.  Ainsworth,  58  111.  163;  Mason  v.  York  &  Cumberland  R.  Co. 

Hamilton  v.  Lubukee,  51  111.  415.  See  52  Me.  82. 

§  82e  "=  Clark  v.  Mitchell,  81  Mmn.  438, 

"^"Cushman  v.  Stone,  69  111.  516,  99  84  N.  W.  327;  Benson  v.  Markoe,  41 

Am   Dec   562  Minn.   112,   42   N.   W.   787;    Burke  v. 

'<■'■'  Pardee  v.  Lindley,  31  111.  174,  83  Backus  51  Minn.  174  53  N.  W.  458; 

Am  Dec.  219;  Strother  v.  Law,  54  111.  Dunning  v,  McDonald,  54  Mmn.  1,  55 

413;    Sargent   v.    Howe.   21    111.    148;  N.  W.  864. 

Wilson  V.   Troup,   2   Cow.   195,    197,  '"  Loveland  v.  Clark,  11  Colo.  26o, 

18  Pac.  544. 


749  CONSTRUCTION  OF  TOWER.  [§  1790. 

for  the  persons  having  a  joint  interest  in  a  mortgage  to  join  in  the 
execution  of  the  power  of  sale.^''*  Where,  by  the  terms  of  a  trust  deed, 
discretionary  power  to  foreclose  under  certain  conditions  is  vested 
in  two  trustees,  the  concurrence  of  both  is  requisite  to  the  exercise 
of  such  power,  even  if  not  so  expressed  in  terms. ^^^  If  there  be  two 
or  more  joint  mortgagees  or  trustees,  the  power  should  be  extended 
to  the  survivors  and  survivor  of  them,  and  the  executors  or  adminis- 
trators of  such  survivor,  or  their  or  his  assigns.  When  the  deed  is 
without  this  provision  for  survivorship,  on  the  death  of  one  of  the 
grantees  his  executor  or  administrator  must  join  in  the  execution  of 
the  power  ;^'^^  unless  it  appears  otherwise  from  the  deed  that  the  in- 
terest was  a  joint  one,  and  that  the  intention  was  that  the  security 
with  all  the  advantage  of  the  power  should  vest  in  the  surviving 
mortgagee.  ^'^^ 

The  execution  of  the  trust  may  be  confided  to  one  person  alone, 
or  to  two  or  more  jointly,  or  to  two  or  more  jointly  and  severally.  If 
it  be  to  several  jointly,  all  must  act  in  the  execution  of  it;  but  if  it 
be  to  them  severally,  or' to  either  of  them,  then  one  alone  may  exe- 
cute the  trust.  The  deed  itself  is  the  authority  for  the  execution 
of  the  trust,  and  it  may  contain  such  provisions  about  the  execution 
of  the  trust  as  the  parties  see  fit  to  make.^^^  If  the  trust  or  power 
be  given  to  two  or  more,  it  is  joint  unless  there  be  words  added 
which  make  it  several  also,  or  which  show  the  grantor's  intention 
to  confide  the  execution  of  it  to  any  number  less  than  the  whole. 
But  upon  the  death  of  one  or  more  of  several  trustees,  under  a  deed 
of  trust,  the  survivors  take  the  entire  legal  estate,  and  may  execute 
the  trust,  although  there  be  no  express  provision  to  this  effect  in  the 
deed.^^^  Upon  the  death  of  the  last  trustee  the  title  vests  in  his  heir, 
until  the  appointment  of  a  new  trustee  by  the  court.^^''  The  estate 
is  generally  regarded  as  vesting  in  the  new  trustee  by  the  appoint- 
ment without  a  conveyance.^^^ 

^  1790a.  When  by  a  trust  deed  the  power  of  sale  is  given  to  the 
trustee  only  upon  request  of  the  benificiary  after  a  default  in  the  pay- 

^■*  Wilson  v.  Troup,  2  Cow.  195,  331,  '"Hannah  v.   Carrington,  18  Ark. 

14  Am.  Dec.  458;  White  v.  Watkins,  85;    Franklin    v.    Osgood,    14   Johns. 

23  Mo.  423;  Powell  v.  Tuttle,  3  N.  Y  527;  Cawfield  v.  Owens,  129  N.  C.  286, 

396.  40  S.  E.  62. 

•'^  Farmers'   Loan   &   Trust  Co.   v.  '™  Greenleaf    v.    Queen,    1    Peters, 

Lake  St.  El.  R.  Co.  122  Fed.  914.  138;    Manlden  v.  Armistead,  14  Ala. 

''"  Townsend    v..    Wilson,    3    Madd.  702.  708. 

261.  '"  Duffy  v.  Calvert.  6  Gill.  487;  Goss 

''"Hind  v.  Poole,  1  Kay  &  J.  383,  v.    Singleton,   2   Head,   67;    Gibbs  v. 

1  Jur.  (N.  S.)  371.  Marsh,  2  Met.  243,  253. 

'"Gra-me  v.  Cullen,  23  Gratt.  266; 
Taylor  v.  Dickinson,  15  Iowa,  483. 


§§    1791,    1793.]    POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.    750 

ment  of  the  principal  or  interest  when  diie,  if  the  trustee  proceeds 
to  foreclose  before  the  maturity  of  the  note,  and  without  the  re- 
quest or  knowledge  of  the  holder  of  the  note,  the  sale  is  totally  in- 
valid and  does  not  affect  the  security  of  the  holder  of  the  note,  and  a 
subsequent  deed  of  trust  executed  by  the  purchaser  conveys  no 
title  nor  interest  superior  to  the  former  deed  of  trust.^**^ 

§  1791.  A  first  and  second  mortgagee  may  concur  in  a  sale.  In 
a  case  where  this  course  was  pursued,  objection  was  taken  that  the 
title  under  such  sale  was  not  marketable,  because  it  was  not  clear 
under  which  power  the  property  had  been  sold;  but  the  Mastei- 
of  the  Rolls  said  that,  as  either  mortgagee  alone  might  have  sold 
under  his  power,  there  was  no  reason  why  they  could  not  combine 
together  and  sell.^^^ 

A  trustee  holding  two  deeds  of  trust  executed  by  the  same  per- 
son for  the  benefit  of  the  same  creditor,  each  deed  being  for  an  un- 
divided half  of  the  laud,  should  sell  the  vv^hole  together  under  both 
deeds,  and  not  an  undivided  half  under  each  deed  at  different  times,  as 
the  presimiption  is  that  the  property  would  command  a  better  price 
if  sold  entire.^^* 

IV.      Revocation  or  Suspension  of  the  Power. 

§  1792.  The  death  of  the  mortgagor  does  not  revoke  a  power 
of  sale,^*^  even  though  the  mortgage  is  held  merely  to  give  a  lien 
on  the  property.^^"    This  being  coupled  with  an  interest  in  the  estate 

I'^Kenaey  v.  Jefferson  County  ^"  Coff man  v.  Scoville,  86  111.  300. 
Bank,  12  Colo.  App.  24,  54  Pac.  404.  ^'^  Wright  v.  Rose,  2  S.  &  S.  323; 
In  this  case  after  a  transfer  of  the  Corder  v.  Morgan,  18  Ves.  344;  Hunt 
note  secured  by  the  deed  of  trust  a  v.  Rousmanier,  8  Wheat.  174,  2 
foreclosure  sale  was  made  without  Mason,  244;  Conners  v.  Holland, 
the  authority  of  the  holder  of  the  113  Mass.  50;  Varnum  v.  Meserve,  8 
note,  and  the  property  was  bid  in  Allen,  158;  Brewer  v.  Winchester, 
for  the  original  beneficiary  named  2  Allen,  389;  Bergen  v.  Bennett,  1 
in  the  deed,  a^d  a  trustee's  deed  Caines  Cas.  1,  2  Am.  Dec.  281; 
executed  and  delivered  to  such  bene-  Hodges  v.  Gill,  9  Bax.  378;  White  v. 
ficiary,  and  afterwards  the  name  of  Stephens,  77  Mo.  452;  Hudgins  v. 
the  beneficiary  was  erased  and  the  Morrow,  47  Ark.  515,  2  S.  W.  104; 
name  of  another  person,  who  was  Carter  v.  Slocomb,  122  N.  C.  475,  29 
not  even  present  at  the  sale,  inserted  S.  E.  720;  More  v.  Calkins,  95  Cal. 
as  grantee  in  the  trustee's  deed;  435,  30  Pac.  583;  Grandin  v.  Em- 
it' was  held  that  the  substituted  mons,  10  N.  D.  223,  86  N.  W.  723; 
grantee  took  no  title,  and  a  subse-  Sulphur  Mines  Co.  v.  Thompson,  93 
Quent  deed  of  trust  executed  by  Va.  293,  25  S.  E.  232;  Wilbum  v. 
him  conveyed  no  title  as  against  Spofford,  4  Sneed.  698. 
the  transferee  of  the  original  note,  "*'•  Reilly  v.  Phillips,  4  S.  D.  604, 
who  had  not  requested  nor  had  any  57  N.  W.  780.  In  this  case  the  court 
knowledge  of  the  foreclosure.  say:      "AppeHants    insist    that    the 

''*^  M'Carogher     v.     Whieldon,     34  rule  of  these  cases  is  not  applicable 

Beav.  107.  in   this  jurisdiction,   because   under 


751  '  REVOa^ION    OR   SUSPENSIOIT.  [§    1792. 

cannot  be  revoked  or  suspended  by  the  mortgagor.  Of  course,  after  his 
death  the  power  cannot  be  exercised  in  his  name,  but  the  authority 
to  execute  it  in  the  name  of  the  grantee  continues.  The  execution 
of  the  power  is  the  grantee's  act  by  virtue  of  the  power.  It  is  not  a 
mere  power  of  attorney. ^^^  A  power,  however,  to  be  irrevocable, 
must  be  coupled  with  an  interest  in  the  property  itself,  and  not 
merely  in  the  proceeds  resulting  from  the  execution  of  the  power. 
Chief  Justice  Marshall  on  this  point  said:  "We  hold  it  to  be  clear 
that  the  interest  which  can  protect  a  power  after  the  death  of  a 
person  who  creates  it  must  be  an  interest  in  the  thing  itself.  In 
other  words,  the  power  must  be  ingrafted  on  an  estate  in  the  thing."^** 
In  Texas,  although  the  general  principle  is  recognized  that  such 
a  power  cannot  be  revoked,  yet  the  exercise  of  it  is  regarded  as  in- 
consistent with  the  statutes  respecting  the  settlement  of  the  estates 
of  deceased  persons,  jvhich  require  liens  upon  their  property  to  be 
enforced  in  the  probate  court,  and  which  give  to  certain  classes 
of  claims  against  a  decedent's  estate  priority  of  payment  over  a 
debt  secured  by  mortgage  or  other  liens.  Therefore,  upon  the  death 
of  the  mortgagor  or  grantor  in  a  trust  deed,  or  of  a  purchaser  from 
either,  while  holding  the  equity  of  redemption,  the  power  cannot 
be  exercised.^^®     A  sale  made  when  the  grantor's  estate  is  in  ad- 

our  law  the  mortgagor  retains  the  Wilkins  v.  McGehee,  86  Ga.  764,  13 

title  to  the  estate   mortgaged,   con-  S.  E.  84;   Johnson  v.  Johnson,  27  S. 

trary  to  the  law  prevailing  in  most  C.  309,  3  S.  E.  606;  Wilson  v.  Troup, 

of  the  States  whence  these  decisions  2    Cow.    (N.    Y.)    195,    14    Am.    Dec. 

come;   but  we  apprehend  that,  upon  458;   Jencks  v.  Alexander,  11  Paige, 

principle,    that    fact    ought    not    to  (N.     Y.)     619,     624;      Anderson     v. 

make   any    difference   in    respect   to  Austin,    34    Barb.    319;    Grandin    v. 

the    survival    of    the    power."      To  Emmons,    10    N.    D.    223,    86    N.    W. 

same  effect  see  Muth  v.  Goddard,  28  723. 

Mont.    237,    72   Pac.    621,   citing  text        >""  Robertson  vT  Paul,  16  Tex.  472; 

and  holding  Texascases  not  to  be  in  Buchanan   v.    Monroe,   22   Tex.    537; 

point.     But  see  §  1794.  Black  v  .Rockmore,  50  Tex.  88;   Ab- 

^'*' Strother  v.  Law,  54  111.  413;  ney  v.  Pope,  52  Tex.  288;  Rogers  v. 
Collins  V.  Hopkins,  7  Iowa,  463;  Watson,  81  Tex.  400,  17  S.  W.  29. 
Berry  v.  Skinner,  30  Md.  567;  Hyde  The  latter  case  shows  that,  if  ad- 
V.  Warren,  46  Miss.  13,  29;  Beatie  v.  ministration  is  not  taken  within  the 
Butler,  21  Mo.  313,  64  Am.  Dec.  234;  time  limited,  the  mortgage  or  lien 
De  Jarnette  v.  De  Giverville,  56  Mo.  becomes  prior  to  other  claims 
440,  448;  Bradley  v.  Chester  Valley  against  the  estate.  To  same  effect 
R.  Co.  36  Pa.  St.  141,  151;  Bell  v.  see  Nat.  Exchange  Bank  v.  Jack- 
Twilight,  22  N.  H.  500.  See  Mans-  son  (Tex.)  33  S.  W.  277;  Gillaspie  v. 
field  V.  Mansfield,  6  Conn.  559,  16  Murray  (Tex.)  66  S.  W.  252.  Where 
Am.  Dec.  76,  for  a  case  of  a  naked  administration  of  an  estate  by  an 
power  from  a  debtor  to  creditor,  independent  executor  under  a  will  is 
Pardee  v.  Lindley,  31  111.  174,  83  still  pending,  a  power  of  sale  in  a 
Am.  Dec.  219.  deed  of  trust  given  by  the  deceased 

^'^Hunt  V.  Rousmanier,  8  Wheat,  cannot   be   executed,    although   four 

174.      And    see    Lockett    v.    Hill,    1  years  have  elapsed  since  the  latter's 

Woods,    552;    Coney    v.    Sanders,    28  death.     Swearingen  v.  Williams,  28 

Ga.   511;    Lathrop  v.  Brown,  65  Ga.  Tex.   Civ.   App.   559,   67   S.   W.   1061. 

312;  Miller  v.  McDonald,  72  Ga.  20;  So  in  Georgia:    Lathrop  v.  Brown,  65 


§    1793.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  752 

ministration  is  void/''°  even  though  the  power  to  sell  during  that 
period  is  expressly  conferred  upon  the  trustee  by  the  trust  deed.^^^ 
It  then  secures  the  creditor  priority  over  such  claims  against  the  debt- 
ors estate  as  by  the  statute  he  is  entitled  to  in  the  due  course  of 
administration.  Expenses  of  last  sickness,  of  administration  and 
management  of  the  estate,  allowances  in  lieu  of  homestead  and  other 
property  exempt  from  forced  sale,  and  the  homestead  right  itself, 
take  precedence  of  the  mortgage  debt.^^-  Except  in  case  the  wife  has 
joined  in  the  mortgage,  the  property  cannot  be  set  aside  to  the  widow 
or  children,  as  exempted  or  appropriated  to  make  up  the  allowances 
made  in  lieu  of  exempted  property,  until  the  debts  secured  are  first 
discharged.^^^  However,  the  death  of  the  grantor  does  not  have  this 
effect,  even  in  Texas,  when  he  has  conveyed  his  equity  of  redemp- 
tion during  his  lifetime.^^* 

In  Colorado  under  a  statute  which  provided  that  no  foreclosure 
shall  be  had  within  one  year  from  the  death  of  the  holder  of  the 
mortgaged  estate,  unless  by  the  permission  of  the  county  court,  and  in 
no  event  until  the  debts  or  claims  have  been  first  proved  and  allowed  by 
such  court,  a  foreclosure  sale  without  such  allowance  is  void."^  The 
equitable  title  of  the  mortgagor  with  his  legal  right  of  possession 
will  sustain  an  action  for  possession  under  the  Code  as  against  a 
purchaser  at  a  void  foreclosure  sale,  even  though  the  latter  has  the 
legal  title.^^'^ 

§  1793.  The  insanity  of  the  mortgagor,  occurring  after  the  mak- 
ing of  the  mortgage,  cannot  of  course  have  any  greater  effect  in 
revoking  or  suspending  the  power  of  sale  than  his  death  would 
have.^^^     Neither  does  an  application  by  a  guardian  or  committee  of 

Ga.  312.    But  the  death  of  one  part-  "=  R.  Civ.   Stat.   1889,  art.   2000. 

ner  in  a  firm  which  has  executed  a  ^"^  Mott  v.  Maris   (Tex.)   29  S.  W. 

power  of  sale  trust  mortgage,  does  825. 

not  prevent  the  exercise  of  the  pow-  '"^  Laws    1889,    p.    474;     Lewis    v. 

er.     Barnet  v.  Houston,  18  Tex.  Civ.  Hamilton,  26  Colo.  263,  58  Pac.  196; 

App.   134,  44  S.  W.   689;    and  Whit-  Reid  v.  Sullivan,  20  Colo.  498,  39  Pac. 

mire  v.   May    (Tex.)    69   S.   W.    100;  338;  Sullivan  v.  Sheets,  22  Colo.  153, 

Schwab     Clothing    Co.     v.     Claunch  43  Pac.   1012;    Townsend  v    Thomp- 

(Tex.)  29  S.  W.  922.    Compare  West-  son,  24  Colo.  411,  -^1  Pac.  433. 

ern  Union  Tel.  Co.  v.  Hearne,  (Tex.)  "'"  Lewis  v.  Hamilton,  26  Colo.  263, 

40  S.  W.  50.  58  Pac.  196. 

1""  Harris  v.  Wilson    (Tex.),  40   S.  '"' Encking    v.    Simmons,    28    Wis. 

W.  868.  272;    Van  Meter  v.  Darrah,  115  Mo. 

'"' Texas    Loan    Agency    v    Dingee  153,  22  S.  W.  30;  Meyer  v.  Kuechler, 

(Tex.),  75  S.  W.  866.  10  Mo.   App.   371;    Bevin  v.   Powell, 

"^McLane  v.  Paschal,  47  Tex.  365;  83  Mo.  365,  11  Mo.  App.  216;  Laugh- 

Batts  V.  Scott,  37  Tex.  59.     The  al-  lin  v.  Hibben,  129  Ind.   5,  27  N.  E. 

lowance  for  homestead  is  not  to  ex-  753;  Lundberg  v.  Davidson,  72  Minn, 

ceed    $5,000.      Thompson    on    Home-  49,  74  N.  W.  1018,  68  Minn.  328,  71 

steads,  §  611.    See,  also,  §§  324-328  of  N.  W.  395,  72  N.  W.  71. 
same. 


753  REVOCATION  OR  SUSPENSION.         [§§1793a,   1794. 

the  lunatic,  for  an  order  to  sell  the  mortgaged  premises  for  the 
benefit  of  his  creditors,  have  any  effect  to  deprive  the  mortgagee  of 
this  summary  means  of  realizing  his  claim. ^'***  Of  course,  if  the 
mortgagee  or  any  one  else  takes  an  unjust  and  improper  advantage 
of  such  condition  of  the  mortgagor,  this  will  be  ground  for  setting 
aside  the  sale^^''  by  suit  in  equity. 

§  1793a.  Effect  of  barring  action  on  debt. — The  power  of  sale  in  a 
trust  deed  is  not  revoked  by  the  fact  that  limitation  has  barred  the 
collection  of  the  notes  secured  by  such  deed.^""  Neither  does  the 
bankruptcy  of  the  mortgagor  affect  the  mortgagee's  authority  to 
execute  the  power,  either  in  the  mortgagor's  name  and  as  his  at- 
torney or  in  the  mortgagee's  own  name;  for  the  assignee  takes  sub- 
ject to  the  rights  of  the  mortgagee.^"^ 

Under  the  Maryland  insolvency  law  a  trustee  in  insolvency  would 
have  superseded  the  conventional  trustee  named  in  a  mortgage  of  the 
insolvent  debtor  to  make  sale  of  the  property  in  case  of  default 
and  is  the  proper  person,  as  representing  all  creditors,  to  sell  to  the 
exclusion  of  the  appointed  trustee.^"-  This  rule  presupposes  that 
the  insolvent  debtor's  possession  remained  undisturbed,  and  the  equity 
of  redemption  remained  in  him  to  pass  to  the  trustee.  Where  the 
mortgage  debt  has  not  matured,  the  trustee  in  insolvency  could  only 
have  sold  the  equity  of  redemption.-"^  The  rule  would  not  apply 
where  the  equity  of  redemption  had  been  assigned  prior  to  the  in- 
solvency.-°*  It  would  not  be  enforced  to  the  detriment  of  a  non- 
resident mortgagee.^"^^ 

§  1794.  In  some  States  where,  by  statute  or  adjudication,  a  mort- 
gage is  regarded  as  a  mere  security  for  debt,  passing  no  title  or 
estate  to  the  mortgagee,  a  power  of  sale  is  regarded  as  not  coupled 
with  an  interest,  and  it  is  revoked  and  rendered  incapable  of  execu- 
tion by  the  death  of  the  mortgagor.^*^" 

*'^  Berry  v.  Skinner,  30  Md.  567;  ercising  a  power  of  sale  is  barred  by- 
Davis  V.  Lane,  10  N.  H.  156.  limitation   as   soon   as   the   debt  se- 

"^Encking    v.    Simmons,    28    Yfis.  cured  is  outlawed.     Hill  v.  Gregory, 

272  64  Ark.  317,  42  S.  W.  408,  construing 

-«« Adams  v.  Kaufman,  11  Tex.  Civ.  Sand.  &  H.  Dig.  «§  5094-5.   See  S  1207 

App.  179;  Mott  v.  Maris  (Tex.)  29  S.  -"Hall  v.  Bliss,  118  Mass.  554,  19 

W.   825;    Dimmit  County  v.   Oppen-  Am.    Rep.    476;    Dixon   v.    Ewart.    3 

iieim.er  (Tex.)  42  S.  W.  1029;  Menzel  Meriv.  321;   Story  on  Agency,  §  482. 

V.  Hinton,  132  N.  C.  660,  44  S.  E.  385.  -"-  Mackubin   v.    Boarman,    54    Md. 

The  power  of  sale  is  not  barred  by  384. 

the    statute    of    limitations,    though  ="2  Gable  v.  Scott,  56  Md.  176,  185. 

an    action    for    foreclosure    of    the  ""*  Ensor  v.  Keech,  64  Md.  378. 

mortgage  is  barred.     Cone  v.  Hyatt,  ™^  Ensor  v.  Lewis,  54  Md.  391. 

132  N.  C.  810,  44  S.  E.  678.     In  Ar-  =""  Johnson    v.    Johnson.    27    S.    C. 

kansas  the  right  to  foreclose  by  ex-  309,  3  S.  E.  606;  Darrow  v.  St.  George, 


§§  1795,  1796.]  POWER  of  sale  mortgages  and  trust  deeds,  754 

In  Georgia,  however,  the  doctrine  is  modified  to  the  extent  that  the 
power  is  irrevocable  during  the  lifetime  of  the  mortgagor,  even  though 
not  made  so  by  express  provision. ^°'^ 

§  1795.  A  power  may  be  modified  and  extended  without  revok- 
ing it.  A  mortgage  deed  contained  a  power  of  sale  providing  that 
if  default  should  be  made  in  payment  of  the  interest,  or  any  part 
of  it,  for  a  month  after  it  became  due,  or  in  the  payment  of  the 
principal  on  the  appointed  day,  then  the  mortgagee  might  sell. 
After  it  became  due  he  called  for  payment,  and  the  mortgagor  ar- 
ranged with  other  parties  for  a  loan  of  the  money  upon  an  assign- 
ment of  the  mortgage,  which  was  executed  with  a  recital  that  in 
the  mortgage  "a  power  of  sale  is  contained  for  the  better  securing 
of  the  principal  sum  and  interest,  but  the  said  power  has  not  been, 
and  is  not  intended  to  be,  exercised,"  and  reciting  the  calling  in  of 
the  mortgage  moneys  and  the  mortgagor's  arrangement  with  the 
assignees  to  loan  the  amount.  The  assignment,  which  was  by  an 
indenture  executed  by  all  the  parties,  confirmed  the  moneys  "and 
all  powers  and  remedies  for  recovering  the  same  sums  respectively," 
and  conveyed  the  estate  in  fee  subject  to  redemption.  The  time 
of  payment  was  extended  seven  years,  and  the  assignees  covenanted 
that  no  sale  should  be  made  without  three  months'  notice.  There 
was  a  power  of  sale  to  arise  upon  default.  On  account  of  intervening 
incumbrances  it  was  desirable,  on  a  subsequent  default,  to  sell 
under  the  power  in  the  original  mortgage  rather  than  that  in  the 
assignment.  It  was  held  that  the  recitals  were  not  intended  to 
extinguish  the  original  power,  but  only  to  modify  and  postpone  the 
exercise  of  it;  and  that  a  sale  could  be  made  under  it.^°^ 

§  1796.  A  conveyance  by  the  mortgagee  of  a  part  of  the  prem- 
ises is  no  waiver  of  his  right  to  sell  under  the  power.  A  mortgagee, 
under  a  mistaken  belief  that  he  was  the  absolute  owner,  having  con- 
veyed a  part  of  the  mortgaged  premises  by  deed  with  covenants  of 
warranty,  was  held  nevertheless  to  possess  the  right  to  foreclose 
the  mortgage  under  a  power  of  sale,  because  his  conveyance  did  not 
amount  to  an  assignment  of  the  mortgage,  and  the  purchaser  took  the 

8  Colo.  592,  9  Pac.  791;    Wilkins  v.  ='"<  Boyd  v.  Petrie,  L.  R.  7  Ch.  App. 

McGehee.    86    Ga.    764;     Lockett    v.  385.    Though  in  England  it  is  usual 

Hill,  1  Woods,  552.  in  the  transfer  of  a  mortgage  to  pro- 

=""Ray  V.  Hemphill,  97  Ga.  563,  25  vide   expressly   for   the   continuance 

S.  E.  485;  Calloway  v.  People's  Bank,  of  the  power,  this  is  not  essential, 

54  Ga.  441;    Moseley  v.   Rambo,  106  as  a  general  assignment  of  all  cov- 

Ga.  597,  32  S.  E.  638;   Mutual  L.  &  enants  and  securities  will  carry  it. 

B.  Co.  v.  Haas,  100  Ga.  111.  Young  v.  Roberts,  15  Beav.  558. 


755  TIEVOCATION    OR    SUSPENSION.  [§    1797. 

title  subject  to  the  mortgage.^"'*  If  he  should  himself  become  the 
l^urchaser  under  the  power  of  sale,  he  would  be  estopped  to  claim,  as 
against  his  grantee  under  his  deed  of  warranty,  the  land  so  conveyed 
by  him.  A  conveyance  in  the  same  way  of  the  whole  estate  would 
doubtless  be  held  to  be  an.  assignment  of  the  mortgage  which  would 
carry  with  it  the  power.  Neither  does  a  mortgagee  waive  his  right 
to  sell  by  an  entry  to  foreclose,  and  the  taking  of  rents  and  profits 
insufficient  to  pay  the  debt.-^"  The  power  to  sell  generally  continues 
so  long  as  the  debt  remains  unpaid.  But  where  a  mortgage  is  given 
upon  a  single  tract  of  land  to  secure  a  debt  due  and  payable  as  an 
entirety,  a  single  exercise  of  the  power  of  sale  exhausts  it,  even 
though  a  jjart  of  the  debt  remains  unpaid. -^^ 

§  1797.  The  rig-ht  to  sell  under  a  power  is  suspended  by  the 
mortg'ag'or's  bringing  a  bill  to  redeem,  in  wliich  he  offers  to  pay 
what  is  due,  after  he  has  given  proper  notice  of  the  pendency  of  hh 
bill;  and  if  such  notice  has  been  filed  in  the  registiy  of  deeds  a  sub- 
sequent purchaser  at  a  sale  under  the  power  cannot  maintain  an 
action  to  recover  the  land.-^"  During  the  pendency  of  a  bill  to  re- 
deem by  the  mortgagor,  charging  usury  and  asking  for  an  account- 
ing, a  power  of  sale  cannot  be  properly  exercised;  and  if  a  sale  is 
made  under  it,  this  should  be  set  aside  and  redemption  allowed  on 
payment  of  the  amount  actually  due."^^  The  pendency  of  a  bill  to 
redeem  by  a  subsequent  incumbrancer  would  not,  it  would  seem, 
suspend  the  power  to  sell;-"  for  in  this  way  the  very  object  of  the 
power,  which  is  to  afford  a  speedy  remedy  without  the  delay  of  a 
suit,  would  be  defeated.  The  incumbrancer  may  protect  himself 
by  purchasing  at  the  sale;  or  by  enforcing  his  claim  upon  the  sur- 
plus proceeds  of  the  sale,  when  his  title  can  be  fully  investigated, 
without  keeping  the  mortgage  creditor  waiting  for  his  money.  But 
when  the  first  mortgagee  has  refused  a  tender  of  the  amount  due 
on  his  mortgage  from  a  subsequent  mortgagee,  who  thereupon  has 
brought  a  suit  to  redeem,  and  the  first  mortgagee  proceeds  to  sell 
under  his  power,  upon  a  prima  facie  case  that  the  subsequent  mort- 
gagee is  entitled  to  redeem,  the  first  mortgagee  may  be  restrained 

=»"  Wilson  v.  Troup,  2  Cow.  195,  14  20   N.   E.   169;    Way  v.   Mullett,   143 

Am.  Dec.  458.  Mass.  49,  8  N.  E.  881. 

""Montague    v.    Dawes,    12    Allen,  ='■'' Ryan   v.    Newcomb,    125   111.   91, 

397.  16  N.  E.  878. 

="Loomis    v.    Clambey,    69    Minn.  -"Adams   v.    Scott,   7   W.    R.    213; 

469,  72  N.  W.  707.  Holland   v.    Citizens'   Sav.    Bank,   16 

"=  Clark  v.   Griffin,  148  Mass.   540,  R.   I.   734,  19  Atl.   654. 


§    1798.]        POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  75G 

from  assigning  his  mortgage,  and  from  selling  under  it,  until  the 
hearing  of  the  case  on  the  hill  to  redeem. -^^ 

The  power  of  sale  is  not  suspended  for  the  reason  that  the  mort- 
gagee has  resorted  to  a  process  of  garnishment  to  collect  the  mort- 
gage deht.  The  several  remedies  upon  a  mortgage  being  collateral 
and  independent,  the  remedy  under  the  power  of  sale  is  not  af- 
fected by  any  other  proceeding  to  enforce  the  debt,  unless  this  has 
resulted  in  a  partial  or  complete  satisfaction  of  it.^^*^ 

§  1798.  A  tender  of  the  amount  due  and  payable  upon  a  mort- 
gage, after  breach  of  the  condition  and  before  the  sale,  does  not, 
according  to  the  rule  adopted  in  Massachusetts,  defeat  the  right  to 
sell  under  the  powder,  because  the  right  to  sell  attaches  at  once,  and 
as  it  is  a  powder  coupled  with  an  interest  it  cannot  be  revoked. 
The  tender  is  merely  the  foimdation  for  a  suit  in  equity  for  redemp- 
tion. A  sale  under  the  power,  after  a  tender  made  and  not  ac- 
cepted, transfers  the  legal  title  and  possession;  but  the  mortgagor 
may  preserve  his  right  to  redeem  against  a  purchaser  by  giving  him 
notice  before  or  at  the  sale  of  the  tender.  Until  he  is  restored  to 
the  legal  right  of  possession  by  a  decree  of  court  in  equity,  he  can 
neither  maintain  nor  defend  a  writ  of  entry  against  one  claiming 
under  the  mortgage.  The  foreclosure  is  complete  by  the  sale  not- 
withstanding the  tender.  And  unless  the  mortgagor  proceeds  in. 
equity  to  redeem,  the  purchaser  is  entitled  to  possession  and  may 
recover  it  by  a  writ  of  entry,  although  he  purchased  with  full 
knowledge  that  after  breach  and  before  the  sale  the  mortgagor 
tendered  the  whole  amount  due  under  the  mortgage.-^^  If,  however,  a 
tender  be  made  at  the  time  stipulated  in  the  condition  of  the 
mortgage,  the  right  to  sell  is  thereby  defeated,  and  a  sale  would 
be  void.-^^ 

After  a  sale  imder  the  power,  though  the  deed  to  carry  it  out  has 
not  been  executed,  the  mortgagor  has  as  matter  of  law  no  right  to 
redeem.  Unless  there  was  some  defect  in  the  proceedings  the  mort- 
gagor's rights  are  gone  when  the  contract  of  sale  under  the  power 
is  made.  A  bill  to  redeem  filed  after  the  sale  and  before  the  exe- 
cution of  the  deed,  made  in  pursuance  of  the  sale  imder  the  power, 

-"  Rhodes    v.    Buckland,    16    Beav.  single  instalment  when  due  matured 

212.  the    whole    debt,    there    was    even 

-"Benjamin   v.    Loughborough,   31  greater   reason    for    holding   that    a 

Ark.  210.  tender  of  the  first  instalment  would 

-''  Cranston  v.  Crane,  97  Mass.  459,  not   entitle   the    mortgagor   to   have 

93  Am.  Dec..  106.     And  see  ISIontague  a    sale    under    the    power    stopped. 

V.  Dawes,  12  Allen,  397.     Where  the  Lincoln  v.  Corbett  (Tex.),  72  S.  W. 

mortgage  debt  was  payable  in  instal-  224. 
ments,    and    the    failure    to    pay    a        ^'^  §§  886-893. 


757  REVOCATION  OR  SUSPENSION.  [§  1799. 

cannot  interrupt  the  mortgagee's  right  to  proceed  to  conclude  the 
mortgagor's  rights  in  the  property,  unless  the  amount  due  is  paid 
into  court  or  an  injunction  is  issued. -^^ 

But  after  payment  and  discharge  of  the  mortgage  a  sale  under 
the  power  is  void  and  of  no  effect.--" 

§  1799.     A  different  rule  is  adopted  in  the  English  courts,  and 

in  some  of  our  state  courts,  whicli  hold  that  upon  a  tender  at  any 
time  before  the  sale  is  actually  made,  even  after  the  property  has 
been  put  up  at  public  auction,  the  mortgagee  is  bound  to  stop  the 
sale.^^^  If  the  mortgagee  refuses  the  tender  and  goes  on  with  the 
sale  the  purchaser  having  knowledge  of  the  circumstances,  the  court, 
instead  of  leaving  the  mortgagor  to  his  remedy  by  bill  to  redeem, 
will  set  aside  the  sale.  In  other  similar  cases  the  court  will  re- 
strain a  sale,  and  allow  the  mortgagor  or  other  person  interested 
in  the  equity  to  proceed  with  a  bill  to  redeem.  But  a  mere  offer 
without  an  actual  tender  of  the  amount  due  is  not  sufficient  to  pre- 
vent a  sale;  and  the  tender  must  include  costs  as  well  as  interest.^-^ 
A  mortgagor  who  has  notice  of  an  intended  sale,  and  allows  it  to 
proceed  without  objection,  cannot  afterwards  show  a  tender,  or  even 
a  payment  in  full  of  the  debt,  and  thereby  defeat  the  title  of  a  bona 
fide  purchaser  wlio  purchased  in  good  faith  without  knowledge  of 
the  payment  or  tender,  the  mortgage  remaining  undischarged  of  rec- 
ord.-^^  But  payment  extinguishes  the  power  of  sale  except  as  against 
a  mortgagor  or  other  party  in  interest  who  is  estopped  to  take  ad- 
vantage of  it.^-* 

Where  it  is  provided  in  a  deed  of  trust  that  upon  any  default  the 
whole  amount  of  principal  and  interest  shall  be  due  forthwith,  and 
the  trustee  may  thereupon  sell,  the  debtor  is  in  equity  entitled  to 
have  proceedings  for  a  sale  stopped  upon  a  tender  to  the  trustee 

^'^  Brown  v.  Wentworth,  181  Mass.  Michigan   the   lien   is  considered   as 

49.      In    Massacliusetts,    by    statute  discharged    by    the    tender-,    so    that 

1888,    ch.    431,    Rev.    Laws    1902,    ch.  no    valid    sale    can    afterwards    be 

187,  §  22,  it  is  provided  that  a  mort-  made  even  to  a  bona  fide  purchaser, 

gagee  who  has  published  a  notice  of  §  893. 

sale  prior  to  the  commencement  of  --  Whitworth  v.  Rhodes,  20  L.  J. 

a  suit  to  redeem,  may  proceed  with  N.    S.     (Ch.)     105.     See    Grugeon    v. 

the   sale   when   the   amount   due   on  Gerrard,  4  Y.  &  C.  119. 

the  mortgage  is  paid  into  court,  or  --'•'  Warner  v.   Blakeman,   36  Barb, 

the  sale  is  enjoined.  501,    affirmed,    4    Keyes,    487;     Mer- 

""  Benson  v.  Markoe,  41  Minn.  112,  chant  v.  Woods,  27  Minn.  396.     See 

42  N.  W.  787.  §§  892,  1450,  1512. 

"^  Jenkins   v.    Jones,   2    Gif.    99,    6  ■-*  Lycoming  F.   Ins.   Co.   v.   Jack- 

Jur.  N.  S.  391;  Burnet  v.  Denniston,  son,    83    111.    302,    25    Am.    Rep.    386; 

5  Johns.  Ch.  35;   Cameron  v.  Irwin,  Redmond  v.  Packenham,  66  111.  434; 

5  Hill,  272,  276.     In  New  York  and  Cameron  v.  Irwin,  5  Hill,  272. 


1800.]        POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS. 


758 


before  sale  of  the  amount  due,  together  with  costs  accrued;  and  if 
the  trustee  proceeds  nevertheless  to  sell,  the  sale  may  be  set  aside."^ 

§  1800.  The  power  is  not  suspended  by  reason  that  the  mort- 
gagor is  within  the  lines  of  an  enemy  at  war  with  his  country, 
if  he  voluntarily  absented  himself  from  home  and  became  an  alien 
enemy.^-^  The  publication  of  notice  in  accordance  with  the  power  is 
binding  and  effectual.  Upon  the  same  principle,  an  alien  enemy 
who  has  voluntarily  absented  himself  from  home  may  be  sued  in 
the  State  of  his  former  residence,  and  is  bound  by  constructive  notice 
in  the  same  manner  as  any  other  non-resident.  The  late  civil  war  in 
this  country  was  attended  with  all  the  consequences  in  this  respect 
that  an  international  or  public  war  would  have  produced.  The  fact 
that  a  mortgagor"  was  so  situated  within  the  enemy's  lines  that  he 
could  not  receive  the  notice  of  sale,  or  appear  in  response  to  it,  did 
not  suspend  the  right  of  the  mortgagee  to  enforce  payment  of  his 
mortgage  in  accordance  with  its  provisions.-^^  In  numerous  cases  it 
would  be  equally  impossible,  for  other  reasons,  for  the  mortgagor  to 
receive  notice  by  publication. 


="Whelan  v.   Reilly,   61  Mo.   565; 
Flower  v.  Elwood,  66  111.  438. 

""  Ludlow  v.  Ramsey,  11  Wall. 
581.  Mr.  Justice  Bradley  said: 
"This  case  differs  from  that  of  Dean 
V.  Nelson,  10  Wallace,  158,  decided 
at  the  present  term.  In  that  case 
Nelson  and  his  wife  were  driven  out 
of  Memphis  by  a  military  order,  and 
were  not  permitted  to  return,  and 
the  proceedings  to  foreclose  their 
property  took  place  during  their  en- 
forced absence.  The  other  defend- 
ant. May,  was  only  nominally  inter- 
ested, and  had  always  been  within 
the  Confederate  lines.  But  if,  as  in 
this  case,  a  party  voluntarily  leaves 
his  country  or  his  residence  for  the 
purpose  of  engaging  in  hostilities 
against  the  former,  he  cannot  be 
permitted  to  complain  of  legal  pro- 
ceedings regularly  prosecuted  against 
him  as  an  absentee,  on  the  ground 
of  his  inability  to  return  or  to  hold 
communication  with  the  place  where 
the  proceedings  are  conducted." 

That  the  existence  of  civil  war  did 
not  exempt  property  of  persons  re- 
siding in  the  rebel  States,  located 
in  the  loyal  States,  from  judicial 
process,  and  foreclosure  or  sale  un- 
der power  of  sale,  for  debts  due  to 
citizens  of  the  latter  States,  see, 
also,      Washington     University     v. 


Finch,  18  Wall.  106,  1  Cent.  L.  J. 
66  (1874);  De  Jarnette  v.  De  Giver- 
ville,  56  Mo.  440;  Martin  v.  Paxson, 
66  Mo.  260;  Harper  v.  Ely,  56  111. 
179;  Thomas  v.  Mahone,  9  Bush,  111; 
Crutcher  v.  Hord,  4  Bush,  360;  Sey- 
mour V.  Bailey,  66  111.  288;  Willard 
v.  Boggs,  56  111.  163;  Mixer  v.  Sib- 
ley, 53  111.  61;  Hall  v.  Conn.  Mut. 
L.  Ins.  Co.  68  111.  357;  Bush  v.  Sher- 
man, 80  111.  160;  Mitchell  v.  Noda- 
way Co.  80  Mo.  257.  Contra,  Walk- 
er V.  Beauchler,  27  Gratt.  511;  Green 
V.  Alexander,  7  D.  C.  147  (semble). 
See  §  1906a. 

"'  Dorsey  v.  Dorsey,  30  Md.  522,  96 
Am.  Dec.  633.  After  the  decision  of 
this  case  the  case  of  Johnson  v.  Rob- 
ertson, 34  Md.  165,  came  before  the 
court,  when,  in  consequence  of  the 
decision  of  the  Supreme  Court  of 
the  United  States  in  Dean  v.  Nel- 
son, 10  Wall.  158,  the  court  over- 
ruled its  former  decision  in  Dorsey 
V.  Dorsey,  and  held  that  a  notice  by 
publication  to  the  mortgagor,  while 
absent  in  the  Confederate  lines,  was 
ineffectual  to  bind  him,  and  that  the 
sale  under  it  was  void.  If  the  decis- 
ion in  Ludlow  v.  Ramsey,  11  Wall. 
581,  had  then  been  made,  the  Su- 
preme Court  of  Maryland  would 
doubtless  have  adhered  to  its  former 
decision. 


759  WHEN    THE    EXERCISE    MAY    BE    EX  JOINED.  [§    1801. 

Aside  from  the  principle  above  stated  as  to  the  right  to  foreclose 
tlie  property  of  alien  enemies,  the  power  of  sale  in  a  mortgage  or 
trust  deed  being  coupled  with  an  interest  and  irrevocable  may,  at 
any  time  after  the  happening  of  the  contingency  in  which  it  is  to  be 
exercised,  be  executed  without  regard  to  the  circumstances  or  dis- 
abilities of  the  maker  of  it  at  that  time."**  Immediately  upon  the 
happening  of  that  contingency,  it  is  the  legal  and  moral  right  of 
the  creditor  to  have  the  power  of  sale  made  for  liis  benefit  executed. 
The  notice  of  sale  required  by  the  power  is  not  for  the  benefit  of 
the  grantor,  in  the  sense  of  a  notice  to  him  of  the  sale  of  the  land; 
for,  if  that  were  the  case,  he  could  altogether  defeat  any  sale  by 
going  to  a  place  where  the  notice  could  not  reach  him ;  but  it  is  in- 
tended rather  to  notify  the  community  that  the  sale  will  take  place. 
The  grantor  must  be  presumed  to  know  that  he  is  in  default,  and 
that  his  property  is  liable  to  be  sold. 


V.     When  the  Exercise  of  the  Power  may  he  enjoined. 

§  1801.  Generally,  the  purpose  for  which  the  power  of  sale  is  given 
being  to  afford  an  additional  and  more  speedy  remedy  for  the  recov- 
ery of  the  debt,  the  mortgagor  is  by  his  contract  bound  to  exercise 
the  necessary  promptness  in  fulfilling  it,  and  cannot  complain  of  a 
legitimate  exercise  of  the  power.^^^  If  in  any  case  it  is  attempted  to 
pervert  the  power  from  its   legitimate  purpose,   and   to   use  it   for 

"^  Washington  University  v.  Finch,  both  of  them   imposed  on  him  be- 

18  Wall.  106,  1  Cent.  L.  J.  66  (1874);  fore  the  war  began."     In  the  latter 

De  Jarnette  v.  De  Giverville,  56  Mo.  case,  Wagner,  Judge,  said:     "So  far 

440.     Both   of  these  cases  relate   to  as  the  authority  of  the  trustee  was 

sales  made  by  trustees  under  pow-  concerned  to  go  on  and  make  a  sale 

ers  given   in  trust  deeds  while  the  of  the  property  in  satisfaction  of  the 

grantors  were  alien  enemies  in  the  debt,  it  made  no  difference  whether 

rebel  States.     In  the  former  case  Mr.  the  grantors  were  in  the  Confeder-' 

Justice  Miller  said:     "The  debt  was  ate  lines  or  in  the  jungles  of  India, 

due     and     unpaid.     The     obligation  or  even  if  they  were  dead." 
which  the  trustee  had  assumed  on  a        =-"  §   1447;    "Such  a  power  as  this 

condition    had    become    absolute    by  may  no  doubt  be  used  for  purposes 

the    presence   of   that   condition.     If  of  oppression;    but  when  conferred, 

the  complainants  had  been  dead,  the  it  must  be  remembered  that  it  is  so 

^•ale  v/ould   not  have  been  void  for  by  a  bargain  between  one  party  and 

that   reason.  ...  If   they   had    been  another,  and  it  is  for  the  party  who 

in    Japan,    it    would    have    been    no  borrows  to  consider  whether  he   is 

l?£?al  reason  for  delay.  .  .  .  The  en-  not  giving  too  large  a  power  to  him 

forced  absence  of  the  complainants,  with  whom  he  is  dealing."    Per  Cot- 

if   it   be   conceded    that   it   was    en-  tenham.  Lord  Chancellor,  in  Jones  v. 

forced,   does  not,   in   our  judgment,  Matthie,   11  Jur.   504.     And  see  Mc- 

afford  a  sufficient  reason  for  arrest-  Galley  v.   Otey,   90   Ala.   302,   12   So. 

ing  their  agent  and  the  agent  of  the  406,  8  So.  157. 
creditor  In  performing  a  duty  which 


§    1801a.]     POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  7G0 

the  purpose  of  oppressing  the  debtor,  or  of  enabling  the  creditor  to 
acquire  the  property  himself,  a  court  of  equity  will  enjoin  the  sale, 
or  will  set  it  aside  after  it  is  made.^^"  Of  course,  so  long  as  the 
creditor  exercises  only  his  legal  right,  although  this  be  contrary  to 
the  wishes  and  interest  of  the  mortgagor,  the  court  will  not  inter- 
fere;-^^ and,  as  will  be  noticed  prasently  more  at  length,  a  stronger 
case  must  be  made  to  call  for  sucli  interference  than  to  set  aside  the 
sale  afterwards.-^-  A  sale  will  not  be  enjoined  because  the  original 
mortgage  deed  conferring  the  power  has  been  lost.-^^ 

The  circumstance  that  an  action  of  trespass  to  try  title  is  pending 
in  regard  to  the  same  premises  does  not  preclude  the  issuance  of  an 
injunction  against  a  sale  under  a  power  in  a  deed  of  trust.^^* 

§  1801a.  A  court  of  equity,  having  once  acquired  jurisdiction  of 
the  parties  and  of  the  subject  matter  through  an  action  to  enjoin  a 
sale,  ma}^  direct  a  sale  of  the  land ;  and  it  is  not  bound  to  direct  such 
sale  in  strict  accordance  with  the  terms  of  the  mortgage.^^^  Having 
acquired  jurisdiction,  the  court  may  properly  enjoin  an  action  at 
law  upon  the  notes  secured  by  the  mortgage.-^*^ 

Where  the  application  for  an  injunction  fails,  however,  the  usual 
method  of  procedure  would  be  to  allow  the  sale  to  be  conducted  by  the 
trustee  in  the  ordinary  course.  To  do  otherwise  would  be  to  keep  him 
in  court  to  encounter  further  litigation  and  expense.  Furthermore 
the  trustee  is  entitled  to  the  remedy  given  by  law  under  the  trust, 
there  being  no  reason  to  deny  it.-^"    In  case  there  are  conflicting  liens 

""  Davey  v.  Durrant,  1  De  G.  &  J.  calls  a  fraud  in  the  exercise  of  the 

535;  Robertson  v.  Norris,  1  Gif.  421;  power,  because  it  is  using  the  power 

Jenkins  v.   Jones,  2   Gif.   !»9;    Whit-  for  a  purpose  foreign  to  the  legiti- 

worth  V.  Rhodes,  20  L.  J.  N.  S.  (Ch.)  mate  purposes  for  which  it  was  in- 

105;    Close  v.   Phipps,   7   Man.   &  G.  tended."     Affirmed  4  Jur.  N.  S.  443. 

586;   Holland  v.  Citizens'  Sav.  Bank,  231;   Jones  v.  Matthie,  11  Jur.  504; 

16  R.  I.  734,  19  Atl.  654.  Security  Loan  Asso.  v.  Lake,  69  Ala. 

"Wherever  a  power  is  given,"  said  456,  quoting  text. 

Sir  J.  Stewart,  V.   C,  in  Robertson  ='=^  Struve    v.    Childs,    63    Ala.    473. 

V.  Norris,  4  Jur.  N.  S.  155,  "the  court  Contra,  Anderson  v.  White,  2  App. 

requires  that  the  power  shall  be  ex-  Cas.  D.  C.  408  (semble). 

ercised    with    a   view    only    to    that  -^  Bibb  v.  Crews,  113  Ala.  617,  21 

which  is  the  legitimate  purpose  for  So.  341. 

effecting  which  the  power  was  con-  "■*  Mott  v.  Maris   (Tex.),  29  S.  W. 

ferred.     The   legitimate  purpose  for  825. 

which  the  power  to  sell  in  this  de-  -^'  Manning  v.  Elliott,  92  N.  C.  48. 

fendant's  mortgage  deed  was  given  ""  Whitley  v.  Dunham  Lumber  Co. 

was  to  secure  to  him  repayment  of  89  Ala.  493,  7  So.  810;  North  Eastern 

his  mortgage  money.     If  he  uses  the  R.  Co.  v.  Barrett,  65  Ga.  601;   Had- 

power  to  sell  which  he  gels  for  that  field  v.  Bartlett,  66  Wis.  G34,  29  N. 

purpose   for  another  purpose,   from  W.  639. 

any  ill  motive,  to  effect  means  and  ="  Watterson  v.  Miller,  42  W.  Va. 

purposes  of  his  own,  or  to  serve  the  108,  24  S.  E.  578;   Martin  v.  Kester, 

purposes    of    other    individuals,    the  49  W.  Va.  647,  39  S.  W.  599. 
court  considers  that  to  be  what  it 


761  WHEN    THE    EXERCISE    MAY    BE   ENJOINED.  [§    1803. 

the  court  acquiring  jurisdiction  through  the  injunction  suit,  may 
adjudicate  between  them  and  administer  the  fund.'^" 

Where  the  enforcement  of  a  sale  under  a  trust  deed  has  been  en- 
joined, a  sale  under  execution  issued  on  the  judgment  of  foreclosure, 
while  the  injunction  is  still  in  force,  is  a  contempt  of  court,  and 
passes  no  title.-^'* 

On  the  same  theory  a  court  of  equity  which  had  acquired  juris- 
diction over  property  included  in  a  trust  deed  though  a  statutory 
procedure  for  enforcing  judgment  liens  set  aside  a  sale  under  the 
power  pending  the  proceedings.-*"  But  the  trustee  under  a  prior  deed 
of  trust  may  enjoin  a  sale  under  a  subsequent  instrument  and  at  the 
same  time  proceed  with  his  own  sale.^*^ 

§  1802.  Legitimate  exercise  of  power. — It  frequently  happens 
that  the  holder  of  a  mortgage  with  a  pow^r  of  sale  is  requested  by 
the  mortgagor,  or  some  other  party  in  interest,  to  exercise  it  for  the 
purpose  of  effecting  a  sale  of  the  property;  as  when  the  title  sub- 
sequent to  the  mortgage  has  become  complicated  by  attachments, 
judgments,  or  other  liens,  so  that  it  is  not  practicable  to  obtain 
releases  from  all  persons  having  claims  upon  it;  or  where  a  sale, 
except  under  the  .power,  has  become  impracticable  because  the  sub- 
sequent liens  upon  it  are  greater  than  the  value  of  the  property. 
Sometimes,  under  these  or  like  circumstances,  a  default  is  design- 
edly permitted,  in  order  to  make  the  power  exercisable  and  to 
cut  off  subsequent  incumbrances.  Doubts  are  sometimes  expressed 
about  the  validity  of  sales  made  on  such  request,  or  with  the  knowl- 
edge on  the  part  of  the  mortgagee  that  the  purpose  is  to  get  rid  of 
a  subsequent  lien ;  but  it  is  conceived  that,  if  the  power  is  fairly  ex- 
ercised according  to  its  terms,  there  is  no  impropriety  in  the  ar- 
rangement. Certainly  tliere  is  no  such  objection  as  to  give  occasion 
for  the  interference  of  the  court  to  restrain  the  sale  or  to  set  it  aside. 
"A  man  taking  that  which  belongs  to  him,  by  means  of  the  security 
which  he  has  contracted  for,  does  not  act  improperly  in  so  doing 
merely  because  one  principal  reason  for  his  calling  in  the  money  is 
a  wish  to   benefit   another   person.      The   case,  however,   might   he 

"« Draper  v.  Davis,  104  U.  S.  347,  v.  McSpadden,  101  Tenn.  433,  47  S. 

26  L.  Ed.  783;  Bourke  v.  Vanderlip,  W.  698. 

22    Tex    221;    Anderson   v.    Phlegar,  -^»Ward  v.  Billups,  76  Tex.  466,  13 

93  Va.   415,  25   S.   E.   107.  S.  W.   308;    Lash  v.   McCormick,   14 

That    an '  outside    lien    bound    the  Minn.  482. 

property  at  the  time  of  the  sale  un-  ='"  Parsons    v.    Snider,    42    W.    Va. 

der  the  power  conferred  by  the  deed  517,  26  S.  E.  285. 

of  trust  is  not,  however,  a  ground  -"  Jopllng  v.  Walton,  lo8  Mo.  i>io, 

for  setting  the  sale  aside.     McClurg  40  S.  W.  99. 


§§    1803,    1804.]    POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.    762 

different  if  it  were  part  of  the  arrangement  that  the  mortgage  debt 
should  be  again  lent  to  the  purchaser."-*^ 

So  long  as  the  mortgagee  is  clearly  within  the  authorit}^  given  by 
the  power,  and  no  fraud  or  illegality  in  the  mortgage  is  shown,  an 
intended  sale  will  not  be  restrained,  although  the  exercise  of  it  be 
harsh  and  improvident.  The  grounds  for  interference  by  injunc- 
tion must  be  very  strong,  and  must  show  that  the  injury  likely  to 
be  sustained  by  the  parties  interested  will  be  irreparable,  or  that  a 
clear  breach  of  trust  will  be  committed  by  the  intended  sale.-*^ 

§  1803.  A  use  of  the  power  to  obtain  an  advantage  under  an- 
other mortgage  is  not  allowable.^"  Where  a  mortgagee  held  two 
mortgages  with  powers  of  sale  upon  the  same  property,  the  subse- 
quent mortgage,  however,  being  of  an  undivided  interest,  and  he 
threatened  to  foreclose  under  the  first  mortgage  unless  both  mort- 
gages should  be  paid,  upon  the  filing  of  a  bill  to  redeem  from  the 
first  mortgage,  and  the  payment  of  the  money  due  upon  it  into 
court,  he  was  enjoined  from  selling  under  that  mortgage;  because 
the  power  in  that  mortgage  only  existed  for  the  purpose  of  securing 
that  money,  and  the  mortgagee  could  not  be  allowed  to  proceed 
under  that  power  in  order  to  have  an  advantage .  in  obtaining  the 
money  due  on  the  second  mortgage.^*"' 

A  bill  by  a  mortgagor  to  redeem,  and  to  enjoin  a  sale  under  a 
power,  alleged  that  the  mortgagor  had  tendered  the  full  amount  of 
the  mortgage  debt,  and  that  nevertheless  the  mortgagee  advertised 
the  land  for  sale  under  the  power,  his  purpose  being  to  coerce  the 
payment  of  another  claim  not  connected  with  the  mortgage.  These 
allegations  not  having  been  met  by  answer,  the  court  enjoined  the 
sale.^''^ 

§  1804.  Grounds  of  interference  must  be  alleged.  Coiirts  of 
equity  will  interfere  by  injunction  to  prevent  a  sale  under  a  power 
in  a  mortgage  or  trust  deed  when,  by  reason  of  fraud,  want  of  con- 
sideration,'*^ or  otherwise,  the  collection  of  the  debt  would  be  against 

"=  Dart's  Vendors  and  Purchasers,  ^*=  Whitworth  v.  Rhodes,  20  L.  J. 

5th  ed.  p.  75.  N.  S.  105;   Struve  v.  Childs,  63  Ala. 

="  Kershaw  v.  Kalow,  1  Jur.  N.  S.  473;    McCalley  v.  Otey,  90  Ala.   302, 

974;   Warner  v.  Jacob,  L.  R.  20  Ch.  12  So.  406,  8  So.  157. 

D.  220;  Bedell  v.  M'Clellan.  11  How.  ^^-^  McCalley  v.  Otey,  90  Ala.  302,  8 

Pr.    172;    Holland    v.    Citizens'    Sav.  So.  157. 

Bank,    16    R.    I.    734.    19    Atl.    654;  ='■  Brooks  v.  Owen,  112  Mo.  251,  19 

Montgomery  v.  McEwen,  9  Minn.  103.  S.  W.  723;   Ryan  v.  Gilliam,  75  Mo. 

*"Gooch  v.  Vaiis?han,  92  N.  C.  610;  132;    Gerdes  v.    Burnham,   78   Minn. 

Struve  v.  Childs,  63  Ala.  473 ;  Zlotoe-  511,  81  N.  W.  516. 
cozski  V.  Smith,  117  Mich.  202,  75  N. 
W.  470. 


763  WHEN    THE    EXERCISE    MAY    BE   ENJOINED.  [§    1805. 

conscience,  and  the  sale  would  work  a  great  and  irreparable  injury."' 
To  warrant  this  interference  the  complainant  must  allege  specifically 
the  grounds  on  which  the  application  is  based  ;^*®  general  statements 
and  inferences  from  facts  are  not  sufficient.^^°  An  allegation  that  the 
mortgagor  does  not  owe  the  note  described  in  the  mortgage,  without 
stating  why  he  does  not  owe  it,  is  not  sufficient  to  warrant  the  re- 
lief.-^^  A  statement  that  the  proposed  sale  will  materially  embarrass 
and  injure  the  petitioner  is  only  a  conclusion  of  his  own,  and  of  no 
consequence  unless  the  facts  are  stated  from  which  the  court  can 
determine  what  the  injury  will  be."^^  There  mu^t  be  clear  and  precise 
allegations  of  distinct  facts  which  would  go  to  show  that  by  reason  of 
fraud,  or  want  or  illegality  of  consideration,  or  for  some  other  reason, 
the  collection  of  the  mortgage  debt  would  be  against  good  conscience, 
and  that  the  sale  would  work  irreparable  injury.^'^^ 

§  1805.  The  court  will  enjoin  a  sale  only  when  the  petitioner's 
rights  are  clear,  or  free  from  reasonable  doubt.  He  must  show 
also  a  good  reason  for  asking  the  interference  of  the  court.^^*  He 
must  show  by  a  clear  preponderance  of  evidence  that  the  mortgagee 
is  about  to  proceed  in  an  improper  or  oppressive  manner,  and  not 
merely  that  he  might  adopt  a  different  remedy  ;-'^  that  the  mortgage 
creditor  is  claiming  more  than  is  due  on  the  debt;  that  the  mort- 
gage was  made  without  consideration;  that  the  consideration  has 
failed  f^^  or  that  the  debt  has  been  satisfied ;-"  or  that  the  accounts 
are  so  complicated  that  the  parties  cannot  state  them  and  ascertain 

"'  Montgomery  v.   Ewen.   9  Minn,  under  said   mortgages,  and  thereby 

103;  Glover  v.  Hembree.  82  Ala.  324,  defeat    the    purposes    of"    the    bill 

8  So.   251;    Vaughan  v.   Marable,   64  brought   by   complainant   to   compel 

Ala.  60.  the   payment  of  said   mortgages   by 

"» Conlin  v.  Carter,  93  III.  536.  said  person,   is  not  such   a   specific 

^■^  Security  Loan  Asso.  v.  Lake,  69  charge  of  an  intention  to  pervert  the 

Ala.  456,  465.  power  of  sale  as  entitles  the  com- 

"'  Foster  v.  Reynolds,  38  Mo.  553.  plainant    to    relief,    or    amounts    to 

="*-  Montgomery  v.  McEwen,  9  Minn,  a  notice  the  purchaser  at  the  sale. 

103  Holland   v.    Citizens'   Sav.   Bank,   16 

"'"  Glover  v.  Hembree,  82  Ala.  324,  R.  L  734,  19  Atl.  654. 

8  So    251;   Vaughan  v.   Marable,  64  ^^'^  The  Johnson  Co.  v.  Henderson, 

Ala.  60;  Whittaker  v.  Hill,  96  N.  C.  83  Md.  125,  34  Atl.  835. 

2    IS    E.  639;    Holland  v.  Citizens'  ="  Bedell  v.  M'Clellan,  11  How.  Pr. 

Sav    Bank,  16  R.  I.  734,  19  Atl.  654.  172;    Security    Loan    Asso.    v.    Lake, 

An     allegation     that     another     had  69  Ala.  456,  465;    Bramlett  v.   Reily 

promised  to  pay  a  mortgage,  but  had  (Miss.),  3  So.  658. 

failed  to  do  so,  and  that  complainant  '"''  Van  Meter  v.  Hamilton,  96  Mo. 

"is  informed  and  believes,  and   there-  654,  10  S.  W.  71. 

fore  charges  it  to  be  true,"  that  said  -"  Knight  v.  Jackson,  36  S.  C.  10, 

person    and    the    mortgagee    "have  14  S.   E.   982;    Frazier  v.   Keller,  71 

combined   together  for  the   purpose  Md.  58,  20  Atl.  134. 
of  allowing  said  property  to  be  sold 


§    1805a.]     POWER   OF    SALE   MORTGAGES   AND   TRUST   DEEDS.  764 

the  amount  due.-^®  In  general  a  stronger  case  must  be  presented  to 
the  court,  to  obtain  an  injunction  against  a  proposed  sale  under  the 
power,  than  to  obtain  a  decree  setting  it  aside  after  it  is  made.^^'* 

A  bill  alleging  that  the  mortgagor  has  overpaid  an  account  due 
the  mortgagee,  and  that  such  overpayment,  if  applied  to  the  mort- 
gage debt,  would  satisfy  it,  does  not  entitle  him,  where  the  over- 
payment is  disputed,  to  have  a  sale  under  the  mortgage  enjoined 
until  the  question  is  adjudicated.-*'"  The  mortgagor  must  ainde  by 
the  terms  of  the  mortgage.  The  power  of  sale  is  given  to  enable 
the  holder  of  the  mortgage  to  collect  the  debt  by  selling,  if  the 
debtor  cannot  or  will  not  pay  it.-*'^  That  the  mortgaged  property 
greatly  exceeds  the  amount  of  the  mortgage  debt;  that  the  sale  Vv^ill 
greatly  injure  tlie  mortgagor,  who  is  unable  to  pay  the  mortgage 
debt;  and  that  the  mortgagee  threatens  to  sell  unless  a  second 
mortgage  is  paid,  and  to  thereby  obtain  an  advantage  and  oppress 
the  mortgagor, — are  not  grounds  for  enjoining  the  sale.-'^^ 

An  injunction  will  not  be  issued  against  carrying  out  a  sale  made 
under  a  power,  when  this  relief  is  not  sought  until  the  sale  has  been 
made  and  the  rights  of  a  purchaser  have  intervened.  If  the  mort- 
gagor has  not  obtained  an  injunction  before  the  sale,  he  should  at- 
tend the  sale  and  apprise  the  bidders  of  his  claims,  in  order  to  be  in  a 
situation  to  avail  himself  of  his  supposed  equities.^^^ 

A  surety  will  not  be  enjoined  from  selling  under  a  mortgage  of  in- 
demnity before  he  has  paid  the  debt,  in  case  the  debt  is  past  due  and 
the  parties  have  agreed  that  the  sale  may  be  advertised,  so  that  it  can 
be  made  by  a  certain  day.^''* 

§  1805a.  All  the  parties  interested  in  the  subject  matter  must 
be  made  parties  to  the  injunction  suit.  The  grantor  in  the  trust  deed 
is  directly  interested  and  should  be  made  a  party,  even  after  he  has  as- 
signed his  interest  in  the  equity  of  redemption.^*'^ 

2^^  Security  Loan  Asso.  v.  Lake,  69  in  the  same  series  of  transactions, 

Ala.  456;   Hinson  v.  Brooks,  67  Ala.  but   even   this    was   not   thought   to 

491;  Muller  v.  Stone,  84  Va.  834,  6  S.  warrant  the  injunction.     The  mort- 

E.  223.  gage  in   the  case  at  bar  originated 

■''^  Kershaw  v.  Kalow,  1  .Tur.  N.  S.  outside    the    business    of    the    firm, 

974;  Glover  v.  Hembree,  82  Ala.  324,  and,  so  far  as  appears,  has  not  been 

8  So.  251,  quoting  text.  complicated    with    said    business." 

=''"' Preston  v.  Shutton,  1  Anstr.  50;  ^''^  Muller  v.  Bayly,  21  Gratt.  521; 

Rawson  v.  Samuel,  1  Craig  &  P.  161;  Frieze  v.  Chapin.  2  R.  L  429. 

Gregg  v.  Hight,  6  Mo.  App.  579 ;  Rob-  -  -  McCulla    v.    Beadleston,    17    R. 

ertson  v.   Hogsheads,   3  Leigh,  667;  I.  20.  20  Atl.  11. 

Frieze  v.  Chapin,  2  R.  L  429:  McCulla  ^'-^  Pender    v.    Pittman,    84    N.    C 

V.    Beadleston.   17   R.    I.   20,   20   Atl.  372. 

11.     In    the    latter    case    Durfee,    C.  -'*Brower    v.    Buxton,    101    N.    C. 

J.,     referring    to    the    cases    above  419,  8  S.  E.  116. 

cited,  said:     "In  some  of  these  cases  ^'^^  Ah^-ahams      v.      Vollbaum,      54 

claim  and  counter-claim  originated  Tex.  226. 


765  WHEN    THE    EXERCISE    MAY    BE    ENJOINED.    [§§    180G,    1807. 

§  1806.  Payment  of  the  amount  justly  due  under  the  mortgage 
must  be  tendered  to  entitle  the  person  seeking  the  injunction  to 
the  consideration  of  the  court.^'*'^  It  has  sometimes  been  said  that 
the  amoimt  admitted  to  be  due  must  be  paid  into  court  at  the  time 
of  filing  the  bill,  and  an  averment  of  such  payment  made  in  the 
bill;"''^  but  it  is  generally  sufficient  if  the  bill  makes  a  tender  of 
whatever  may  be  found  due,  and  then  pajmient  into  court  is  not 
essential  to  the  equity  of  the  bill.'*'^  If  a  mortgagor,  who  has  agreed 
to  pay  attorneys'  fees  rendered  necessary  by  his  default,  brings  suit 
to  enjoin  a  sale,  on  the  ground  that  partial  payments  have  been 
made,  without  tendering  the  unpaid  balance,  he  is  liable  for  attor- 
neys' fees  incurred  by  the  mortgagee  in  defending  the  suit.^^^  The 
complainant  in  a  bill  to  enjoin  a  sale  under  the  mortgage  and  to  have 
the  mortgage  declared  void  and  cancelled,  must  suljmit  himself  to  the 
authority  and  jurisdiction  of  the  court  and  offer  to  do  equity  by  pay- 
ing any  sum  of  money  that  the  court  might  find  to  be  justly  due  to  the 
mortgagee.' 


270 


§  1807.  When  the  mortgage  was  void  in  its  inception  on  ac- 
count of  fraud,  undoubtedly  a  sale  under  the  power  may  be  en- 
joined.^'^i  rp|^^  ^^Y\  in  such  case  must  clearly  disclose  the  fraud,  and 
the  proof  clearly  substantiate  it,  though  this  rule  is  somewhat  re- 
laxed in  case  the  mortgagee  sustains  a  fiduciary  relation  to  the 
mortgagor.  Where  a  mortgage  by  a  corporation  was  of  doubtful 
validity  on  account  of  being  made  to  the  directors  themselves  on 
their  own  vote,  a  sale  was  restrained  until  a  hearing  of  the  case."- 

=^'"  Sloan    v.    Coolbaugh,    10    Iowa,  473;    Security  L.   Asso.   v.    Lake,   69 

31-    Powell    V.    Hopkins,    38    Md.    1;  Ala.  456;  Whitley  v.  Dunham  Lum- 

Barber     v.     Levy     (Miss.)     18     So.  ber  Co.   89  Ala.  493,  7  So.  810. 

438;    Vechte    v.    Brownell,    8    Paige,  -""Knight  v.  Jackson,  36  S.  C.  10, 

212;     Meysenburg    v.     Schlieper,    46  14  S.  E.  982. 

Mo.  209;    Cook  v.  Patterson,  103  N.  ^■"  Ross    v.    New    England    Mortg. 

C    127    9  S.  B.  402;  Carver  v.  Brady,  Sec.    Co.    101   Ala.    362,    13    So.    564; 

104   N.   C.   219,    10   S.   E.   565;    Will-  Giddens  v.   Boiling,  99   Ala.   319,   13 

iams    V.    Troy,    39    Ala.    118;    New  So.   511. 

Eng.   Mortg.   Co.  v.   Powell,   97  Ala.  =■' Pierson    v.    Ryerson,    14    N.    J. 

483,    12   So.   55;    American  Mortgage  Eq.     181;     International     Build.     & 

Co.    V.    Sewell,    92    Ala.    163,    9    So.  Loan   Asso.   v.   Barker   (Tex.),  39  S. 

143;   Norman  v.  Peper,  24  Fed.  403.  W.    317;    Beard    v.    Bliley,    3    Colo. 

But  this   rule  is  held   not  to   apply  App.  479;   Gay  v.  Hancock,  1  Rand, 

to   a  case  where   the   mortgagee   at  72.     In  the  latter  case  the  fraud  had 

the    time    of    taking    the    mortgage  been    practiced    upon    a    purchaser 

was  the  solicitor  of  the  mortgagor,  who    had    been    induced    to    give    a 

Macleod  v.   Jones,  L.   R.   24  Ch.   D.  deed    of    trust    to    secure    the    pur- 

289.  chase  price. 

=^"  Daughdrill  v.   Sweeney,  41  Ala.  ■'-  Southampton      Boat       Co.       v. 

310.  Muntz,  12  W.   R.  330.     See  Carpen- 

^^McCalley  v.   Otey,   90   Ala.   302,  ter  v.  Talbot,  33  Fed.  537. 
8  So.  157;   Struve  v.  Childs,  63  Ala. 


§§  1807a,  1807b.]    power  of  sale  mortgages  and  trust  deeds.    766 

But  the  application  must  be  made  by  the  mortgagor  upon  whom 
the  fraud  was  practiced  in  obtaining  the  mortgage,  and  cannot  be 
made  by  a  purchaser  from  the  mortgagor  v;ithout  paying  the  entire 
debt,  although  the  holder  of  the  mortgage  had  taken  it  as  security 
for  a  less  amount,-'^  or  altliough  he  had  taken  it  with  notice  of  the 
fraud.^^* 

§  1807a.  There  may  also  be  an  injunction  aguinst  the  execution  of 
the  power  by  reason  of  circumstances  arising  after  the  maldng  of 
the  mortgage,  in  consequence  of  which  the  execution  of  it  would  be 
inequitable;  but  the  court  will  not  interfere  in  such  cases  except 
upon  strong  reasons. ^'^^  The  fact  that  part  of  the  principal  of  the 
debt  has  been  paid  does  not  warrant  an  injunction  against  the  sale, 
unless  it  be  in  restraint  of  selling  more  than  enough  to  pay  the 
amount  due.-'^'^  But  payment  of  the  entire  debt  affords  ground  for 
such  injunction.-'^ 

A  sale  under  a  trust  deed  given  for  purchase-money  of  land 
bought  at  a  sale  under  a  deed  of  trust  executed  by  a  third  person  will 
not  be  enjoined,  so  long  as  the  petitioner  claims  title  under  such 
purchase,  on  the  ground  that  the  trustee  under  the  former  deed  of 
trust  had  no  power  to  make  the  sale,  or  that  the  deed  of  trust  which  is 
sought  to  be  enforced  is  void  Ijecause  of  an  insufficient  description  of 
tlie  land,  when  sucli  description  is  the  same  as  that  contained  in  the 
deed  under  which  he  claims  title.^'^ 

§  1807b.  But  it  is  no  ground  for  enjoining  a  foreclosure  under 
a  power  that  the  mortgage  was  made  for  the  purpose  of  de- 
frauding the  mortgagor's  creditors,  if  it  was  in  fact  given  to 
secure  an  actual  indebtedness.  "A  conveyance  or  transfer  in  fraud 
of  creditors  is  not  regarded  as  turpis  causa,  which  renders  all  con- 
tracts void.  It  is  merely  voidable  only  in  favor  of  the  defrauded 
creditors,"'^  leaving  it  in  all  other  respects,  and  as  between  the  parties, 
valid;  the  fraud,  if  there  be  one,  being  strictly  a  private  fraud, 
which  is  available  only  to  those  injured  by  it."^^"  But  it  is  a  ground 
for  enjoining  the  foreclosure  of  such  mortgage  that  in  fact  it  docs 

"=  Foster  v.  Wightman,  123  Mass.  ^''^  Such    creditors    could    have    a 

100.  sale  under  the   mortgage  set  aside. 

="*  Fairfield  v.  McArthur,  15  Gray,  Shields   v.   Hobart,   172   Mo.   521,   72 

526.     And  see  §   1303.  S.  W.  675. 

"=Per  Greene,   C.   J.,  in  Frieze  v.  ^^^  Devlin  v.   Quigg,  44  Minn.   534, 

Chapin,  2  R.  I.  429,  432.  47  N.  W.  258,  per  Mitchell,  J.;   Liv- 

"« Powell  V.  Hopkins,  38  Md.  1.  ingston  v.  Ives,  35  Minn.  55,  27  N. 

2"  §   1813  a.  W.   74. 

"^McCarley  v.  Tippah  County,  58 
Miss.  483. 


767  WHEN    THE    EXERCISE   MAY    BE    ENJOINED.    [§§    1807c,    1807(1. 

not  secure  any  indebtedness,  and  the  mortgagor  cannot  be  deprived 
of  this  defence  by  the  mortgagee's  showing  that  the  mortgage  waa 
executed  to  defraud  creditors,  so  that  the  mortgagor  does  not  come 
into  equity  with  clean  hands,  but  sets  up  his  own  fraud  as  a  ground 
of  relief.-*^  These  maxims  are  not  applicable  when  the  mortgagor  is 
seeking  to  prevent  the  mortgagee  from  enforcing  the  mortgage,  on 
the  ground  that  it  was  executed  without  consideration,  and  not  on 
the  ground  that  it  was  executed  to  defraud  creditors. 

A  sale  will  not  be  enjoined  on  the  application  of  one  who  claims  an 
equitable  interest  in  the  land  existing  prior  to  the  execution  of  the 
mortgage,  unless  he  clearly  proves  that  the  mortgagee  had  notice  of 
such  equitable  interest  and  claim  before  taking  the  mortgage.^*- 

A  guardian  cannot  exercise  the  power  of  sale  contained  in  a  mort- 
gage to  the  guardian,  executed  by  the  ward  prior  to  the  guardianship, 
and  purchase  the  mortgaged  property  at  the  sale.^*^ 

§  1807c.  The  mere  fact  that  the  mortgagor  was  insane  at  the 
time  of  the  execution  of  the  mortgage  is  not  sufficient  ground  for 
enjoining  the  sale.  If  the  mortgagee  took  the  mortgage  in  ignorance 
of  the  insanity  in  perfect  good  faith,  and  without  taking  any  advan- 
tage, equity  will  not  interfere  to  set  aside  the  mortgage,  when  in- 
justice would  be  done  to  the  mortgagee,  and  he  could  not  be  restored 
to  the  position  he  held  before  taking  the  mortgage.^^* 

§  1807d.  Where  there  is  a  question  whether  there  has  been  a 
default  under  the  conditions  of  the  mortgage,  and  this  issue  is  con- 
tested by  affidavit,  the  court  is  justified,  in  its  discretion,  in  restrain- 

"^  Devlin  v.   Quigg,   44  Minn.   534,  sacrifice,   directly   or   indirectly,   for 

47    N.    W.    258,    citing    Wearse    v.  his    own    benefit.     Such    a    liability 

Pierce,    24    Pick.     141;     Hannan    v.  the  law  will  not  tolerate,  and  there- 

Hannan,    123    Mass.    441;    Briggs    v.  fore    it    does    not   permit    the    same 

Langford,    107   N.   Y.    680,    14   N.    E.  person    to   occupy   two   antagonistic 

502;    Sackner   v.    Sackner,    39    Mich,  relations  from  which  a  possible  con- 

39.  fiict    of    duty    may    arise,    and    will 

^'*-  Alston  V.  Marshall,  112  Ala.  638,  not    stop    to    consider    whether    or 

20    So.    850;    Erwin    v.    Hall,    18   111.  not  a  sale  in  ?,uch  circumstances  in 

App.  315.  a  particular  instance  is  fair  or  oth- 

"^  Horton  v.   Maine,  22  R.   I.   126,  erwise.     Perkins  v.  Se  Ipsam,  11  R. 

46  Atl.  403,  per  Curiam.    "To  permit  I.    270;    Spelman    v.    Terry,    8    Hun, 

a    mortgagee    to    exercise    the   pow-  205;  Rogers  v.  Rogers,  3  Wend.  503 

er  of  sale  in  a  mortgage  given  by  Froneberger  v.  Lewis,  79  N.  C.  426 

the    ward    before    the    guardianship  Jamison    v.    Glascock,    29    Mo.    191 

would    deprive    the    estate    of    the  Tennant  v.   Trenchard,  L.  R.   4  Ch. 

ward   of  the   very  protection   which  537." 

it  is   the   purpose   of   the  guardian-        -"*  1  Story  Eq.  Jur.   §  228.  2  Pom. 

ship    to   afford,    while    at    the    same  Eq.    §   946:    Gribben  v.   Maxwell,   34 

time    a    temptation    might    be    pre-  Kans.    8,    7    Pac.    584;    Mut.    L.    Ins. 

sented  to  the  mortgagee  to  conduct  Co.    v.    Hunt.    79    N.    Y.    540;    Wire- 

the  sale  in  his  own  interest  rather  bach   v.  Bank,  97   Pa.  St.  543;    Blount 

than    in    the    interest    of   the    ward,  v.  Spratt,  113  Mo.  48,  20  S.  W.  967; 

and   to   purchase  the  property  at  a  French  v.  Snell,  29  N.  J.  Eq.  95. 


§    18U8.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS. 


768 


iiig  the  foreclosure  sale  until  this  issue  should  be  judicially  deter- 
mined.-**^ 

And  so  if  a  breach  of  the  condition  has  been  distinctly  waived  or 
released,  or  if  by  agreement  the  right  to  foreclose  has  been  re- 
nounced or  postponed,  the  mortgagor  may  liiive  an  injunction  against 
a  foreclosure  attempted  in  violation  of  such  release  or  agreement.-^® 

But  a  sale  under  a  trust  deed  will  not  be  enjoined  on  the  debtor's 
allegation  that  the  creditor  had  offered  to  allow  the  principal  debt 
to  stand  if  the  debtor  would  pay  the  interest  promptly  and  keep 
the  property  in  repair,  and  that  he  had  made  an  outlay  relying  upon 
such  proposal,  where  it  appears  that  the  debtor  paid  the  interest 
on  a  part  only  of  the  principal  debt,  and  the  creditor  had  thereupon 
demanded  that  he  should  pay  the  whole  of  the  interest.^" 

The  mortgagee's  delay  in  exercising  the  right  of  foreclosure  for  the 
non-payment  of  interest  is  not  a  waiver  of  this  right.^^* 

§  1808.  Usury. — It  is  no  ground  for  enjoining  a  sale  under  a  trust 
deed  that  the  notes  secured  reserve  usurious  interest  or  include  it, 
except  in  those  States  where  usury  renders  the  contract  void.  The 
trustee's  duty  to  sell  and  to  apply  the  proceeds  in  discharge  of  the 
debt  legally  due  remains  the  same.  If  he  should  attempt  to  mis- 
apply the  proceeds,  and  pay  on  account  of  usury  what  was  not 
legally  due,  the  court  would  then  interfere.^*^  Where  usury  does  not 
invalidate  the  mortgage,  a  sale  under  the  power  will  not  be  enjoined 
by  reason  of  it  unless  the  debtor  brings  into  court  the  principal  and 
the  legal  interest  due.^''^  In  New  York,  however,  where  usury  renders 
void  the  contract,  a  power  of  sale  in  a  usurious  mortgage  is  con- 
sidered void,  and  a  sale  under  it  may  be  restrained.^^^     If  a  sale  be 

285  O'Brien  v.  Oswold,  45  Minn.  59,  Moseley  v.   Rambo,  106  Ga.   597,  32 

47  N.  W.  316;   Barnum  v.  Bobb,  68  S.  E.  638,  quoting  text. 

yiQ    gl9  In  Iowa  it  seems  that  an  injunc- 

^^^  Hubbard  v.  Jasinski,  46  111.  160;  tion  would  be  allowed  in  such  case 

Penouilh   v.   Abraham,   42   La.    Ann.  upon  tender  of  the  amount  due,  less 

326    7  So.  533.  tbe     usurious     interest.     Casady     v. 

"-»'' Bramlett  V.  Reily  (Miss.),  3  So.  Bosler,    11    Iowa,    242.     And    so    in 

g5g  Maryland:      Walker    v.    Cockey,    38 

^''^Glas    V.    Glas,    114    Cal.    566,    46  Md.   75;    Hill   v.   Reif snider,   39   Md. 

Par    667    55  Am.  St.  90;    Kansas  L.  429:    Powell  v.   Hopkins,   38  Md.   1; 

&  T.  Co'.  V.  Gill,  2  Kans.  App.  488,  Gantt   v.    Grindall,    49   Md.    310.     So 

43  Pac.  991.  in     Wisconsin,     without     a     tender. 

"•■Norman  v.  Peper,  24  Fed.  403;  Haggerson  v.  Phillips.  37  Wis.  364. 

Tooke  V.  Newman,  75  111.  215.  -"'  Hyland    v.     Stafford,    10    Barb. 

=™  Powell    V.    Hopkins,    38    Md.    1;  558;    Burnet   v.   Dennison,    5   Johns. 

Walker  v.   Cockey,   38   Md.   75;    Es-  Ch.     35,     41.     And     see     New    Eng. 

lava  V.   Crampton,  61  Ala.   507;    Al-  Mortg.    Co.    v.    Powell.   97    Ala.    483, 

pton    v.    Marshall,    112    Ala.    638.    20  12    So.    55,    where    also    there    were 

So.  850;  Ferguson  v.  Soden,  111  Mo.  other   grounds   for    the   application. 
208,    19    S.    W.    727,    quoting    text; 


769  WHEN    THE    EXERCISE    MAY    BE    ENJOINED.  [§    1809. 

actually  made  tO'  one  having  no  notice  of  the  usury,  it  will  be  up- 
held;'"- but  one  having  such  notice  would  not  by  such  sale  acquire 
any  title.^"^  Xeither  is  it  a  ground  for  enjoining  a  sale  under  a  power 
that  the  mortgagee  in  his  notice  claims  a  greater  amount  than  was 
actually  and  legally  due.^"* 

In  North  Carolina  it  is  declared  that  a  mortgagee  will  be  enjoined 
from  selling  when  there  is  any  suggestion  of  oppression  arising  from 
usury  or  the  like.^''^  The  interest  justly  due,  as  well  as  the  principal, 
must  be  tendered  before  this  equitable  relief  will  be  granted.'^* 
Though  the  statute  provides  that  usury  shall  be  deemed  a  forfeiture 
of  the  entire  interest,  a  person  who  seeks  the  equitable  aid  of  a 
court  to  enjoin  a  sale  must  do  equity.  If  the  mortgagee  waives  the 
usurious  part  of  the  contract,  the  injunction  will  be  refused.^*^^ 

§  1809.  Unconscionable  penalty. — It  has  been  said,  however, 
that  where  a  mortgage  and  note  provide  a  penalty  of  a  high  rate  of 
interest  after  maturity,  such  in  amount  that  a  court  in  equity  would 
give  relief  against  it  as  unconscionable,  that  the  proper  course  is  to 
obtain  an  injunction  restraining  a  sale  under  the  power  until  the 
amount  actually  due  can  be  ascertained;  because,  if  a  sale  is  allowed 
to  be  had  under  the  power,  the  mortgagee  may  retain  the  full 
amount  of  the  debt  and  penalty,  and  the  mortgagor  cannot  recover 
back  any  part  of  it  by  action  at  law.  The  contract  is  not  in  itself 
illegal,  and  the  only  relief  against  it  is  upon  equitable  considera- 
tions.^^® 

^°='  Jackson    v.    Henry,    10    Johns,  homestead  of  the  complainant,  that 

185,  6  Am.  Dec.  328.  it  was  stocked  with  teams  and  sup- 

2"^  Jackson  v.  Dominick,  14  Johns,  plied  with  laborers,  that  he  was  car- 

435.  rying    on    farming    operations,    and 

-"  Armstrong  v.   Sanford,  7  Minn,  that   irreparable   damage   would   re- 

49.     The  rule   is   different   in   Iowa,  suit  from  a  foreclosure  of  the  mort- 

where     apparently      an     injunction  gage  pending  complainant's  bill  for 

would  be  granted  upon  ?,  tender  of  relief.       The     injunction     was     re- 

the  amount  justly  due.     Stringham  tained  until  a  hearing.     It  does  not 

v.  Brown,  7  Iowa,  33;  Sloan  v.  Cool-  clearly   appear   upon   what   grounds 

baugh,  10  Iowa,  31.  the    injunction    was   granted    or   re- 

-"^  Kornegay    v.    Spicer,    76    N.    C.  tained.     The  decision  can  hardly  be 

95;    Meroney  v.  Atlanta  Loan  Asso.  relied   upon   in   other  States. 

112    N.    C.    852,    17    S.    E.    637.     See  ='"' Cook    v.    Patterson,    103    N.    C. 

New  Eng.  Mortg.   Co.  v.  Powell,  97  127,   9   S.   E.   402;    Carver  v.   Brady, 

Ala.    483,    12    So.    55.     In    this    case  104  N.  C.  219,  10  S.  E.  565;   Purnell 

the  mortgagor  alleged  the  invalidity  v.    Vaughan,    82    N.    C.    134;    Simon- 

of  the  mortgage  on  account  of  usu-  ton  v.  Lanier,  71  N.  C.  498. 

ry    under    the    laws    of    New    York,  ="  Manning  v.  Elliott.,  92  N.  C.  48. 

and    under    the    laws    of    Alabama,  ="' Bidwell  v.  Whitney,  4  Minn.  76; 

because    the    loan    was    made    by    a  Culbertson   v.    Lennon,   4   Minn.   51; 

foreign  corporation.     In  addition  to  Banker  v.  Brent,  4  Minn.   521;    Pnr- 

these   grounds   of   equity   the  mort-  nell    v.    Vaughan,    77    N.     C.    268; 

gagor  alleged  that  the  lands  in  con-  Hooker  v.  Austin,  41  Miss.  717. 
troversy   constituted   the   farm   and 


§§    1810,    1811.]    POWER   OF    SALE   MORTGAGES   AND   TRUST   DEEDS.    770 

§  1810.     A  want  of  notice  of  the  sale  is  no  ground  for  enjoining 

it.  The  power  of  sale  generally  stipulates  that  it  shall  be  exercised 
cnly  after  giving  notice  by  advertisement  for  a  certain  time  in  some 
newspaper,  or  after  giving  some  other  prescribed  notice.  In  several 
States  the  notice  to  be  given  is  prescribed  by  statute,  and  in  such 
case  the  statute  must  be  followed,  whatever  may  be  the  provisions 
of  the  power  in  this  respect.  In  either  case  a  sale  made  without  the 
proper  prescribed  notice  is  invalid,  but  ordinarily  the  courts  will 
not  interfere  to  restrain  a  sale  about  to  be  made  without  such  notice. 
The  purchaser  is  bound  to  know  what  the  requirements  of  the  deed 
or  of  the  statute  are  in  this  respect,  and  to  see  that  they  have  been 
complied  with;-^^  and  the  mortgagor  and  others  interested  in  the 
equity  ma.y  redeem  all  the  same  if  the  power  is  illegally  exercised. 
Even  under  the  English  statute,  which  provides  that  the  purchaser 
shall  not  be  affected  by  the  absence  of  such  notice,  and  that  the 
:nortgagor  may  have  remedy  by  an  action  for  damages,  or  under  a 
power  with  like  provisions,  the  Court  of  Chancery  has  no  jurisdic- 
tion to  restrain  a  sale  of  which  no  notice  has  been  given. ^°° 

§  1811.  Not  enjoined  to  allow  set-off. — Neither  will  a  sale  under 
a  power  be  enjoined  in  order  that  the  mortgagor  may  be  enabled 
to  set  off  a  balance  which  may  be  found  in  his  favor  upon  unliqui- 
dated claims  in  controversy  between  him  and  the  mortgagee  ;^°^  nor 
to  enable  the  mortgagor  to  prosecute  a  bill  to  correct  an  alleged 
error  in  the  amount  of  the  mortgage.^"^ 

*^'  Anon.  Madd.  &  Gel.  10.  A  pro-  part  in  the  prompt  payment  of 
vision  in  the  power  that  the  pur-  either  note.  The  only  way  she 
chaser  shall  not  be  bound  to  inquire  could  have  defeated  the  exercise  of 
into  the  existence  of  notice,  does  this  power  was  to  pay  the  notes; 
not  protect  him  against  his  actual  and  the  fact  that  she  had  an  ac- 
knowledge that  there  was  no  notice,  count  against  one  or  both  of  the 
Parkinson  v.  Hanbury,  1  Drew.  &  defendants  to  the  amount  of  her 
Sm.  143,  2  De  G.,  J.  &  S.  450.  See,  indebtedness  to  them  could  not  op- 
also.  Ford  v.  Heely,  3  Jur.  N.  S.  erate  per  se  as  a  cancellation  of 
1116;  Forster  v.  Hoggart,  15  Q.  B.  their  contract  touching  the  sale  of 
155.  the     land."     McDaniel     v.     Cowart, 

'""Prichard  v.  Wilson,  10  Jur.   N.  109  Ga.  419,  34  S.  E.  589. 

S.  330.  In    North    Dakota    and    South    Da- 

="•' Frieze  v.  Chapin,  2  R.  I.  429;  kota  if,  after  the  commencement  of 
Nat.  Rubber  Co.  v.  Rhode  Island  proceedings  by  advertisement,  it  ap- 
Hospital  Trust  Co.  (R.  I.)  33  pears  by  affidavit  that  the  mortga- 
Atl.  254;  McCulla  v.  Beadleston,  17  gor  has  a  counter-claim,  or  any 
R.  I.  20,  20  Atl.  11;  Tate  v.  Evans,  other  valid  defense,  the  mortgagee 
54  Ala.  16;  Robertson  v.  Hogs-  may  be  enjoined  from  foreclosing 
heads,  3  Leigh,  667;  Koger  v.  Kane,  by  advertisement,  and  further  pro- 
5  Leigh,  607;  Gregg  v.  Hight,  6  ceedings  must  be  had  in  court.  Pro- 
Mo.  App.  579:  Glover  v.  Hembree,  viso  in  §  5411  Comp.  Laws;  Mc- 
82  Ala,  324,  8  So.  251.  "The  con-  Cann  v.  Mortgage  Co.  3  N.  D.  172, 
tract  between   her  and   the   defend-  54   N.   W.    1026. 

ants  gives  them  the  power  to   sell  '"=  Outtrin  v.   Graves,  1  Barb.  Ch. 

the  land  in  case  of  default  on  her  49. 


77i  WHEN  THE  EXERCISE  MAY  BE  ENJOINED.   [§§    1812,    1813. 

A  sale  under  a  power  will  not  be  enjoined  pending  a  suit  to  settle 
partnership  accounts  between  the  mortgagor  and  mortgagee  not  in- 
volved in  the  mortgage,  without  an  averment  of  the  mortgagee's 
insolvency,  or  some  other  circumstance  indicating  that  the  mortga- 
gor might  sustain  an  irreparable  injury  by  the  sale.^^^^ 

§  1812.  Time  for  contribution  to  redeem. — It  is  no  ground  for 
suspending  a  sale  that  the  several  owners  of  the  equity  of  redemp- 
tion are  at  variance  as  to  the  proportions  which  they  shall  con- 
tribute for  the  redemption  of  the  mortgage;  though  the  court  may,> 
upon  payment  into  court  of  a  sum  sufficient  to  indemnify  the  mort- 
gagee against  loss,  grant  a  reasonable  postponement.^"* 

§  1813.  When  amount  of  debt  is  in  dispute. — In  an  early  case 
in  New  York  a  sale  was  enjoined  on  an  application  in  behalf  of  an 
infant  heir  of  the  mortgagor,  the  amount  due  upon  £he  mortgage 
being  in  dispute.^°^  The  court,  however,  did  not  seem  to  consider 
that  the  case  afforded  any  equitable  gi'ound  for  interference,  fur- 
ther than  to  subject  the  sale  to  siome  restrictions,  and  perhaps 
made  these  restrictions  only  because  the  defendant  consented  to 
them.  These  were,  that  the  amount  due  should  be  computed  by  a 
master,  who  should  be  associated  with  the  mortgagee  in  making 
the  sale;  and  that  a  further  notice  of  the  sale  should  be  given;  and 
that  only  sO'  much  of  the  land  should  be  sold  as  the  master  should 
deem  sufficient,  in  case  a  part  could  be  sold  without  prejudice.  In 
another  case  in  that  State  a  sale  was  enjoined  where  the  mortgagee 
claimed  in  his  notice  a  larger  amount  than  was  actually  due.^°** 
Whether  these  would  be  grounds  for  enjoining  a  sale,  where  there 
is  no  statute  providing  that  only  so  much  of  the  property  shall  be 
sold  as  is  sufficient  to  satisfy  the  debt,  may  well  be  doubted.  But 
where  the  accounts  between  the  parties  are  complicated,  and  the 
balance  due  under  the  mortgage  is  uncertain,  a  sale  may  be  en- 
joined until  the  equities  between  the  parties,  which  should  affect 
the  amount  due  under  the  mortgage,  are  settled,  and  tlie  balance 
due  can   be  ascertained. ^°^      A   mortgagor  must  act  in  good   faith, 

'"Glover  v.  Hembree,  82  Ala.  324,  ^"^  Cole  v.  Savage,  Clarke  (N.  Y.), 

8  So.   251;    Cummlngs  v.   Norris,   25  361. 

N.  Y.  625.  ="  Draper  v.  Davis,  104  U.  S.  347; 

^"^  Brinckerhoff      v.      Lansing,      4  Kornegay    v.    Spicer,    76    N.    C.    95; 

Johns.  Ch.  65,  8  Am.  Dec.  538.     See  Pritchard    v.    Sanderson,    84    N.    C. 

Massie  v.  Wilson,  16  Iowa,  390.  299;  Harrison  v.  Bray,  92  N.  C.  488; 

''"^  Van     Bergen     v.     Demarest,     4  Gooch    v.    Vanghan,    92    N.    C.    610; 

Johns.  Ch.  37.     See  §  1775,  and  Ca-  Hutaff  v.  Adrian,  112  N.   C.  259,  17 

rey  v.  Fulmer,  74  Miss.  729,  21  So.  S.   E.    78;    Tillery   v.    Wrenn.    86   N. 

752.  C.  217;   Capehart  v.  Biggs,  77  N.  C. 


§    1813a.]     POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  772 

however,  and  where  he  fails  to  show  real  complications  and  uncer- 
tainty in  the  accounts,  relief  in  equity  will  be  denied  him.^°* 

While  there  is  an  injunction  against  a  sale  under  a  deed  of  trust, 
if  it  is  found  that  the  debt  due  is  less  than  the  amount  called  for  in 
such  deed,  there  should  not  be  an  absolute  dissolution  of  the  injunc- 
tion, but  a  decree  should  be  entered  fixing  the  amount  due  and  in  the 
discretion  of  the  court,  either  dissolving  tbe  injunction  as  to  that 
amount  and  dismissing  the  bill,  or  the  court  should  retain  the  cause 
and  enter  a  decree  of  sale  under  its  supervision.^"'' 

§  1813a.  That  the  mortgage  has  been  satisfied  is  a  ground  for 
enjoining  a  sale  under  it.^^°  Thus  upon  evidence  that  the  mortgagor 
has  performed  services  for  the  mortgagee  in  value  equal  to  the  debt 
secured,  an  injunction  against  a  sale  will  be  made  perpetual. ^^^  A 
junior  mortgagee  may  have  an  injimction  against  a  sale  of  the  property 
under  a  prior  mortgage  that  has  been  satisfied. ^^- 

A  sale  will  not  be  enjoined  merely  to  allow  the  mortgagor  to  re- 
deem. But  a  l)ill  which  avers  payment  of  the  mortgage  debt,  and 
yet  offers  to  pay  any  balance  that  may  be  found  due  on  a  statement 
of  the  account,  and  prays,  in  the  alternative,  for  a  cancellation  of 
the  mortgage  if  the  debt  secured  by  it  should  be  found  to  be  fully 
•  satisfied,  or  for  a  redemption  from  the  mortgage  if  a  balance  should  be 
found  against  the  complainant,  contains  equity.^^^ 

261;    Purnell  v.   Vaughan,   77   N.    C.  '^^  Frazier  v.  Keller,  71  Md.  58,  20 

268;    Bridgers    v.    Morris,    90    N.    C.  Atl.  134.     See,  also,  .Whitly  v.  Dun- 

32;  Rossett  v.  Fisher,  11  Gratt.  492;  ham  Lumber  Co    89  Ala.  493,  7  So. 

Curry  v.   Hill,  18  W.  Va.   370;    Lai-  810:  Farmers'  Sav.  &  Build.  &  Loan 

lance  v.  Fisher,  29  W.  Va.  512,  2  S.  Asso.  v.   Kent,    117  Ala.   G24,   23   So. 

E.  775;   Muller  v.  Stone,  84  Va.  834,  757;    McCalley  v.   Otey,  90  Ala.  302, 

6  S.   E.  223;    Shultz  v.   Hansbrough,  8  So.  157. 

33    Gratt.    567;    Hogan   v.    Duke,    20  A  preliminary  injunction  may  be 

Gratt.     244;     Osburn    v.     Andre,    58  granted    upon    the    affidavit    of    the 

Miss.  609;  Carey  v.  Fulmer,  74  Miss,  mortgagor  that  he  has  satisfied  the 

729,  21  So.  752;  Dickerson  v.  Hayes,  debt.     Newmann    v.    Frevin,    42    La. 

26  Minn.  100,  1  N.  W.  834;  New  Eng.  Ann.  720,  7  So.  799. 

Mortg.    Co.    V.    Powell,    97    Ala.    483,  ^'-  Bloomingdale     v.      Barnard,      7 

12  So.  53;  Hooker  v.  Austin,  41  Miss.  Hun,  459;  Dings  v.  Parshall,  7  Hun, 

717;    Goodrich  v.   Foster,    131   Mass.  522;    Brigham    v.    White,    44    Iowa, 

217;   Waite  v.  Ballou,  19  Kans.  601.  677. 

For    a    construction    of    a    remedial  ='^  Whitley     v.     Dunham     Lumber 

statute  giving  a  court  of  equity  this  Co.  89  Ala.  493,  7  So.  810;   Fields  v. 

power,    see    James    River    Lodge    v.  Helms,  70  Ala.  460;   Gilmer  v.  Wal- 

Campbell,  6  S.  D.  157,  60  N.  W.  750.  lace,  79   Ala.   464.     In  the  case  first 

^"'Barber  v.    Levy    (Miss.)    18   So.  cited   the  court   say:     "The   denials 

438.  of  the  answer   of  the  fact   of   pay- 

309  pj.y.   y    Qj(j   Dominion   Building  ment  and  satisfaction  did  not  enti- 

&  Loan  Asso.  48  W.  Va.  61.  tie  the  defendants  to  a   dissolution 

^'''Long   V.    Little,    119    111.    600,    8  of  the  injunction  of  the  threatened 

N.  E.  194;   Green  v.  Englemann,  39  sale.     The  fact  of  payment  was  not 

Mich    460;    James    v.    Withers,    126  essential   to  that  aspect  of  the  bill 

N.  C.  715,  36  S.  E.  178.  which  sought  an  accounting  and  re- 


773  WHEN    THE   EXERCISE    MAY    BE    ENJOINED.    [§§    1814,    1815. 

§  1814.  Where  one  purchased  land  subject  to  a  mortgage,  which 
he  supposed  was  in  the  common  form,  without  a  power  of  sale, 
and  would  require  three  3ears'  j)ossessioii  by  the  mortgagee  to  effect 
a  foreclosure,  the  mortgage  having  been  made  the  same  day  and  not 
recorded,  a  sale  under  the  power  was  enjoined  upon  his  application. 
He  was  allowed,  however,  only  time  to  raise  the  money,  and  not 
the  three  years  in  which  to  redeem.^^*  It  is  conceived  that,  in  those 
parts  of  the  country  in  which  power  of  sale  mortgages  are  now  the 
usual  and  common  form,  an  injunction  would  not  now  be  granted  on 
like  grounds. 

§  1815.  Clouding  title. — The  fact  that  the  sale  if  made  would, 
in  the  apprehension  of  the  petitioner,  result  in  clouding  his  title, 
is  not  such  a  threatened  injury  that  an  injunction  should  be  granted 
to  restrain  it.^^^  The  sale  would  create  no  new  cloud  over  the  title  of 
the  plaintiff.^^''  If  the  mortgagee  should  attempt  to  sell  property 
not  included  in  the  mortgage,  or  an  interest  greater  than  the  mort- 
gage conveyed  to  him,  the  sale  would  be  of  no  effect  as  regards 
such  property  or  interest,  and  would  not  really  cloud  the  title  to  it.^^'^ 
That  the  debt  and  mortgage  are  barred  by  the  statute  of  limita- 
tions, the  mortgagor  being  in  possession,  is  not  a  sufficient  ground 
for  enjoining  a  sale,  for  a  sale  would  carry  to  the  purchaser  no 
title.  The  mortgagor  has  a  full  defence  to  an'  action  for  ejectment 
when  brought  by  the  purchaser.  The  only  result  of  the  sale  would 
be  a  clouding  of  the  title,  which  is  not  a  ground  for  interference 
with  the  sale.^^^ 

For  the  same  reason  a  sale  will  not  be  enjoined  on  the  ground 
that  the  mortgagee  has  no  legal  authority  to  sell.^^** 

But  equity  will  interfere  by  injunction  in  favor  of  one  claiming 
title  to  land  through  an  unrecorded  deed,  to  prevent  a  sale  under  a 

demption    from    the    mortgage,    and  111.    160;    Gardner   v.    Terry,   99   Mo. 

the     injunction    -was     properly     re-  523,  12  S.  W.  888.     Compare  Wilson 

tained  for  the  purposes  of  redemp-  v.  Gray,  97  Mo.  App.  632. 

tion,  aside  from  the  prayer  for  can-  ''"  The    N.    C.    Gold    Amal.    Co.    v. 

cellation  on  the  theory  of  satisfac-  The   N.    C.   Ore  Dressing  Co.   73   N. 

tion."  C.  468. 

^'•'  Piatt    V.    McClure,    3    Wood.    &  ^^'  Armstrong  v.   Sanford,  7  Minn. 

M.  151.  49;   Preiss  v.  Campbell,  59  Ala.  635. 

'''  Armstrong  v.   Sanford.  7  Minn.  See,  however,  Corles  v.  Lashley,  15 

49,  per  Atwater,  J.;    Montgomery  v.  N.  J.   Eq.   116. 

MrEwen,    9    Minn.    103;    Buettel    v.  -^'^  Hiitaff  v.  Adrian,  112  N.  C.  259, 

Harmount,   46  Minn.   481,   49   N.   W.  17  S.  E.  78.     But  see  Gillis  v.  Rosen- 

250;    Southerland   v.    Harper,    83    N.  heimer,  64  Tex.  243. 

C.   200;    Browning  v.   Lavender,   104  '"'Chap-man   v.   Younger,   32   S.    C. 

N.  C.  69,  10  S.  E.  77.  295,  10  S.  E.  1077. 

But  see   Hubbard   v.   Jasinski,   46 


§§  1815a,  1816.]  POWER  of  sale  mortgages  and  tulst  deeds.  774 

deed  of  trust  held  by  one  who  took  it  with  notice  of  the  plaintiff's 
claim. ^-*' 

§  1815a.  A  pending  suit  throwing  doubt  on  the  grantor's  right 
to  execute  a  deed  of  trust  would  be  a  ground  for  enjoining  a  sale 
under  such  deed.  It  would  be  impossible  to  secure  an  adequate  price 
for  the  property.  While  this  relief  might  not  not  be  granted  in  favor 
of  the  grantor  who  had  contracted  to  give  a  power  of  sale  with  full 
knowledge  of  the  circumstances,  it  would  be  given  for  the  benefit  of 
one  of  his  innocent  creditors.^-^  The  doctrine  has  been  distinctly 
recognized  that  a  court  of  equity  will  not  permit  a  forced  sale  of  lands 
when  clouds  are  hanging  over  the  title. ^--  It  is  the  duty  of  a  trustee, 
before  making  sale  of  the  trust  subject,  to  apply  to  a  court  of  equity 
for  its  aid,  whenever  necessary  to  remove  any  impediments  in  the  way 
of  a  fair  execution  of  his  trust ;  or  to  remove  the  clouds,  if  any,  on  the 
title.  If  the  trustee  fails  to  discharge  this  duty,  the  beneficiary  may 
invoke  the  aid  of  a  court  of  equity  for  that  purpose.^^^ 

The  existence  of  a  lien  for  a  small  paving  tax  is  not  such  a  cloud  on 
the  title  as  to  warrant  the  enjoining  of  a  sale  imder  a  deed  of  trust 
given  for  the  price  thereof,  as  the  trustee  can  be  compelled  to  pay  the 
tax  out  of  the  purchase  money.^-'* 

§  1816.  The  insolvency  of  the  trustee  in  a  deed  of  trust  is  no 
ground  for  restraining  a  sale  of  the  property  upon  the  application 
of  the  grantor,  unless  it  is  shown  that  there  is  danger  that  the 
trustee  Avill  misapply  the  moneys  arising  from  the  sale.^^^  But  upon 
the  application  of  one  who  is  interested  in  the  disbursement  of  the 
money,  and  the  showing  of  sufficient  cause,  a  court  of  equity  should 
require  security  of  the  trustee  before  allowing  him  to  proceed  with 
the  execution  of  the  trust.^^^ 

"-"  Martin    v  .   Jones,     62    Mo.     23.  =-  Miller  v.  Argyle's  Ex'r,  5  Leigh, 

The  court  said:     "But  it  is  obvious  460;    Gay    v.    Hancock,    1   Rand.    72. 

that  the  condition  of  the  purchaser  See   §    1502. 

at  the  trustee's  sale  would  be  very  =-'  Glenn     v.      Augusta     Perpetual 

different   from   that   of   the    present  Building  &   Loan   Ass.,   99   Va.    695, 

defendant,  and  might  create  embar-  40  S.  E.  25. 

rassing  questions A  bona  fide  '-*  Patch   v.    Monisett    (Va.)    22    S. 

purchaser   at    the   sale   without   no-  E.  173. 

tice     would     have     very     different  '==  Tooke   v.    Newman,   75   111.    215. 

claims  from  that  of  the  present  de-  Walker,   C.    J.:    "Insolvency,   or  the 

fendant.  ...  It  is  one  of  the  pecu-  want  of  large  capital,  by  no  means 

liar  branches  of  equitable   jurisdic-  implies  a  want  of  integrity  or  bus- 

tion    to   anticipate   such    difficulties,  iness  capacity.     He  may  have  these 

to    prevent    future    litigation,     and  in   the  highest   degree,   and   yet   be 

thus  remove  a  cloud  upon  the  title."  poor." 

^^'Lane   v.  Tidball,    Gilmer    (Va.).  ^■-"  Terry    v.    Fitzgerald,    32    Graft. 

130.     See,    also,    Morgan   v     Glendy,  843;   Hogan  v.  Duke,  20  Graft.  244. 

92  Va.   86,  22  S.   E.   854.  For   a   bond    required    of    a    com- 


775  WHEN    THE    EXERCISE    MAY    BE    EXJOIXED.    [^§    1817-1820. 

§  1817.  Scarcity  of  money  or  business  depression. — The  fact 
that  at  tiie  time  of  the  proposed  sale  under  a  mortgage  or  trust 
deed  money  is  scarce,  and  that  the  terms  of  the  sale  require  a  large 
cash  payment,  is  no  ground  for  an  injunction  ;^-^  nor  is  tlie  fact  that 
there  is  a  general  depression  in  business,  and  the  weather  incle- 
ment at  the  season  of  the  year  of  the  proposed  sale.^^^  Neither  are 
hard  times  a  ground  for  setting  aside  a  sale  which  has  already  been 
made.^^'' 

§  1817a.     Real   and  personal  property  covered  by  a  trust  deed 

should  be  sold  together  when  that  is  necessary  to  get  a  fair  price. 
And  a  contemplated  sale  by  the  trustee  of  the  realty  alone  which  would 
result  in  a  sacrifice  of  the  property  may  be  enjoined. ^^° 

But  where  a  trust  deed  embraced  a  lot,  mill  machinery,  and  other 
chattels,  which  were  subject  to  conflicting  liens  and  the  trustee  pro- 
posed to  sell  property  not  included  in  his  deed,  an  injunction  against 
the  sale  was  properly  issued. ^^^ 

§  1818.  A  referee  or  master  may  be  associated  with  the  mort- 
gagee for  the  purpose  of  insuring  a  fair  sale,  or  a  sale  of  only 
enough  of  the  premises  to  satisfy  the  mortgage  debt;  instead  of 
enjoining  a  sale,  where  there  is  apprehension  of  an  oppressive  or 
improper  exercise  of  it.^^- 

§  1819.     Recovery   back   of   money   paid   under   duress. — Besides 

these  remedies  by  restraining  or  setting  aside  a  sale  improperly  ex- 
ercised, in  case  a  mortgagor  is  obliged  to  pay  a  sum  not  properly 
chargeable  to  him,  in  order  to  prevent  the  sale  of  his  property 
under  the  power,  he  may  recover  back  the  money  so  paid  in  a  suit 
at  law;  as,  for  instance,  where  a  mortgagee  would  not  stop  a  sale 
unless  the  mortgagor  would  pay  an  extortionate  sum  for  expenses 
then  incurred  in  the  proceedings  to  sell,  and  the  mortgagor  paid  the 
amoimt  under  protest.^^^ 

§  1820.     The   mortgagee's   damages   and  costs   when  wrongfully 

plainant    in    such    a    case    and    the  ^"  Draper  v.  Davis,  104  U.  S.  347, 

rights  under  such  bond,  see  Foster  26  L.  Ed.  783. 

V.  Goodrich,  127  Mass.   176.  "'  Van     Bergen    v.     Demarest,     4 

^-"  Muller  V.   Bayly,  21  Gratt.   521;  Johns.  Ch.  37. 

Muller  V.  Stone,  84  Va.  834,  6  S.  E.  ""Close    v.    Phipps,    7   Man.    &   G. 

223.  586.    Tindal,  C.  J.:  "The  money  was 

''« Caperton  v.  Landcraft,  3  W.  Va.  obtained  by  what  the  law  would  call 

540;  Anderson  v.  White,  2  App.  Gas.  duress;   as  the  plaintiff  was  obliged 

D.  C.  408.  either  to  pay  it  or  to  suffer  her  es- 

"-'*  Lipscomb  v.  New  York  Life  tate  to  be  sold,  and  incur  the  ex- 
Ins.  Co.  1?.8  Mo.  17,  39  S.  W.  465.  pense  and  risk  of  a  bill  in  equity." 

=="  Anchor   Stove   Works   v.    Gray,  And     see     Vechte    v.     Brownell,     8 

9  W.  Va.  469.  Paige,  212. 


§    1830.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  776 

enjoined  are  not  only  the  usual  taxable  costs  and  counsel  fees,  but 
also,  when  the  sale  does  not  yield  enough  to  satisfy  the  debt,  in- 
terest on  it  while  the  collection  of  it  was  suspended,  and  the  value  of 
the  emblements  removed  by  the  owner  in  the  meantime.^^* 

Where  the  owner  of  the  equity  of  redemption,  upon  the  grant- 
ing of  a  temporary  injunction  in  his  favor  against  a  sale  under  a 
power  contained  in  a  second  mortgage,  was  required  to  execute  a 
bond  to  the  mortgagee  conditioned  that,  in  case  it  should  be  de- 
termined that  the  mortgagee  was  entitled  to  hold  the  premises 
chargeable  for  the  payment  of  his  mortgage  in  full,  the  obligor 
should  pay  the  overdue  interest  thereon,  with  interest  on  that 
sum,  and  "keep  down  all  interest  accruing  or  accrued"  on  the 
first  mortgage;  and  subsequently  the  injunction  was  dissolved,  the 
bill  dismissed,  and  the  premises  sold  under  the  power  for  a  sum 
sufficient  to  pay  the  first  but  not  the  second,  mortgage  in  full, 
— it  was  held  that  the  mortgagee  was  entitled  to  recover  in  a 
suit  upon  the  bond,  the  interest  on  the  second  mortgage  having 
been  paid,  the  interest  accrued  on  the  first  mortgage  at  the  time 
the  injunction  issued,  as  well  as  the  interest  accruing  thereon  from 
that  time  to  the  dissolution  of  the  injunction, ^^^  but  not  after- 
wards.^^® The  obvious  purpose  of  the  clause  providing  that  the  owner 
of  the  equity  of  redemption  should  pay  the  accrued  interest  on  the  first 
mortgage  was,  that,  while  the  second  mortgagee  was  restrained  from 
selling,  the  holder  of  the  first  mortgage  should  be  paid  the  interest 
due  upon  that  mortgage,  so  that  he  would  not  foreclose,  and  thereby 
cut  off  the  second  mortgagee. ^^^ 

In  Mississippi  a  mortgagee  who  has  been  wrongly  enjoined  is  by 
statute  given  five  per  cent  on  the  amount  secured  as  damages.  These 
damages  can  be  collected  although  the  injunction  suit  is  instituted  by 
a  third  person,^^^  or  although  a  supersedeas  has  been  taken. ^*^  They 
are  not  allowable  where  the  injunction  was  wholly  inoperative  because 
the  debt  was  not  due  and  the  sale  was  not  delayed. ^*^ 

^^^Aldrich    v.     Reynolds,        Barb.        '^*  Williams     v.     Bank     of     Com- 

Ch.  613.  merce,   71   Miss.   858,   16   So.   238,   42 

=*"  Goodrich   v.    Foster,  131   Mass.    Am.  St.  Rep.  503. 

217.  "''Burns  v.  Dreyfus,  69  Miss.  211. 

"0  Foster   v.    Goodrich,  127    Mass.    11  So.  107,  30  Am.  St.  Rep.  539. 

176.  =■*"  People's  Build.  &  Loan  Ass.  v. 

*"  Goodrich  v.  Foster,  131  Mass.  McElroy,  72  Miss.  434,  17  So.  422. 
217,  per  Endicott,  J. 


777 


PERSONAL  NOTICE  OF  SALE. 

VI.     Personal  Notice  of  Sale. 


[§  1821. 


§  1821.  No  notice  at  all  is  necessary  unless  made  so  by  statute,-*^ 
or  by  the  power  itself  f*-  the  sale  may  be  private.^*^  When  that  pro- 
vides only  for  a  published  notice,  this  is  all  that  any  one  interested 
in  the  property  is  entitled  to,  unless  there  be  an  agreement  for  an 
express  notice.^**  In  no  case  is  an  actual  personal  notice  of  the 
sale  to  the  mortgagor  necessary  unless  this  is  provided  for  in  the 
mortgage,  or  by  statute,^*^  or  has  been  promised  in  some  other  way,^*" 
or  is  due  to  the  mortgagor  in  fairness  because  he  might  be  thrown  off 
his  guard  by  prior  acts  or  proceedings  of  the  mortgagee. ^^^  When  the 
power  authorizes  a  sale  either  by  public  auction  or  private  contract,  the 
mortgagee  may  sell  by  private  contract  without  making  a  previous 
attempt  to  sell  by  auction. ^^®  The  deed  in  such  a  case  should  prop- 
erly refer  to  the  power  in  the  mortgage;  but  even  if  it  does  not 
refer  to  the  mortgage  or  the  power,  a  conveyance  by  the  mortgagee 
will  be  deemed  to  be  in  excution  of  the  power,  and  not  an  assign- 
ment of  the  mortgage,  if  the  note  secured  be  not  assigned  to  the 


'"Bell  v.  Williams  (Tex.).  56  S. 
W.  774;  Marston  v.  Yaites  (Tex.)  66 
S.  W.  867;  Fischer  v.  Simon  (Tex.) 
66  S.  W.  882;  Georgi  v.  Juergen 
(Tex.)  66  S.  W.  873. 

»"Davey  v.  Durrant,  1  De  G.  &  J. 
553.  The  power  in  this  case  author- 
ized a  sale  either  by  public  sale  or 
private  contract.  Marston  v.  Brit- 
tenham,  76  111.  611.  See,  also,  Hood- 
less  v.  Reid,  112  111.  105;  In  re  Brit- 
ish Canadian  Loan  Ca  16  Ont.  15; 
In  re  Gilchrist,  11  Ont.  537;  Canada 
Build.  Soc.  v.  Teeter,  19  Ont.  156. 

"^  Mowry  v  Sanborn,  68  N.  Y.  153, 
160,  per  Andrews,  J.:  Martin  v.  Pax- 
son,  66  Mo.  260,  266,  per  Hough,  J. 

"*  Dyer  v.  Shurtleff,  112  Mass. 
165,  17  Am.  Rep.  77;  Hurt  v.  Kelly, 
43  Mo.  238;  Manning  v.  Elliott,  92 
N.  C.  48;  Bridgers  v.  Morris,  90  N. 
C.  32;  Carver  v.  Brady,  104  N.  C. 
219,  10  S.  E.  565. 

'"Walker  v.  Boggess,  41  W.  Va. 
588,  23  S.  E.  550. 

S4S  Princeton  Loan  &  Trust  Co.  v. 
Munson,  60  111.  371.  "The  debtor 
himself  here  prescribed  the  kind  of 
notice  which  should  be  given  in  case 
of  sale:  it  was  not  personal  notice, 
but  notice  by  advertisement  in  a 
newspaper.  To  say  that  a  further 
personal  notice  was  required  by  im- 
plication would  be  to  annex  a  condi- 
tion to  the  power  of  sale  which  the 


maker  of  the  power  did  not  see  fit 
to  provide,  and  the  court  would  be 
making  a  contract  for  the  parties 
instead  of  enforcing  the  one  made 
by  themselves."  Per  Mr.  Justice 
Sheldon.  Also,  Cleaver  v.  Green, 
107  111.  67;  Ritchie  v.  Judd,  137  111. 
453,  27  N.  E.  682;  Nations  v.  Pulse, 
175  Mo.  86,  74  S.  W.  1012;  Harlin  v. 
Nation,  126  Mo.  97,  27  S.  W.  330. 
The  same  is  true  in  regard  to  a  pur- 
chaser of  the  equity  of  redemption. 
Mclver  v.  Smith,  118  N.  C.  73,  23  S. 
E.  971. 

In  Capehart  v.  Biggs,  77  N.  C.  261, 
Pearson,  C.  J.,  says  that  the  mort- 
gagee before  selling  ought  to  give 
the  mortgagor  reasonable  notice 
that  in  default  of  payment  he  will 
sell,  and  that  the  want  of  such  no- 
tice IS  ground  for  enjoining  the  sale. 
But  this  decision  is  all  wrong.  It 
takes  the  parties  under  guardian- 
ship; and  more,  it  makes  a  con- 
tract for  them.  This  case  has  since 
been  overruled  on  this  point.  Man- 
ning V.  Elliot,  92  N.  C.  48;  Bridgers 
V.  Morris,  90  N.  C.  32.  See,  also, 
Hoodless  V.  Reid,  112  111.  105;  Mars- 
ton V.   Brittenham.  76   111.   611. 

'"Tartt  V.  Clayton,  109  111.  579; 
Webber  v.  Curtis,  104  111.  309. 

'''  Davey  v.  Durrant,  1  De  G.  &  J. 
553. 


§§  1821a,  1832.]  POWER  of  sale  mortgages  and  trust  deeds  778 

grantee.^***  The  rule  of  construction  in  regard  to  conveyances  con- 
taining no  reference  to  a  power  is  now  generally  if  not  universally 
declared  to  be  that,  if  such  a  conveyance  would  have  some  effect  if 
referred  to  an  interest,  but  would  not  have  full  effect  without  ref- 
erence to  a  power,  it  should  have  effect  by  virtue  of  the  power. ^^° 

A  mortgage  is  not  bound  to  adopt  any  other  mode  of  advertise- 
ment and  sale  than  that  specified  in  the  mortgage;  even  to  recover 
upon  an  agreement  by  a  third  person  that,  if  the  mortgagee  is 
obliged  to  sell  the  mortgaged  premises  for  breach  of  condition,  and 
shall  advertise  and  sell  the  same,  such  third  person  will  purchase 
the  premises  and  pay  the  amount  of  the  mortgage.^^^ 

§  1821a.  A  junior  incumbrancer  is  not  entitled  to  a  notice  of  the 
sale.  "In  the  absence  of  fraud  or  some  undue  advantage  being  taken, 
the  la.w  imposes  no  duty  upon  a  person  holding  a  prior  mortgage  or 
deed  of  trust  to  notify  the  holder  of  a  similar  subsequent  or  junior 
lien  or  incumbrance  upon  the  same  property  of  his  intention  to  sell 
the  property  under  his  mortgage  or  deed  of  trust."^^*^ 

§  1822.  All  the  essential  requisites  of  the  power  must  be 
strictly  complied  with;^^^  and  when  there  are  statutory  provisions 
relating  to  the  notice  of  the  sale,  or  the  conduct  of  it,  these  must 
be  strictly  followed.  These  requirements  of  the  power  and  of  the 
statute  are  conditions  on  which  the  foreclosure  depends,  and  if  not 
fulfilled  the  sale  is  void.^^*  The  statute  in  force  at  the  time  the 
mortgage  was  executed  governs,  and  the  rights  of  the  parties  are 
not  affected  by  a  subsequent  act.^^^ 

Corporate  mortgages  usually  provide  for  a  continuance  of  default 
for  a  certain  time  after  notice  shall  be  given  to  the  mortgagor  of 

^">  Lanigan    v.     Sv/eany,    53    Ark.  rule     and     cites     the     authorities. 

185,  13  S.  W.  740.  The    case    of   Pease    v.    Iron    Co.    49 

^■■^'"1  Sugd.  Pow'ers,  412-422;  Camp-  Mo.    124,    is   overruled    in    Campbell 

bell  v.  Johnson,  65  Mo.  439;  Warner  v.  Johnson,  65  Mo.  439. 

v.  Insurance  Co.  109  U.  S.  357,  3  Sup.  "''  Stickney    v.    Evana,    127    Mass. 

Ct.  350,  221;    Fiink  v.  Eggleston,  92  202. 

111.    515;    Blagge   v.    Miles,    1    Story,  ^^^  Hardwick  v.  Hamilton,  121  Mo. 

426,  445-450.  465,  26  S.  W.  342. 

"This       seems      reasonable      and  ^'^^  Ormsby    v.     Tarascon,     3     Litt. 

right,  for  the  grantor  is  understood  404;    Dana   v.    Farrington,    4    Minn, 

in  equity  to  engage  with  his  gran-  433;    Gibson  v.  Jones,  5  Leigh,  370. 

tee  to  make  his  conveyance  as  ef-  ^"  New   York:    Low    v.    Purdy,    2 

fectual    as    he    has    power   to    make  Lans.   422;    Cole  v.  Moffit,   20  Barb. 

it;    and   it  should  be  assumed   that  18;    Cohoes    Co.    v.    Goss,    13    Barb, 

he    acted    by    virtue    of    whatsoever  137;    King  v.    Duntz,    11   Barb.    191; 

right  enabled  him  to  discharge  his  St.    John    v.    Bumpstead,    17    Barb, 

full  undertaking,  and  his  act  will  be  100;   Van  Slyke  v.  Shelden,  9  Barb, 

so   referred."      Per    Hemingway,    J.,  278.     Texas:    Childs  v.  Hill,  20  Tex. 

in     Lanigan     v.     Sweany,     53     Ark.  Civ.  App.  162,  49  S.  W.  652. 

185,   13   S.   W.   740,   who  states   the  '"  Smith    v.    Green,    41    Fed.    455. 


779  PERSONAL    NOTICE   OF   SALE.  [§§    1823-1825. 

intention  to  sell  under  the  power.^^''  A-  strict  compliance  with  such 
provision  is  essential  to  a  valid  sale  under  the  power.^^^ 

Under  a  statute  or  power  requiring  the  service  of  notice  upon  the 
mortgagor  and  others  interested  in  the  equity  of  redemption,  a  sale 
without  such  notice  does  not  bar  the  right  of  redemption  of  a  person 
entitled  to  it,  even  though  he  had  actual  notice  of  the  sale.  He  is 
entitled  to  the  legal  notice.^^^ 

If  the  statute  provides  for  service  of  notice  ■  upon  the  personal 
representative  of  a  deceased  mortgagor,  but,  no  personal  representa- 
tive having  been  appointed,  service  is  made  upon  his  heirs  at  law, 
the  sale  is  valid  as  against  them.^^^ 

§  1823.     When  the  notice  required  is  a  personal  notice  to  the 

mortgagor  or  his  assigns,  if  fairly  given  pursuant  to  the  power,  it 
does  not  matter  that  the  person  upon  whom  it  is  served  is  an  infant,  or 
is  insane,  or  under  any  other  disability.^*^" 

§  1824.  A  mortgagor  cannot  waive  notice  for  others,  [f  those 
claiming  under  the  mortgagor  are  entitled  to  notice,  he  cannot  waive 
it  as  against  them  and  consent  to  a  sale.^^^  But  he  may  waive  it  for 
himself.^'^- 

§  1825.  If  a  mortgagee  voluntarily  promises  the  mortgagor  not 
to  sell  under  the  power  without  notice  to  him,  there  being  no  con- 
sideration for  the  promise,  it  is  not  legally  binding  upon  him,  and  he 
may  sell  imder  the  power,  or  assign  the  mortgage  to  others  who 
may  sell  without  giving  notice,  and  such  assignees  are  not  liable 
to  action  for  depriving  the  mortgagor  of  his  equity  of  redemption, 
even  if  they  obtained  the  assignment  by  fraud  and  falsehood.^*^^  The 
promise  of  the  mortgagee  would  not  bind  his  assignee  or  a  pur- 
chaser at  the  sale  who  had  no  knowledge  of  it.     But  a  sale  by  the 

^='' §    1191a;      Jones    on    Corporate  the  statute  is,  that  notice  shall  be 

Bonds  &  Mortgages,   §    384.  given   to  those  whose   interests   are 

^'  Robinson   v.   Ala.   &   G.    Manuf.  to    be    affected.      The    spirit    of    the 

Co.  48  Fed.  12.  statute  is  respected,  though  its  let- 

'"'  Root    v.    Wheeler,    12    Abb.    Pr.  ter  be  not  observed,  by  service  up- 

294.  on    parties   in    interest.      The   letter 

^^"Bond  v.  Bond,  51  Hun,  507,  4  N.  killeth,      but     the      spirit      maketh 

Y.  Supp.  569,  citing  in  support  King  alive." 

V.  Duntz,  11  Barb.   191;  Anderson  v.  "'■"  Tracey    v.    Lawrence,    2    Drew. 

Austin,  34  Barb.  319;   Cole  v.  Moffit,  403;    Robertson    v.    Lockie,   15    Sim. 

20    Barb.    18;    Hubbell    v.    Sibley,    5  285. 

Lans.    51;     Van    Schaack    v.    Saun-  '"^  Porster    v.    Hoggart,    15    Q.    B. 

ders,    32    Hun,    515;    and    criticising  155. 

Mackenzie    v.    Alster,    64    How.    Pr.  ■"-  Maulsby   v.    Barker,   3    Mackey, 

388,    to    the    contrary.      In    Bond    v.  165. 

Bond,    51    Hun,   507,   4   N.    Y.    Supp.  '"■'Randall   r.    Hazelton,    12   Allen, 

569,  the  court  say:     "The  spirit  of  412. 


§§  1826,  18.27.]   POWER  of  sale  mortgages  and  trust  deeds.     780 

person  who  made  such  promise,  without  giving  the  promised  notice, 
would  be  set  aside  unless  a  bona  fide  purchaser  had  acquired  title 
by  receiving  a  deed  before  any  proceedings  to  set  the  sale  aside  were 
begun.^^*  But  the  sale  will  not  be  set  aside  on  the  ground  of  such  a 
promise  when  the  evidence  as  to  the  promise  is  conflicting,  and  the 
conduct  of  the  debtor  after  the  sale  has  been  inconsistent  with  his 
reliance  upon  such  promise.^*^^  If  a  mortgagee  has  promised  a 
junior  mortgagee  or  any  one  claiming  under  the  mortgagor  that  he 
will  notify  him  if  he  should  wish  to  enforce  the  mortgage,  or  that 
he  will  give  him  an  account  of  his  claim,  his  entry  and  foreclosure 
without  such  special  notice  is  fraudulent,  and  the  right  to  redeem 
remains  open  to  such  party  until  the  stipulated  notice  is  gr\'en  or  ac- 
count rendered,  the  property  remaining  in  the  hands  of  the  mortgagee 
who  promised  to  give  such  notice.^^^ 

§  1826.  Neglect  to  g^ve  notice  may  be  ground  for  setting  aside 
a  sale.  Where  the  owner  of  the  equity  of  redemption  gave  money 
to  the  mortgagor  to  pay  an  instalment  of  interast,  but  the  mortgagor 
did  not  pay  it  over  to  the  mortgagee,  and  the  owner  being  informed 
that  the  mortgagor  had  not  paid  the  interest  sent  word  to  the  mort- 
gagee's attorney  that  if  the  mortgagor  did  not  pay  the  interest  he 
would,  and  the  mortgagee  afterwards,  without  giving  notice  to  the 
owner,  sold  the  estate,  although  the  mortgagee  acted  in  good  faith 
and  in  exact  conformity  to  the  provisions  of  the  mortgage,  and  sold 
the  estate  to  a  purchaser  who  in  good  faith  was  the  highest  .bidder 
at  the  sale,  no  deed  having  been  delivered,  the  sale  was  set  aside  in 
equity  on  the  ground  that,  after  it  became  evident  that  the  mort- 
gagor would  not  pay,  notice  should  have  been  given  to  the  owner.^^'^ 


VII.     Publication  of  Notice. 

§  1827.  The  notice  usually  required  in  powers  of  sale  is  a  pub- 
lication for  a  certain  length  of  time  in  one  or  more  newspapers  pub- 
lished in  the  county  in  which  the  premises  are  situate.  As  will  be 
seen  by  reference  to  the  statutes  relating  to  power  of  sale  mort- 
gages, the  substance  of  the  notice  and  the  manner  of  giving  it  are 

""Pestel   V.    Primm,   109   111.   353;  erford     v.     Williams,     42     Mo.     18; 

Cassady    v.    Wallace,    102    Mo.    575,  Clarkson  v.   Creely,   40  Mo.   114,   35 

15  S.  W.  138.  Mo.  95. 

=>"  Hairston   v.    Ward,   108    111.    87.        '"'  Drinan    v.    Nichols,    115    Mass, 

^'-Hall  V.  Cushman,  14  N.  H.  171;  353. 
Green  v.  Cross,  45  N.  H.  574;  Ruth- 


781  PUBLICATION  OF  NOTICE.  [§  1828. 

prescribed  in  several  States;  and  where  this  is  the  case  the  recjuire- 
ments  of  the  statute  must  be  strictly  followed,  whatever  may  be  the 
terms  of  the  power.^*^^  The  power  may  impose  additional  obligations, 
but  cannot  take  away  any  of  those  imposed  by  statute;  as,  for  in- 
stance, a  private  sale,  though  expressly  authorized  by  the  mortgage, 
would  not  bar  the  equity  of  redemption  when  a  sale  at  public  auc- 
tion, after  giving  specified  notices,  is  required  by  statute.^""  It  has 
been  held  that  a  foreclosure  according  to  the  statutory  requirement 
is  valid  even  when  the  power  imposes  additional  requirements.^'^"  In 
the  absence  of  statutory  requirements,  the  kind'  of  notice,  the  place 
where  it  shall  be  given,  the  time  when  it  shall  be  given,  and  the 
duration  or  number  of  publications,  are  properly  subjects  of  con- 
tract between  the  parties,  and  their  agreement  is  binding  upon 
them.^'^  The  parties  may  agree  that  the  notice  shall  be  published 
in  a  county  or  State  other  than  that  in  which  the  land  is  situated; 
or  they  may  agree  to  dispense  with  notice  altogether. 

§  1828.  Statutes  regulating  the  foreclosure  of  mortgages  have 
no  application  to  mortgages  of  real  estate  situated  out  of  the  State 
where  the  statute  was  enacted.^"  The  court  cannot  in  such  case  in- 
terfere with  or  control  a  sale  made  within  the  State  according  to 
such  terms  as  the  parties  have  agreed  upon  in  the  power,  unless  it 
appears  that  these  terms  are  contrary  to  the  statutes  or  law  of  the 
State  or  county  where  the  land  is  situated,  or  that  there  is  some 
illegality  in  the  proceedings  to  sell.  The  parties  to  a  mortgage 
have  the  power,  in  the  absence  of  any  statute  regulation,  to  agree 

^^  Shillaber  v.  Robinson,  97  U.  S.  tion  have  been  held  not  to  prevent 

68.  the  parties  agreeing  upon  a  dlffer- 

^'^^  Lawrence  v.  Farmers'  Loan  &  ent  mode  of  giving  notice  if  they 
Trust  Co.  13  N.  Y.  642.  A  doubt  wish  to.  Knapp  v.  Anderson,  89 
has  been  expressed  whether  this  Md.  189,  42  Atl.  933. 
decision  should  be  extended  to  any  A  similar  statutory  provision  in 
requirement  other  than  a  sale  at  another  State  directing  that  prop- 
public  auction;  whether  a  compli-  erty  should  be  sold  in  the  county 
ance  with  the  statute  in  any  other  where  it  was  located  was  held  to 
respect  is  necessary;  as,  for  in-  override  a  stipulation  in  the  deed 
stance,  whether  compliance  with  a  that  it  should  be  sold  in  another 
provision  in  a  power  that  the  no-  county.  The  statute  was  read  into 
tice  of  sale  shall  be  for  a  shorter  the  deed  of  trust  and  controlled 
time,  and  in  a  different  manner,  when  any  of  the  provisions  in  the 
from  that  required  by  statute,  deed  conflicted  with  it.  Kerr  v. 
would  not  be  sufficient.  Elliott  v.  Galloway,  94  Tex.  641,  64  S.  W.  858. 
Wood,  53  Barb.  285,  305,  45  N.  Y.  ""  Butterfield  v.  Farnham,  19 
71.     The   parties  could   not  author-  Minn.  85. 

ize  a  sale  of  the  property  outside  of  ^'^  Martin   v.    Paxson,    66   Mo.    260. 

the  county  in  contravention  of  the  '"-Elliott   v.    Wood,    45    N.    Y.    71; 

statute.      Webb    v.    Haeffer.    53    Md.  Central    Gold    Mining    Co.    v.    Piatt, 

187.     But  the   statute   prescribing  a  3  Daly,  263. 
certain  time  and   mode  of  publica- 


§    1829,]        POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.  782 

upon  the  manner  in  whicli  the  property  may  be  sold  to  realize  the 
s-eciirity.  Therefore  a  sale,  after  specified  notices  in  the  city  of 
New  York,  of  lands  situate  in  Colorado,  aiithorized  by  mortgage, 
cannot  be  restrained  by  the  conrts  of  New  York  as  being  in  conflict 
with  the  statutes  of  that  State.  The  only  ground  of  interference 
would  be  that  the  sale  provided  for  was  in  conflict  with  the  laws  of 
Colorado.^'^ 

§  1829.  Fairness  required. — In  giving  the  notice  the  mortgagee 
is  retpiired  to  act  in  a  business-like  manner,  with  a  view  to  obtain  as 
large  a  price  as  he  reasonably  can  with  due  diligence  on  his  part, 
and  in  common  fairness  toward  the  mortgagor.^"*  So  far  as  the 
deed  leaves  any  matters  pertaining  to  the  exercise  of  the  power  to 
the  discretion  of  the  mortgagee  or  trustee,  a  fair  and  honest  exer- 
cise of  his  judgment  is  demanded.^'^ 

The  provisions  of  the  power  and  of  any  statutes  regulating  the  ex- 
ercise of  it  must  be  strictly  complied  with;''"*'  but  at  the  same  time 
such  strictness  and  literal  compliance  should  not  be  exacted  as 
would  destroy  the  power  and  render  the  intended  security  valueless."^ 
The  proceedings  may  be  regarded  as  ex  parte,  and  the  mortgagor 
may  be  divested  of  his  estate  without  his  knowledge  and  without 
his  consent  other  than  that  contained  in  the  mortgage  itself.  But 
under  a  statute  providing  for  a  certain  notice  of  sale  in  case  the 
parties  fail  to  provide  for  a  notice  in  the  deed,  it  has  been  held  that 
the  notice  prescribed  by  statute  may  be  used  in  case  the  mode  of 
notice  agi-eed  upon  in  the  mortgage  is  impossible;  as  where  this  re- 
quired an  advertisement  every  other  day  in  some  newspaper  pub- 
lished in  the  county,  when  there  was  no  paper  other  than  two  weekly 
papers  published  in  the  county."* 

«'2  Carpenter  v.  Black  Hawk  Gold  said:     "The  Introduction  o-f  powers 

Mining  Co.   65   N.   Y.   43.  of   sale   into   mortgages   was,    as    is 

^'*Mathie     v.     Edwards,     2     Coll.  well  known,  a  device  to  escape  re- 

465;    Hoffman   v.    Anthony,    6   R.    I.  demption;      but     in     this     country, 

282,'   7    Am.    Dec.    701;    Meacham    v.  from  the  beginning,  the  legislatures 

Steele,  93  111.  135.  have   stepped    in,    and    so    r-^gulated 

'•=  Ingle   V.    Culbertson,    43    Iowa,  the    sales    as   to   give    them    proper 

265.  publicity,    and    usually    made    them 

^"'Lee    V.    Mason,    10    Mich.    403;  subject  to  some  reasonable   redemp- 

Hebert  v.  Bulte,  42  Mich.  489,  4  N.  tion.     As  in  all  other  cases  of  rem- 

W.  215;   Doyle  v.  Howard,  16  Mich,  edy  by  act  of  the  party,  i*  has  been 

261;    Sherwood  V.  Reade,  7    Hill,  431;  held   that  every   essentia'   provision 

Thompson  v.   Commissioners,  79   N.  of  law  shall  be  complied   with,  and 

Y.  54;   Wood  v.   Lake,  62   Ala.   489;  so    appear.      Parties    ma."    add    to 

Hahn  v.  Pindell,  1  Bush,  538;  Luns-  these    conditions    but    cannot    dis- 

ford  V.  Speaks,  112  N.  C.  608,  17  S.  pense  with  them." 

E    430  ^■'Waller    v.    Arnold,    7i     111.    350. 

In    Pierce    v.    Grimley,    77    Mich.  ="Warehime  v.  Carroll  Co.  Build. 

273,  281,  43  N.  W.  932,  Campbell,  J.,  Asso.  44  Md.  512. 


783  PUBLICATION  OF  NOTICI-].      [§g  1830,  1831. 

§  1830.  Burden  of  proof  as  to  notice. — When  the  validity  of  a 
sale  under  a  power  is  questioned,  on  the  ground  that  the  advertise- 
ment of  the  sale  was  not  made  in  pursuance  of  the  deed,  the  better 
opinion  is  that  in  an  action  at  law  it  will  l)e  presumed,  after  the 
execution  of  a  deed  under  the  power  of  sale  to  the  purchaser,  that 
all  the  terms  of  the  power  and  all  requirements  as  to  notice  have 
been  complied  with.  Certainly,  in  an  action  of  ejectment  by  the 
purchaser  against  the  grantor  or  other  person  in  possession,  no  evi- 
dence aside  from  the  deed  to  such  purchaser  and  the  recitals  in  it 
is  necessary  to  show  title  and  right  of  possession  in  the  plaintiff.^^® 
It  would  seem,  moreover,  that  the  defendant  would  not  be  permitted 
to  prove  that  notice  of  sale  was  not  given  under  the  power,  because 
the  deed  would  confer  upon  the  purchaser  the  legal  title  to  the  land.^^'^ 
Yet  it  lias  been  held  in  a  few  cases  in  equity,  that  the  burden  of 
proving  a  proper  advertisement  rests  upon  the  purchaser  or  other 
party  insisting  upon  the  sale,"*^  and  that  recitals  in  a  deed  made  by 
the  person  clothed  with  the  power  in  execution  of  it  are  no  evidence 
of  compliance  with  the  prerequisites  to  a  valid  sale.^^- 

On  a  bill  to  set  aside  a  sale  on  the  ground  that  the  notice  of  sale 
was  defective,  and  was  published  in  an  obscure  paper,  the  burden 
of  proving  these  defects  rests  with  the  complainant.^^^  It  is  pre- 
sumed that  the  terms  and  conditions  of  the  deed  of  trust  or  mort- 
gage were  complied  with  and  notice  of  sale  properly  given;  though 
this  presumption  arising  from  the  deed  under  the  power  and  its 
record  may  be  rebutted  in  equity  by  proof  to  the  contrary,^^* 

A  sale  is  not  rendered  defective  by  the  fact  that  it  is  twice  ad- 
vertised, in  case  the  second  advertisement  is  rendered  necessary  by 
a  defect  in  the  first  notice,  and  no  sale  is  made  under  the  first  notice, 
and  it  is  not  shown  that  any  one  was  misled  by  it.^®^ 

§  1831.  A  notice  of  sale  published  before  any  default  has  oc- 
curred in  the  condition  of  the  mortgage  is  ineffectual  and  void,  and 

^'"Savings  and  Loan  Soc.  v.  Deer-  Speaks,  112  N.  C.  608,  17  S.  E.  430, 

ing,  66  Cal.  281.     And  see  White  v.  quoting  text.     See  §   1895. 

Stepliens,    77    Mo.    452;    Dryden    v.  =-' Gibson   v.    Jones    5    Leigh,    370; 

Stephens,  19  W.  Va.   1;    Lallance  v.  Wood   v.    Lake,  62   Ala.   489.     Proof 

Fisher,  29  W.  Va.  512,  2  S.  E.  775;  of     publication     by     production     of 

Lunsford   v.   Speaks,   112   N.    C.   608,  copies    of   the   newspaper.      McCam- 

17  S.  E.  430,  quoting  text;    Allen  v.  mon  v.  Detroit  L.   &  N.   R.  Co.   103 

Courtney  (Tex.)  58  S.  W.  200,  quot-  Mich.  104,  61  N.  W.  273. 

ing  text.  =^=Wood    v.    Lake,    62    Ala.    489. 

'8»  Fulton   V.    Johnson,   24   W.    Va.  ==8=  Tartt  v.   Clavton,   109   111.    579. 

95,    108,    per   Green,   J.;    Windett   v.  ^«^  Burke  v.  Adair,  23  W.  Va.  139. 

Hurlbut,    115    111.    403;    Lunsford   v.  ="=  Ritchie  v.  Judd,  137  111.  453,  27 

N.  E.  682. 


§    1832.]        POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.  784 

a  sale  under  it  invalid.^®*'  Equally  ineffectual  would  be  a  publication 
after  the  time  fixed  for  the  sale.  For  these  reasons  it  has  been 
necessary  to  determine  in  some  eases  when  a  publication  takes  place. 
The  time  of  publication  and  the  date  of  the  paper  are  not  always 
or  necessarily  the  same;  and  in  the  case  of  newspapers  published 
weekly,  it  is  the  general  practice  to  issue  a  portion,  at  least,  of  the 
copies  printed  in  advance  of  the  date  of  the  paper.  In  case  of  a 
newspaper  dated  Saturday,  the  whole  edition  of  which,  except  a 
small  fraction,  is  either  delivered  by  carriers  to  subscribers,  or  de- 
posited in  the  post-office  on  Friday,  the  publication  is  undoubtedly 
on  Friday.  When  the  proprietor  of  the  paper  sends  the  copies  out 
or  mails  them,  they  pass  beyond  his  control,  and  the  publication  is 
complete.  The  fact  that  a  small  portion  of  the  edition  is  not  issued 
till  Saturday  is  not  material.  It  is  not  necessary  that  a  notice 
should  appear  in  every  copy  of  the  whole  edition  regularly  printed 
and  published  in  order  to  constitute  a  publication.  In  such  case, 
therefore,  if  Friday  be  the  last  day  for  payment,  the  debtor  would 
have  the  whole  of  the  business  hours  of  that  day  in  which  to  make 
payment,  and  the  publication  would  be  in  advance  of  the  default, 
and  would  be  ineffectual  as  the  first  publication  of  the  notice. ^^'^  If 
such  a  publication  before  default  is  one  of  the  requisite  number  of 
publications  prior  to  the  time  appointed  for  the  sale,  a  subsequent 
postponement  of  the  day  of  sale  for  a  week  does  not  cure  the  defect, 
even  if  the  notice  be  again  published,  bcause  neither  the  notice 
fixed  for  the  day  of  sale  in  the  first  place,  nor  that  for  the  adjourned 
day,  is  published  for  the  requisite  number  of  weeks  before  the  sale.^^* 

§  1832.  An  assi^ment  of  the  mortgage,  or  of  any  interest  in  it, 
after  the  first  advertisement  of  the  sale,  and  before  the  day  of  sale, 
invalidates  the  sale  if  the  assignee  continues  the  advertisement  and 
sells  under  it,  instead  of  advertising  anew  in  his  own  name.^^'' 
This  is  upon  the  ground  that  by  the  assignment  the  mortgagee 
ceased  to  have  any  interest  in  the  mortgage;  and  that  the  power 
cannot  be  separated  from  the  interest  in  the  land,  and  exercised  by 
one  having  no  interest  whatever  in  the  mortgage.  The  assignment, 
moreover,  vests  the  legal  interest  of  the  mortgage  in  the  assignee, 
and  the  power  necessarily  passes  with  it  unless  expressly  reserved. 

''"Gustav.  Adolph.  Build.  Asso.  v.  ^^°  Niles  v.  Ransford,  1  Mich.   338, 

Kratz,  55  Md.  394;   Potomac  Manuf.  51    Am.    Dec.    95;    Dunning    v.    Mc- 

Co.    v.    Evans,    84   Va.    717,    6    S.    E.  Donald,   54    Minn.    1,   55   N.   W.    864, 

2;    Long  v.    Long,   79  Mo.    644.  followed   in   Merrick   v.    Putnam,   73 

="  Pratt  v.  Tinkcom,  21  Minn.  142.  Minn.  240,  75  N.  W.  1047. 

^^  Pratt  v.  Tinkcom,  21  Minn.  142. 


'^85  PUBLICATION    OF    NOTICE.  [§§    1833-1835. 

"An  advertisement  in  tlie  name  of  the  mortgagee  in  this  case  can 
have  no  greater  force  or  effect  than  if  it  had  been  made  in  the  name 
of  a  third  person,  a  stranger  to  all  the  parties  in  interest,  which 
would  be  none  at  all."^''** 

§  1833.  Chang^e  af  statute  as  to  len^h  of  notice. — It  is  within 
the  power  of  a  legislature  to  change  an  existing  law  which  requires 
the  notice  under  a  power  of  sale  to  be  published  for  a  certain  length 
of  time  before  the  sale,  by  providing  for  a  shorter  time  of  publica- 
tion, and  such  a  law  is  not  unconstitutional  as  applied  to  mortgages 
existing  at  the  time  of  its  passage.^'*^  It  does  not  impair  the  obliga- 
tion of  the  contract.  It  operates  upon  the  remedy  only,  and  it  does 
not  in  such  operation  impair  or  take  away  the  right  of  th-e  mort- 
gagee to  enforce  the  obligation.  The  time  of  notice  might  be 
lengthened,  and  the  remedy  rendered  less  speedy  and  convenient, 
without  impairing  the  obligation.  If  there  is  still  a  substantial 
obligation  left,  that  is  sufficient. 

§  1834.  How  long  after  publication  sale  may  be. — In  the  ab- 
sence of  any  express  provision  in  regard  to  the  time  at  which  a  sale 
shall  be  made  after  the  publication  of  the  notice,  the  sale  must  be 
within  such  a  reasonable  time  after  the  last  publication  as  not  to 
thwart  the  purpose  of  the  statute;  but  it  need  not  be  within  the 
week  following  the  last  advertisement.^^^  A  provision  that  a  sale 
may  be  made  after  a  certain  number  of  days'  notice  does  not  limit 
the  sale  to  the  day  immediately  succeeding  the  expiration  of  the 
time  named.^'*^  A  sale  made  without  advertising  it  for  the  time  re- 
quired by  the  deed  is  void.^^* 

§  1835.  Selection  of  newspaper. — The  deed  of  trust  or  mort- 
gage iisually  provides  for  the  publication  of  notice  of  the  sale  in 
some  newspaper  published  in  the  county  or  place  where  the  prop- 
erty is  situated.  No  particular  newspaper  being  designated,  the 
trustee  or  mortgagee  may  select  any  suitable  medium  for  the  publi- 
cation at  his  discretion,  observing  the  general  requirement  of  the 
trust  that  he  act  in  fairness  and  in  good  faith.^"^    It  is  not  requisite 

'""Niles  v.  Ransford,  1  Mich.  338,  McMahan    v.    American    Bldg.    etc. 

51  Am.  Dec.  95,  per  Wing,  J.  Ass.  75  Miss.  965,  23  So.  431. 

^»' James  v.  Stiill,  9  Barb.  482.  ^»^  Beal  v.   Blair,   33   Iowa,  318. 

'"^  Atlvinson  v.  Duffy,  16  Minn.  45.  ^'*  Siemers  v.  Schrader.  88  Mo.  20. 

Where    a    deed    of   trust   authorized  ^^-  Ingle    v.    Culbertson,    43    Iowa, 

the  trustee  to  sell  after  publication  265;     Thompson    v.     Hey  wood,     129 

"for  four  weeks  next  before  the  day  Mass.   401;    Stevenson   v.    Hano,    148 

of    sale,"    a    sale    made    nine    days  Mass.  616,  20  N.  E.  200. 
after   the   last   publication    is   void. 


§    183G.]        POWER   OF    SALE    JSIORTGAGES   AND    TRUST   DEEDS.  780 

that  he  should  select  the  paper  of  the  largest  circulation,  or  of  an}^ 
particular  class  or  character.  A  publication  in  a  law  and  adver- 
tising journal  of  limited  circulation  has  been  held  to  be  proper.^"''' 
Whether  or  not  such  a  paper  is  a  newspaper  is  a  proper  question 
for  the  jury.^^^  A  paper  issued  weekly,  and  principally  devoted  to 
matters  of  interest  to  a  particular  religio^is  denomination,  but  con- 
taining a  column  devoted  to  general  news,  is  a  "newspaper"  in 
which  a  notice  of  sale  may  be  published.'^^^  No  proof  of  the  notoriety 
or  extent  of  the  circulation  of  the  paper  in  which  the  notice  was 
published  is  required  to  sustain  a  sale  under  it.^"^ 

A  paper  entitled  "The  Real  Estate  Register  and  Rental  Guide," 
not  designed  for  general  circulation,  but  devoted  to  a  limited  class  of 
readers  has  been  held  not  to  be  a  "public  newspaper"  within  the 
terms  of  a  power  of  sale.^'^° 

If  the  deed  does  not  prescribe  the  place  of  publication,  but  leaves 
this  to  the  discretion  of  the  trustee,  he  may,  in  a  fair  exercise  of  his 
discretion,  publish  notice  in  a  newspaper  printed  outside  the  limits 
of  the  State  in  which  the  land  is  situated.*'*^ 

Under  a  statute  which  requires  the  publication  of  the  notice  in  a 
newspaper  "printed"  in  the  county,  evidence  that  the  notice  was 
published  in  a  newspaper  "published"  in  the  county  does  not  show 
a  compliance  with  the  statute.*"- 

A  change  in  the  name  of  the  paper  during  the  time  of  publication 
does  not  invalidate  the  notice,  if  it  appears  that  the  paper  is  the 
same,  or  has  taken  a  new  name  upon  a  consolidation  with  another 
paper.***^ 

§  1836.     Place   of   publication. — WTiere  the   deed   provided   that 

'°'' Kellogg  v.  Carrico,  47  Mo.  157;  called  by  complainant's  counsel,  the 

Benkendorf  v.  Vincenz,  52  Mo.  441;  newspapers,  though  devoted  prima- 

Taylor  v.  Reid,  103  111.  349.  rily    to    the    interests    of    particular 

^■■''  Meyer    v.    Opperman,    76    Tex.  classes  of  readers,   had  either  been 

105,  13  S.  W.  174.  extensively    used    for    the    publica- 

''"'^Hull   V.   King,  38  Minn.   349,  37  tion   of   notices   of   sales   and   other 

N.  W.  792;   Beecher  v.  Stephens,  25  legal    notices,    or   were   newspapers, 

Minn.  14(3:    Kerr  v.  Hitt,  75  111.  51;  or  had  been  found  by  lower  courts 

Hernandez  v.  Drake,  81  111.  34.  to    be    newspapers,    of    general    cir- 

"'"'  St.    Joseph    Manufacturing    Co.  culation,  in  which  respect  they  were 

V.  Daggett,  88  111.  556.  unlike  the  newspaper  under  consid- 

^"''Croweil  V.  Parker,  22  R.   I.   51,  eration." 
52    46  Atl.  35.    Per  Matteson,  C.  J.:         '"'Ingle  v.   Jones,   43   Iowa,   286. 
"In  Kerr  v.  Hitt,  75  111.  51;  Railton        ""- Bragdon  v.  Hatch,  77  Me.  433. 
V.  Lauder,  126  111.  219,  18  N.  E.  555;         ^"^Wilkerson    v.    Eilers,    114    Mo. 

Maass   v.    Hess,   140   111.    576,   29   N.  245,   21   S.   W.   514;    Isaacs   v.    Shat- 

E    887-    Kellogg  v.   Carrico,  47   Mo.  tuck,  12  Vt.  668;    Soule  v.   Chase,  1 

157;   Benkendorf  v.  Vincenz,  52  Mo.  Robt.  (N.  Y.)  222;  Reimer  v.  Newel, 

441;    Lynch  v.   Durfee,   24  L.   R.   A.  47  Minn.   237,  49  N.  W.   865. 
793,  to  which  our  attention  has  been 


787  PUBLICATTOX    OF    NOTICE.  [§    1836. 

notice  of  sale  should  be  given  "by  advertisement  in  some  news- 
paper printed  in  St.  Louis  and  Franklin  County,"  and  notice  was 
given  only  in  a  newspaper  printed  in  the  latter  county,  the  sale  was 
declared  void.  The  deed  being  recorded,  the  purchaser  had  notice 
of  its  requirements,  and  was  bound  by  them.*"*  A  requirement  in  a 
deed  of  trust  that  sixty  days'  notice  shall  be  given  in  newspapers 
published  in  Eichmond,  Virginia,  and  in  the  city  of  New  York, 
must  be  fully  complied  with  to  effect  a  valid  sale;  and  the  fact  that 
the  mortgagee  was  in  Virginia  where  the  land  was  situated,  and 
communication  with  New  York  was  prohibited  on  account  of  the 
pending  war,  is  no  excuse  for  failure  to  publish  the  notice  as  re- 
quired.*"^ 

Under  a  statute  providing  that  the  notice  shall  be  published  in  a 
newspaper,  if  any,  in  the  city  or  tow^i  wherein  the  mortgaged 
premises  are  situated,  a  notice  of  foreclosure  of  a  mortgage  of  land  in 
Dighton  in  the  Fall  Eiver  News  was  held  sufficient,  although  there 
was  a  paper  called  the  Dighton  Eock,  which  had  the  same  contents 
as  a  newspaper  called  the  Fall  Eiver  Advertiser  but  a  different 
heading  and  date-line,  printed  in  Fall  Eiver,  a  few  copies  of  which 
were  sent  to  Dighton  to  regular  subscribers  or  for  sale  and  distribu- 
tion;  for  under  these  facts  the  Dighton  Eock  was  not  published  in 
Dighton.*"« 

Where  the  record  of  a  mortgage  is  erroneous  as  to  the  place  where 
the  publication  of  notice  of  sale  shall  be  made,  but  the  publication 
is  made  as  provided  in  the  mortgage  itself,  the  notice  of  sale  is  not 
bad.  The  inaccuracy  of  the  record  is  the  fault  of  the  recording 
officer,  and  the  mortgagee  has  a  right  to  presume  that  the  mortgage 
has  been  correctly  recorded.*"^ 

404  Thornburg  v.  Jones,  36  Mo.  514.  posed  to  be  issued  in  Hamilton,  but 
^'''Bigler  v.  Waller,  14  Wall.  297.  which,  in  fact,  was  issued  in  Bev- 
*""  Rose  V.  Fall  River  Five  Cents  erly,  in  the  same  county.  No  paper 
Sav.  Bank,  165  Mass.  273,  43  N.  E.  was  printed  and  issued  in  Hamil- 
93.  In  Brown  v.  Wentworth,  181  ton.  There  were  twenty-four  sub- 
Mass.  49,  in  an  attempt  to  comply  scribers  there  to  the  Wenham- 
with  a  statute  of  Massachusetts,  Hamilton  Times.  It  was  held  that 
Acts  1882,  ch.  75,  Rev.  Laws  1902,  probably  it  was  a  mistake  to  sup- 
ch.  187,  §  14,  which  provides  for  pose  that  the  paper  was  published 
publication  of  notice  in  a  newspa-  in  Hamilton  in  such  a  sense  as  to 
per,  if  any,  published  in  a  city  or  make  the  choice  of  it  compulsory; 
town  in  which  the  land  lies;  other-  but  if  not  published  there,  it  was 
wise,  in  a  newspaper  published  in  a  "newspaper  published  in  the  coun- 
such  county,  a  mortgagee's  adver-  ty  where  the  mortgaged  premises 
tisement  of  a  foreclosure  sale  of  are  situated."  and  fulfilled  the  re- 
land  in  Hamilton  was  published  in  quirement  of  the  statute, 
the  Wenham  -  Hamilton  Times,  **'  Colgan  v.  McNamara,  16  R.  I. 
which    the    mortgagee's    agent    sup-  554,  18  Atl.  157. 


§§  1837,  1838.]  POWER  of  sale  mortgages  and  trust  deeds,  788 

§  1837.  Posting  in  public  places. — A  deed  of  trust  required  notice 
of  sale  to  be  posted  in  four  public  places  in  the  county,  and  two  of 
the  notices  were  posted  at  different  places  in  the  same  town.  Ob- 
jection was  taken  that  the  town  was  but  one  public  place;  but  the 
court,  without  admitting  that  there  was  anything  in  the  objection, 
held  that  it  could  only  be  availed  of  in  equity,  and  not  in  an  action 
at  law.***^  Under  a  deed  which  provides  for  a  sale  on  thirty  days' 
notice  by  posting,  if  the  notices  have  been  put  up  that  number  of 
days  before  the  sale,  it  is  not  necessary  to  the  validity  of  the  sale 
that  the  notices  shall  remain  posted  all  the  time  up  to  the  sale.'*"'' 

A  provision  in  a  mortgage  that  the  mortgagee  might  sell  after 
having  advertised  the  sale  for  sixty  days  in  a  newspaper  published 
in  a  town  named,  "by  posting  up  written  or  printed  notices  in  four 
places  in  the  county,"  was  construed  to  mean  that  the  notice  might 
be  given  in  either  mode,  the  word   Ijy  being  evidently  a  mistake 

A  general  provision  in  a  mortgage  which  requires  that  notice  of 
the  foreclosure  sale  be  posted  in  at  least  three  public  places,  one  of 
which  shall  be  at  the  Court  House  door  of  said  county,  does  not  re- 
quire a  notice  to  be  posted  upon  the  premises;  and  it  is  no  cause  of 
complaint  on  the  part  of  the  mortgagor  that  a  notice  of  the  foreclosure 
sale  under  such  mortgage  was  not  posted  upon  the  mortgaged  prem- 
ises.*^^  But  a  sale  would  be  invalid  where  a  trustee  failed  to  obey 
an  injunction  to  give  notice  by  posting  notices  and  gave  notice  by 
publication.*^^ 

§  1838.  Length  of  time  of  publication. — A  deed  of  trust  required 
a  publication  of  the  notice  of  sale  for  five  consecutive  days,  the  last 
of  which  should  be  ten  days  before  the  sale.  The  last  notice  was 
on  the  eleventh  day  before  that  fixed  for  the  sale.  Upon  a  claim 
that  the  last  insertion  should  have  been  on  the  tenth  day  before 
the  sale,  it  w^as  held  that  the  last  insertion  might  be  more  than 
ten  days  before  the  sale,  but  could  not  be  made  within  a  less  time.*^^ 
A  longer  notice,  within  a  reasonable  limit,  does  not  injure  but  rather 
benefits  the  debtor. 

^"^  Rice  V.  Brown,  77  111.   549.     In  notices    in    different    parts    of    the 

Graham    v.    Fitts,    53    Miss.    307,    it  court-house  yard.     Nat.  Loan  &  In- 

was  held  that  there  was  nothing  in  vest.   Co.   v.   Dorenblaser    (Tex.),   69 

a  kindred  objection.  S.  W.  1019. 

^""Graham  v.  Fitts,  53  Miss.  307.  *'- Clark    v.    Burke    (Tex.),    39    S. 

^'"Watson  V.  Sherman,  84  111.   263.  W.   306. 

^'^McClendon  v.   Equitable  Mortg.         ^''Tooke  v.   Newman,   75   111.   215; 

Co.  122  Ala.  384,  25  So.  30.     A  stat-  Taylor    v.    Reid,    103    111.    349;    Beal 

utory    provision    of    like    import    is  v.  Blair,  33  Iowa,  318. 
not   satisfied   by   posting   the   three 


789  ruBLicATiox  of  notice.  [§  1838. 

A  requirement  in  a  deed  of  "thirty  days'  public"  notice  in  a 
newspaper  is  satisfied  by  the  publication  of  notice  on  eaph  successive 
secular  day  in  a  newspaper  not  published  on  Sundays.*^*  A  require- 
ment of  publication  "ten  days  before  the  sale"  is  fulfilled  by  pub- 
lishing a  notice  of  a  sale  to  be  had  on  the  thirteenth  day  of  a  month, 
on  the  second  day  of  that  month,  and  each  day  thereafter  except 
Sunday,  although  there  are  only  nine  insertions  of  the  notice.*^^  An 
advertisement  of  a  sale  in  a  newspaper  "for  five  days"  is  sufficient, 
though  one  of  the  five  days  is  a  Sunday  intervening  between  the 
first  and  last  days  of  publication."^  It  is  a  sufficient  compliance  with 
a  requirement  that  ten  days'  notice  of  the  sale  shall  be  given,  that 
the  first  insertion  of  the  notice  is  made  not  less  than  ten  days  before 
the  sale.  It  is  not  necessary  that  ten  days  shall  intervene  between 
the  last  insertion  and  the  day  of  sale.*^"  A  requirement  of  "three 
weeks'  previous  notice"  is  met  by  a  publication  once  a  week  for 
three  weeks,  and  does  not  render  necessary  the  publication  of  the 
notice  daily  for  three  weeks  previous  to  the  sale."^  A  sale  authorized 
after  "first  giving  thirty  days'  public  notice"  is  properly  advertised 
by  the  publication  of  a  notice  once  a  week  for  five  weeks,"''  or  even, 
it  is  held,  for  four  weeks  only,*^"  the  first  publication  being  more  than 
thirty  days  before  the  sale.  A  requirement  of  notice  in  a  newspaper 
"ten  days  before  the  day  of  sale"  would  be  satisfied,  it  would  seem,  by 
a  single  publication  ten  days  before  the  sale, — the  language  not  im- 

"'  Kellogg  V.  Carrico,  47  Mo.   157.  however,  the  rule,  founded   in   rea- 

*i"  Cushman   v.   Stone,   69   111.   516;  son    and    supported    by    the    weight 

Weld    v.    Rees,    48    111.    428;    St.    Jo-  of  authority,    independently   of   any 

seph  Manufacturing  Co.  v.  Daggett,  statutory  rule  on  the  subject,  is  that 

84  111.  556.     In  Lerch  v.  H:ll,  2  Tex.  when  a  statute  prescribes  a  certain 

Civ.    App.    421,    21    S.    W.    183,    the  number    of    days    within    which    an 

deed  of  ti'ust  required   the   land   to  act  is  to  be  done,  and  says  nothing 

be  sold   after   advertisement   of  ten  about  Sunday,  it  is  to  be  included, 

days   in   some   newspaper   published  unless  the  last  day  falls  on  Sunday, 

in    Tom    Green    County.      The    evi-  in   which   case   the   act   may   gener- 

dence    shows    that    the    ilrst    publi-  ally  be  done  on  the  succeeding  day." 

cation  was  made  on  the  8th  of  Oc-  Citing  Street   v.    United    States,   133 

tober,    1887,   and   the  sale   was   lade  U.   S.  299,  10  Sup.   Ct.  309;    King  v. 

on  the  18th  of   October,   1887.     The  Dowdall.    2    Sandf.    131;    Porter    v 

sale    was    held    void    because    there  Pierce,  120  N.  Y.  217,  24  N.  E.  281; 

were   not   ten   full    days    before   the  Cressey  v.  Parks,  76  Me.  532. 

sale,    the    court    saying:     "The    day  "'  St.    Joseph    Manufacturing    Co. 

upon    which    the    advertisement    is  v.  Daggett,   84   111.   556. 

first  published  is  to  be  excluded  in  ^"'Johnson  v.   Dorsey,   7  Gill,  269. 

computing  the  time  when  the  pub-  In  re  Harris,    14   R.   I.   637;    Thurs- 

lication   begins."  ton  v.  Miller,  10  R.  I.  358. 

""  Bowles    V.    Brauer,    89    Va.    466,  ^'^  Leffler    v.    Armstrong,    4    Iowa, 

16  S.   E.  356.     The  notice  was  pub-  482,    68    Am.    Dec.    672;    Enocks    v. 

lished  on  March   5th,   6th,  7th,   8th,  Miller,  60  Miss.  19;   Taylor  v.  Reid, 

and    10th,    there    being   no    publica-  103  111.  349. 

tion    on    Monday,    the    9th.     Lewis,  *-"  Gray  v.  Worst,  129  Mo.  122,  31 

J.,    delivering    tiie    judgment,    said:  S.  W.  585. 
"In    the    construction    of    statutes, 


§    1838.]        POWER   OF   SALE    MORTGAGES   AND    TRUST   DEEDS.  790 

porting  a  continuous  publication.*^^  So  a  requirement  of  notice 
"thirty  days  .before  the  day  of  sale"  is  satisfied  by  a  single  publica- 
tion that  length  of  time  before  the  sale.*-- 

But  on  the  other  hand  a  provision  for  "twenty  days'  notice"  of 
a  sale  has  been  held  to  mean  a  continuous  publication  for  that 
time.'*-^  Whether  the  publication  must  be  continuous  is  a  question 
depending  upon  the  meaning  of  the  language  used. 

Where  the  language  in  regard  to  notice  is  "first  giving  notice  by 
publishing  the  same  once  each  week  for  three  successive  weeks," 
the  first  publication  need  not  be  made  three  weeks  before  the  time 
appointed  for  the  sale.'***  The  rule  is  the  same  where  the  power  re- 
quires "thirty  days'  notice  by  publishing  once  a  week  for  three 
weeks  successively."  It  is  sufficient  that  notice  was  published  once 
a  week  for  three  successive  weeks,  and  the  first  publication  was  made 
thirty  days  before  the  sale.*-^  Such  a  notice,  moreover,  requires  that 
the  thirty  days  shall  elapse,  not  from  the  last  insertion  of  the  notice 
in  the  paper  to  the  day  of  sale,  but  from  the  first.*""  Where  a  notice  is 
required  to  be  published  once  a  week  for  six  weeks,  the  first  publica- 
tion must  be  at  least  forty-two  days  before  the  day  of  sale.*^^  And 
so  in  New  York,  where  publication  for  twelve  weeks  successively,  at 
least  once  a  week,  is  required,  the  publications  may  be  made  in  less 
than  eighty-four  days,  provided  there  be  a  publication  once  in  each 
week  for  twelve  successive  weeks.*-^  It  would  seem  that  the  last  adver- 
tisement may  be  on  th-e  morning  of  the  day  of  sale.*"^ 

"^Weld   V.    Rees,   48   111.    428,    432.  8    Mont.    32,    19    Pac.    403,    affirmed 
See,  also,  Muskingum  Valley  Turn-  156  U.  S.  470,  15  Sup.  Ct.  440;  How- 
pike  Co.   V.   Ward,   13  Ohio,   120,   43  ard    v.    Fulton,    79    Tex.    231,    14    S. 
Am.  Dec.  191;   Andrews  v    Railroad  W.  1061. 
Co.  14  Ind.  169.  '-"Howard  v.  Fulton,  79  Tex.  231, 

'"  Jenkins    v.    Pierce,    98    111.    646.  14  S.  W.  1061.     The  rule  is  the  same 

A  provision  authorizing  a  sale  "af-  whatever  the  number  of  weeks  may 

ter     having     advertised     such     sale  be.    Wilson  v.  Insurance  Co.  65  Fed. 

thirty    days    in    a   newspaper"    does  38,  12  C.  C.  A.   505;    Pratt  v.  Tink- 

not    require    thirty    consecutive   ad-  com,  21  Minn.  142;  Ogden  r.  Walker, 

vertisements,    but   is   satisfied   by   a  59    Ind.    460;    Boyd   v.    McFarlin,    58 

publication  each  week  for  four  sue-  Ga.    208;    Smith   v.    Rowles,    85    Ind. 

cessive  weeks,   the   first  publication  265;  Parsons  v.  Lanning  27  N.  J.  Eq. 

being   thirty    days    before    the   sale.  70;    In   re   North   Whitehall,   47   Pa. 

Hamilton    v.    Fowler,    99    Fed.    18.  St.  156;   Finlayson  v.  Peterson,  5  N. 

Apparently  only  a  single  advertise-  D.  587,  67  N.  W.  953. 

ment    thirty    days    before    the    sale  ■*='  Finlayson     v.     Peterson,     5     N. 

was  required.  Dak.  587,  67  N.  W.  953,  57  Am.  St. 

^-^  Washington    v.    Bassett,    15    R.  584.  33  L.  R.  A.  532. 

I.   563,  10  Atl.   625,   2   Am.    St.    Rep.  "« George  v.   Arthur,   2   Hun,   406; 

929;    Stine   v.    Wilkson,    10    Mo.    75,  Howard  v.  Hatch,  29  Barb.  297.    And 

96;  German  Bank  v.  Stumpf,  73  Mo.  see,    as    to   judicial    sales,    Wood    v. 

311;    Leffler   v.    Armstrong,   4    Iowa,  Moorehouse,  45  N.  Y.  368,  affirming 

482,  68  Am.  Dec.  672.  1  Lans.  405.     Olcott  v.  Robinson,'  21 

'■'*  Dexter    v.    Shepard,    117    Mass.  N.    Y.    150.    reversing   20   Barb.    148 

480;  Frothingham  v.  March,  1  Mass.  78  Am.   Dec.    126;   Enocks  v.  Miller, 

247;   Wilson  v.  Page,  76  Me.  279.  60  Miss.  19. 

*"  First  Nat.   Bank  v.   Mining  Co.  '-"  Bowles   v.   Brower,   89   Va.    466, 


791  WHAT    THE    NOTICE   SHOULD    CONTAIN.  [§    1839. 

But  a  requirement  of  publication  "for  twelve  successive  weeks, 
at  least  once  in  each  week,"  is  not  met  by  a  publication  once  in 
each  week  for  twelve  weeks,  followed  by  a  sale  made  less  than 
twelve  weeks   from  the  time  of  the  first  publication.*^'^ 

A  requirement  that  a  thirty  days'  previous  notice  of  sale  be  given 
by  publication  in  some  newspaper  is  satisfied,  though  the  sale  takes 
place  on  the  thirtieth  day  after  the  first  publication.*^^ 

The  notice  need  not  be  published  in  all  the  editions  of  the  paper 
issued  on  the  days  on  which  the  notice  was  published.*^^ 

The  mortgagor  or  owner  of  the  equity  of  redemption  may  agree 
that  the  advertisement  may  be  for  a  shorter  period  than  that  ex- 
pressed in  the  deed,  and  his  agreement  estops  him  from  afterwards 
objecting  that  this  provision  of  the  power  was  not  complied  with.*^* 


VIII.     What  the  Notice  should  contain. 

§  1839.  The  advertisement  of  the  sale  should  fully  comply  with 
the  terms  of  the  power,  and  even  a  bare  literal  compliance  is  not 
enough.  It  must  give  with  clearness  all  reasonable  information  about 
the  proposed  sale.  It  should  describe  the  mortgage  by  stating  the 
names  of  the  parties,  its  date,  and  the  record.*^*  Under  a  statute 
providing  that  the  notice  shall  specify  "the  date  of  the  mortgage  and 
when  and  where  recorded,"  a  notice  incorrectly  giving  the  page  of  the 
record  is  defective.*^^  Where  an  assignment  of  a  mortgage  must  be 
recorded  to  entitle  the  assignee  to  sell,  the  advertisement  should  state 
that  the  person  making  the  sale  is  the  record  owner  of  the  mortgage.*^^ 

16   S.   E.    356;    Worley  v.    Naylor,   6  N.   W.   221;    Reading  v.   Waterman, 

Minn.      192.       This      decision      was  46    Mich.    107,    8    N.    W.    691.      See, 

founded  on  a  statute.  however,     Martin     v.     Baldwin,     30 

""Bacon    v.     Kennedy,     56    Mich.  Minn.    537,    16    N.    W.    449;    Clifford 

329,  22  N.  W.   276;    Gantz  v.   Toles,  v.    Tomlinson,   61   Minn.    195,    64    N. 

40  Mich.   725.  W.    381;    Yellowly   v.    Beardsley,    76 

"' Mallory  v.  Kessler,  18  Utah,  11,  Miss.   613;    M'Candia  v.   Billings,  10 

54  Pac.   892.  N.  D.  373,  87  N.  W.  1008;   Bacon  v. 

«p  Everson    v.    Johnson,    22    Hun,  Insurance  Co.   131  U.   S.  258,  9  Sup. 

115-  Johnson  v.  Wood,  125  Ala.  330,  Ct.    787;    Morgan    v.    Joy,    121    Mo. 

28  So.  454.  677,    26    S.    W.    670;    Baker   v.    Cun- 

^'^'Maulsby    v.    Barker,    3   Mackey,  ningham,  162  Mo.  134,  62  S.  W.  445. 
165.  "^  Peasley    v.    Ridgway,    82    Minn. 

«^But  even  though  the  statute  288,  84  N.  W.  102;  Clifford  v.  Tom- 
provides  that  the  notice  shall  spec-  linson,  62  Minn.  195,  64  N.  W.  381. 
ify  the  date  of  the  instrument,  a  ""Burke  v.  Baldwin,  51  Minn.  181. 
mistake  in  giving  the  date  as  March  53  N.  W.  460;  Backus  v.  Burke,  48 
31st  instead  of  March  21st  is  not  Minn.  260,  51  N.  W.  284;  Burke  v. 
fatally  defective,  where  the  record  Backus,  51  Minn.  174.  53  N.  W.  458; 
of  the  mortgage  is  correctly  stated.  Dunning  v.  McDonald,  54  Minn.  1, 
Brown  v.  Burney,  128  Mich.  205,  87  55  N.  W.  864. 


§    1840.]        POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  793 

It  should  appear  iipon  the  face  of  it  that  the  sale  is  to  he  made  hy 
virtue  of  the  power,  or  for  the  purpose  of  foreclosure.*^^  It  should 
show  that  a  default  has  occurred  within  the  terms  of  the  mortgage  ;*^* 
but  it  need  not  point  out  for  what  particular  breach  of  condition 
the  sale  is  to  be  made/^''  or  state  the  precise  amount  due  on  the 
mortgage  debt.***'  It  is  not  essential  for  the  notice  to  state  whether 
the  amount  due  is  interest  or  principal.**^  Where  a  statute  requires 
that  the  amount  due  be  stated  in  the  notice,  it  need  only  be  given 
with  substantial  accuracy.**-  If  the  advertisement  of  the  sale  is  pre- 
scribed by  statute,  the  provisions  of  the  statute  must  be  complied  with ; 
but  if  all  the  information  required  by  the  statute  is  fully  given  in  the 
notice  as  published,  the  fact  that  it  does  not  state  in  the  words  of  the 
statute  that  the  mortgage  will  be  foreclosed  by  a  sale  of  the  mortgaged 
premises  is  immaterial.**^ 

§  1840.  It  must  properly  describe  the  premises  and  the  interest 
to  be  sold,  so  as  to  reasonably  inform  the  public  as  to  what  is  to  be 
sold;***  and  if  the  description,  though  including  the  lot  to  be  sold, 
contains  double  the  area  of  the  lot  mortgaged,  the  sale  will  be  void.**^ 
But  a  slight  variance  in  the  description  of  the  quantity  of  the  mort- 
gaged premises,  between  that  contained  in  the  notice  and  that  in 
the  mortgage,  is  not  fatal  to  the  validity  of  the  foreclosure,  in  the 
absence  of  any  evidence  of  actual  prejudice.***' 

"'Leet  v.  McMaster,  51  Barb.  236;  Loveland  v.   Clark,  11  Colo.  265,  18 

Judd  V.  O'Brien,  21  N.  Y.  186,  190.  Pac.     544;     Streeter    v.     Ilsley,     147 

"«Bush  V.   Sherman,  80  111.  160.  Mass.  141,  23  N.  E.  837;  Texas  Sav- 

""  King     V.     Bronson,     122     Mass.  ings  Loan  Ass.   v.   Seitzler,   12   Tex. 

122.  Civ.  App.  551,  34  S.  W.  348.     A  de- 

**°  Gooch  v.  Addison,  13  Tex.   Civ.  scription    in    the    advertisement    as 

App.  76,  35  S.  W.   83.  "the    Noel    Mill    property,    situated 

■*"  Tra'fton  v.  Cornell,  62  Minn.  442,  in   the  seventeenth   civil  district  of 

64  N.  W.  1148.  Franklin      County"      is      sufficient. 

'"Reedy   v.    Millizen,    155    111.    636,  Grace  v.   Noel   Mill   Co.    (Tenn.)    63 

40  N.  E.  1028.     Describing  too  large  S.  W.  246. 

an   indebtedness   in   a   trustee's   no-  **' Fenner  v.   Tucker,  6  R.   I.   551; 

tice  of  sale  is  not  ground   for  set-  Hoffman  v.  Anthony,  6  R.  I.  282,  75 

ting  the  sale  aside,  unless  done  with  Am.    Dec.   701.      The    reason    given 

a     fraudulent     design.     Kerfoot     v.  by   the   court   is    that   persons    who 

Billings,  160  111.  563,  43  N.  B.  804.  might  desire  to  purchase  the  quan- 

*"  Maxwell  v.  Newton,  65  Wis.  261,  tity  of  land  embraced  in  the  mort- 

27   N.   W.    31;    White  v.    McClellan,  gage    might    not    want    to    buy    the 

62  Md.  347;    Judd  v.   O'Brien,  21  N.  tract    advertised    to    be    sold,    and 

Y.    186;    Can  dee    v.    Burke,    1    Hun,  therefore  might  not  attend  the  sale. 

549;   M'Candia  v.  Billings,  10  N.  D.  "' Schoch    v.     Birdsall.    48    Minn. 

373,    87   N.   W.    1008;    Lee   v.    Clary,  441,  51  N.  W.  382.     The  court  say: 

38   Mich.   223.  "Any     change     in     the     description 

"*  Newman  v.  Jackson,  12  Wheat,  that  would  render  it  uncertain,  ob- 

570;  Reading  v.  Waterman.  46  Mich,  scare,    or   misleading   in   respect   to 

110,     8     N.     W.     691;     Yellowly     v.  what   the   bidder   would   acquire   by 

Beardsley,  76  Miss.  613,  24  So.  973;  his  purchase  would  undoubtedly  be 

Stephenson  v.  January,  49  Mo.  465;  tively    prejudicial.      As    a    general 


793  WHAT   THE   NOTICE   SHOULD    CONTAIN".  [§    1840. 

If  the  real  estate  advertised  is  substantially  different  from  that 
sold  or  from  that  which  the  mortgagee  had  a  right  to  sell,  the  sale  is 
not  a  valid  exercise  of  the  power.  An  advertisement  of  a  sale  of 
land  under  a  power  of  sale  in  a  mortgage  described  four  lots  which 
originally  had  been  included  in  the  mortgage,  but  the  most  valuable 
of  which  had  been  released  therefrom  on  payment  of  three-fifths 
of  the  mortgage  debt.  The  mortgagee's .  attorney  who  published  the 
advertisement  did  not  know  of  the  release.  At  the  time  of  the  sale  the 
released  lot  had  a  house  upon  it  worth  more  than  the  amount  of 
the  original  mortgage  debt.  The  other  lots  which  remained  subject 
to  the  mortgage  were  vacant.  The  mortgage  provided  that  in  case  of 
default  the  mortgagee  might  "sell  the  granted  premises  or  such  por- 
tion thereof  as  may  remain  subject  to  this  mortgage  in  case  of  any 
partial  release  thereof."  The  sale  took  place  at  the  time  advertised. 
The  mortgagee's  attorney  having  discovered  his  mistake,  the  auc- 
tioneer, just  before  the  sale,  announced  to  those  present  that  the 
lot  with  the  house  on  it  had  been  released,  and  proceeded  to  sell  three 
vacant  lots.  It  was  held  that  the  sale  was  not  a  valid  execution 
of  the  power  given  by  the  mortgage,  as  the  real  estate  advertised 
was  substantially  different  from  what  the  mortgagee  sold,  or  had  a 
right  to  sell."' 

Where  it  is  deemed  advantageous  to  sell  a  large  tract  of  land  in  par- 
cels, the  advertisement  should  accurately  describe  the  parcels,  so  that 
intending  purchasers  may  act  intelligently  and  shall  not  be  mislead.**^ 

If  the  sale  embraces  the  whole  of  the  property  mortgaged,  the 
description  should  conform  substantially  to  that  contained  in  the 
mortgage.  A  notice  which  states  nothing  as  to  the  quantity  of 
land  to  be  sold,  and  gives  no  metes  or  bounds,  and  no  information 
whether  it  is  a  village  lot  or  a  farm,  is  insufficient.*"     It  is  usual 

rule     however,    omissions    or    inac-  and   Bell    Silver    &    Copper    Mining 

curacies    not    calculated    to    mislead  Co.    v.    First    Nat.    Bank    of    Butte, 

or  to  work  injury  are  to  be  disre-  156  U.   S.  470,  15  S.   Ct.  440,  where 

garded  "     Stephenson     v.     January,  the  advertisement  follows  the  mort- 

49  Mo    465;  Noland  v.  Bank  of  Lee's  gage;   but  these  cases  make  against 

Summit,  129  Mo.  57,  31  S.  W.  341.  them.     Neither     does     the     case    of 

"'  People's  Savings  Bank  v.  Wun-  Pryor  v.  Baker,  133  Mass.  459,  sup- 

derlich,  178  Mass.  453,  457,  59  N.  E.  port   this    contention;    in    that   case 

1040.     '  "Since     the      advertisement  the    advertisement    described    what 

included     all     the     land     originally  the   defendant   had   a  right    to   sell, 

covered    by    the    mortgagee,    while  what  was  in  fact  sold,  and  nothing 

by     the     terms     of     the     mortgage  more."     Per  Loring,   J. 

all  the  land   over  which  the  mort-  "'Carroll   v.    Hutton,   88  Md.    676, 

gagee    then    had    a    power    of    sale  41  Atl.  1081. 

was      the      land      remaining      after  «» Rathbone  v.  Clarke,  9  Abb.  Pr. 

the   partial   release,   the   defendants  66,  note;   Yellowly  v.  Beardsley,  76 

can  get  no  support  from  cases  like  Miss.  613,  24  So.  973. 
Colcord  v.  Bettinson,  131  Mass.  233, 


§    1841.]       POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS,  794 

and  proper,  besides  describing  the  premises  by  metes  and  bounds, 
to  refer  to  the  book  and  page  of  the  record  of  the  mortgage  deed 
and  to  give  the  date  of  it.  An  advertisement  following  the  de- 
scription of  the  premises  by  metes  and  bounds  contained  in  the 
mortgage,  and  referring  by  book  and  page  to  the  registry  of  deeds, 
and  by  book  and  page  to  a  plan  recorded  in  the  office  of  the  super- 
intendent of  public  lands,  contains  a  sufficient  description  of  the 
property j'*^"  though  this  description  be  imperfect.*^^  If  tlie  premises 
are  sufficiently  described  in  other  respects,  an  error  in  the  reference 
to  the  record  or  to  the  date  would  not,  it  is  conceived,  invalidate  the 
notice.  Even  where  by  statute  references  to  the  record  and  to  the 
date  are  required  to  be  given,  a  notice  referring  correctly  to  the  clerk's 
office  where  the  mortgage  is  recorded,  and  to  the  date  of  the  record,  is 
held  sufficient,  although  it  mistakes  the  number  of  the  book  in  which 
the  record  is  made.^^^ 

A  sale  will  not  be  set  aside  because  the  notice  of  sale  fails  to 
state  in  what  town  the  property  is  situated,  where  the  description  is 
in  other  respects  sufficient  for  its  location  and  identity,  and  the 
notice  is  published  in  the  town  where  the  property  is  situated;  es- 
pecially if  there  is  no  intimation  that  the  property  sold  for  less  than 
its  fair  market  value."*^^ 

§  1841.  Notices  of  distinct  lots  should  be  separate.  Several  mort- 
gages or  deeds  of  trust  having  the  same  parties,  and  in  every  way 
alike  except  in  the  amounts  secured,  should  be  advertised  separately, 
if  they  cover  different  lots  of  land.*^*  But  there  is  no  legal  objection 
to  advertising  the  several  parcels  under  the  several  mortgages  or 
trust  deeds  in  one  notice,  reciting  each  mortgage  or  deed,  and  the 
lands  thereby  conve}^ed.*^^  The  sales  of  the  several  parcels  should 
1)6  made  separately.  If,  however,  the  different  mortgages  are  upon 
the  same  lot,  there  would  seem  to  be  no  objection  to  publishing  them 

*'-"  Stickney    v.    Evans,    127    Massi        *"  Dickerson  v.  Small,  64  Md.  395. 

202.  See  Reeside  v.  Peter,  33  Md.  120. 

''^'Robinson   v.    Amateur   Asso.    14        *'^  Morse   v.    Byam,    55    Mich.    594; 

S.    C.    148;    Loveland    v.    Clark,    11  Marsh    v.    Morton,    75    111.    621.     In 

Colo.  265,  18  Pac.  544.  this   case   notices   under   nine   trust 

*"'-Judd  V.  O'Brien,  21  N.  Y.  186;  deeds  upon  different  lots  v/ere  pub- 
McCammon  v.  Detroit  L.  &  N.  R.  lished  separately,  and  occupied 
Co.  103  Mich.  104,  61  N.  W.  273.  about  three  columns  of  a  daily  pa- 
An  error  in  the  advertisement  in  per.  It  was  objected  that  the  no- 
stating  the  source  of  the  mortga-  tices  should  have  been  consolidated 
gor's  title  is  not  sufficient  to  inval-  into  one,  but  the  court  allowed 
idate  the  sale.  Richardson  v.  costs  for  the  separate  notices. 
Hedges,  150  Ind.  53,  49  N.  E.  822.  *^^  Tyler    v.    Mass.    Mut.    Ins.    Co. 

108  111.   58. 


'^95  AVHAT   THE    NOTICE   SHOULD    COXTAIX.  [§    1841. 

together.''2°  If  the  mortgage  is  upon  several  lots  upon  which  the 
mortgage  debt  is  apportioned  in  specified  amounts,  so  that  it  is  in 
effect  a  separate  mortgage  for  each  lot,  the  notice  of  sale  may  include 
all  the  lots,  yet  it  must  state  the  amount  claimed  to  be  due  on  each 
lot  separately. •'^^ 

But  where  a  mortgage  covering  three  lots  of  land  was  given  to 
secure  the  payment  of  a  note  for  a  certain  sum,  and  the  condition  of 
defeasance  was  that  the  mortgagor  should  pay  that  sum,  one  third  of 
Which  should  be  a  specific  lien  on  each  of  the  three  lots  described, 
releasable  at  any  time  by  the  payment  of  a  third  part  of  said 
amount,  together  with  accrued  interest,  it  was  held  that  this  was  in 
effect  a  separate  mortgage  upon  each  lot  separately,  and  that  a 
notice  of  foreclosure  sale  under  the  power,  stating  only  the  amount 
of  the  entire  debt  claimed  to  be  due,  as  though  the  mortgage  had 
been  for  the  entire  debt  without  apportionment,  was  invalid;  and  a 
sale  of  the  three  lots  together  for  a  gross  sum  was  also  invalid,  and 
the  foreclosure  was  ineffectual.*^^ 

A  description  of  the  property  merely  by  reference  to  a  plat  or 
deed  on  record  has  been  held  sufificient,*^^  though  it  is  probable 
that  such  a  description  would  not  generally  be  held  good.  The 
description  should  be  sufficient  to  apprise  the  mortgagor  and  others 
interested  in  the  land  that  the  land  to  be  sold  is  that  in  which  they 
have  an  interest;  and  sufficient  to  enal)le  those  who  may  wish  to 
purchase  to  locate  and  identify  the  property,  though  a  description 
by  metes  and  bounds  is  not  always  necessary.**^"  When  a  portion  of 
the  land  described  in  the  mortgage  has  been  released  from  the  oper- 
ation of  it,  it  is  desirable  that  the  portion  remaining  which  is  to 
be  sold  should  be  described  by  metes  and  bounds,  with  a  reference 
to  the  mortgage  and  to  the  date  and  record  of  the  release,  rather 
than  that  the  premises  should  be  described  in  the  same  manner  as 

*="  In    Brown    v.    Wentworth,    181  ject  to  the  first  mortgage.     The  sale 

Mass.  49,  a  first  mortgage  embraced  in  form  followed  the  advertisement, 

three  lots.    A  second  mortgage  cov-  The  persons  present  at  the  first  sale 

ered    these    lots    and    three    others,  walked  across  the  road  and  attended 

Foreclosure  sales  under  both  mort-  the  second,  understanding  what  had 

gages  were  advertised  for  the  same  been    done.     The    lots    not    included 

time,  the  sale  under  the  first  mort-  in    the    first    mortgage    brought    a 

gage  as  in  front  of  a  hotel  on  the  fair    price    at    second    sale.     It    was 

premises,  and  that  under  the  second  held  that  the  sale  was  good, 

mortgage  as    in    front    of    a    barn  «' Mason    v.    Goodnow,    41    Minn, 

across    the    road    from    the    hotel.  9.  42   N.   W.   482;    Child  v.   Morgan 

The   sale   under   the    first   mortgage  51  Minn.  116,  52  N.  W.  1127. 

took  place  first,  so  that,  under  the  ^^'^  Child  v.  Morgan,  51  Minn.  116 

second     mortgage,     there     remained  52   N.  W.    1127. 

only  three  lots  to  sell,  although  the  «^  Fitzpatrick  v.  Fitzpatrick,  6  R. 

advertisement     had      announced      a  I.  64,  75  Am.  Dec.  681. 

sale  of  six  lots,  the  first  three  sub-  *^'' Jackson  v.  Harris,  3  Cow.  241. 


§§    1842,    1843.]    POWER   OF    SALE    MORTGAGES    AND   TRUST    DEEDS.    79G 

they  are  described  in  the  mortgage  with  such  reference  to  the  re- 
lease made.  But  a  notice  containing  only  a  reference  to  the  ex- 
cepted portion  released  is  good.*^^  When,  however,  there  have  been 
many  releases,  so  that  the  part  to  be  sold  would  not  be  recognized 
at  all  by  the  description  given  in  the  mortgage,  a  description  of  the 
premises  to  be  sold  as  they  actually  are  is  all  the  more  desirable; 
and  a  reference  to  the  releases,  except  generally,  or  as  being  the  prop- 
erty not  before  released  of  record  from  the  operation  of  the  mort- 
gage, is  not  important.  If  the  description  of  the  premises  follows 
that  in  the  mortgage,  this  is  generally  sufficient;**'-  and  a  change  in 
the  street  number  of  the  building  since  the  mortgage  was  made  doe= 
not  invalidate  the  noticc*^^ 

§  1842.  Where  the  advertisement  ^ave  only  a  short  and  incom- 
plete description  of  the  property,  and  did  not  state  the  name  of 
the  mortgagee  or  of  the  assignee  of  the  mortgage,  and  was  signed 
only  "per  order  of  the  assignee  of  said  mortgage,"  and  the  place  of 
sale  was  remote  from  the  premises  to  be  sold,  and  the  notice  was 
ineffectual  to  attract  purchasers,  the  sale  was  held  invalid,  and  the 
mortgagor  allowed  to  redeem.*''*  '"With  such  a  notice,"  say  the 
court,  "and  under  such  circumstances,  a  mortgagee  who  is  author- 
ized to  sell  only  at  auction,  finding  himself  to  be  the  only  bidder  at 
the  sale,  cannot  in  good  faith  proceed  with  the  sale  and  purchase 
tlie  property  for  himself  at  his  own  price,  and  insist  upon  such  a 
purchase  as  precluding  the  mortgagor  from  all  right  to  redeem  the 
property." 

§1843.     The  notice  must  show  who  orders  the  sale;   and  if  it 

omits  to  identify  the  holder  of  the  mortgage,  and  is  signed  by  no 
one,  although  it  states  the  names  of  the  mortgagor  and  mortgagee, 
and  refers  to  the  book  and  page  of  the  record  of  the  mortgage,  a  sals 
under  it  will  be  iiivalid.**^^  In  Ehode  Island,  however,  it  has  been  held 
that  an  advertisement  is  sufficient  although  the  mortgagee  was  not 
named  in  the  notice,  and  that  was  signed  only  in  the  words  "liy 
order  of  the  mortgagee."*'''^  If  the  notice  correctly  states  the  place 
of  record,  though  it  gives  neither  the  name  of  the  mortgagee  nor  of 
the  mortgagor,  nor  of  any  one  connected  with  the  mortgagor,  it  is 

"^Wilson  V.   Paige,  76  Me.   279.  *" Montague   v.    Dawes,    14    Allen 

^'^Loveland  v.  Clark,  11  Colo.  265,  369. 

8  Pac.  Rep.  544;   Reading  v.  Water-  ■"''Roche  v.  Farnsworth,  106  Mass. 

man,    46    Mich.    110,    8    N.    W.    691;  509. 

Miller   v.    Lanham,   35   Neb.    886,   53  *°"  Fitzpatrick  v.   Fitzpatrick,  6  R. 

N.  W.   1010.  I.  64,  75  Am.  Dec.  681;   Woonsocket 

*^^  Model   Lodging  House   Asso.   v.  Inst,    for    Savings    v.    Am.    Worsted 

Boston,  114  Mass.  133.  Co.  13  R.  I.  255. 


797  WHAT    THE    NOTICE   SHOULD    CONTAIN.  [§    1844. 

sufficient.*"  But  the  same  court  lield  a  notice  to  be  fatally  defective 
in  which  the  reference  to  the  record  was  not  correctly  made,  and 
neither  the  name  of  the  mortgagor  nor  of  the  mortgagee  nor  of  the 
auctioneer  was  given,  and  the  notice  was  not  signed  by  any  one.*''* 
Under  a  statute  requiring  that  the  notice  shall  specify  the  name  of 
the  mortgagee,  it  is  sufficient  that  the  notice  is  signed  by  him  and 
contains  an  accurate  reference  to  the  record.*''^  If  there  are  several 
owners  of  the  mortgage,  the  notice  should  be  signed  by  all  who  ap- 
pear of  record  to  be  owners  of  it.'''^  Upon  the  death  of  the  mort- 
gagee, in  the  absence  of  any  bequest  of  the  mortgage,  the  legal 
title  vests  in  his  executor  or  administrator;  and  a  notice  signed  by 
the  executor  or  administrator,  with  the  word  "executor"  or  "ad- 
ministrator" affixed,  sufficiently  discloses  his  interest  and  the  source 
of  his  title.*" 

In  a  notice  of  sale  by  a  mortgagee  it  is  not  necessary  to  set  forth 
an  assignment  of  the  mortgage  made  by  him,  and  a  reassignment  to 
him  by  the  assignee.*^^ 

A  notice  which  does  not  give  correctly  the  name  of  the  mort- 
gagor, when  a  statute  provides  that  the  notice  shall  specify  the 
names  of  the  mortgagor  and  mortgagee,  is  insufficient,  and  a  sale 
under  it  is  invalid.*"  But  a  notice  which  in  reciting  the  name  of 
the  mortgagee  omits  the  initial  of  his  middle  name,  but  the  notice 
at  the  end  is  properly  signed  by  the  mortgagee  with  his  full  name, 
is  a  valid  notice,  and  affords  no  groimd  for  setting  aside  a  sale 
under  it.*'^* 

^  1844.  The  notice  of  sale  need  not  name  the  owners  of  the 
equity  of  redemption,  or  the  subsequent  mortgagees,  or  others  who 
have  acquired  an  interest  in  the  estate  from  the  mortgagor  since  the 
mortgagee's  title  accrued.*"  It  is  sufficient  if  the  notice  correctly 
sets  out  the  place  of  record  of  the  mortgage.     Any  one  desiring  to 

*"Colgan   v    McNamara,   16   R.    I.  365;  Dyer  v.  Shurtleff,  112  Mass.  165, 

554   18  Atl    157  17    Am.    Rep.    77;    Silva   v.    Turner, 

"'« Hoffman  v.  Anthony,  6  R.  I.  282,  166    Mass.    407,    44    N.    E.    532(.     In 

75  Am.  Dec.  701.  Roche  v.  Farnsworth,  106  Mass.  509, 

*"■■' Candee  v.  Burke,  1  Hun,  546.  the    omission    to    name    those    who 

*™  Dunning  v.  McDonald,  54  Minn,  had   acquired   interest   in  the   prop- 

1,  55  N.  W.  864.  erty    from    the    mortgagor    was    er- 

'  ^'i  Bridenbecker      v.      Prescott,      3  roneously  alluded  to  as  one  of  the 

Hun,   419.  defects     of     the     notice,     but     the 

^"  White  V.  McClellan,  62  Md.  347.  decision    does    not   rest    upon    that; 

^'^^  Lee    V.     Clary,     38    Mich.    223;  the    fatal    defect    there    being    the 

Thompson   v.    Commissioner,    79    N.  omission    to    name,    either    in    the 

Y.  54.  body    of   the    notice   or   in    the   sig- 

"■^  White  V.  McClellan,  62  Md.  347  nature,  the  assignee  of  the  mortgage 

*'^  Learned    v.    Foster,    117    Mass.  who  made  the  sale. 


§§  1845,  1846.]   POWER  of  sale  mortgages  and  trust  deeds.  798 

know  the  names  of  the  mortgagor,  the  mortgagee,  and  others  con- 
nected with  the  mortgage  can  learn  them  from  the  record.*'" 

§  1845.  It  must  specify  definitely  the  time  and  place  of  sale.*"^ 
A  notice  of  a  sale  advertised  to  take  place  in  February,  1858,  though 
the  sale  was  intended  to  be  made  and  was  actually  made  in  1859, 
was  fatally  defective.*'^  If  there  be  an  established  usage  that  such 
sales  shall  be  at  a  particular  place,  as  for  instance,  the  rotunda  of 
the  city  hall,  a  notice  of  a  sale  to  l^e  made  at  the  city  hall  would  be 
sufficient.*'"  Under  the  Minnesota  statute  for  sale  by  advertisement, 
a  notice  of  sale  appointed  for  the  7th  day  of  November,  1859,  with- 
out naming  any  hour  of  sale,  does  not  necessarily  render  the  sale 
invalid.  It  is  an  irregularity  which  is  not  allowed  to  overthrow  a 
sale,  unless  seasonable  application  be  made,  and  certainly  not  after 
a  lapse  of  twelve  years  after  the  time  of  sale.**''  A  sale  advertised 
to  be  made  at  "the  hour  of  eleven  o'clock"  may  be  made  at  any 
time  between  eleven  and  twelve  o'clock  of  the  day  named.  For  the 
purposes  of  the  sale,  it  is  to  be  considered  eleven  o'clock  until  it  is 
twelve  o'clock.**^  But  a  valid  sale  cannot  be  made  before  the  hour 
advertised.  Thus,  if  the  hour  of  sale  stated  in  the  notice  is  eleven 
o'clock,  a  sale  fifteen  minutes  before  that  hour  is  void.**^ 

The  record  of  a  certificate  of  sale  stating  that  the  sale  was  had 
at  the  time  stated  in  the  notice,  and  also  at  another  time,  does  not 
estop  the  mortgagor  from  showing  the  actual  time  of  sale. 

§  1846.  If  the  power  makes  no  provision  as  to  the  time,  place, 
or  terms  of  sale,  or  the  manner  of  advertising  it,  and  no  statute 
regulates  the  proceedings,  the  mortgagee  or  trustee  may  exercise  his 
discretion  in  these  matters,  and  if  fairly  exercised  the  sale  will  be 
valid  ;**^  though  it  would  be  a  safe  and  prudent  course  to  pursue  the 

^'^Colgan   v.    McNamara,   16   R.    I.  208.  47  N.  W.  788.     "Reasonably  ac- 

554,  18  Atl.  157.     In  Hoffman  v.  An-  curate  time-pieces  vary  a  few  min- 

thony,  6  R.  I.  282,  75  Am.  Dec.  701,  utes    in    the    time;    and    a    sale    in 

the  notice  was  defective  in  not  cor-  which  there  should  be  a  departure 

rectly  referring  to  the  record.  from    the    absolutely    correct    time, 

*•'  Burnet   v.    Denniston,    5    Johns,  by  reason   of  such   variance,  would 

Ch.  35.  probably  be  good,  for  persons  pur- 

^•^Fenner  v.  Tucker,  6  R.  I.  551.  posing  to   attend    such   a    sale    may 

*'^  Hornby  v.  Cramer,  12  How.  Pr.  be    supposed    to    take    into    account 

490.  the    fact    that    time-pieces     practi- 

'«'' Menard  v.  Crowe,  20  Minn.  448;  cally  accurate  will  vary  a  few  min- 

Butterfield    v.    Farnham,    19    Minn.  utes.     It   is   not   found    that    selling 

85.  before  the  hour,    in   this   case,   was 

^"McGovern    v.     Union     Mut.     L.  by  reason  of  the  ordinary  variance 

Ins.    Co.    109    111.    151;     Lathrop    v.  in  time-pieces."     Per  Gilfillan,   C.J. 

Tracy,    24    Colo.    382,  .  51    Pac.    486;  ^-^  Olcott  v.   Bynum,   17   Wall.    44; 

Lester    v.    Citizens'    Sav.    Bank,    17  Meier   v.   Meier,   105   Mo.   411,   16   S. 

R.   I.   88,  20  Atl.   231.  W.     223;     Greenwood     v.     Fontaine 

*"  Richards  v.  Finnegan,  45  Minn.  (Tex.),  34  S.  W.  826. 


799  WHAT    THE    NOTICE   SHOULD    COXTAIX.    [§§    1847,    1848. 

mode  ordinarily  provided  for  in  judicial  sales/"  and  a  court  of  equity 
would  enforce  the  power  according  to  its  general  practice.  But  if 
the  mortgage  provides  that  the  mortgagee  shall  advertise  the  time, 
place  and  terms  of  sale  in  a  prescribed  newspaper,  this  is  in  effect 
an  authority  to  him  to  fix  the  time,  place,  and  terms  of  sale  at  his 
discretion.**^  If  the  deed  or  mortgage  provide  that  tlie  sale  shall  be 
made  on  or  near  the  premises,  or  at  a  particular  place  in  a  town  or 
city  named,  a  sale  at  any  other  place  would  not  be  in  pursuance  of 
the  power,  and  would  be  invalid.**"  But  if  it  merely  provide  that 
the  sale  shall  be  in  a  certain  town  or  city,  the  trustee  or  mortgagee 
mdy  cause  it  to  be  made  at  any  usual  or  convenient  place, 

§  1847.  Sale  fixed  for  Sunday  or  a  legal  holiday. — Proceedings 
to  foreclose  a  mortgage  are  not  void  because  the  day  specified  in 
the  advertisement  happens  on  a  Sunday.  The  court  in  a  New  York 
case  thought  that  a  sale  on  Sunday  might  not  be  prohibited  by  the 
statutes  of  that  State;  but  in  that  case,  the  mistake  being  discovered 
before  the  day  of  sale,  a  postponement  was  made  and  advertised 
before  the  day  fixed  for  the  sale;  and  the  sale  on  the  following  day 
was  held  to  be  regular.*^^ 

A  valid  sale  may  be  made  on  the  twenty-second  day  of  February, 
though  it  is  declared  by  statute  to  be  a  legal  holiday,  the  transaction 
of  secular  business  on  that  day  not  being  prohibited  by  the  statute.**^ 

§  1848.  Sale  at  ruins  of  court-house. — Under  a  deed  of  trust 
made  before  the  destruction  of  a  city  court-house,  providing  that  any 
sale  under  it  should  be  had  at  the  north  door  of  the  court-house,  a 
sale  after  the  destruction  of  the  court-house  may  be  made  on  the 
ground  immediately  in  front  of  the  place  where  the  north  door  was 
at  the  time  of  the  execution  of  the  deed.**"  But  such  a  provision  in 
a  mortgage  made  before  the  destruction  of  the  court-house  does  not 
restrict  the  sale  to  the  site  of  the  court-house  then  in  existence,  but 
after  its  destruction  the  sale  may  be  advertised  and  made  at  the  north 
door  of  the  building  then  in  use  as  a  court-house.*''* 

After  such  a  sale  has  been  had,  and  a  deed  is  given,  in  which  it  is 

*"  Calloway   v.    People's   Bank,    54  27  Am.  Dec.  117;  Westgate  v.  Hand- 

Ga.  441.  lin,  7  How.  Pr.  372. 

'"■'Calloway   v.    People's   Bank,    54  ''*'*  Stewart  v.   Brown    (Mo.),   16   S. 

Ga.   441.  W.   389. 

*'"  See  Rice  v.  Brown,  77  111.  549;  *''■' Chandler  v.  White.  84  111.   435; 

Fry    v.    Old    Dominion    Build.    &    L.  Waller  v.  Arnold.  71  111.  350. 

Ass.  48  W.  Va.  61;  Beitel  v.  Dobbin  ^■"' Alden    v.     Goldie,    82    III.    581; 

(Tex.),    44    S.    W.    299;    Chandler   v.  Wilhelm    v.    Schmidt,    84    111.    183; 

Peters    (Tex.),  44  S.   W.   867.  Riggs   v.    Owen,   120   Mo.   176,   25   S. 

^^'Sayles   v.    Smith,    12    Wend.    57,  W.    356. 


§    1849.]       POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  800 

recited  that  the  sale  was  in  due  form,  and  according  to  the  terms  of 
the  deed,  it  is  held  that  a  subsequent  purchaser  is  not  bound  to  look 
beyond  the  recitals  of  the  deed.*"^ 

§  1849.  "Under  a  deed  of  trust  providing  that  the  sale  shall  take 
place  at  the  "court-house  door,"  a  sale  made  at  the  door  of  a  building 
temporarily  used  as  a  court-house,  while  repairs  are  making  upon 
the  court-house  building,  is  a  sufficient  compliance  with  the  terms 
of  the  deed.*^^  Where  a  deed  of  trust,  made  after  the  destruction  by 
fire  of  the  court-house  in  Chicago,  provided  that  the  sale  should  be 
made  "at  the  north  door  of  the  court-house  in  the  city  of  Chicago," 
and  the  county  courts  were  then  held  in  a  portion  of  a  building  for- 
merly a  court-house,  but  which  had  two  north  doors,  an  advertisement 
of  a  sale  to  be  made  at  one  of  those  doors  was  held  to  have  been  ad- 
vertised to  be  made  at  the  place  designated  in  the  deed.*'*^  If  the 
court-house  be  removed  after  the  execution  of  the  mortgage,  and  es- 
tablished at  a  different  place  in  the  same  town,  the  sale  must  be  at  the 
new  court-house,  and  not  at  the  building  formerly  used.*^*  A  trust 
deed  requiring  the  sale  under  it  to  be  made  at  the  court-house  of 
the  county  is  properly  executed  by  a  sale  at  the  court-house  of  a  newly- 
organized  county  which  includes  the  land  sold.*^^ 

A  notice  of  sale  to  be  held  at  the  front  door  of  the  court-house  in 
a  village  named,  when  in  fact  there  is  no  court-house,  nor  any  place- 
known  as  the  court-house,  in  such  village,  is  void.*'^®  Where,  at  the 
time  a  mortgage  was  made,  there  was  no  court-house  in  the  county 
named,  the  courts  being  held  in  buildings  hired  for  the  purpose,  but 
a  new  court-house  was  in  process  of  building,  a  sale  is  properly  made 
at  the  door  of  the  unfinished  court-house.*®^ 

Where  it  was  provided  that  the  sale  under  a  deed  of  trust  should 
be  made  at  the  "east  court-house  door,"  and  there  was  at  the  time 
the  deed  was  executed  a  court-house  with  an  east  door,  but  this  court- 
house was  afterwards  partly  destroyed,  and  abandoned  as  such,  and 
at  the  time  of  the  sale  the  circuit  court  was  held  in  one  building 
and  the  county  and  probate  courts  were  held  in  another,  each  of 

"'  Long    V.    Rogers,    6    Biss.    416t,  52.     See  further,  as  to  what  is  the 

per    Blodgett,    J.:     "I    am    inclined  "court-house      door,"      Maloney      v. 

to  think  that  would  be  a  good  point  Webb,  112  Mo.  575,  20  S.  W.  283. 

if  made  at  the   time  the  sale  took  *"' Gregory  v.    Clarke,   75   111.   485; 

place.     It  would  be  good  ground  for  Alden  v.  Goldie,  82  111.  581. 

stopping  the  sale  before  rights   in-  *'■'*  Napton  v.  Hurt,  70  Mo.  497. 

tervene;   but  I  doubt  if  a  purchaser  *°' Williams  v.  Pouns,  48  Tex.  141. 

would  be  absolutely  obliged  to  take  ^°^  Bottineau   v.    ^tna   L.    Ins.    Co. 

notice   that   the   court-house   was   a  31  Minn.  125,  16  N.  W.  849. 

ruin."  "'Davis   v.    Hess,   103   Mo.   31,   15 

^'■'-  Hambright  v.  Brockman,  59  Mo.  S.  W.  324. 


801  WHAT    THE    NOTICE   SHOULD    CONTAIN.  [§    1849. 

which  was  far  removed  from  the  other,  and  from  the  abandoned 
eoui-t-hoiise,  the  trustee  gave  notice  that  he  would  sell  the  property 
"at  the  front  door  of  the  court-house,"  and  he  made  the  sale  at  the 
north  door,  that  led  upstairs  to  the  part  of  the  building  occupied  by 
the  circuit  court,  though  said  court  was  not  in  session  at  the  time. 
It  appeared  that  persons  who  would  have  bid  for  the  property, 
had  it  been  sold  at  the  proper  place,  refused  to  attend  the  sale 
because  of  the  doubt  entertained  of  its  legality,  and  that  the  prop- 
erty sold  for  less  than  one-half  of  its  value.  It  was  held  that  a 
sale  at  the  door  of  the  court-house  existing  at  the  time  of  the  sale 
would  be  valid,  but  the  complainants  were  entitled  to  a  trial  of  the 
issue  whether,  at  the  time  of  the  sale,  there  was  more  than  one  place 
in  the  city  designated  as  "the  court-house,"  at  which  sales  of  such 
character  were  made.    The  sale  was  held  invalid.*''® 

If  the  mortgage  or  deed  of  trust  specifies  no  place  of  sale,  tha 
sale  may  be  made  at  the  court-house  door,  if  by  custom  that  is  the 
place  where  sucK  sales  are  usually  made.  In  such  case  the  place  of 
sale  is  left  to  the  reasonable  discretion  of  the  mortgagee  or  trustee.*'^'' 
On  a  similar  principle  a  requirement  that  a  sale  be  made  at  a  court- 
house door  in  a  certain  county  gives  the  trustee  discretion  to  select 
which  court-house  he  will  choose  when  there  are  tAvo  in  the  county.^"'' 

*"*  Stewart  v.  Brown,  112  Mo.  171,  out  with  reasonable  certainty,  the 
20  S.  W.  451.  Sherwood,  C.  J.,  con-  party  entitled  to  resort  to  the  se- 
curred  in  the  result  on  the  ground  curity  should  institute  foreclosure 
that  the  circumstances  of  the  sale  proceedings  in  court, 
were  such  as  should  have  induced  The  majority  of  the  court  seemed 
the  trustee  to  refrain  from  acting  to  be  of  the  opinion  that  too  much 
regardless  of  the  question  of  local-  importance  should  not  be  given  to 
ity.  In  his  opinion,  however,  the  the  designation  of  the  particular 
rule  declared  in  Hambright  v.  door;  and  that  the  word  "court- 
Brockman,  59  Mo.  52,  followed  after-  house"  should  be  given  more  prom- 
wards  in  Napton  v.  Hurt,  70  Mo.  inence,  and  made  the  controlling 
497,  established  a  rule  of  property  feature;  and  that  the  parties  intend- 
which  should  not  be  lightly  depart-  ed  that  the  sale  should  occur  at  the 
ed  from.  Black  and  Gontt,  JJ.,  door  of  the  court-house,  without  re- 
concurred  in  the  result  on  the  gard  to  the  change  in  location,  and 
ground  that  the  sale  should  have  without  regard  to  whether  the  new 
been  made  at  the  old  court-house,  court-house  had  a  door  correspond- 
for  by  the  power  the  place  desig-  ing  to  the  particular  door  men- 
nated  for  the  sale  was  the  "east  tioned  or  not;  citing  as  sustaining 
court-house  door,"  and  this  descrip-  this  view  the  cases  of  Alden  v.  Gol- 
tion  only  applied  to  the  court-house  die,  82  111.  581;  V/ilhelm  v.  Schmidt, 
which  had  been  partially  destroyed.  84  111.  183;  Williams  v.  Pouns,  48 
This  was  the  ground  of  the  decis-  Tex.  141;  Hickey  v.  Behrens,  75  Tex. 
ion  in  Division  No.  1  of  the  Su-  488,  12  S.  W.  679.  To  same  effect 
preme  Court  of  the  State  in  this  see  Martin  v.  Earth,  4  Colo.  App. 
same  case.     Stewart  v.  Brown  (Mo.),  346,  36  Pac.  72. 

16    S.     W.     389.     Barclay,    J.,    con-  •'■"'  Hess  v.  Dean,  66  Tex.  663,  2  S. 

curred  in  the  result  on  the  ground  W.  727. 

that  the  sale  could  not  be  made  at  ■■^«' Grav  v.  Worst,  129  Mo.  122,  31 

the  circuit  court  building,  and  that  §.  W.  585. 
the  place  of  sale  not  being  pointed 


§8  1849a,  1850.]  power  of  sale  mortgages  and  trust  deeds.  80:3 

§  1849a.  Sale  in  newly  incorporated  town  or  county. — Where 
a  mortgage  was  executed  of  land  in  the  south  part  of  Maiden,  and 
this  part  of  that  town  was  afterwards  incorporated  as  the  town  of 
Everett,  the  same  mortgagor  after  such  incorporation  executed  an- 
other mortgage  of  the  same  land  to  the  same  mortgagee,  describing 
it,  as  in  the  first  mortgage,  as  situated  in  the  south  part  of  Maiden, 
though  the  mortgagor  then  resided  upon  the  premises  within  the 
limits  of  Everett.  The  mortgage  provided  for  a  sale  of  the  premises 
"at  public  auction  in  said  Maiden."  The  notice  by  publication  wa^ 
given  of  a  sale  to  take  place  "on  the  premises  described  in  the 
mortgage  deed,  namely,  a  lot  of  land  situated  in  the  south  part  of 
Maiden;"  and  described  the  lot  by  metes  and  bounds  as  situated  on 
a  certain  street;  and  also  described  the  mortgage  by  date,  and  by 
reference  to  the  book  and  page  in  the  registry  where  it  was  recorded. 
In  an  action  by  the  mortgagor,  after  a  sale  under  such  notice,  claim- 
ing that  the  notice  was  insufficient,  and  that  the  sale  was  made  at  a 
place  not  authorized,  it  was  held  the  notice  was  good  and  the  sale 
was  properly  made  upon  the  premises.  The  mortgage  referred  to 
in  the  notice  afforded  means  of  ascertaining  the  exact  locality  of 
the  mortgaged  land.  The  fact  that  this  had  been  incorporated  into 
the  town  of  Everett  was  immaterial,  though  this  fact  must  be  pre- 
sumed to  have  been  known  to  the  mortgagor.^*^ 

Where,  at  the  time  a  mortgage  was  given,  foreclosure  sales  were 
required  by  law  to  be  made  in  the  county  where  the  land  is  situated, 
and  after  the  making  of  the  mortgage  the  portion  of  the  county  in 
which  the  mortgaged  land  is  situated  is  legally  annexed  to  another 
county,  a  sale  made  on  the  premises  fulfils  the  requirement.^''^' 

A  trust  deed  required  a  sale  to  be  made  at  the  county  seat,  and 
before  the  sale  took  place  the  county  was  divided  and  two  new  county 
seats  were  chosen.  Under  these  circumstances  the  sale  should  have 
been  made  either  at  the  original  county  seat  or  at  the  county  seat 
of  the  part  including  the  lands  covered  by  the  trust  deed.  A  sale  at  the 
new  county  seat  of  the  sub-division  where  none  of  the  mortgaged  lands 
were  situated,  was  void.^''^ 

§  1850.  Sale  at  city  hall. — A  notice  of  a  sale  to  be  made  at  the 
city  hall  in  the  city  of  New  York  was  held  to  specify  the  place  of 
sale  with  sufficient  definiteness,  inasmuch  as  by  common  usage  the 
rotunda  in  the  city  hall   proper  is   the  established   place  for   such 

^"^Colcord  V  Bettinson,  131  Mass.  =<«  Durrell  v.  Farwell  (Tex.)»  27 
233.  S.  W.  795. 

=°2  Chilton  v.   Brooks,   71   Md.    445, 
18  Atl.  868. 


803  WHAT  THE   XOTICE  SHOULD   CONTAIN.    [§§    1851,   1852. 

sales/'"*  It  was  said  in  tliis  case,  however,  that  except  for  such  usage 
the  notice  would  be  too  indefinite,  as  all  the  buildings  used  for  hold- 
ing courts  within  the  Park  are  deemed  in  law  the  city  hall.  A 
notice  which  designates  the  place  of  sale  as  "at  the  court-house  in 
the  city  of  St.  Paul"  is  sufficient  to  uphold  the  sale,  in  tbe  absenc<? 
of  any  evidence  of  fraud  or  unfairness,  or  actual  or  probable  in- 
jury.=«= 

If  the  place  of  sale  be  left  to  the  discretion  of  the  trustee  or  mort- 
gagee, he  may  make  the  sale  at  a  place  outside  the  State  in  which 
the  mortgaged  lands  are  situated ;  and  if  he  acts  with  fairness,  and 
the  parties  interested  in  the  property  are  not  prejudiced  therebv, 
the  sale  will  be  sustained. °°'' 

§  1851.  If  a  mistake  be  made  in  the  advertisement,  such  as 
would  render  a  sale  under  it  irregular  or  voidable,  the  mortgagee 
may  waive  the  proceedings  and  advertise  anew;  or  he  may  avail 
himself  of  his  right  to  seek  his  remedy  by  foreclosure  in  a  court  of 
chancery.^^'^  Where  the  mistake  was  that  the  day  of  sale  fell  on  Sun- 
day, and  the  now  notice  fixing  a  different  day  for  the  sale  claimed 
a  different  amount  as  due,  it  was  held  that  there  was  nothing  in  the 
proceedings  that  enabled  the  mortgagor  to  avoid  the  sale.^"^  A  cleri- 
cal mistake  in  the  notice  of  sale  will  not  invalidate  the  title  of  a 
bona  fide  purchaser  who  had  no  notice  of  the  mistake,  and  was  in 
no  way  responsible  for  it.^^°^  The  omission  of  the  words  "will  be 
sold"  when  other  recitals  in  the  notice  show  that  a  sale  is  meant 
does  not  invalidate  the  notice.^^" 

§  1852.  Any  error  in  the  notice  of  sale  which  would  naturally 
mislead  the  public,  ,or  deter  persons  from  attending  the  sale  and  bid- 
ding, will  render  the  sale  irregular  and  void.  Such  would  be  the  ef- 
fect of  an  erroneous  statement  that  the  premises  would  be  sold  for 
default  of  three  mortgages  when  in  fact  there  were  but  two,  the 
third  being  upon  other  land  f^^  and  such  would  be  the  effect  of  a  no- 

=»"  Hornby    v.     Cramer,     12     How.  '""  Nau    v.    Brunette,    79   "Wis.    664, 

Pr.   490.  48  N.  W.  649. 

""=  Golcher    v.    Brisbin,    20    Minn.  ^'^  Burnet   v.    Denniston,    5    Johns. 

453;    Thorwarth    v.    Armstrong,    20  Ch.  35.     See,  also,  Hubbell  v.  Sibley. 

Minn.  464.  5  Lans.  51,  50  N.  Y.  468;   Pearson  v. 

^'^  Ingle  V.  Jones,  43  Iowa,  286.  Gooch,   69   N.    H.    208,    40    Atl.    390; 

'»'  Atwater      v.      Kinman,      Harr.  Very   v.    Russell,    65    N.    H.    646,    23 

(Mich.)  243.  Atl.  522;  Briggs  v.  Briggs,  135  Mass. 

^°*  Banning  v.  Armstrong,  7  Minn.  306;    Clark    v.    Simmons,    150    Mass. 

46.  357,  23  N.  E.   108;    Hoffman  v.   An- 

='"' Mitchell    V.     Nodaway    County,  thony,  6  R.  I.  282;   Fenner  v.  Tuck- 

80  Mo.  257.  er,  6  R.  I.  551;  Equitable  Trust  Co. 

V.  Fisher,  106  111.  189. 


§    1853.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  80-1 

tice  of  sale  subject  to  prior  incumbrances,  when  the  records  showed 
the  existence  of  a  prior  mortgage,  which  had  in  fact  been  paid,  but 
not  discharged.^^^ 

A  change  in  the  time  appointed  for  the  sale  after  notice  has  once 
been  given,  if  the  mortgagor  is  thereby  mislead  to  his  prejudice, 
avoids  the  sale  though  the  notice  was  published  for  the  requisite 
length  of  time  after  the  change.^^^  When  a  sale  is  adjourned  to  a 
future  day,  but  the  notice  of  it  as  published  is  for  a  different  day, 
the  sale  will  be  void.^"  Such  also  may  be  the  effect  of  an  advertise- 
ment of  sale  in  which  the  day  of  the  Aveek  and  day  of  the  month 
fixed  for  it  are  not  coincident  ;^^^  or  one  in  which  the  sale  was  by 
mistake  fixed  for  the  wrong  year.^^"  But  where  the  advertisement 
stated  the  day  of  the  month  correctly,  but  gave  the  wrong  day  of 
the  week,  and  the  mistake  was  corrected  in  the  notice  published  the 
day  before  the  sale,  there  being  no  evidence  of  any  intention  to  mis- 
lead, a  bill  in  equity  to  set  aside  the  sale  for  irregularity  was  dis- 
missed.^^''^ 

Where  a  notice  of  sale  under  a  deed  of  trust  described  three  notes 
secured  by  it,  one  of  them  not  being  due,  and  recited  that  the  trus- 
tee had  been  called  upon  to  sell  the  property  for  the  payment  of  two 
of  them,  there  is  no  implication  that  the  trustee  intended  to  sell  for 
the  payment  of  all  of  the  notes,  and  the  notice  is  not  open  to  objec- 
tion.^^® A  notice  is  not  objectionable  as  misleading  for  the  reason 
that  it  does  not  mention  that  all  the  notes  have  been  paid  but  one, 
when  it  recites  in  general  terms  that  default  had  been  made.^^° 

And  error  in  stating  the  amount  of  an  attorney's  fee  stipulated  for 
in  the  mortgage  will  not,  in  the  absence  of  fraud  or  prejudice  to  the 
owner  of  the  land,  invalidate  the  sale.^^° 

§  1853.  Sale  of  equity  of  redemption. — A  power  of  sale  in  a 
first  mortgage  which  authorizes  the  mortgagee  to  advertise  and  sell 
at  auction  the  mortgaged  premises,  including  all  equity  of  redemp- 
tion of  the  mortgagor,  gives  no  authority  to  sell  the  equity  of  re- 
demption alone;  and  if  the  advertisement  states  only  that  the  equity 
of  redemption  will  be  sold,  it  is  insufficient,  and  the  sale  under  it  is 
invalid.  Any  one  wishing  to  purchase  could  only  infer  from  the 
advertisement  that  he  could  buy  an  estate  on  which  the  incumbrance 

'*'-' Pearson  v.  Gooch,  69  N.  H.  208,  ""  Fenner  v.  Tucker,  6  R.  I.  551. 

40  Atl.  390.  ='"  Chandler  v.   Cook,  2  McArthur, 

"^  Dana    v.    Farrington,    4    Minn.     176. 

433.  ''"'  Tooke  v.  Newman,  75  111.  215. 

'^•^  Miller  v.  Hull.  4  Den.  104.  '^''^  Bush  v.  Sherman,  80  111.  160. 

"'  Calloway  v.  People's  Bank,  54  ""  Swenson  v.  Halberg,  1  Fed.  444. 
Ga.  441,  450. 


805  WHAT    THE    NOTICE   SHOULD    CONTAIN.  [§    1854. 

would  continue/'-^  But  an  advertisement  by  a  second  mortgagee  of 
"all  the  right,  title,  interest,  and  estate  which,  by  virtue  of  the 
power  contained  in  said  mortgage  and  the  assignments  thereof,  I 
have  the  right  to  sell,  in  and  to"  the  mortgaged  premises,  is  not  de- 
fective, though  the  power  was  to  sell  the  granted  premises  subject 
to  a  prior  mortgage.  The  legal  effect  of  the  advertisement  is  the 
same  as  if  the  language  of  the  mortgage  had  been  used,  and  covild 
mislead  no  one.^^- 

On  the  other  hand,  the  mortgagee  cannot  sell  a  greater  interest 
than  his  mortgage  gives  him  authority  to  sell.  Holding  a  junior 
mortgage,  he  cannot  sell  the  entire  estate  free  from  incumbrances, 
but  he  must  sell  subject  to  the  incumbrances  having  precedence  of 
his  mortgage.^^^  He  cannot  sell  the  entire  estate  as  unincumbered, 
although  the  auctioneer  at  the  sale  states  the  existence  of  the  prior 
mortgage,  and  says  it  may  remain  at  the  option  of  the  purchaser, 
and  the  deed  delivered  to  the  purchaser  also  states  that  he  assumes 
and  agrees  to  pay  the  first  mortgage  as  part  of  the  consideration. 
The  mortgagee  can  sell  under  the  power  only  what  was  conveyed 
to  him,  namely,  an  equity  of  redemption.^-*  The  consent  of  the  prior 
incumbrancers  to  such  a  sale  would  bind  them,  but  would  not  make 
the  sale  valid  as  against  the  owner  of  the  equity  of  redemption.^-^' 
The  latter,  however,  might  affirm  such  a  sale,  and  he  would  affirm 
it  by  receiving  any  surplus  there  might  be,  or  by  bringing  suit  for 
such  surplus.''^-*' 

§  1854.  Unimportant  amissions. — If  the  notice  contain  such  facts 
as  reasonably  apprise  the  public  of  the  time,  place  and  terms  of  sale, 
and  describes  the  property  sufficienth^  mere  omissions  or  inaccura- 
cies not  calculated  to  mislead  any  one  are  not  to  be  regarded ;  as  where 
a  notice  stated  that  the  property  would  be  sold  for  cash  at  the  court- 

521  Fowle  v.  Merrill,  10  Allen,  350;  not  affect  the  mortgagor's  right  to 

Donohue    v.    Chase,    130    Mass.    137,  redeem,     or    the     mortgagee's    own 

per  Endicott,   J.:  right  to  foreclose.     A  proper  execu- 

"A    mortgagee    has    the    right    to  tion  of  the  power  of  sale  contained 

sell,  under  a  power  contained  in  his  in  the  mortgage  requires  the  mort- 

mortgage,    the    whole    title    of    the  gagee  to   sell   all   he   is   entitled   to 

mortgagor    and    of    himself    in    the  sell  under  it." 

land    mortgaged;    that    is,    he    may  "=  Model   Lodging  House  Asso.   v. 

sell  the  equity  of  redemption  of  the  Boston,  114  Mass.  133. 

mortgagor,   and   such   interest  as   is  ^'^  Donohue    v.    Chase,    130    Mass: 

conveyed    to   him   by   the    mortgage  137. 

under  which  he  sells.     But  he  can-  '■-*  Dearnaley   v.    Chase,    136   Mass. 

not    sell    the    equity    of    redemption  288. 

of  the  mortgagor  by  itself;  nor  can  "=  Cook  v.  Basley,  123  Mass.  396. 

he  sell  an  undivided  portion  of  his  ^-^  O'Connell    v.    Kelly,    114    Mass. 

interest  in  the  land  included  in  the  97.     And    see    Morton    v.    Hall,    118 

mortgage.     Such    sales    would    pass  Mass.    511;    Alden    v.    Wilkins,    117 

no  title  to  the  purchaser,  and  would  Mass.  216. 


§    1855.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  800 

house  door  in  the  town  of  Hillsboro,  without  naming  the  county, 
or  stating  that  the  sale  would  be  at  public  vendue  to  the  highest 
bidder.^^'^ 

It  need  not  state  the  terms  of  sale,  or  that  the  terms  would  be 
stated  at  the  time  of  sale ;  and  if  at  the  sale  a  deposit  is  required,  , 
and  this  prevented  a  person  present  from  bidding,  if  the  mortgagee 
acted  in  good  faith,  and  the  requiring  of  a  deposit  was  usual  and 
reasonable,  this  does  not  invalidate  the  sale.^^^ 

The  advertisement  need  not  be  dated.  The  time  of  its  first  ap- 
pearance by  publication  will  be  taken  as  the  date.^-'' 

It  is  not  necessary  that  the  advertisement  of  a  sale  under  a  power 
should  state  that  a  default  has  occurred  in  the  performance  of  the 
condition  of  the  mortgage.  The  statement,  that  the  sale  is  by  virtue  of 
the  power  given  by  the  mortgage,  necessarily  implies  that  there 
has  been  a  default.^^"  Of  course,  therefore  the  notice  need  not  state 
for  what  breach  of  the  condition  the  land  is  to  be  sold.^^^ 

§  1855.  A  statutory  requirement  that  the  notice  shall  state  the 
amount  claimed  to  be  due  at  the  time  of  the  first  publication  is 
sufficiently  met  by  a  statement  of  the  amount  claimed  to  be  due  at 
a  certain  prior  date,  and  that  the  mortgagee  claims  that  sum  with 
interest  from  that  time.^^-  If  only  a  part  of  the  mortgage  debt  be 
due,  it  is  the  usual  and  safer  way  to  state  both  the  whole  amount  of 
the  debt  and  the  amount  of  it  which  has  become  payable.^^^  The 
fact  that  the  notice  states  a  larger  sum  to  be  due  than  is  actually 
due  does  not  affect  the  validity  of  the  sale,  if  no  actual  injury  or 
fraudulent  purpose  is  shown.^^*  Although  an  excessive  claim  might 
have  the  effect  to  deter  bidders,  it  cannot  be  inferred  in  the  absence 
of  proof  that  it  actually  had  this  effect.  If  the  mortgagee  should 
bid  up  to  the  amount  of  his  excessive  claim,  and  take  the  property, 

""  Powers  v.  Kueckoff,  41  Mo.  425,  "'  Silva  v.   Turner,  166  Mass.  407, 

97    Am.    Dec.    281.     See,    also,    Gray  44  N.  E.  532. 

V.  Shaw,  14  Mo.  341;  Beatie  v.  But-  »='=  Judd  v.   O'Brien,  21   N.   Y.   186, 

ler,    21    Mo.    313,    64    Am.    Dec.    234;  189;    Hoyt    v.    Pawtucket    Inst,    for 

Hornby    v.    Cramer,    12       How.    Pr.  Savings,  110  111.  390. 

490;   McCammon  v.  Detroit  L.  &  N.  "^  Jencks   v.   Alexander,   11   Paige, 

R.  Co.  103  Mich.   104,  61  N.  W.  273.  619,  626. 

^■=' Model  Lodging  House  Asso.  v.  "^  Fairman  v.  Peck,  87  111.  156; 
Boston,  114  Mass.  133;  Goodale  v.  Hamilton  v.  Lubukee,  51  111.  415, 
Wheeler,  11  N.  H.  424;  Pope  v.  Bur-  99  Am.  Dec.  562;  Jencks  v.  Alex- 
rage,  115  Mass.  282;  Wing  v.  Hay-  ander,  11  Paige,  619;  Klock  v. 
ford,  124  Mass.  249.  Cronkhite,    1    Hill,    107;    White    v. 

""Ramsey    v.    Merriam,    6    Minn.  McClellan,    62    Md.    347;    Bowers    v. 

168.                   "  Hechtman,   45  Minn.   238,  47  N.  W. 

""Model  Lodging  House  Asso.   v.  792. 
Boston,    114    Mass.    133.      And    see 
King  v.  Bronson,  122  Mass.  122. 


S07  SALE  IN  PARCELS.  [§§  1856,  1857. 

he  would  be  obliged  to  pay  to  tlie  mortgagor  the  excess  over  what 
was  legally  due.'^^^ 

Where  the  amount  of  the  debt  and  interest  is  given,  "and  the 
taxes,  if  any,"  it  is  not  necessary  to  state  the  amount  of  the  taxes."" 

It  is  not  necessary,  in  the  absence  of  a  statutory  requirement  or 
of  a  requirement  in  the  inortgage  deed,  that  the  amount  due,  for 
which  the  property  is  sold,  should  be  stated."^ 

Where  a  mortgage  of  land  was  given  for  $2,500,  of  which  $1,050 
only  was  advanced,  but  the  balance  was  paid  by  the  mortgagee  in 
an  ax^tion  brought  by  a  creditor  of  the  mortgagor  against  him,  in 
which  the  mortgagee  was  summoned  as  trustee  after  deducting  the 
interest  due,  it  was  held  that  the  notice  of  sale,  stating  that  the 
mortgage  was  for  $2,500  was  sufficient."^ 

§  1856.  In  advertising  a  sale  under  a  second  mortg'ag'e  it  is 
not  essential  to  state  the  amount  due  upon  the  first  mortgage,  even 
if  both  mortgages  are  held  by  the  same  person.  And  if  the  mortgagee 
at  the  sale  slightly  overestimates  the  amount  due  on  that  mortgage, 
it  is  immaterial.^'* 

IX.     Sale  in  Parcels. 

§  1857.     Generally  there  is  no  obligation  to  sell  in  parcels,  except 

where  such  sale  is  required  by  statute,  or  where  special  equities, 
which  the  mortgagee  is  bound  to  respect,  have  arisen  as  to  por- 
tions of  the  premises,^**  as  where  the  mortgagor  has  subsequently 
sold  a  part  of  the  mortgaged  property. ^*^  Even  when  the  mortgagor 
has  alienated  a  part  of  the  mortgaged  property,  and  upon  equitable 
grounds  the  purchaser  is  entitled  to  have  the  part  of  the  prem- 
ises not  alienated  first  sold  under  the  power,  he  must  apply  to  a 
court  of  chancery  before  the  sale  for  an  order  directing  the  sale  to 
be  so  made;  and  if  he  does  not  do  this  he  cannot  apply  to  have  the 
sale  set  aside  as  against  a  bona  fide  purchaser.^*^     There  is  generally 

='"  Butterfield      v.      Parnham,      19  "''Model   Lodging  House  Asso.  v. 

Minn.  85;  Bennett  v.  Healey,  6  Minn.  Boston,  114  Mass.  133. 

240;  Bailey  v.  Merritt,  7  Minn.  159;  ""  Loveland  v.  Clark,  11  Colo.  265, 

Ramsey    v.    Merriam,    6    Mi-nn.    168;  18  Pac.  Rep.  544;   Gray  v.  Shaw,  14 

Spencer    v.     Annon,    4    Minn.     542;  Mo.     341;     Singleton     v.     Scott,     11 

Spottswood    V.     Herrick,     22    Minn.  Iowa,  589. 

458;    Seller  v.  Wilber,  29  Minn.  307,  ^"  Pine     Bhiff,     &c.     Ry.     Co.     v. 

13  N.  W.  136.  James,  54  Ark.  81,  15  S.  W.  15. 

""  Kirkpatrick  v.  Lewis,  46  Minn.  "-  St.    Joseph    Manufacturing    Co 

164,  48  N.  W.  783.  v.  Daggett,  84  111.  556.     See  Meacham 

="  Jenkins  v.  Pierce,  98  111.   646.  v.    Steele,    93    111.    135;    Hosmer    v. 

"^Silva  V.  Turner,  166  Mass.  407,  Campbell,  98  111.  572. 
44  N.  E.  532. 


§    1857.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  808 

no  obligation  npon  him  to  sell  in  lots  in  order  to  o1:)tain  a  greater 
price.^*^  The  deed  generally  empowers  the  mortgagee  to  sell  the 
whole  estate  upon  any  default,  and  to  pay  the  entire  debt  from  the 
proceeds,  and  usually  makes  no  provision  in  regard  to  the  sale  of 
the  property  in  parcels.^**  The  mortgagee  may  nevertheless  sell  in 
parcels  when  the  property  will  bring  a  better  price  by  this  mode 
of  sale,  especially  if  the  mortgaged  premises  consist  of  distinct 
parcels.^*^  After  he  has  advertised  the  property  to  be  sold  in  lots, 
the  sale  should  be  made  accordingly.  When  the  sale  is  made 
in  parcels,  it  must  stop  when  enough  has  been  realized  to  pay  the 
debt  and  expenses;  for,  the  debt  being  paid,  the  power  of  sale  is 
exhausted.^*® 

It  is  true,  however,  that  some  courts  have  adopted  the  rule  that 
all  forced  sales  of  property  shall  be  made  in  parcels,  when  the  lots 
are  sufficiently  distinct  both  in  law  and  in  fact  to  render  distinct  sales 
^racticable.^*'^  In  such  case,  when  the  property  is  susceptible  of 
division  into  lots,  a  sale  of  the  entire  premises  together  will  vitiate 
the  sale,  and  a  court  of  equity  may  set  it  aside.^*^ 

In  some  States  it  is  provided  by  statute  that  when  the  mort- 
gaged premises  consist  of  distinct  farms  or  lots  they  shall  be  sold 
separately,  and  that  the  sale  shall  cease  when  a  sufficient  sum  has 
been  realized  to  satisfy  the  debt.^*^     The  distinct  farms  or  lots  in- 

="  Adams   v.   Scott,   7  W.   R.   213;  the  property  he  can  make   distinct 

Cleaver  v.  Green,  107  111.  G7;  Abbott  sales.     It  is  essential  to  justice  and 

v.    Peck,    3-5    Minn.    499;    Grover    v.  to  the  protection  of  the  unfortunate 

Fox,  36  Mich.  461;   Scott  v.  Ballard,  debtors  that  this  should  be  the  gen- 

117   N.    C.    195;    Shaw   v.    Holloway,  eral  rule.     Any  other  would  lead  to 

13  Tex.  Civ.  App.  254,  35  S.  W.  800;  the     most     shameful     sacrifices     of 

Old  Dominion  Inv.   Co.  v.   Moomaw  property.     There  may  be  exceptions, 

(Va.)    25  S.  E.  540.     As  to  sales  in  but  the  purchaser  must  bring  him- 

parcels  under  decree  of  court,  see  §§  self  within  them." 

1616-1619.  "*  Thomas  v.  Fewster  95  Md.  446, 

"*  Connolly  v.   Belt,   5    Cranch   C.  52    Atl.    750;    Carroll   v.    Hutton,    88 

C.  405.  Md.    679,    41    Atl.    1081;    Hopper    v. 

=*^  Holmes  v.  Turner's  Falls  Lum-  Hopper,    79    Md.    400.    29    Atl.    611; 

ber  Co.  150  Mass.  535,  23  N.  E.  305.  Loeber  v.  Eckes  55  Md.  1;  Mahoney 

Selling  in  parcels  might  be  a  ground  v.  Mackubin,  52  Md.  357,  366;   Ree- 

for  setting  aside  a  sale  if  it  caused  side  v.  Peter,  33  Md.  120.  123;  Hub- 

the    property    to    go    at   a    sacrifice,  bard  v.  Jarrell,  23  Md.  66;   Johnson 

Middlesex  Banking  Co.  v.  Lester,  7  v.  Hambleton,  52  Md.  378;    Sumrall 

S.  D.  333,  64  N.  W.  168.  v.    Chaffin,    48   Mo.    402;    Chesley   v. 

="  Charter  v.  Stevens,  3  Denio,  33,  Chesley,    49    Mo.    540,    54    Mo.    347, 

45  Am.  Dec.  444;  Baker  v.  Halligan,  and  cases  cited. 

75    Mo.    435;    Curry    v.    Hill,    18   W.  ""New  York:    §   1751. 

Va.  370.  Wisconsin:   §  1762. 

"'Rowley   v.    Brown,    1   Binn.    61.  Mississippi:    §    1744. 

This  was  a  sale  on  execution.     The  Minnesota:   §  1743. 

court  say:      "It  is  the  rule  of  this  Michigan:    §    1741. 

court   to   disallow   in   every   case   a  North  Dakota  and  South  Dakota: 

lumping  sale  by  the  sheriff,   where  §  1752a. 
from  the  distinctness  of  the  items  of 


809  SALE  IN  PARCELS.  [§  1857. 

tended  by  this  provision  are  not  such  as  are  formed  by  a  higliway 
or  by  section  lines  crossing  a  farm  mortgaged  as  one  tract,  but 
separate  and  distinct  lots  or  farms  not  forming  together  one  lot 
or  farm  are  intended.^^°  If  such  separate  lots  were  fenced  and  used 
as  one  parcel  when  the  mortgage  was  given,  and  continued  to  be  so 
fenced  and  used,  all  can  be  sold  as  one  parcel. ^'^^  If  after  the  giving 
of  the  mortgage  the  land  is  subdivided,  and  other  persons  acquire 
interests  in  separate  portions  of  the  land,  tliereby  acquiring  equi- 
ties which  a  court  of  equity  upon  timely  application  would  protect 
by  requiring  the  sale  under  the  mortgage  to  be  made  in  separate 
parcels,  yet  without  such  application  a  sale  of  the  entire  tract  as 
mortgaged  is  rightful,  and  will  not  for  that  reason  be  set  aside.^^^ 
But  where  the  mortgaged  land  is  laid  out  in  city  blocks  and  the 
mortgagee  joins  in  dedicating  the  streets  to  the  public,  each  block 
becomes  a  separate  parcel  and  must  be  sold  by  itself. ^^^  The  mort- 
gagee, if  he  chooses,  without  any  direction  of  the  court,  may  respect 
the  equities  of  a  purchaser  of  a  portion  of  the  land  and  sell  the 
remaining  land  first,  and  the  mortgagor  has  no  ground  for  objection 
to  such  course;  nor  can  he  complain  if  the  mortgagee  releases  such 
portion  previously  conveyed  from  the  lien  of  the  mortgage. ^^* 

Whether  a  sale  contrary  to  the  statute  is  void  or  merely  voidable, 
is  a  question  upon  which  there  is  some  conflict  of  authority,  though 
the  better  rule  is  that  such  a  sale  is  only  voidable  for  cause  shown, 
as  that  it  was  the  result  of  actual  fraud,  or  that  the  sale  was  to  the 
prejudice  of  the  owner  of  the  equity  of  redemption.^^^    But  the  sale  of 

^-'■'  Larzelere    v.    Starkweather,    38  '^^  Bay  View  Land  Co.  v.  Myers,  62 

Mich.  9G;  Yale  v.  Stevenson,  58  Mich.  Minn.  265,  64  N.  W.  816. 

537,    25    N.    W.    488;    Hawes    v.    De-  The   burden    of    proving   that   the 

troit  F.  &  M.  Ins.  Co.  109  Mich.  324,  lands  were  not  occupied  a?  one  lot 

67  N.  W.  329;  Hull  v.  King,  38  Minn.  Is  upon  the  party  who  attacks  the 

349,  37  N.  W.  792;    Mason  v.  Good-  validity   of   the   sale   in   one   parcel, 

now,  41  Minn.  9,  42  N.  W.  482;  Bitzer  Gage  v.   Sanborn,   106  Mich.  269,  64 

V.  Campbell,  47  Minn.  221,  49  N.  W.  N.  W.  32;  Marx  v.  Smith,  111  Mich. 

691;    Barge   v.    Klausman,   42   Minn.  125,  69  N.  W.  150. 

281,  44  N.  W.  69;    Child  v.  Morgan,  =^'' Clark  v.   Kraker,  51  Minn.   444, 

51  Minn.   116,  52  N.  W.   1127.  53  N.  W.  706. 

'-'-'  Yale  V.  Stevenson,  58  Mich.  537,  ^='  Swenson  v.  Halberg,  1  McCrary, 

25  N.  W.   488;    Maxwell   v.   Newton,  96,  1  Fed.  444;  Willard  v.  Finnegan, 

65  Wis.  261,  27  N.  W.  31;  Thompson  42  Minn.  476,  44  N.  W.  985;  Tillman 

V.   Browne,  10   S.  D.   344,   73  N.  W.  v.   Jackson,    1   Minn.    183;    Ryder  v. 

194.  Hnlett,  44  Minn.  353,  46  N.  W.  559; 

"■'-  Clark  V.   Kraker,  51   Minn.   444,  Clark   v.  Kraker,  51   Minn.  444,  53   N. 

53  N.  W.  706;  Johnson  v.  Williams,  W.  706;   Cunningham  v.  Cassidv,  17 

4   Minn.    260;    Faquin   v.   Braley,   10  N.  Y.  276;  Middlesex  Banking  Co.  v. 

Minn.  379;  Abbott  v.  Peck,  35  Minn.  Lester,   7  S.   D.   333,   64  N.   W.   168; 

499.  29  N.  W.   194;    Willard  v.  Fin-  Northwestern    Mortgage    T.    Co.    v 

negan,  42  Minn.  476,  44  N.  W.  985;  Bradley,  9  S.  D.  495,  70  N.  W.  648. 
Rvder  v.  Hulett,  44  Minn.  353,  46  N. 
W.  559. 


§    1858.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  810 

I'urtlier  parcels  after  enough  has  been  realized  to  satisfy  the  mortgage 
debt  is  void,  and  passes  no  title.^^®  But  the  advertisement  need 
not  state  that  the  sale  Avill  stop  as  soon  as  enough  has  been  realized 
to  satisfy  the  mortgage  debt,  as  that  will  be  presumed.^^''^ 

If  after  a  release  of  a  portion  of  the  premises  the  remainder  can 
be  sold  in  distinct  parcels,  a  sale  of  the  whole  together,  when  this 
Avould  be  prejudicial  to  the  owner,  is  void  or  voidable.^"* 

A  party  interested  in  the  equity  of  redemption,  who  for  a  valu- 
able consideration  has  waived  his  right  to  redeem,  cannot  object 
that  the  sale  was  not  made  in  parcels,  for  the  requirement  is  made 
in  the  interest  of  those  entitled  to  redeem,  and  to  protect  this  right 
in  each  parcel  separately.^^"  For  the  same  reason  the  mortgagee  can- 
not take  this  objection  to  his  own  proceedings.^®" 

The  fact  that  a  parcel  not  covered  by  the  mortgage  is  sold  with  a 
parcel  covered  by  it,  as  one  tract  and  for  one  gross  sum,  does  not 
avoid  the  sale  of  the  mortgaged  land.^®^ 

Three  parcels  of  land  covered  by  one  mortgage  were  sold  sep- 
arately under  the  misapprehension  that,  as  the  notice  stated  the  sale 
would  be  on  the  premises,  it  required  a  sale  on  each  parcel.  The  mort- 
gagee bid  one  dollar  over  and  above  the  mortgage  on  each  parcel ;  he 
and  the  auctioneer  understanding  that  each  bid  was  for  the  whole 
property  and  that  it  constituted  but  one  sale.  The  mortgagor  was 
present  and  made  no  objection.  While  these  proceedings  were  irregu- 
lar, the  court  held  they  were  in  no  way  detrimental  to  the  mortgagor 
and  amounted  to  but  one  sale.^®^ 

§  1858.  Under  a  statute  requiring  a  sale  in  parcels  a  mort- 
gagee is  not  justified  in   selling  the  entire   property   in   one   lot 

when  any  one  interested  in  the  equity  of  redemption  requests  a 
sale  in  parcels,  and  offers  in  good  faith  to  bid  the  amount  of  the 
mortgage  debt  and  expenses  for  a  part  of  the  property  so  situ- 
ated that  it  may  be  conveniently  sold  separately.^"^  But  a  mort- 
gagee is  not  bound  to  sell  in  parcels  without  request  where  the 
division  into  parcels  was  not  made  until  after  the  execution  of 
the  mortgage.     The  mortgagee  is   often   in   no   situation  to   know 

«« Kirbie  v.  Howie,  9  S.  D.  471,  70        '»'  Babcock  v.  Wells,   25   R.    I.   23, 

N    W    640  ^4  Atl.  599. 

'"'Moore  v    Barksdale  (Va.)   25  S.        ^^  Ellsworth   v.    Lockwood,    42    N. 

J.   529  Y.    89.      In   this   case,    although   the 

"«Durm  V    Fish,   46  Mich.   312,   9  premises     were     described     in     the 

j^   w   429  mortgage  as  one  tract,  the  mortgage 

=^=»  Clark  V.   Stilson,   36  Mich.   482.  authorized   a  sale  of   "any  part  or 

^o"  Clark  V.  Stilson,  36  Mich.  482,  parts"  of  it 

"•Bottineau   v.    .Etna   L.    Ins.   Co. 
31  Minn.  125,  16  N.  W.  849. 


811  SALE  IN  PARCELS,  [§  1859. 

of  subsequent  divisions  of  the  property;  and  a  sale,  therefore,  in 
one  entire  parcel,  should  be  held  to  be  good  unless  a  request  to  di- 
vide it  be  shown. ^"^^ 

In  some  cases  it  has  been  said  that  if  the  premises  at  the  time 
of  the  mortgage  consisted  of  one  tract,  and  were  so  described,  the 
mortgagee  is  not  bound  to  sell  in  parcels,  although  the  land  has 
subsequently  been  divided  into  lots,^''^  and  although  he  is  requested 
by  one  interested  in  the  equity  to  sell  in  lots  according  to  a  plan.'"''^ 
When  the  mortgage  describes  the  land  as  one  tract,  it  is  said  that 
it  is  the  right  of  the  mortgagee  by  the  contract  to  sell  the  whole 
of  the  mortgaged  premises  in  satisfaction  of  his  debt;  but  the 
better  opinion  would  seem  to  be  that  the  obligation  to  sell  in  lots 
has  reference  to  the  situation  of  the  property  at  the  time  of  sale, 
irrespective  of  the  description  of  the  mortgage.^"^ 

The  criterion  in  all  cases  is.  What  mode  of  sale  will  realize  the 
largest  amount  of  money?  If  this  object  can  be  obtained  by  the 
sale  of  the  whole  mortgaged  premises  together,  that  is  the  propei- 
mode  to  pursue,  even  if  they  are  readily  divisible.  If  the  land  is 
divisible  into  separate  parcels,  and  is  better  adapted  for  use  in  par- 
cels, then  the  presumption  would  seem  to  be  that  it  would  produce 
a  larger  amount  of  money  if  sold  in  that  way,  and  the  sale  should 
be  made  accordingly.^^* 

§  1859.  A  trustee  under  a  deed  of  trust  is  bound  to  render 
the  sale  as  beneficial  as  possible  to  the  debtor;  and  even  in  the 
absence  of  any  provision  in  the  deed  for  a  sale  of  a  part  of  the 
property,  or  for  selling  it  in  parcels  if  it  be  susceptible  of  division 
and  will  bring  more  by  sale  in  separate  parcels,  or  if  a  sale  of  a 
part  will  satisfy  the  debt,  he  is  bound  to  act  accordingly;^^"  and  a 

»"  Ellsworth  v.  Lockwood,  9  Hun,  Sherwood,    71   Mich.    516,   39   N.   W. 

548;   Shannon  v.  Hay,  106  Ind.  589;  740;   Curry  v.  Hill,  18  W.  Va.  370. 

Kline    v.    Vogel,    11    Mo.    App.    211;  '«« Wells    v.    Wells,    47    Barb.    416. 

Johnson   v.   Williams,   4   Minn.   260;  See,  also,  American  Ins.  Co.  v.  Oak- 

Paquin  v.  Braley,  10  Minn.  379;  Ab-  ley,  9  Paige,  259,  38  Am.  Dec.  561; 

bott  v.  Peck,  35  Minn.  499,  2'9  N.  W.  Slater  v.  Maxwell,  6  Wall.  268,  275; 

194-   Willard  v.  Finnegan.  42  Minn.  Lalor  v.   McCarthy,  24  Minn.   417. 

476,'  44  N.  W.  985.  '"'  In  Olcott  v.  Bynum,  17  Wall.  44, 

='"'  Lamerson  v.  Marvin,  8  Barb.  9.  62,     where    express    authority    was 

'™  Griswold    v.    Fowler,    24    Barb,  given  to  sell  all  the  property  upon 

135.      Although    consisting    of    two  the  failure  to  pay  any  instalment  of 

tracts,  if  they  have  previously  been  the    debt   secured    at    maturity,    Mr. 

held  and  used  together  as  one  farm.  Justice  Swayne  said:     "If  enough  of 

a  sale  of   the   whole   in   one   parcel  it  to  satisfy  the  amount  due  could 

is    good.      Anderson    v.    Austin,    34  be  segregated  and  sold  without  in- 

Barb.  319.  jury   to  the  residue,   it  would  have 

^"^  Ellsworth    v.    Lockwood.    42    N.  been  the  duty  of  the  mortgagees  so 

Y.  89,  9  Hun,  548;  Durm  v.  Fish,  46  to  sell."     A  direction  in  the  deed  to 

Mich.    312,   9   N.   W.    429;    Keyes   v.  sell  by  parcels  is  binding.     Carroll 


§    1859.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS. 


812 


sale  not  so  made  will  be  held  invalid  on  application  of  the  party 
injnred.^^''  The  trustee  must  exercise  a  sound  discretion  in  selling, 
and  must  sell  the  land  as  a  whole  where  it  will  sell  for  more  in  this 
way  than  in  parcels,^^^  and  in  parcels  when  it  will  sell  better  in  this 
way.  The  intervention  and  assistance  of  a  court  of  equity  may  be 
invoked  in  a  proper  case,  to  control  the  trustee  in  the  exercise  of 
his  discretion,  either  to  sell  the  land  as  a  whole  or  to  sell  it  in  par- 
cels."- But  a  sale  once  made  will  not  be  set  aside  merely  on  the 
ground  that  the  property  was  sold  as  a  whole  when  it  was  capable 
of  easy  division.  It  must  appear  further  that  the  interests  of  the 
debtor  were  sacrificed,"^  or  that  there  was  some  attendant  fraud  or 
unfair  dealing.^'^ 

The  mortgage  is  usually  so  drawn  that  the  whole  debt  becomes 
due  upon  any  default  ;"^  but  even  when  this  is  not  the  case^  upon  a 
default  in  the  pajonent  of  an  instalment  of  interest  or  of  principal 
the  whole  mortgaged  estate  may  be  sold  when  a  sale  of  a  part  would 
greatly  impair  the  whole."®  A  sale  of  the  whole  estate,  or  of  even 
a  part  of  it,  for  an  instalment  only  of  the  mortgage  debt,  exhausts 
the  power  and  the  mortgage  lien."'' 

A  railway  conveyed  by  a  trust  deed  or  mortgage  to  secure  bonds 
may  generally  be  sold  all  together  upon  a  default  in  the  payment  of 

V.  Hutton,  88  Md.  676,  41  Atl.  1081.  =>'•  Singleton  v.  Scott,  11  Iowa,  589; 

The  court  say:      "As  trustee  under  Kellogg    v.     Carrico,     47     Mo.     157; 

the  mortgage  to  make  the  sale,  he  Carter  v.  Abshire,  48  Mo.  300;  Terry 

was  bound  for  the  protection  of  the  v.    Fitzgerald,   32    Graft.    843. 

interest     of     all     the     parties     con-  "- Torry    v.    Fitzgerald,    32    Graft, 

cerned    to    bring    the    property    into  843. 

the  market  in  such  manner  as  to  ob-  ^'^  Chesley  v.  Chesley,  54  Mo.  347; 

tain    a    fair    market    price.    .    .    He  Ingle  v.  Jones,  43  Iowa,  286;    Shine 

should  exercise  the  same  degree  of  v.    Hill,    23    Iowa,    264;    Fairman    v. 

judgment  and  prudence  that  a  care-  Peck,  87  111.  156. 

ful  owner  would  exercise  in  a  sale  '^'^  Benkendorf  v.   Vmcenz,   52   Mo. 

of  his  own   property,  and   in  doing  441;   Ross  v.  Mead,  10  111.  171;   Gil- 

that  he  would  have  fully  considered  lespie  v.   Smith,  29  HI-   4^3,  81  Am 

the  best  mode  of  offering  the  prop-  Dec.    388;    Kerfoot    v.    Billings,    160 

erty    not  only  as  to  whether  it  was  111.    563.   43   N.    E.    804;    Fairman   v. 

advisable  to  offer  it  in  lots  or  par-  Peck.  87  111.  156;  Lazarus  v.  Caesar, 

eels,  but  also  as  to  the  proper  lo-  157  Mo.  199,  57  S.    V\.   751 

cation  and  outlines  of  each  parcel.  -^5  1181;  Seaton  v^  Twyford   L  R. 

While  [the  deed]  directed  that  11  Eq.   Cas.   591;    Philips  v.  Bailey, 

he  should  offer  the  tract  in  separate  82  Mo.  639.                        ^n  ^r  u     aa. 

farms  or  farm  tracts,  yet  that  did  =- Olcott  v^  Bynum,   17  Wall    44 

not  relieve  the  trustee  of  his  duty  Dunham  v.  Cm.,  Peru,  &c^  Railway 

of    determining   the    advisability    of  Co.  1  Wall.  254;  Pope  v.  Durant    26 

making  other  or  different  divisions."  Iowa,     233;     Salmon    v.     Uagett,    6 

See,  also,  Axman  v.  Smith,  156  Mo.  Bland.  125. 

9Rfi    p;7   q    W    105  "'Fowler    v.    Johnson,    26    Minn. 

-  Tatum  V."  Holiiday,  59  Mo.  422;  338,  3  N.  W.  986,  6  R  W.  486;  Stan- 

Goode  V.  Comfort,  39  Mo.  313;  Gray  dish  v.  Vosberg,  27  Mmn.  175,  6  N. 

V   Shaw,  14  Mo.  341;  Taylor's  Heirs  W.  489;   Pryor  v.  Baker,  133  Mass. 

V.  Elliott,  32  Mo.  172,  175.  459. 


813  SALE  IN  PARCELS.  [§  1860. 

interest,  or  of  an  instalment  of  the  principal,  before  the  maturity 
of  the  entire  principal  of  the  debt,  because  it  would  generally  be 
the  case  that  the  line  of  road  could  not  be  divided  and  sold  in 
pieces  without  manifest  injury  to  the  property.  The  fact  that  the 
road  is  situated  in  two  or  more  States,  and  was  originally  owned  by 
two  corporations  created  in  different  States,  does  not  affect  the  de- 
termination of  this  question.^'^^ 

§  1860.  Sale  of  sufficient  only  to  pay  the  debt. — When  a  mort- 
gage or  trust  deed  authorizes  the  sale  of  the  whole  premises  upon 
a  default,  a  sale  of  the  whole  is  regular,  and  as  a  rule  no  court 
will  interfere  with  the  exercise  of  the  power  in  this  way.  Yet 
it  has  been  held,  where  the  policy  of  the  laws  of  a  State  seemed 
to  require  that  all  forced  sales  of  land  should  be  confined  to  such 
portions  of  the  premises  as  are  suflficient  to  satisfy  the  debt,  that  a 
court  of  equity  might  interpose  to  prevent  the  full  exercise  of  the 
power  if  the  lands  are  divisible.  But  this  is  an  interference  with 
the  contract  of  the  parties  which  the  courts  will  not  make  unless 
very  strong  reasons  exist  for  so  doing.^'^  The  trustee  or  mortgagee 
may  advertise  the  whole  of  the  lands,  for  until  the  property  is 
actually  offered  for  sale  it  cannot  be  known  with  certainty  how 
much  of  it  will  be  necessary  to  satisfy  the  mortgage  debt.^^"  The 
whole  of  the  mortgaged  lands  must  be  sold  together  if  they  cannot 
be  divided  without  injuriously  affecting  the  sale  or  the  value  of  the 
part  not  sold.^*^ 

Although  tlie  debt  be  payable  in  instalments,  and  only  one  of 
them  is  due,  a  sale  of  the  whole  estate  may  be  made.  The  power 
contemplates  only  one  sale,  and  the  statutes  do  not  provide  for  a 
sale  subject  to  future  instalments.^^^ 

""Wilmer  v.  Atlanta  &  Richmond  of  sale,  and  bid  in  the  property  in 

Air  Line  R.   Co.   2  Woods,  447.  satisfaction      of      the      note.        The 

""  Johnson    v.    Williams,    4   Minn,  amount  bid  was  about  one  third  of 

260.  the  value  of  the  property;    and  the 

"^^  Cleaver  v.  Mathews,  83  Va.  801,  holder  of  the  note,  the  trustee-,  and 

3  S.  E.  439.  the    debtor   all    knew    that    the    two 

^*^  Michie  v.  Jeffries,  21  Graft.  334.  other   notes   were   still   outstanding, 

^*- Barber    v.    Cary,    11   Barb.    549;  and    held    by    another    person;    and 

Bunce  v.  Reed,  16  Barb.  347;  Cox  v.  that  the  sale  was  made  in  satisfac- 

Wheeler,    7    Paige,    248;    McLean   v.  tion    of    the    first    note    only.      The 

Presley,   56   Ala.   211.     See  Pryor  v.  debtor  redeemed  the  land  from  the 

Baker,  133  Mass.  459.  sale,    and    the    holder    of   the    other 

It  has  been  held,  however,  that  two  notes  brought  suit  to  foreclose 
there  may  be  successive  sales  of  the  them.  It  was  held  that  the  last  two 
property  to  pay  instalments  of  the  notes  were  still  a  lien  on  the  land, 
debt  secured.  Thus,  where  a  trust  and  that  the  property  might  be  fore- 
deed  secured  three  promissory  notes  closed  and  sold  in  satisfaction  of 
payable  at  intervals  of  a  year,  the  these  notes.  Shields  v.  Dyer,  86 
holder  of  the  note  first  maturing  Tenn.  41,  5  S.  W.  439. 
sold  the  property  under  the  power 


§§    1861,    1862.]    POWER   OF    SALE    MORTGAGES    AND   TRUST    DEEDS.    814 

X.     Conduct  of  Sale,  Terms,  and  Adjournment. 

§  1861.  Mortgfagee  may  act  by  attorney. — The  entry  upon  the 
premises  authorized  by  the  power,  the  giving  of  the  notice  of  sale, 
and  the  conduct  of  the  sale,  axe  acts  which  the  mortgagee  may 
perform  through  others,  whose  authority  need  not  be  under  seal  or 
in  writing.^^'^  He  may  employ  an  auctioneer  to  make  the  sale,  and 
his  personal  presence  at  the  time  and  place  of  sale  is  not  essential.^®* 
In  general  he  may  employ  an  agent  or  attorney  to  do  any  acts 
which  are  merely  ministerial,  and  which  involve  no  exercise  of  dis- 
cretionary powers.^**^  Of  course,  he  makes  himself  responsible  for 
his  agent's  acts;  and  if  he  allows  his  agent  to  receive  the  proceeds 
of  the  sale,  and  they  are  lost  or  misapplied,  he  cannot  sue  the  mort- 
gagor for  the  debt;  or  if  he  concurs  with  an  assignee  from  the 
mortgagor  of  the  equity  of  redemption  in  selling  the  property,  and 
allows  him  to  receive  the  purchase-money,  he  may  be  perpetually 
restrained  from  suing  the  mortgagor  for  the  debt.^®*^  It  is  not  neces- 
sary that  the  mortgagee  be  personally  present  at  the  sale.  This 
may  be  conducted  by  his  attorney,  whose  acts  he  ratifies  by  subse- 
quently making  the  deed  necessary  to  convey  the  property. ^^^ 

§  1862.  But  a  trustee  under  a  deed  of  trust  should  be  person- 
ally present  at  the  sale,  so  that  he  may,  if  necessary  to  prevent  a 
sacrifice  of  the  property,  adjourn  the  sale,  which  it  would  be  clearly 
liis  duty  to  do;  therefore  his  absence  at  tlie  sale  has  been  held  to 
render  the  sale  void.^^®     He  cannot  delegate  his  power  to  a  stranger 

''^'Hoit  V.  Russell,   56   N.   H.   559:  v.  Dougherty,  69  Tex.   477,  6  S.  W. 
Cranston  v.  Crane,  97  Mass.  459,  93  850;   Bitter  v.  Calhoun,  8  S.  W.  523. 
Am.  Dec.  106;   Yourt  v.  Hopkins,  24  If  the  notice  specifies  that  the  mort- 
111.  326;  Watson  v.  Sherman,  84  111.  gagee  will  make  the  sale  fhe  sheriff 
263.  is  not  authorized  to  make  it,  except 
"^  Fogarty  v.  Sawyer,  23  Cal.  570;  upon    instructions    from    the    mort- 
Ray  V.  Home  &  Foreign,  etc.  Co.  98  gagee.     Watson  v.  Lynch,  127  Mich. 
Ga.    122,    26    S.    B.    56;     Palmer    v.  365,  86  N.  W.  807.     Under  a  statute 
Young,  96  Ga.  246.  requiring  mortgage  sal.es  to  be  con- 
In  Rhode  Island  no  officer  of  any  ducted  by  a  sheriff,  the  sheriff  has 
corporation   shall   act  as  auctioneer  no  right  to  open  the  sale  and  offer 
in  the  foreclosure  of  any  mortgage  the  land  until  directed  to  do  so  by 
held  by  such  corporation.    P.  S.  1882,  the    mortgagee,    and    a   sale   by   the 
ch.  137,  §  9.  sheriff    without    instructions     is    a 
"'  Hubbard  v.   Jarrell,  23  Md.   66,  nullity.      Simonton    v.    Connecticut 
82.  Mut.  Life  Ins.  Co.   (Minn.)  95  N.  W. 
^^''  Palmer  v.  Hendrie,  28  Beav.  341.  451.     It  has  been  held  that  a  mort- 
"' Munn    V.    Purges.    70    111.    604;  gagee  is  under  the  same  obligation 
McHany  v.  Schenk,  88  111.  357;  Par-  to    take    personal    supervision    over 
ker  V.  Banks,  79  N.   C.  480;    Welsh  the    sale    that    a    trustee    is    under. 
V.    Coley,    82    Ala.    363,    2    So.    733.  Green    v.    Stevenson    (Tenn.)    54    S. 
Otherwise     in     Texas:     Dunlap     v.  W.  1011. 

Wright,  11  Tex.  597,  62  Am.  Dec.  506;         '^^'^  Landrum  v.  Union  Bank  of  Mo. 

Harris  v.   Catlin,   53  Tex.   8;    Crafts  6  Mo.  48;  Vail  v.  Jacobs,  62  Mo.  130; 


815  CONDUCT    OF    SALE,    TERMS,    AXD    ADJOURNMENT.       [§    18G2. 

unless  the  deed  of  tmst  authorizes  him  to  do  so.-"'**^  In  case  he  is  au- 
thorized to  delegate  such  power,  it  would  devolve  upon  one  asserting 
the  sale  to  show  that  it  had  been  delegated  to  the  person  who  actually 
made  it.^'**'  He  must,  moreover,  be  present  during  the  whole  sale;  it 
is  not  sufficient  that  he  is  present  at  its  opening  and  close,  if  he  be 
absent  during  its  Tprogress/'^^  He  is  bound  to  adopt  all  reasonable 
precautions  to  render  the  sale  beneficial  to  the  debtor;  a  bare  com- 
pliance with  the  terms  of  the  power  is  not  enough.  He  must  to 
this  end  exercise  a  reasonable  judgment  or  discretion  in  respect  to 
advertising  the  property  and  conducting  the  sale.  In  respect  to  all 
duties  which  are  not  merely  mechanical  or  ministerial,  and  are  not 
prescribed  by  the  terms  of  the  deed,  a  special  trust  and  confidence 
are  reposed  in  him,  and  he  cannot  delegate  these  to  an  agent.^^^ 

He  has  an  undoubted  right,  however,  to  employ  an  auctioneer  to 
sell  the  lands  conveyed,  provided  he  is  himself  present  at  the  sale, 
directing  and  controlling  it.^*^^ 

The  sale  must  be  made  by  the  person  authorized  in  the  deed  to 
make  it.  He  cannot  act  by  an  agent,  unless  the  deed  expressly 
provides  that  he  may  do  so.^^*  Thus,  if  the  deed  provides  that  the 
sale  shall  be  made  by  the  United  States  marshal,  a  deputv  can- 
not act  as  auctioneer,  and  make  the  sale  in  the  absence  of  the 
marshal. ^°^ 

If  the  deed  be  to  two  trustees,  either  of  whom  is  authorized  to 
sell  on  default,  and  both  join  in  giving  notice  and  in  executing  the 
deed  to  the  purchaser,  the  power  is  well  executed  although  but  one 
attended  the  sale.^"^  But  a  sale  at  which  only  one  of  two  trustees 
was  present  is  invalid,  unless  the  deed  expressly  provides  that  one 
may  act  alone;  and  it  is  not  rendered  valid  by  the  absent  trustee's 

Graham  v.  King,  50  Mo.  22,  11  Mo.  "^^  Smith    v.    Lowther,    35    W.    Va. 

401;    Bales    v.    Perry,    51    Mo.    449;  300,  13  S.  E.  999. 

Singer   Manufacturing   Co.    v.    Chal-  '''■>"  Littell    v.    Jones,    56    Ark.    139, 

mers,  2  Utah,  542;    WiclvS  v.  West-  19  S.  W.  497;  Shahan  v.  Tethero,  114 

cott,    59   Md.    270;    Fuller   v.    O'Neil,  Ala.    404,    21    So.    951;     Gamble    v. 

69    Tex.    349,    6    S.    W.    181;    North  Caldwell,  98  Ala.   577,  12  So.   424. 

American  Trust  Co.  v.  Chappell,  70  ^"  Brickenkamp    v.    Rees,    69    Mo. 

Ark.  507,  69  S.  W.  546.   In  Connolly  426. 

V.  Belt,  5  Cranch  C.   C.  405,  it  was  ^''^  Bales   v.    Perry,    51   Mo.    449. 

held  that  the  trustee  might  depute  ""^  McPherson    v.    Sanborn,    88    111. 

a  competent  agent  to  attend  the  sale  150;   Taylor  v.  Hopkins,  40  111.  442. 

and  conduct  it;  and,  in  the  absence  ''■'*  Hess  v.  Dean,  66  Tex.  663,  2  S. 

of    a    statute    requiring    the    trustee  W.  727;  Grover  v.  Hale.  107  111.  C38. 

to    be    present,    the    sale    would    be  '"'■'  Singer     Manufacturing     Co.     v. 

valid.      This   case   seems   to   be    ap-  Chalmers,  2  Utah,  542. 

proved  in  Smith  v.  Black,  115  U.  S.  '>»"  Weld  v.  Rees,  48  111.  428;  Smith 

308,  6  Sup.  Ct.  50.    To  like  effect  see  v.   Black,   115  U.   S.   308,  6  Sup.   Ct. 

Tyler    v.    Herring,    67    Miss.    169,   '6  50. 
So.  840;   Dunton  v.  Sharpe,  70  Miss. 
850,  12  So.  800. 


§§  18G3,  1864.]  POWER  of  sale  mortgages  and  trust  deeds.  816 

ratifying  the  sale  and  joining  in  the  deed,  with  no  information  as  to 
the  state  of  affairs  at  the  sale.^^^ 

§  1863.  The  power  generally  provides  that  the  sale  shall  be  by 
public  auction,  and  in  such  case  there  can  be  no  valid  private  sale.^^® 
If  the  power  allows  of  either  mode,  a  private  sale  made  in  good 
faith  and  for  a  fair  price  is  good,  even  without  any  advertiseraent.^°^ 
If  the  authority  be  to  sell  by  private  contract,  a  sale  at  auction  would 
not,  it  is  conceived,  be  justified;'""'  for  the  object  in  authorizing  a 
private  sale  may  be  supposed  to  be  the  obtaining  of  a  better  price 
than  would  ordinarily  be  realized  by  an  auction  sale.  If  the  power 
contains  no  restriction  or  provision  as  to  the  mode  of  sale,  the  mort- 
gagee may  sell  at  private  sale  as  well  as  by  public  auction,  though 
as  a  general  rule  a  sale  by  auction  would  be  the  safer  and  better  course. 
If  the  power  makes  provision  for  a  sale  by  auction,  prescribing  the 
place  of  sale  and  the  length  of  time  the  notice  shall  be  advertised,  Ihis 
precludes  the  right  to  sell  at  private  sale.^°^ 

To  make  the  sale  binding  upon  the  purchaser  and  the  mortgagee  the 
auctioneer  should  require  the  execution  of  a  memorandum  in  compli- 
ance with  the  statute  of  frauds.*'"^ 

A  requirement  that  the  sale  shall  be  "within  lawful  hours"  has 
been  held  to  mean,  in  the  absence  of  statute,  only  a  restriction  against 
sale  at  an  imusual  and  unreasonable  hour.^°^ 

§  1864.  The  terms  of  sale,  while  they  should  properly  make  it 
safe  for  the  mortgagee,  should  not  be  so  stringent  as  to  deter  per- 
sons from  attending  the  sale  and  bidding.  If  the  conditions  are 
such  as  to  have  this  effect  the  sale  may  be  avoided.  Not  only  must 
the  mortgagee  adhere  strictly  to  the  terms  of  the  power,  but  in  the 
trust  relation  in  which  he  stands  towards  the  persons  interested  in 
the  equity  of  redemption  he  is  bound  to  adopt  proper  means  to  get 
a  reasonable  price  for  the  property.*"'*  There  should  be  no  special 
conditions   for  the   advantage  of   any  third   person,   such   as   might 

"'Black    V.    Smith,    4    McArthur,  Dawes,  12   Allen,   397;    Lawrence  v. 

338.  Farmers'  Loan  &  Trust  Co.  13  N.  Y 

^■"' Where   the   highest  bidder   was  200;   Elliott  v.  Wood,  45  N.  Y.  71. 

unable  to  comply  with  the  terms  of  "'"'  See  Daniel  v.  Adams,  Amb.  495. 

the    sale,    and    it   was    subsequently  °'"  Griffin  v.  Marine  Co.  52  111.  130. 

sold  by  a  private  agreement  to  the  ""-White    v.     Crew,     16     Ga.     416; 

highest  responsible  bidder  with  the  Seymour    v.    National    Build.    &    L. 

consent  of  the  grantor  in  the  trust  Asso.  116  Ga.  285,  42  S.  E.  518. 

deed,  the  latter  cannot  object  to  the  ^"^  Thompson  v.  Cobb,  95  Tex.  140, 

validity    of    the    sale.      Cockrill    v.  65  S.  W.  1090. 

Whitworth   (Tenn.)    52  S.  W.   524.  ""'  Falkner  v.  Equitable  Reversion- 

■™Davey  v.  Durant,  1  De  G.  &  J.  Jiry  Society,  4  Drew,  352;  Matthie  v. 

535;      Brouard     v.     Dumaresque.     3  Edwards,  2  Coll.  465. 
Moore,    P.    C.    C.    457;    Montague   v. 


817  CONDUCT  or  sale^  terms^  and  adjournment.     [§  1865. 

depreciate  the  j^roperty.  Any  condition  that  a  prudent  and  rea- 
sonable owner  would  impose  when  selling  in  his  own  right  ie  jus- 
tifiable in  a  sale  by  the  mortgagee  under  the  power.  The  mort- 
gagee may  make  reservations  for  the  benefit  of  the  owner  of  the 
equity  of  redemption,  as,  for  instance,  a  reservation  of  a  growing 
crop.*'°^ 

Although  by  the  terms  of  the  mortgage  the  sale  is  to  be  for  cash 
only,  the  mortgagee  has  the  right  to  agree  with  the  purchaser  to 
allow  him  time  for  the  payment  of  the  purchase-money.  This  is  a 
matter  between  the  mortgagee  and  the  purchaser,  which  they  can 
arrange  to  suit  themselves.'''"^ 

The  mortgagor  is  interested  only  in  the  surplus  money  after  the 
payment  of  the  mortgage  debt,  and  he  may  recover  this  from  the 
mortgagee  in  an  action  for  money  had  and  received,  notwithstand- 
ing the  purchaser's  notes  afterwards  become  worthless.'"*^ 

If  the  mortgage  provides  for  a  sale  for  cash,  the  sale  is  not  vitiated 
by  an  announcement  at  the  time  of  sale  that  payment  in  gold  and 
silver  or  legal  tender  currency  will  be  required  within  twelve  or 
twenty-four  hours  after  the  sale,  when  no  fraudulent  purpose  in 
making  such  terms  is  shown.'''^^ 

§  1865.  The  acquiesence  of  the  mortgagor  in  the  conduct  of 
the  sale,  and  particularly  in  the  terms  of  it,  will  cure  any  defect 
in  this  respect,  and  give  validity  to  it.""''  In  Markey  v.  Langley  the 
mortgagor  was  present  at  the  sale,  and  made  no  objection  to  the 
terms  and  conditions  of  it,  and  his  acquiescence  was  held  to  conclude 
him  from  making  objection  afterwards.  The  case  of  Taylor  v. 
Chowning  is  to  the  same  effect.     Where  property  is  sold  for  cash  to 

■^"^  Sherman    v.    Willett,    42    N.    Y.  N.  C.  608,  17  S.  E.  430,  per  MacRae, 

146.     If  a  mortgagee  in  possession,  J.:  Markey  v.  Langley,  92  U.  S.  142; 

upon    making    a    sale,    reserves    the  Olcott   v.    Bynum,    17    Wall.    44,    64. 

crops  or  the  rents  for  the  year,  and  In  the  latter  case  there  had  been  a 

himself    becomes    the    purchaser    at  sale  of  land  in  North  Carolina  under 

the  sale,  he  is  liable  for  the  crops  a  power  in  the  year  1860.    When  the 

or  rents  upon  a  subsequent  redemp-  bill  was  filed  to  set  it  aside,  nearly 

tion  by  the  mortgagor.     Roulhac  v.  eight  years  had  elapsed.     The  mort- 

Jones,  78  Ala.  398.  gagor  resided  in  New  York,  and  the 

"■""  Burden    v.    Whetstone,    92    Ala.  other   parties    in    interest   in    North 

480,  9  So.  176;   Mewburn  v.  Bass,  82  Carolina.     Mr.  Justice  Swayne  said: 

Ala.  622,  2  So.  520;   Cooper  v.  Horns-  "Making  allowance  for  the  difficulty 

by,  71  Ala.  62.  of    intercourse    between    the    North 

""'  Tompkins   v.    Drennen,   56   Fed.  and  the  South  during  the  war,  there 

694.  was   acquiescense.    express   and    im- 

™^Lallance  v.    Fisher,   29   W.    Va.  plied,  for  three  years  after  the  war 

512,  2  S.  E.  775.  ceased.     This,     if     not     conclusive, 

609  Taylor    v.    Chowning,    3    Leigh,  weighs    neavily    against    the    com- 

654;  Meier  v.  Meier,  105  Mo.  411,  16  plainant." 
S.  W.  223;    Lunsford  v.  Speaks,  112 


§    18G6.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  818 

the  debtor,  who  is  the  highest  bidder,  but  he  is  unable  to  raise  the 
money  required,  it  may  be  sold  to  the  next  highest  bidder  without 
again  putting  the  property  up  and  striking  it  off.  The  debtor,  hav- 
ing been  indulged  in  a  little  time  to  make  his  bid  good,  and  having 
failed  to  do  so,  is  in  no  position  to  complain  of  a  technical  infor 
mality."*^ 

The  usual  and  proper  course,  however,  is,  upon  the  failure  of  s 
bidder  to  make  payment  at  the  time,  to  reopen  the  sale  before  the 
bidders  disperse,  or  to  adjourn  the  sale  to  a  time  then  declared.'*^^ 
If,  through  mistake,  he  strike  off  the  property  to  the  wrong  person, 
or  to  one  not  in  a  position  to  comply  with  his  bid,  he  may,  in  the 
exercise  of  a  wise  discretion,  when  substantial  justice  can  be  done,  and 
the  rights  of  interested  parties  l)e  protected,  select  the  proper  bid- 
der to  whom  the  sale  should  be  made,  and  the  deed  may  be  given.*^^^ 

If  no  one  but  the  owner  of  the  note  bids  at  a  sale,  his  offer  in  the 
sense  of  the  term  as  used  in  the  trust  deed  is  the  "highest  and  best 
bid."  Where  the  trust  deed  provides  that  the  trustee  must  sell  for 
the  highest  and  best  price,  this  does  not  mean  that  no  sale  is  legal 
unless  there  are  three  or  more  bids.  If  only  one  bona  fide  bid  is  made, 
it  is  in  the  language  of  the  instrument,  "the  highest  and  best  bid."°^^ 

§  1866.  Payment  at  time  of  sale. — In  fixing  the  terms  of  pay- 
ment for  a  sale  under  a  mortgage  or  trust  deed,  the  mortgagee  or 
trustee  is  bound  to  act  fairly  and  with  proper  discretion.  It  is  usual 
and  proper  to  require  a  deposit  at  the  time  of  sale  of  a  reasonable  sum 
to  cover  the  expenses  of  sale,  and  insure  the  completion  of  it  by  the 
purchaser.®^*  Such  a  reasonable  deposit  is  forfeited  to  the  use  of 
the  mortgagee  if  the  purchaser  fails  to  comply  with  the  terms  of  sale, 
and  he  cannot  recover  it  back  from  the  mortgagee.^^^  If  the  pay- 
ment of  the  whole  amount  of  the  purchase-money  be  arbitrarily  re- 
quired at  the  time  of  sale,  or  w^ithin  an  hour's  time  after  it,  against 
the  remonstrances  of  persons  in  attendance  at  the  sale,  the  sale  will 
be  set  aside.®^®  It  must  be  shown,  however,  that  this  requirement  had 
the  effect  of  keeping  persons  present  from  bidding. *'^^  A  requirement, 
not  of  the  immediate  payment  of  the   entire  purchase-money,   but 

"^"Maloney  v.  Webb,  112  Mo.   575,  '"'Donahue  v.  Parkman,  161  Mass. 

20  S.  W.  683.  412,  37  N.   E.   805. 

•"■"  Davis   V.    Hess,    103   Mo.    31,    15  ""  Goldsmith    v.    Osborne,    1    Edw. 

S.  W.  324.  Ch.    560,    562.      See    Model    Lodging 

"-  Coler  V.  Barth,  24  Colo.   31,   48  House    Asso.    v.    Boston,    114    Mass. 

Pac.  656.  133;  Maryland  Land  &  Build.  Soc.  v 

«'=  Lathrop     v.     Tracy,     24     Colo.  Smith,  41  Md.  516.    See  §  1613. 

382,  51  Pac.  486.  •"■  Goode   v.    Comfort,   39   Mo.    313, 

«'*  Donahue  v.  Parkman,  161  Mass.  326;  Jones  v.  Moore,  42  Mo.  413. 
412,  37  N.  E.  205. 


811)  CONDUCT    OF    SALE,    TERMS,    AND    ADJOURNMENT.-     [§    1866. 

of  a  deposit  of  a  sum  iiniisnally  large,  and  not  proportioned  to  the 
value  of  the  property,  would  have  the  same  effect  in  invalidating  the 
sale.  It  is  not  unreasonable  to  require  the  payment  of  $500  down 
upon  a  sale  under  a  mortgage  for  $8,000,  although  the  advertise- 
ment of  the  sale  did  not  state  that  such  a  payment  would  be  required, 
but  did  state  that  the  terms  of  sale  would  be  stated  at  the  time  of 
sale.  At  such  a  sale  a  person  who  had  been  requested  by  the  mort- 
gagor, who  was  present,  to  run  up  the  estate  for  him,  having  bid  it 
off,  and  not  having  $500  with  him  to  pay,  and  not  asking  any  delay, 
the  estate  was  put  up  again  and  sold  for  a  less  sum.  It  was  held  that 
there  was  no  evidence  in  these  circumstances  of  fraud  or  unfairness  in 
the  sale. •'1 8 

When  the  sale  is  to  be  for  cash,  the  purchaser  is  not  entitled  to 
demand  a  conveyance  unless  he  tenders  the  amount  of  his  bid  in  cash 
at  the  time  of  the  sale  or  during  business  hours  of  the  day  of  sale. 
The  tender  of  a  draft  or  clieck  is  not  siiificient.  The  purchaser  is 
bound  to  know  the  terms  of  sale.'^^'' 

In  a  case  in  Maryland,  property  worth  at  least  $6,600  was  pur- 
chased by  tlie  mortgagee  for  $1,600;  and  it  further  appeared  that 
it  had  previously  been  struck  off  to  another  purchaser  for  the  sum 
of  $2,375,  who.  tendered  about  half  of  this  in  cash,  and  stated  that 
he  would  pay  the  balance  on  the  ratification  of  the  sale  as  required 
by  the  laws  of  that  State,  and  offered  sufficient  security  for  this. 
Tlie  mortgagee  declined  to  receive  the  money,  as  not  in  conformitv 
with  the  terms  of  sale,  which  were  for  cash;  and  upon  a  subsequent 
offer  of  the  property  the  mortgagee  purchased  it.  The  sale  was  set 
aside.  Mr.  Justice  Stewart,  delivering  the  opinion  of  the  court, 
said  the  mortgagee  had  "misapprehended  the  nature  of  his  duty  as 
trustee,  which  required  an  advantageous  sale  of  the  property  for  the 
benefit  of  all  the  parties  interested.  .  ,  .  There  is  this  difference, 
however,  between  the  trustee  and  the  mortgagee,  which  should  never 
be  forgotten  by  the  latter:  that  he  has  a  personal  interest  in  the 
proceeding,  and  that  the  mortgagor  has,  notwithstanding,  reposed 
full  trust  and  confidence  in  his  strict  impartiality,  and  that  tliere 
must  be  ample  reciprocity  on  his  part  by  a  fair  and  just  discharge 
of  his  duty-'^'^o 

The  actual  payment  of  the  deposit  may  be  waived  without  affect- 
ing the  validity  of  the  sale.     Thus,  where  land  had  been  sold  under 

"^Wing    V.     Hayford,     124     Mass.        «°  Horsey   v.    Hough,   38   Md.    130, 

249-  cited  with  approval  by  Mr.   Justice 

«•»  Dwelle  V.  Blackshear  Bank,  115  Swavne  in  Markey  v.  Lanelev    92  U 

Ga.  679,  42  S.  E.  49.  S.   142    154 


g§  1867,  1868.]  POWER  of  sale  mortgages  and  trust  deeds,  820 

a  power  for  more  than  enough  to  satisfy  the  mortgage  debt,  the 
validity  of  the  sale  was  objected  to  because  the  purchaser  had  not 
paid  down  fifty  dollars  in  cash  as  required  by  the  terms  of  the  sale. 
It  appeared  that  the  purchaser,  when  he  bid  off  the  property,  did 
not  have  that  sum,  but  the  auctioneer  agreed  to  advance  it,  and  told 
the  mortgagee  that  the  purchaser  had  paid  it,  and  that  the  money 
was  ready  for  him.  It  was  held  that  this  arrangement,  not  objected 
to  by  the  mortgagee  at  the  time,  had  the  effect  of  a  payment  of  the 
mortgage  debt  to  the  amount  of  such  sum  of  fifty  dollars,  and  that 
the  validity  of  the  sale  could  not  be  objected  to  because  the  pur- 
chaser did  not  actually  pay  over  this  sum.  If  the  purchaser  had 
actually  paid  the  deposit  to  the  auctioneer,  the  mortgagee  would 
have  been  obliged  to  look  to  him  for  it,  just  as  he  is  obliged  to  look 
to  him  for  it  under  the  agreement  made.®^^ 

§  1867.  Time  for  examination  of  title. — Among  other  conditions 
of  sale  it  is  usual  to  provide  that  a  certain  time  shall  be  allowed  the 
purchaser  for  the  examination  of  the  title  before  the  purchase-money 
is  payable.  If  unexpected  difficulties  occur  in  completing  the  ex- 
amination of  title,  or  in  making  the  title  satisfactory  to  the  pur- 
chaser, much  more  time  than  that  stipulated  for  may  be  necessary. 
In  such  cases  time  is  not  generally  considered  of  the  essence  of  the 
contract.*'^- 

§  1868.  Giving  credit. — In  general  it  may  be  said  that  where  a 
power  of  sale  does  not  expressly  authorize  the  mortgagee  to  give 
credit,  or  to  accept  a  mortgage  in  part  payment  of  the  purchase- 
money  under  the  sale  to  be  made  by  him,  a  sale  for  cash  is  contem- 
plated, and  he  would  not  be  authorized  to  give  credit  for  more  than 
the  amount  of  the  debt  due  him,  as  the  mortgagor  or  subsequent  in- 
cumbrancers are  entitled  to  receive  the  surplus  remaining  after  the 
payment  of  the  mortgage  debt  in  cash.  The  persons  entitled  to  the 
surplus  could,  of  course,  by  subsequent  agreement,  waive  this  right, 
and  join  the  mortgagee  in  giving  credit  for  the  amount  coming  to 
them. 

A  purchaser  at  the  sale  is,  of  course,  chargeable  with  notice  of 
any  requirement  contained  in  the  mortgage  as  to  credit,  and  with 
notice  of  any  irregularity  attending  the  sale  in  this  respect;  but  a 
remote  purchaser  is  not  chargeable  with  such  notice."-^  If  a  require- 
ment that  the  sale  be  for  cash  be  substantially  though  not  literally 
complied  with,  and  no  injury  be  done  to  the  mortgagor,  no  objection 

"'  Farnsworth    v.    Boardman,    131        '"  Hobson  v.   Bell,   2  Beav.   17. 
Mass.  115.  ''^Johnson  v.  Watson,  87  111.  535. 


821  CONDUCT    OF    SALE,    TERMS,    AND    ADJOURNMENT.       [§    18G8. 

can  be  taken  to  the  sale."-'*  If  the  mortgagee  or  the  trustee  in  a  deed 
of  trust,  in  making  a  sale  purporting  to  be  for  cash,  gives  credit,  or 
has  an  understanding  with  the  bidder  that  credit  will  be  given  him 
on  part  of  his  bid,  in  order  to  induce  him  to  make  the  property 
bring  the  full  amount  of  the  debt  secured,  this  is  not  to  the  injury 
of  the  mortgagor,  or  those  claiming  under  him,  and  will  not  avoid 
the  sale.'^-^ 

If  the  power  of  sale  provides  that  the  sale  shall  be  for  cash,  the 
mortgagee  is  not  bound  to  accept  the  highest  bid,  unless  it  be  bona 
fide  for  cash.*^^** 

If  a  deed  of  trust  provides  for  a  sale  for  cash,  a  decree  for  the 
sale  of  the  trust  property  should  conform  to  the  terms  of  the  deed, 
unless  all  the  parties  in  interest  consent  to  a  change  of  the  terms.®^'^ 
If  the  power  of  sale  provides  that  the  sale  shall  be  for  cash,  the 
validity  of  it  is  not  affected  by  giving  credit."^*  If,  upon  a  sale  under 
a  power  to  sell  for  cash,  the  purchaser  gives  his  check,  which  is 
good,  and  it  is  accepted  as  cash,  he  complies  with  the  requirement."^^ 
Unless  there  be  a  surplus  left  after  payment  of  the  mortgage, 
the  payment  of  the  purchase-money  is  a  matter  between  the  mortgagee 
and  the  purchaser,  and  the  mortgagor  has  no  interest  in  it  except  to 
obtain  credit  on  his  debt  for  the  amount  of  the  sale.®^'' 

An  express  stipulation  that  a  sale  be  for  cash  must  be  complied 
with.  Bidders  at  the  sale  were  bound  to  inquire  into  the  authority  of 
the  trustee  to  sell  and  the  terms  and  conditions  upon  which  the  sale 
was  to  be  had.  Being  charged  with  notice,  and  not  having  tendered 
the  amount  of  their  bid  in  cash  either  at  the  time  of  sale  or  during 
the  legal  hours  of  sale  on  the  day  the  property  was  put  up  for  sale, 
the  bidders  had  no  right  to  come  into  a  court  of  equity  and  pray  for 
the  specific  performance  of  a  contract  of  sale  which  was  never  com- 
pleted on  account  of  their  failure  to  comply  with  the  terms  of  sale."^^ 

An  express  stipulation  in  a  deed  of  trust  requiring  the  trustee  to 
sell  on  credit  must  be  observed.  Thus  a  trust  deed  provided  that  "if, 
at  the  time  of  such  sale,  any  of  the  notes  shall  not  have  become  due 

""Ballinger    v.    Bourland,    87    111.  "="  McConneaughey     v.     Bogardus, 

513,  29  Am.  Rep.  69;  Burr  v.  Borden,  106  111.  321;  Carey  v.  Brown,  62  Cal. 

61   111.   389.  373. 

«^^  Marsh  v.  Hubbard,  50  Tex.  203;  "^Mewburn   v.   Bass,   82   Ala.   622, 

Chase    v.    First    Nat.    Bank,    1    Tex.  2  So.  520;   Durden  v.  Whetstone,  92 

Civ.  App.  595,  20  S.  W.  1027;  Marlin  Ala.  480,  9  So.  176;  Cooper  v.  Horns- 

v.  Sawver   (Tenn.)   57  S.  W.  416.  by,  71  Ala.   62;    Atkins  v.  Tutwiler. 

»"''  Coier  v.   Barth,  24  Colo.   31,  48  98  Ala.  129,  11  So.  640. 

Pac.  656.  ""  Dwelle  v.  Blackshear,  Bank,  115 

«•-■'"  Wood  V.  Krebbs,  33  Gratt.   685.  Ga.  679,  42  S.  E.  49. 

"^Mewburn  v.   Bass,   82   Ala.   622, 
2  So.  520. 


§§  18G9,  1870.]   POWER  OF  sale  mortgages  and  trust  deeds.  823 

and  payable,  such  part  or  parts  of  said  purchase-money  as  will  be 
sufficient  to  pay  off  and  discharge  such  remaining  notes  shall  be 
made  payable  at  such  time  or  times  as  the  said  remaining  notes  will 
become  payable."  It  was  held  that  the  trustee  exceeded  his  authority 
by   insisting  that   cash   should   be   paid   at  the  time   of  the   sale."^- 

§  1869.  When  the  power  does  not  prescribe  the  terms  of  sale, 
the  sale  may  properly  be  for  cash,  even  where  it  is  customary  to 
give  credit  on  foreclosure  sales."^^  In  Maryland,  where  sales  under 
powers  must  be  reported  to  the  court  and  confirmed  to  make  them 
valid,  an  objection  to  a  sale  for  cash  as  harsh  and  inequitable  can 
be  taken  only  upon  the  ratification  of  the  sale,  and  is  no  ground  for 
enjoining  it.*^^* 

A  sheriff,  making  a  sale  under  a  deed  of  trust  as  trustee,  made 
proclamation  that  the  purchase-price  must  be  paid  within  thirty 
minutes  after  the  sale.  The  wife  of  the  debtor  bid  in  the  property. 
Upon  being  asked  what  she  could  do,  she  replied  that  she  did  not 
know,  and  then  left,  and  did  not  return.  The  sheriff  resold  the 
property  for  a  larger  sum.  It  was  held  that  the  sheriff's  conduct 
was  not  oppressive;  that,  the  sale  being  for  cash,  he  was  justified  in 
requiring  immediate  payment;  and  that  it  was  proper  for  him  to 
resell  before  the  bidders  dispersed,  and  so  avoid  the  necessity  of  re- 
advertising.''^^ 

8  1870.  If  the  mortgagee  may  sell  for  cash  or  credit  he  must 
use  his  discretion  fairly.  When  by  the  terms  of  the  power  he  is 
authorized  to  use  his  discretion  in  this  respect,  he  must  use  it  fairly 
in  the  interest  of  the  mortgagor,  and  not  merely  for  his  own  in- 
terest; and  if  the  property  is  subject  also  to  other  liens,  the  mort- 
gagee in  selling  under  his  power  is  a  trustee  for  them,  as  well  as  for 
the  mortgagor.  Whether  he  shall  sell  for  cash  or  for  credit,  or  for 
both,  when  expressly  authorized  to  do  either,  is  a  matter  for  his 

«3==  Patch   v    Monisett   (Va.)    22   S.  sheriff,  in  making  the  sale,  occupied 

■g   -|^Y3  "  the    position    of    the    trustee,    and 

"»  Olcott  V  Bynum  17  Wall.  44.  he  was  in  duty  bound  to  act  in  good 
"We  cannot  hold,  as  'a  rule  of  law,  faith  as  an  indifferent  person,  and 
apart  from  the  circumstances  of  the  adopt  all  reasonable  methods  of  pro- 
case  that  the  requirement  of  cash,  ceeding  in  order  to  make  the  land 
instead  of  cash  and  credit  is  un-  bring  the  most  money,  but  he  was 
reasonable.  No  case  is  cited  where-  not  called  upon  to  pursue  that 
in  any  such  rule  has  been  held,  course  which  would  compel  him  to 
and  we  do  not  think  that  any  can  be  readvertise  the  property.  Had  he 
cited"  By  the  court  in  Hitz  v.  suffered  the  bidders  to  disperse 
Jenks,  16  App.  D.  C.  530,  553.  without     any     proclamation     as     to 

•'*  Powell  v    Hopkins,  38  Md.  1.  when  he  would  resell,  it  would  have 

""Davis   V    Hess.    103   Mo.    31,    15  been      his      duty      to      readvertise. 

S     W     324       Per    Black,    J.:      "The  Judge  v.  Booge,  47  Mo.  544. 


823 


CONDUCT    OF    SALE,    TERMS,    AND    ADJOUUNMENT.       [§    1871. 


discretion,  to  be  fairly  exercised  for  the  benefit  of  all  concerned. 
"He  must  regard  the  interest  of  others  as  well  as  his  own.  He 
should  seek  to  promote  the  common  welfare.  If  he  does  this,  and 
keeps  within  the  scope  of  his  authority,  a  court  of  equity  will  in 
nowise  hold  him  responsible  for  mere  errors  of  judgment,  if  they 
have  occurred,  or  for  results,  however  unfortunate,  which  he  could 
not  liave  anticipa.ted."*'^^ 

§  1871.  The  moi-tgagee  may,  in  making  the  sale,  take  all  the 
risk  of  the  credit  or  for  the  purchase-money  upon  himself,  and 
charge  himself  with  the  whole  proceeds,  and  then  pay  the  surplus 
in  cash  to  the  owner  of  the  equity  of  redemption,  or  others  entitled 
to  it.  With  this  limitation,  neither  the  mortgagor  nor  other  parties 
interested  in  the  property  can  object  to  the  giving  of  credit,  for  this 
affords  an  opportunity  to  make  a  better  sale,  and  is  for  the  benefit 
of  all  parties. ''^'  Although  the  deed  itself  provides  that  the  sale  shall 
be  made  for  cash,  the  mortgagee  may  give  credit  for  that  part  of 
the  proceeds  coming  to  him  f^^  and  if  there  is  no  surplus,  there  is  no 
one  who  can  be  injured  by  any  credit  which  the  holder  of  the  mort- 
gage may  extend  to  the  bidder  ;®^^  and  where  the  premises  have  sub- 
sequently become  incumbered  by  other  liens,  the  holders  of  which 
are  satisfied  to  take  the  notes  of  the  purchaser  at  the  foreclosure 
sale,  the  mortgagee  making  the  sale  may  take  such  notes  in  part 
payment,  as  they  are  equivalent  to  cash,  and  the  taking  of  them 
does  not  prejudice  any  one."*"  On  the  contrary,  such  a  course  would 
generally  result  to  the  advantage  of  the  owner  and  of  the  holders  of 
subsequent  liens.''*^ 

A  power  of  sale  given  to  a  mortgagee  authorized  him,  in  case  of 
a  default  in  payment  of  the  principal  sum  and  interest,  to  dispose 
of  the  premises  by  public  sale  or  private  contract  for  such  price  as 
could  reasonably  be  obtained  for  them.  Upon  default  the  mort- 
gagee made  a  private  contract  of  sale.  Subsequently,  the  pur- 
chaser not  finding  it  convenient  to  pay  the  money  down,  it  was 
agreed  that  the  larger  portion  of  the  purchase-money  should  re- 
main on  a  mortgage  of  the  estate;  and  then,  instead  of  convey- 
ing the  estate  to  the  buyer,  the  mortgagee  conveyed  to  a  trustee, 

^^"Markey    v.    Langley,    92    U.    S.  "^  Strother   v.    Law,    54    111.    413. 

142,  per  Mr.  Justice  Swayne.  "^  Sawyer    v.    Campbell,    130    111. 

«"  Bailey  v.   ^tna  Ins.   Co.  10  Al-  186,  22  N.  E.  458;  Burr  v.  Borden,  61 

len,  286;   Davey  v.  Durrant,  1  De  G.  111.    389;     Waterman    v.    Spaulding, 

&    J.     535.      And    see    Thurlow    v.  51  111.  425. 

Mackeson,  L.   R.   4  Q.  B.   97;    Cren-  »«' Mead    v.    McLaughlin.    42    Mo. 

Shaw    V.    Seigfried,    24    Gratt.    272;  198. 

Cox  V.  Wheeler,  7  Paige,  248;  Parker  »*'  Cox  v.  Wheeler,  7  Paige,  248. 
V.  Banks,  79  N.  C.  480. 


§§  1872,  1873.]  POWER  of  sale  mortgages  and  trust  deeds.  824 

to  hold  in  the  first  place  as  security  for  the  payment  of  the  pnr- 
chase-money.  It  was  contended  that  this  was  not  a  good  exercise 
of  the  power,  because  the  purchase-money  was  not  paid  down. 
The  amount  received  was  less  than  the  debt  due  the  mortgagee. 
The  court  held  that  the  power  was  duly  exercised,  and  that  it 
was  immaterial  that  the  contract  of  purchase  was  carried  out  by 
mortgage.®*^ 

The  sale  is  not  vitiated  by  an  arrangement  made  before  the  sale 
between  the  mortgagee  and  the  purchaser  whereby  the  amount  of 
the  purchaser's  bid  is  to  be  applied  upon  a  debt  due  him  from  the 
mortgagee.''*^ 

§  1872.  When  the  mortg-agee  is  expressly  authorized  to  sell  for 
cash  or  on  credit,  he  may  do  either  or  combine  both  in  the  sale; 
and  although  the  terms  of  sale  provide  for  the  payment  of  one- 
third  of  the  purchase-money  in  cash,  and  the  balance  In  notes  secured 
by  mortgage  upon  the  same  property,  it  is  competent  for  the  mort- 
gagee to  change  the  terms  after  the  property  is  struck  off,  by  giv- 
ing credit  for  a  larger  portion  of  the  purchase-money.  Such  a  power 
is  in  this  respect  without  restriction. ''** 

In  Markey  v.  Langley,  the  mortgagee,  being  authorized  to  sell 
for  cash  or  for  credit,  sold  wholly  upon  credit,  and  took  property  in 
addition  to  that  covered  by  the  original  mortgage  as  security.  On 
account  of  a  great  depreciation  in  value  afterwards,  the  mortgagee 
was  obliged  to  sell  the  property  again,  and  for  a  less  price;  and  a 
subsequent  incumbrancer  then  claimed  that  the  mortgagee  should 
be  charged  with  a  portion  of  the  nominal  proceeds  of  the  first  sale  as 
cash,  on  the  ground  that  he  was  not  justified  in  selling  for  credit 
wholly.  But  the  court  held  that,  having  authority  to  sell  in  this 
way,  and  having  acted  at  the  time  in  good  faith  and  for  the  benefit 
of  all  concerned,  so  far  as  then  appeared,  he  could  not  be  held  re- 
sponsible for  the  results.*'*^ 

When  a  sale  is  properly  made  in  part  for  credit,  interest  con- 
tinues to  run  on  the  part  of  the  mortgage  debt  not  satisfied  by  the 
cash  payments,  until  the  purchase-money  is  received.®*^ 

§  1873.  Adjournment. — The  power  to  a  trustee  or  mortgagee  to 
sell  by  public  auction,  after  a  certain  public  notice  of  the  time  and 
place  of  sale,  includes  the  power  to  adjourn  the  sale,  in  the  exercise 

'"  Thurlow  v.  Mackeson,  L.   R.   4  «"  Markey  v.  Langley,  92  U.  S.  142. 

Q.  B.  97.  '"  Stanford  v.  Andrews,  12  Heisk. 

•"Tartt    v.    Clayton,    109    111.    579.  664. 
'**  Markey  v.  Langley,  92  U.  S.  142. 


825 


CONDUCT    OF    SALE,    TERMS,    AXD    ADJOURNMENT.       [§    1873. 


of  a  sound  discretion,  in  order  to  obtain  a  fair  price  for  the  property.''*^ 
He  may  adjourn  it  more  than  once.''*'*  Without  such  power  the 
property  might  be  sacrificed  to  the  injury  not  only  of  the  creditor 
but  of  the  debtor  as  well.  As  has  already  been  seen,  this  power  of 
adjournment  is  held  to  belong  to  sheriffs  and  other  public  officers 
selling  under  judgment  or  decree  of  court.''*'*  "If  such  a  power," 
says  Mr.  Justice  Curtis,  "is  implied  wdiere  the  law,  acting  in  invi- 
tum,  selects  the  officer,  a  fortiori  it  may  be  presumed  to  be  granted 
to  a  trustee  selected  by  the  parties.'"'^*' 

It  is  well  settled  that  a  mortgagee  may,  in  the  exercise  of  a 
reasonable  discretion,  adjourn  the  sale  from  time  to  time.**^^  It  is 
his  duty,  growing  out  of  the  trust  relation  he  occupies  towards  the 
mortgagor  and  all  parties  interested  under  him,  to  get  the  best 
price  he  can,  and  to  take  proper  and  reasonable  means  to  obtain 
the  full  value  of  the  property.  If  he  deems  it  expedient  to  ad- 
journ the  sale  for  the  reason  that  very  few  persons  are  present, 
he  has  the  right  to  do  so.  He  must  act  in  good  faith.  It  often  be- 
comes in  this  way  the  duty  of  the  mortgagee,  or  of  a  trustee  under 
a  deed  of  trust,  to  adjourn  the  sale.^^-  The  want  of  bidders  ren- 
ders an  adjournment  necessary.  If  a  trustee  finds  that  there  is  no 
bidder  except  the  creditor,  or  only  sham  bidders,  he  should  adjourn 
the  sale.*'^^  But  in  a  case  where  there  were  about  a  dozen  persons 
present,  and  several  of  these  bid  upon  the  property,  it  was  held  that 
the  mortgagee  w^as  under  no  obligation  to  adjourn  the  sale.®®* 

A  sale  at  which  no  one  is  present  but  the  auctioneer,  who  bids 
off  the  property  for  the  mortgagee,  is  void.  It  is  not  a  legal  auc- 
tion.''^^  If  the  purchaser  to  whom  the  property  is  struck  off  at  the 
auction  refuses  to  complete  his  purchase,  and  the  hour  of  sale  has 

""  Crutchfield    v.    Hewett,    2    App.  Johnston  v.  Eason,  3  Ired.  Eq.  330. 

Cas.  D.  C.  373.  336;    Meyer   v.   Jefferson   Ins.    Co.    5 

"'Richards    v.    Holmes,    18    How.  Mo.    App.    245;    Thompson    v.    Hey- 

143.  wood,     129     Mass.     401;     Briggs     v. 

"^^  See   chapter   xxxvi;    Warren   v.  Briggs,  135  Mass.  306;  Clark  v.  Sim- 

Leland,    9     Mass.     265;     Russell    v.  mons,    150  Mass.  357,  23  N.  E.   108; 

Richards,   11   Me.    371,   26   Am.   Dec.  Marcus  v.   Collamore,  168  Mass.   56, 

532;  Tinkom  v.  Purdy,  5  Johns.  345;  46   N.   E.   432;    Bailey  v.   Brown,   14 

Bennett   v.    Brundage.   8   Minn.    432.  Colo.  App.  392,  60  Pac.  20. 

""  Richards    v.    Holmes,    18    How.  °"  Fairfax   v.    Hopkins,    2    Cranch, 

143.  134. 

""  Richards    v.    Holmes,    18    How.  "*  Stevenson    v.    Hano,    148    Mass. 

143;    Dexter   v.    Shepard,    117    Mass.  616,  20  N.  E.  200;   Marcus  v.  Colla- 

480;  Hosmer  v.  Sargent,  8  Allen,  97,  more,  168  Mass.  56,  46  N.  E.  432. 

85  Am.  Dec.  683;   Erwin  v.  Hall,  18  "'Campbell  v.  Swan,  48  Barb.  109; 

111.  App.  315.  Clark    v.    Simmons,    150    Mass.    357, 

•"  Fairfax    v    Hopkins,    2    Cranch,  23  N.  E.  108. 
134;  Vail  v.  Jacobs,  62  Mo.  130,  133; 


§    1874.]        POWER    OF    SALE    MORTGAGES   AND    TRUST    DEEDS.  826 

passed  and  the  bidders  have  departed,  a  resale  cannot  be  made  with- 
out advertising  the  property  anew.*'"'' 

When  an  adjournment .  is  made,  it  is  usual  for  the  officer  to  an- 
nounce to  those  in  attendance  at  the  sale  the  time  and  place  to 
which  the  sale  is  adjourned.  The  time  announced  in  this  way  and 
that  afterwards  published  should  agree,  or  the  validity  of  the  sala 
may  be  affected. *''^^ 

§  1874.     The  notice  by  publication  of  an  adjournment  of  a  sale, 

if  given  at  all,  need  not  be  so  minute  and  specific  as  the  original  ad- 
vertisement.*'^^ The  adjourned  sale  is  in  effect  the  sale  of  which  the 
previous  notice  was  published.  If  the  notice  of  the  adjourned  sale 
by  mistake  fixes  a  different  and  more  distant  day  for  the  sale  than  that 
to  which  the  adjournment  was  actually  made,  and  the  sale  is  actually 
made  upon  the  day  specified  in  such  notice,  it  will  be  irregular  and 
void.**^^  Whether  publication  of  the  adjournment  is  necessary  de- 
pends upon  the  circumstances  of  the  case,  and  particularly  upon 
the  length  of  time  for  which  the  adjournment  is  made.  But  it 
would  seem  that  the  omission  to  advertise  the  adjournment,  in  any 
case  of  an  adjournment  for  a  reasonable  time,  would  not  avoid  the 
sale.*""*  Where  adjournments  of  the  sale  have  been  made  at  the  re- 
quest of  the  mortgagor,  who  has  sufficient  notice  of  the  same  to  pro- 
tect his  interest,  he  cannot  object  that  the  adjournments  were  not  ad- 
vertised in  proper  form,  as  no  advertisement  of  them  is  necessary 
under  such  circumstances."^^ 

There  is  no  absolute  rule  of  law  that,  when  the  first  advertisement 
of  a  sale  of  land  under  a  power  in  a  mortgage  fails  to  bring  any  one 
to  the  sale,  it  is  the  mortgagee's  duty  to  advertise  again  as  fully  as 
before.  As  Mr.  Justice  Holmes  says:  "The  first  advertisements  are 
required  by  the  mortgage;  any  other  or  further  duties  of  the  mort- 
gagee are  less  defined,  and  are  embraced  under  the  general  obliga- 
tion to  make  reasonable  efforts  to  prevent  a  sacrifice  of  the  property.""®^ 

'"Barnard  v.  Duncan,  38  Mo.  170,  85  Am.  Dec.  683;   Stearns  v.  Welsh, 

90  Am.  Dec.  416;   Dover  v.  Kenner-  7  Hun,   676;    Allen  v.   Cole,   9  N.  J. 

ly,  38  Mo.  469.  Eq.   286,   59   Am.   Dec.   416;    Coxe   v. 

«"  Miller    v.    Hull,    4    Denio,    104;  Halsted,  2  N.  J.  Eq.   311.     The  last 

Jackson   v.    Clark,    7   Johns.    217.  three     cases    relate    to    foreclosure 

"^  Dexter    v.    Shepard,     117    Mass.  sales  in  equity. 

480;      Marcus      v.      Collamore,      168  '"'Stevenson    v.    Dana,    166    Mass. 

Mass.    56,    46    N.    E.    432;    Fennyery  163,   44   N.   E.   128;    Hosmer  v.   Sar- 

V.  Ransom,  170  Mass.  303,  307,  49  N.  gent,  supra. 

E.    620;    Way    v.    Dyer,    176    Mass.  ''"Marcus  v.  Collamore,  168  Mass. 

448,    57    N.    E.     678;     Stevenson    v.  56,    46    N.    E.    432,    citing    Clark    v. 

Dana,  166  Mass.  163,  44  N.  E.  128.  Simmons,  150  Mass.  357,  360.  23  N. 

•"Miller  v.    Hull,   4   Denio,   104.  E.  108;  Stevenson  v.  Dana,  166  Mass. 

*»"  Hosmer  v.  Sargent,  8  Allen,  97,  163,  170,  44  N.  E.  128. 


837  CONDUCT    OF    SALE,    TERMS,    AND    ADJOURNMENT.       [§    187.4 

It  is  no  objection  to  the  validity  of  a  sale  after  several  adjournments, 
that  the  adjournments  were  not  advertised,  if  it  does  not  appear  that 
the  failure  so  to  advertise  resulted  in  any  sacrifice  of  the  property 
or  involved  any  injury  to  the  owner  of  the  equity  of  redemption.*^^ 

Failure  to  give  notice  of  adjournment  may,  with  other  circum- 
stances, indicate  bad  faith  or  want  of  reasonable  judgment  in  the 
mortgagee.  Thus  a  sale  was  held  not  to  have  been  made  in  good  faith 
under  the  following  circumstances :  The  mortgagor,  though  he  had 
requested  that  notice  should  be  given  him  when  any  action  should 
l3e  taken  looking  to  a  sale,  was  not  informed  of  the  sale  until  late 
in  the  evening  before  it  took  place,  and  then  was  not  informed  of 
the  hour  or  place  of  sale.  The  sale  had  been  adjourned  several 
times,  in  the  absence  of  bidders,  no  one  being  present  other  than 
the  auctioneer  and  an  agent  of  the  mortgagee,  and  no  notice  of 
any  adjournment  having  been  given  except  by  proclamation  made 
at  the  time.  Finally  the  property  was  sold  nearly  three  months 
after  the  time  named  in  the  original  notice  of  sale,  and  was  bid 
in  by  the  mortgagee  for  less  than  its  market  value.  "We  cannot 
infer,"  say  the  court,  "that  notice  to  the  mortgagor,  and  a  reason- 
able effort  to  notify  others,  would  have  failed  to  procure  the  at- 
tendance of  bidders  at  the  times  fixed  by  the  adjournments."^^* 

The  adjournment  should  be  announced  at  the  time  and  place 
appointed  for  the  sale;  and  the  time  and  place  of  the  adjourned  sale 
should  be  stated.  It  may  be  made  Avithout  the  agency  of  a  licensed 
auctioneer. 

In  Illinois  it  is  held  that  a  trustee  in  a  deed  of  trust  may  adjourn 
the  sale  in  his  discretion;  but  when  he  does  so,  he  must  give  a  new 
notice  for  the  same  length  of  time  required  in  the  first  instance.''®^ 
In  some  States  it  is  provided  by  statute  that  notice  of  adjournment 
shall  be  given  in  the  same  paper  in  which  the  original  notice  was 
published,  and  by  posting  also.*^*'® 

But  generally  a  sale  under  a  power  may  be  adjourned  to  a  future 
day  without  giving  a  new  notice  for  the  length  of  time  required  for 
the  first  notice.^*''^     After  a  postponement  of  a  sale  has  been  publicly 

•""Way  v.  Dyer,   176  Mass.  448,  57  Minnesota:     §    1743.     See  Sanborn 

N.   E.    678;    Stevenson   v.    Dana,   166  v.    Petter,    35   Minn.    449,    29    N.    W. 

Mass.   163,   44  N.   E.   128;    Dexter  v.  64,  for  a  case  of  insufficient  adver- 

Shepard,   117  Mass.   480;    Hosmer  v.  tisement    of   an   adjournment. 

Sargent,   8   Allen    (Mass.),   97.  New  York:     §   1751. 

""^  Clark    v.    Simmons,    150    Mass.  Wisconsin:     §  1762. 

357.  23  N.  E.  108.  '^""Jackson  v.  Clark,  7  Johns.  217; 

""^  Griffin  v.  Marine  Co.  52  111.  130;  Dana    v.    Farrington,    4    Minn.    433; 

Thornton  v.  Boyden,  31  111.  200.  Bennett  v.   Brundage,   8  Minn.    432; 

•"'•"  See     Statutory     Provisions     for  Sayles    v.    Smith,    12    Wend.    57,    27 

Michigan:     §    1741.  Am.    Dec.    117;    Westgate   v.    Hand- 


§§  1875,  1876.]  POWER  of  sale  mortgages  and  trust  deeds.  828 

announced,  the  mortgagee  cannot  disregard  it,  and  proceed  to  sell 
at  the  time  fixed  in  the  original  notice.  This  would  enable  the 
mortgagee  to  mislead  the  mortgagor,  and  would  confuse  persons 
wishing  to  purchase  as  to  the  time  of  sale.®*^® 

§  1875.  There  is  no  obligation  to  delay  sale  to  a  more  favorable 
time.  If  a  mortgagee  sells  openly  and  fairly,  and  in  compliance 
with  the  terms  of  the  power,  it  cannot  be  objected  that  he  might 
have  obtained  a  greater  price  by  waiting  until  a  more  favorable 
time.  No  such  obligation  is  imposed  by  the  mortgage."'^'*  In  a 
case  before  the  Court  of  Appeal  in  Chancery,  in  relation  to  a  sale 
by  private  contract,  Lord  Justice  Knight  Bruce  said:  "It  may  be 
that,  by  speculating  and  waiting  a  long  time,  a  larger  sum  would 
thereafter  have  been  obtainable  had  the  sale  not  taken  place  as  it 
did.  But  Mr.  Durrant  (the  mortgagee)  was  not  bound  to  speculate 
or  wait,  and  was  justified  in  accepting  Mr.  Packe's  price,  which 
was,  I  repeat,  in  my  opinion,  a  reasonable  and  fair  price.'"'^" 


XI.     Who  may  purchase  at  Sale  under  Power. 

§  1876.     The    mortgagee    is    not    usually  allowed  to  purchase. 

Being  regarded  as  in  some  respects  a  trustee  of  the  property  mort- 
gaged, as  a  rule  he  cannot  himself  become  a  purchaser  at  the  sale, 
either  directly  or  indirectly  through  another  person,  unless  this  right 
be  given  him  by  the  terms  of  the  power.^^^  He  is  bound  to  exercise 
entire  good  faith;  and  if,  without  express  authority  given  him  so  to 
do,  he  becomes  the  purchaser  at  the  sale,  he  is  subject  to  the  rule 

lin    7   How.   Pr.   372;    Crutchfleld  v.  111.  196;  Ross  v.  Demoss,  45  111.  447; 

Hewett    2  App.  Cas.  D.  C.  373.  Hall  v.  Towne,  45  111.  493;   Watson 

"''Jackson  v.  Clark,  7  Johns.  217.  v.  Sherman,  84  111.  263;  Ezzel  v. 
The  postponement  was  published  Watson,  83  Ala.  120,  3  So.  Rep.  309; 
under  the  original  notice  as  fol-  Garland  v.  Watson,  74  Ala.  323;  Mc- 
lows:  "Note,  the  sale  of  the  above  Lean  v.  Presley,  56  Ala.  211;  How- 
property  is  postponed  to  Wednes-  ell  v.  Pool,  92  N.  C.  450;  Thomas 
day,  the  3d  day  of  September  next."  v.    Jones,    84    Ala.    302,    4    So.    270; 

"•"''Franklin    v.     Greene,    2     Allen,  Very    v.    Russell,    65    N.    H.    646,    23 

519-    Dunn   v.    McCoy,    150   Mo.    548,  Atl.    522;    Galvin   v.    Newton,   19   R. 

52  S    W.  21.  I-   176,  36  Atl.  3;   Whitaker  v.  Mid- 

"'"Davey  v.   Durrant,   1   De   G.   &  die    States    Co.    7    App.    D.    C.    203; 

J.  535.  Shew  v.  Call,  119  N.  C.  450,  26  S.  E. 

«"  Downes   v.    Grazebrook,    3    Mer.  33;    Houston    v.    Building    Asso.    80 

200-    In  re  Bloye's  Trust,  1  Mae.  &  Miss.  31,  31  So.  540;  Byrd  v.  Clarke, 

G    488-    Lockett   v.    Hill,    1   Woods,  52  Miss.  623;  Douthit  v.  Nabors,  133 

552-    Griffin    v.    Marine   Co.    of   Chi-  Ala.  453,  32  So.  625;  Elrod  v.  Smith, 

cago    52    111.    130;    Waite   v.    Denni-  130  Ala.   212,   30  So.   420;    American 

son    51  111    319;   Phares  v.  Barbour,  Freehold    Land    Mortg.    Co.    v.    Pol- 

49   ill.   370;    Roberts  v.   Fleming,   53  lard,  127  Ala.  227,  29  So.  .598. 


829 


WHO    MAY    PURCHASE   AT    SALE    UNDER    POWER.        [§    1876. 


which  applies  generally  to  a  trustee  and  prohibits  his  purchasing 
the  trust  property."^'  The  rule  applies  equally  to  a  purchase  by  a 
third  person  for  the  benefit  of  the  mortgagee.''"^ 

If  the  mortgagee  or  trustee,  when  not  authorized,  purchases  at  the 
sale,  the  mortgagor  or  any  other  person  interested  under  him  may 
disaffirm  the  sale,  provided  he  acts  within  a  reasonable  time.*'^*  Such 
a  sale  is  voidable  only,  and  cannot  be  treated  in  a  suit  at  law  as  ab- 
solutely void,  unless  actual  fraud  be  shown  ;''^^  and,  being  good  till  it 
is  set  aside,  will  support  an  action  of  ejectment.''^*'  The  sale  can  be 
disaffirmed  only  in  a  court  of  equity.*'" 

Such  a  sale  is  a  full  execution  of  the  power  of  sale  in  the  mort- 
gage, and  the  mortgagee  cannot  treat  the  sale  as  void  and  proceed  to 
sell  again  under  the  power  of  sale.    The  second  sale  derives  no  force 


«"Michoud  v.  Girod,  4  How.  503; 
Parmenter  v.  Walker,  9  R.  I.  225; 
Korns  v.  Shaffer,  27  Md.  83;  How- 
ard V.  Ames,  3  Met.  308;  Hyndman 
V.  Hyndman,  19  Vt.  9,  46  Am.  Dec. 
171;  Benham  v.  Rowe,  2  Cal.  387, 
56  Am.  Dec.  342;  Rutherford  v. 
Williams,  42  Mo.  18;  Whitehead  v. 
Hellen,  76  N.  C.  99;  Kornegay  v. 
Spicer,  76  N.  C.  95;  Robinson  v. 
Amateur  Asso.  14  S.  C.  148. 

""Nichols  V.  Otto,  132  111.  91,  23 
N.  E.  411;  Harper  v.  Ely,  56  111. 
179;  Lockwood  v.  Mills,  39  111.  602; 
Miles  v.  Wheeler,  43  111.  123;  Ham- 
ilton V.  Lubukee,  51  111.  415;  Tip- 
ton v.  Wortham,  93  Ala.  321,  9  So. 
596;  Averitt  v.  Elliot,  109  N.  C. 
560,  13  S.  E.  785;  Joyner  v.  Farmer, 
78  N.  C.  196. 

"■^Munn  V.  Burges,  70  111.  604; 
Farrar  v.  Payne,  73  111.  82;  John- 
son v.  Watson,  87  111.  535;  Thorn- 
ton V.  Irwin,  43  Mo.  153;  Allen  v. 
Ranson,  44  Mo.  263,  100  Am.  Dec. 
282;  McCall  v.  Mash,  89  Ala.  487, 
'  7  So.  770;  McLean  v.  Presley,  56 
Ala.  211;  Harris  v.  Miller,  71  Ala. 
26;  Adams  v.  Sayre,  70  Ala.  318; 
Downs  v.  Hopkins,  65  Ala.  508; 
Thomas  v.  Jones,  84  Ala.  302,  4  So. 
Rep.  270;  Dozier  v.  Mitchell,  65  Ala. 
511;  Bzzel  v.  Watson,  83  Ala.  120, 
3  So.  309;  Garland  v.  Watson,  74 
Ala.  323;  Knox  v.  Armistead,  87 
Ala.  511,  6  So.  311;  Mason  v.  Am. 
Mortg.  Co.  124  Ala.  347,  26  So.  909; 
Lovelace  v.  Hutchinson,  106  Ala. 
417,  17  So.  623;  Standback  v.  Thorn- 
ton, 106  Ga.  81,  31  S.  E.  805;  Helm 
V.  Yerger,  61  Miss.  44;   Dawkins  v. 


Patterson,  87  N.  C.  384;  Joyner  v. 
Farmer,  78  N.  C.  196. 

The  mortgagee  in  such  case  stands 
in  the  relation  of  a  trustee  who  has 
obtained  an  advantage  over  his  ces- 
tui que  trust,  and,  out  of  great  cau- 
tion, a  court  of  equity  permits  the 
cestui  que  trust  to  elect  within  a 
reasonable  time  whether  he  will 
disaffirm  the  sale. 

In  Alabama  the  mortgagee  may 
compel  the  mortgagor  to  elect  to 
affirm  or  disaffirm  the  sale.  Ameri- 
can Mortg.  Co.  V.  Sewell,  92  Ala. 
163,  9  So.  143;  American  Freehold 
Land  Mortg.  Co.  v.  Pollard,  127 
Aia.  227,  29  So.  598. 

As  to  reasonable  time,  see  §  1922. 

"■'Patten  v.  Pearson,  57  Me.  428; 
Burns  v.  Thayer,  115  Mass.  89; 
Nichols  V.  Otto,  132  111.  91,  23  N. 
E.  411;  Mulvey  v.  Gibbons,  87  111. 
367;  Munn  v.  Burges,  70  111.  604; 
Gibbons  v.  Hoag,  95  111.  45;  Con- 
nolly V.  Hammond,  51  Tex.  635; 
Jenkins  v.  Pierce.  98  111.  646;  Ezzel 
V.  Watson,  83  Ala.  120,  3  So.  309; 
Harris  v.  Miller,  71  Ala.  26;  Aver- 
itt V.  Elliot,  109  N.  C.  560,  13  S.  E. 
785;  Joyner  v.  Farmer,  78  N.  C.  196; 
Standback  v.  Thornton,  106  Ga.  81, 
31  S.  E.  805;  Mut.  Loan  Banking  Co. 
V.  Haas,  100  Ga.  Ill,  27  S.  B.  980; 
Palmer  v.  Young,  96  Ga.  246,  22  S. 
E.  928;  Diefenbach  v.  Vaughan,  116 
Ala.  150,  23  So.  88. 

"■'•  Hawkins  v.  Hudson.  45  Ala. 
482.  See  Whitehead  v.  Hellen,  76 
N.  C.  99,  a  wrong  decision. 

"'  Harris  v.  Miller,  71  Ala.  26. 


§    1876.]        POWER   OF    SALE   MORTGAGES   AND   TRUST    DEEDS.  830 

as  having  been  made  nnder  the  power  in  the  mortgage,  and  is  simply 
a  conveyance  by  the  mortgagee  as  owner  through  the  first  sale."^ 

A  Ijeneficiary  nnder  the  trust,  or  a  mortgagee  who  becomes  a  pur- 
chaser, is  regarded  only  as  a.  mortgagee  in  possession  in  consequence 
of  the  sale  and  conveyance,  but  is  entitled  to  be  treated  as  the  owner 
ol  the  property  until  it  is  redeemed."''  If  the  mortgagor  does  not 
claim  his  right  to  avoid  such  a  sale,  the  mortgagee  may  himself  come 
into  equity  to  have  the  uncertainty  of  his  title  removed  by  a  confirma- 
tion of  the  sale,  or  "by  a  resale  under  order  of  court.*'^''  But  if  the 
mortgagee,  after  indirectly  becoming  the  purchaser,  sells  a  portion  of 
the  premises  to  one  who  has  no  notice  of  any  defect  in  the  proceedings, 
the  mortgagee  cannot  have  the  sale  set  aside  as  against  such  pur- 
chaser.^*^ 

The  pledgee  of  a  mortgage,  upon  selling  the  property  under  a 
power  of  sale  in  satisfaction  of  the  pledgor's  debt,  cannot  become 
the  purchaser  at  the  sale.  In  reference  to  the  pledge  and  the  pledgor 
he  occupies  a  fiduciary  relation,  and  is  in  the  position  of  a  trustee, 
whose  duty  it  is  to  exercise  his  right  of  sale  for  the  benefit  of  the 
pledgor.''*^ 

Where  the  notes  have  been  transferred  by  the  payee  to  a  firm  of 
wdiich  he  is  a  member,  all  the  members  of  the  firm  are  equally  pro- 
hibited from  purchasing  at  the  salc^^^*  But  a  mortgagee  may  pur- 
chase an  outstanding  title,  or  the  equity  of  redemption,  either  from 
the  mortgagor  or  from  his  grantee,  and  hold  the  title  absolutely  in 
his  own  right.  He  may  purchase  under  a  judgment  of  prior  date 
to  the  mortgage.*'**  But  if  the  purchase  be  aided  by  the  mortgagor, 
or  he  be  fraudulently  prevented  by  the  mortgagee  from  purchasing 
liimself.  and  the  mortgagee  has  taken  advantage  of  his  position,  he 
will  hold  the  title  acquired  for  the  benefit  of  the  mortgagor  as  his 
trustee.*'*^ 

The  mortgagee  may  also  purchase  from  the  mortgagor,  unless  the 
mortgagee  uses  his  position  to  obtain  the  equity  of  redemption  at 
an  inadequate  price.*'*''  As  between  mortgagee  and  mortgagor,  there 
is  nothing  analogous  to  a  trust  until  the  whole  mortgage  debt  has 

«"  Lovelace     v.     Hutchinson,     106        "^^  Gibbons  v.  Hoag,  95  111.  45. 
Ala     417     17    So.    623;     Pollard    v.        "^^^  Callan  v.  Wilson,  127  U.  S.  540, 
American   Freehold    Mortg.    Co.    103    8  Sup.  Ct.   1301,  per  Matthews    J. 
Ala.  289,  298,  16  So.  801.  '-^  Mapps  v.  Sharpe,  32  i"-  13. 

"'^Goldsmith  v.  Osborne,  1  Edw.  "^^  Roberts  v.  Fleming,  53  111.  19b, 
Ch  560,  562;  Rutherford  v.  Will-  Harrison  v.  Roberts,  6  Fla  711; 
iams    42  Mo    18  Walthall  v.   Rives,  34  Ala.   91. 

•''»  McLean  v.  Presley,  56  Ala.  211;         «^^  Griffin  v.  Marine  Co.  52  111.  130. 
Harris  v.   Miller,  71   Ala.   26;    Crad-        "'« Ford  v.  Olden,  L.  R.  3  Eq.  461, 
dock  V.   Am.  Mort.  Co.   88  Ala.  281,     36  L.  J.  C.  651. 
7   So.   196. 


831  WHO    MAY    rURCIIASE   AT    SALE    UNDER    POWER.     [§    1876a. 

been  paid  and  satisfied;  from  whicli  moment,  and  not  until  tlion, 
the  mortgagee  becomes  a  trustee  for  tlie  mortgagor."''' 

Wlien  a  third  person  has  in  good  faith  purcliascd  at  tlie  mortgage 
sale,  the  mortgagee  may  purchase  of  him.  His  trust  is  ended  with 
the  sale."****  If  a  third  person  bids  off  the  land  at  the  sale,  and  after- 
wards informs  the  mortgagee  that  he  cannot  pay  the  purchase-money, 
whereupon  the  mortgagee  agrees  to  take  the  land  at  the  bid,  but 
there  was  no  arrangement  whatever  between  him  and  the  purchaser 
at  the  time  of  the  sale,  the  mortgagee  is  not  a  purchaser  at  his  or\vn 
sale,  and  hence  the  sale  is  effectual  to  cut  off  the  equity  of  redeni))- 
tion.*'^^  But  if  there  was  a  previous  arrangement  between  him  and 
the  purchaser  for  a  reconveyance,  the  trust  may  still  attach  to  him, 
and  the  title  he  has  acquired  will  be  voidable.'^"*'  The  presumption 
is  in  favor  of  the  mortgagee  that  he  has  fulfilled  his  trust  until  the 
contrary  is  shown. 

The  purchaser  at  a  foreclosure  sale  must  be  a  person  or  a  legal 
entity;  and  therefore  a  sale  to  "the  estate  of  A.  B.,  deceased,"  is 
void.*'^^ 

§  1876a.  If  the  mortgagor  or  the  owner  of  the  equity  of  redemp- 
tion elects  to  dissaffirm  the  sale,  and  brings  a  bill  for  this  purpose 
within  a  reasonable  time,  he  must  offer  to  redeem,  or  must  tender 
what  is  due  upon  the  mortgage.  A  bill  which  merely  asks  to  have 
the  sale  set  aside  is  insufficient.'^"-  In  suit  to  redeem  from  such  trust 
deed,  the  grantor  should  pay  the  debt  and  interest,  with  taxes  paid 
and  necessary  repairs  made  by  such  purchaser,  and  the  cost  of  im- 
provements authorized  by  him,  and  is  entitled  to  credit  for  the 
reasonable  rents  and  profits  of  the  land.  He  is  not  chargeable  with 
the  cost  of  the  invalid  sale."^''^ 

The  mortgagor  or  owner  of  the  equity  of  redemption  must  exercise 
the  right  of  disaffirming  the  sale  himself;  he  cannot  convey  this 
right  to  another  so  as  to  authorize  him  to  disaffirm  it."''* 

Only  the  mortgagor  or  his  grantee  or  the  owner  of  the  equity  of  re- 
demption can  avoid  the  sale  on  the  ground  that  the  mortgagee  or 

687  pgj.  Wood,  V.   C,   in   Kirkwood  ""'  Kenaston    v.    Lorig,    81    Minn. 

V.  Thompson,  2  Hem.  &  M.   392.  454;    Allen   v.    Allen,    48   Minn.    462, 

■^^•^  Watson  V.  Sherman,  84  111.  263.  51   N.   W.   473;    Mclnerney   v.    Beck, 

See  §   1880.  10  Wash.  515,  39  Pac.  130. 

"*''  burden    v.    Whetstone,    92    Ala.  '■■'-  Garland  v.  Watson,  74  Ala.  313. 

480,  9  So.  176.  ""'  Stallings    v.    Thomas,    55    Ark. 

'''"Munn    V.    Burges,    70    111.    604:  326,  18  S.  W.  184. 

Bush  V.   Sherman,   80   111.    160;    Hoit  •"'^  MrCall    v.    Mash,    89    Ala.    487, 

v.  Russell,  56  N.  H.  559;  Whitehead  7  So.  770. 
V.  Hellen,  76  N.  C.  99. 


§§  1877,  1878.]  POWER  of  sale  mortgages  and  trust  deeds.  83S 

his  assignee  has  become  the  purchaser  at  his  own  sale.®^^  Such  a  sale 
is  valid  as  to  all  other  parties.^^"  A  purchaser  under  an  execution 
sale  subject  to  a  prior  mortgage  cannot  object  that  the  mortgagee 
became  the  purchaser  at  his  own  sale.*'^^  A  mortgagee's  purchase 
at  his  own  sale  is  binding  upon  him  when  the  price  is  reasonable,  and 
no  exception  is  taken  by  the  parties  in  interest.''^* 

If  the  mortgagee  who  has  purchased  at  his  own  sale  under  a  mort- 
gage which  did  not  authoribe  him  to  become  the  purchaser,  enters 
into  possession,  he  is  accountable  to  the  mortgagor  or  owner  for  the 
rents  and  profits  as  trustee,  and  is  bound  to  apply  them  in  extin- 
guishment of  the  mortgage  debt.^^^ 

§  1877.  It  is  not  necessary  in  order  to  avoid  the  sale  to  show  that 
there  was  any  actual  fraud  or  imfairness  in  the  transaction,  when 
a  mortgagee  has  violated  the  principle  that  a  trustee  can  never  be 
a  purchaser.  There  might  be  fraud  or  unfairness,  and  yet  this 
could  not  be  proved.  To  guard  against  this  uncertainty,  and  to 
place  the  trustee  beyond  the  reach  of  temptation,  the  law  allows 
the  cestui  que  trust  to  set  aside  such  a  sale  at  his  option  without 
showing  that  he  has  been  in  any  way  injured.  A  mortgage  with  a 
power  of  sale  confers  a  trust  coupled  with  an  interest,  but  the  rule 
applies  with  the  same  force  as  in  the  case  of  a  naked  trust.  With- 
out the  agreement  or  consent  of  the  mortgagor  he  can  acquire  no 
title  by  a  purchase,  directly  or  indirectly,  at  his  own  sale  under  the 
power.'^''° 

§  1878.     The  rule   applies   equally  to   the   mortgagee's   solicitor. 

If  the  power  of  sale  does  not  give  to  the  mortgagee  any  right  to 
purchase,  his  solicitor  or  agent  is,  equally  with  himself,  disabled 
from  becoming  the  purchaser  of  the  property  either  for  himself  or 
for  another.  The  mortgagee  in  such  case  occupies  a  fiduciary  re- 
lation to  others,  and  his  solicitor  who  conducts  the  sale  stands  in 
the  same  position  he  does  as  regards  a  purchase  of  the  property.'^"^ 

^"^  Houston    V.    Building    Asso.    80  Bleckley  v.   Fowler,   21  Cal.   326,   82 

Miss.  31,  31  So.  540.  Am.   Dec.  747;    Houston  v.   Building 

""'''  Comer  v.   Sheehan,  74  Ala.  452,  Asso.  80  Miss.  31,  31  So.  540.  quot- 

458;   Cooper  v.  Hornsby,  71  Ala.  62,  ing  text;  Jones  v.  Pullen,  115  N.  C. 

65;  Harris  v.  Miller,  71  Ala.  26.  465,  20  S.  E.   624. 

"■'"  Martinez  v.  Lindsey,  91  Ala.  334,  '"  "Perhaps   he   is   upon   principle 

8  So.  787.  the    individual    of    all    others    di?- 

oos  "Whitehead    v.    Whitehurst,    108  abled,"  said  Lord  Eldon  in  Ex  parte 

N.  C.  458,  13  S.  E.  166.  Bennett.    10    Ves.    381,    385.     "As    to 

""^  Lovelace     v.     Hutchinson,     106  the  solicitor,"  says  the  same  judge, 

Ala.    417,    17    So.    623;     Toomer    v.  Ex  parte  James,  8  Ves.  337,  346.  "if 

Randolph,  60  Ala.  356,  360.  there  is  any  utility  in  applying  the 

'""Thornton  v.  Irwin,  43  Mo.   153;  principle    against   the   assignee,    the 

Rutherford  v.  Williams,  42  Mo.   18;  application  as  against  the  solicitor 


833  WHO    MAY    PURCHASE   AT    SALE   UNDER   POWER,        [§    1879. 

He  is  bound  by  the  same  obligations  to  secure  the  best  possible  re- 
sults, regardless  of  the  interest  of  all  other  persons  except  the  mort- 
gagor and  mortgagee.  Neither  can  he  act  for  a  third  party  having 
a  different  interest,  in  nowise  identical  with  the  interest  of  those  for 
whom  he  is  first  bound  to  act.  By  reason  of  his  relations  to  the 
mortgagee  he  is  bound  to  get  the  highest  price;  and  if  he  act  for 
another  person  in  buying,  he  is  bound  to  obtain  the  property  at  as 
low  a  price  as  he  can.  These  characters  are  utterly  inconsistent, 
and  the  policy  of  the  law  does  not  allow  them  to  be  united  in  the 
same  person. '^°^  Even  the  employment  by  a  purchaser  of  a  clerk  of 
the  mortgagee's  solicitor  to  bid  for  him  at  the  sale  is  sufficient  to 
invalidate  it.''°^ 

§  1879.  Mortgagee's  agent. — Doubts  were  at  first  expressed 
whether  one  who  has  acted  as  the  agent  of  the  mortgagee  in  survey- 
ing the  property,  advancing  the  money,  and  receiving  the  interest, 
is  a  competent  purchaser  under  the  power;  but  on  appeal  the  Chan- 
cellor expressly  held  that  he  could  not  purchase. ''°*  For  stronger 
reasons,  one  who  has  acted  for  the  mortgagee  in  advertising  the 
property  and  in  making  the  sale  cannot  properly  purchase  at  the 
sale.''"^  But,  like  a  purchase  by  a  mortgagee,  a  purchase  by  his  agent 
is  voidable  only  and  not  void.'^°®  The  fact  that  the  purchaser  at  a 
sale  under  a  povrer  is  a  nominal  purchaser  who  afterwards  transfers 
the  land  to  the  mortgagee,  does  not  operate  to  make  the  sale  a  mere 
assignment  of  the  mortgage,  but  conveys  the  legal  title  of  the  land  to 
the  mortgagee,  who  may  upon  such  title  maintain  ejectment  against 
the  mortgagor.''"^ 

"When,  however,  the  mortgagee  is  authorized  by  the  deed  to  pur- 
chase at  the  sale,  he  may  properly  arrange  beforehand  with  a  third 
person  to  bid  a  sum  not  less  than  the  amount  of  the  mortgage  and 
the  incidental  expenses,  as  such  an  arrangement  has  no  tendency  to 
prevent  competition  at  the  sale,  or  to  depreciate  the  price,  but  on 

is    more    loudly    called    for."     See,  '"^  Parnell    v.    Tyler,    2    L.    J.    Ch. 

also,   on   the   general   subject,   Orme  N.  S.  195. 

v.  Wright,  3  Jur.  19;  York  Build-  '"^  Orme  v.  Wright,  3  Jur.  19.  972. 
ings  Co.  V.  Mackenzie,  8  Brown  '"^  Hoit  v.  Russell,  56  N.  H.  559. 
Pari.  Cas.  App.  42;  Downes  v.  Graze-  '""Adams  v.  Sayre,  76  Ala.  509; 
brooke,  3  Mer.  200,  209;  Fox  v.  Gibson  v.  Barbour,  100  N.  C.  192, 
Mackreth,  2  Bro.  C.  C.  400;  Whit-  6  S.  E.  766;  Martin  v.  McNeely,  101 
comb  V.  Minchin,  5  Madd.  91;  Gard-  N.  C.  634,  8  S.  E.  231.  This  holds 
ner  v.  Ogden,  22  N.  Y.  327,  78  Am.  true  even  though  the  purchase  was 
Dec.  192;  Campbell  v.  Swan,  48  made  by  the  auctioneer  conduct- 
Barb.  109.  ing    the    sale.     Russell    v.    Roberts, 

'"2  Dyer  v.  Shurtleff,  112  Mass.  165,  121  N.  C.  322,  28  S.  E.  406.  • 

17  Am.  Rep.  77.  ""Williamson  v.   Mayer,   117   Ala. 

253,  23  So.  3. 


§    1880.]        POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS,  834 

the  contrary  makes  it  certain  that  the  sale  will  at  least  pay  the 
mortgage  debt.''°^  Nor  does  the  fact  that  the  mortgagee  purchased 
the  property  through  an  agent  at  the  sale  for  less  than  its  value,  no 
other  bidders  being  present,  make  the  sale  invalid. '^"^  Under  an  au- 
thorization to  the  mortgagee  to  become  the  purchaser  at  the  sale, 
another  may  purchase,  and  receive  a  conveyance,  as  trustee  for  the 
mortgagee. '^^° 

Whether  a  person  authorized  by  a  mortgagee  to  sell  a  mortgaged 
estate  under  a  power  of  sale  has  authority  to  purchase  the  estate  for 
the  mortgagee,  where  there  is  no  express  written  authority  for  this 
purpose,  and  the  testimony  is  conflicting,  is  a  question  of  fact  for 
the  jury.''^^^ 

§  1880.  Under  the  same  rule  a  trustee  in  a  deed  of  trust  cannot 
buy  for  his  own  benefit  at  the  trust  sale.'^-  The  trustee  is  the  repre- 
sentative not  only  of  the  owner  of  the  debt,  but  also  of  the  owner 
of  the  land;  not  only  of  the  creditor,  but  of  the  debtor;  and  it  is 
his  duty  to  act  for  the  interest  of  both,  and  not  exclusively  in  the 
interest  of  either.'^^^  But  the  mere  fact  that  the  trustee,  after  a  sale 
by  him  to  a  third  person,  purchased  the  premises  of  him,  does  not 
vitiate  the  original  sale.'^^*  ''Whether  culpable  or  commendable  de- 
pends upon  the  circumstances  of  each  case.  It  may  be  wrong,  and 
it  may  be  right.  It  may  be  approved  by  the  parties  interested  and 
affirmed.  It  may  be  condemned  by  them  and  avoided.  When  it  is 
found  that  the  transaction  is  itself  fair  and  honest,  that  the  purchase 
was  not  contemplated  at  the  original  sale,  but  was  first  thought  of 
years  afterwards,  and  was  then  made  for  a  full  and  fair  consideration 
actually  paid  by  the  trustee,  and  after  the  fiduciary  duty  was  at  an 
end,  we  find  no  authority  to  justify  us  in  pronouncing  the  original 
sale  to  have  been  fraudulent."'^^^  If  a  trustee  buys  in  a  prior  mort- 
gage he  will  hold  it  for  the  benefit  of  his  cestui  que  trust,  upon  being 
reimbursed  the  amount  he  has  fairly  paid  for  it.'^^*' 

The  objection  to  a  purchase  by  the  trustee  applies  as  well  to  a 

"'Dexter  v.  Shepard,  117  Mass.  "^  Hood  v.  Adams,  128  Mass.  207. 
480.  '"Lass  v.   Sternberg,   50  Mo.   124; 

The  purchaser  in  such  case,  after  Stephen  v.  Beall,  22  Wall.  329,  340; 

taking    a    deed    in    his    own    name,  Harrison  v.  Manson,  95  Va.  593,  29 

holds    in    trust    for    the    mortgage  S.    B.    420;    Dwyer    v.    Rohan    (Mo. 

creditor.     Byrnes  v.  Morris,  53  Tex.  App.),  73  S.  W.  384. 
213  '■-'Williamson    v.    Stone,    128    111. 

'"""  Learned  v.   Geer,  139  Mass.   31,  129,  22  N.  E.  1005. 
29  N.  E.  215.    And  see  Wing  v.  Hay-        "''  Stephen  v.  Beall,  22  Wall.  329. 
ford,  124  Mass.  249;    King  v.  Bron-        "'=*  Mr.    Justice    Hunt    in    Stephen 

son    122  Mass.  122.  v.  Beall,  22  Wall.  329.     See   §    1876. 

""Gamble    v.     Caldwell,    98    Ala.        "'■  Crutchfield   v.    Haynes,   14   Ala. 

577,  12  So.  424.  49;   Gunter  v.  Janes,  9  Cal.  643. 


835  WHO    MAY    PURCHASE   AT    SALE    UNDER    POWER.        [§    1881. 

purchase  by  his  attorney  in  the  interest  of  the  creditor.^^^  But  the 
fact  that  the  representative  of  the  trustee,  in  the  matters  of  adver- 
tising and  selling  the  land,  bids  in  behalf  of  a  prospective  purchaser, 
does  not  incapacitate  him  from  nuiking  the  sale.'^** 

But  the  objection  to  a  purchase  by  a  trustee  at  his  own  sale 
does  not  apply  so  as  to  prevent  a  purchase  by  a  beneficiary  under 
the  trust  deed.'^^"  The  legal  title  is  in  the  trustee,  and  the  duty  of 
exercising  the  power  of  sale  fairly  rests  upon  him,  and  not  upon 
the  creditor  secured.  "The  relation  of  a  creditor  secured  by  such 
deed  of  trust  to  a  sale  made  under  a  power  to  a  stranger  as  trus- 
tee, does  not  differ  from  that  of  a  mortgagee  of  real  estate  sold  under 
judicial  proceedings  for  foreclosure  by  a  decree  of  a  court  of  equity."^^" 

If  a  trustee  bids  in  the  trust  property  for  the  benefit  of  the  bene- 
ficiaries he  is  accountable  for  the  specific  property,  and  not  for  the 
amount  for  which  the  property  was  bid  in.^^^ 

In  applying  this  rule  against  a  purchase  by  a  trustee,  a  corporation 
is  recognized  as  a  separate  entity.  So  that  where  a  bank  was  the 
beneficiary  in  a  trust  deed,  a  purchase  by  the  l^ank  was  valid,  al- 
though the  trustees  were  directors  and  stockholders  in  the  bank.'^-- 

The  absence  of  the  trustee  and  the  appointment  of  a  substitute 
to  act  in  his  place  has  been  held  not  to  remove  the  disability  on  the 
part  of  the  original  trustee  as  to  his  purchasing  at  a  sale  of  the  trust 
property.'^^^ 

§  1881.  Perhaps  there  is  less  strictness  in  applying  the  rule  to 
the  case  of  a  mortgagee  purchasing  at  his  own  sale  imder  the  power 
than  there  is  in  the  case  of  a  trustee  purchasing.  The  mortgagee  in 
such  case  is  not  merely  a  trustee,  but  he  is  also  a  cestui  que  trust, 

"'Williamson    v.    Stone,    128    111.  ment  of  the  interest  to  accrue  after 

129,  22  N.  E.  1005.  the   sale,   and   for  all   damages   and 

''*  Dunton  v.  Sharpe,  70  Miss.  850,  waste   that   may   be  occasioned.     R. 

12  So.  800.  S.    §§   3298,  3299;   Johnson  v.   Atchi- 

"°  Easton   v.    German   -   American  son,  90  Mo.  48. 

Bank,  127  U.  S.  538,  8  Sup.  Ct.  1297;  "' Mareck    v.     Minneapolis     Trust 

Felton  v.  Le  Breton,  92  Cal.  457,  28  Co.   74  Minn.   538.     But  see   Spring- 

Pac.    490;    Walker   v.    Brungard,    13  field    Engine    and    Thresher    Co.    v. 

Sm.  &  M.  723,  766;  Monroe  v.  Fucht-  Donovan,    147    Mo.    622,    49    S.    W. 

ler,  121  N.  C.  101,  28  S.  E.  63.  500,  where  the  beneficiary  wrote  to 

""  Easton   v.    German   -    American  the  trustee  with  directions  to  enter 

Bank,  127  U.  S.  538,  8  Sup.  Ct.  1297,  a   bid    for    him.    which    the    trustee 

per  Matthews,  J.  did,  and  the  property  was  knocked 

In  Missouri  it  is  provided  by  stat-  off    and     sold     to     the     beneficiary, 

ute   that  if   the  property   is  bought  This  was  held  to  be  a  legal  bid. 

by  the   cestui   que   trust  or   his   as-  "-  Copsey  v.  Sacramento  Bank,  133 

signee,  or  by  any  other  person  for  Cal.  659,  66  Pac.  7. 

him,  the  grantor  may  redeem,  pro-  "'  Brewer    v.    Harrison,    27    Colo, 

vided  he  gives  security  for  the  pay-  349,  62  Pac.  224. 


§    1882.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS. 


836 


and  if  he  were  not  allowed  to  become  a  purchaser  under  any  circum- 
stances his  security  might  become  greatly  impaired.^^* 

Accordingly  it  has  been  held  that  where  such  a  purchase  is  made 
with  the  knowledge  and  consent  of  the  mortgagor,  in  the  absence 
of  all  suspicion  of  fraud,  it  is  good  and  valid.'^-^  At  any  rate  the 
mortgagor  would  not  be  allowed  to  avoid  the  sale  after  waiting  sev- 
eral years.''^®  The  purchase  being  made  with  the  mortgagor's  con- 
sent is  the  same  thing  in  effect  as  a  conveyance  of  the  equity  by 
the  mortgagor  to  the  mortgagee  at  a  private  sale. 

When  the  creditor  or  his  agent  buys  at  a  trustee's  sale  no  objec- 
tion to  the  sale  can  be  taken  because  the  purchase-money  is  not 
actually  paid  to  the  trustee.  It  would  be  an  idle  ceremony  to  pay 
over  the  money  and  immediately  receive  it  back  again.''" 

§  1882.  When  the  sale  is  made  by  judicial  process,  there  is 
usually  no  restraint  upon  the  purchase  of  the  property  by  the  mort- 
gage creditor.^^*  The  sale  is  in  such  case  made  by  a  sheriff  or  other 
officer  appointed  by  the  court  or  designated  by  law,  and  the  creditor 
is  not  himself  the  seller.  The  case  is  just  the  same  as  that  of  a  sale 
upon  an  ordinary  execution  at  which  the  judgment  creditor  has  full 
liberty  to  buy."**  And  so  also  in  those  States  in  which  there  are  stat- 
utes which  regulate  all  sales  under  powers  in  mortgages,  prescribing 
in  detail  the  notices  that  must  be  given,  and  specifically  providing  for 
the  conduct  of  the  sale,  which  is  made  by  a  public  officer,  there  is  not 
the  same  objection  to  the  mortgagee's  becoming  the  purchaser,  and 
therefore  these  statutes  generally  provide  also  that  the  mortgagee 
may  fairly  and  in  good  faith  purchase  the  whole  or  any  part  of  the 
property.''^" 

The  mortgagee  may  purchase  at  a  sale  under  a  power  that  runs 
to  himself,  if  the  sale  is  made  in  good  faith  by  the  sheriff  in  ac- 

"*In  Bergen  v.  Bennett,  1  Caines  Bergen    v.    Bennett,    1    Caines    Cas. 

Cas     1,    19,    Judge    Kent    said:     "It  1,  19,  2  Am.  Dec.  281. 

has     also     been     made     a     question  ""Weld  v.  Rees,  48  111.  428.     And 

whether    the    rule    vould    apply    to  see    Jacobs    v.    Turpin,    83    111.    424; 

the  case  of  a  trustee  who  was  him-  Beal  v.  Blair,  33  Iowa,  318. 

self    a    cestui    que    trust,    and    was  "'As    in   Maryland:     §    1740. 

obliged    to    purchase    in    order    to  '==  Stratford  v.   Twynam,  Jac.   418. 

avoid    a   loss   to   himself   by   a   sale  ""As  in  New  York:     §   1751. 

at  a  less  price."    But  he  forebore  to  Michigan:     §   1741. 

express    any    opinion    whether    the  Wisconsin:      §     i762;     Maxwell    v. 

distinction   was   well   taken   or   not.  Newton.  65  Wis.  2>;... 

See,  also,  Hyde  v.  Warren,  46  Miss  Illinois:     §  1733. 

j3    29  Minnesota:     §  1743. 

"'Dobson  V.  Racey,  8  N.  Y.  216.  Rhode  Island:    §  1756. 

"'Medsker  v.  Swaney,  45  Mo.  273; 


837  WHO    MAY    PURCHASE   AT    SALE    UNDER    POWER.        [§    1882. 

cordance  with  the  statute;"^  but  not  if  his  own  agent  acts  as  auc- 
tioneer and  makes  the  certificate  and  affidavit  of  sale."^ 

Under  a  trust  deed,  when  the  sale  is  made  by  a  disinterested 
trustee,  the  beneficiary  may  ordinarily  purchase.  The  holder  of 
a  note  secured  by  a  trust  deed  may  buy  at  the  sale.  He  may  leave 
a  bid  with  the  auctioneer,  and  the  purchase  under  it  will  be  valid 
if  it  is  the  highest  that  can  be  obtained  ;^^^  but  if  there  is  any  un- 
fairness on  his  part,  such  as  a  representation  at  the  sale  that  the 
mortgagor  would  have  a  right  to  redeem  from  the  sale  within  twelve 
months,  when  there  is  no  such  right  of  redemption,  and  the  prop- 
erty in  consequence  brings  only  about  half  its  value,  it  will  be  held 
that  the  sale  may  be  avoided.''^* 

In  Missouri,  however,  it  is  held  that  where  the  mortgage  pro- 
vides for  a  sale  by  the  mortgagee,  or,  in  case  of  his  refusal  to  act, 
by  the  marshal,  they  are  for  the  purposes  of  the  sale  co-trustees, 
and  the  mortgagee  cannot,  by  refusing  to  make  the  sale,  relieve 
himself  of  his  disability  to  purchase  at  the  sale  by  the  marshal.^^^ 

In  New  York  the  mortgagee  by  statute  is  allowed  to  purchase  at 
the  sale;"^  but,  independently  of  the  statute,  it  was  there  held  that 
he  had  a  perfect  right  to  purchase  at  his  own  sale."^  He  is  not  there 
regarded  as  occupying  a  fiduciary  relation  to  the  mortgagor.  The 
foreclosure  and  sale,  when  the  mortgagee  becomes  the  purchaser, 
is  as  complete  a  bar  of  the  equity  of  redemption  as  when  any  one 
else  becomes  the  purchaser."^  An  agent  may  bid  for  him  at  the  sale 
without  disclosing  the  fact  of  the  agency;  and  this  is  no  fraud  on 
other  bidders,  as  he  has  a  right  to  buy,  and  would  be  bound  to  take 
the  property  if  struck  off  to  him."^ 

In  Mississippi  the  court  in  a  recent  case  cited  cases  in  which  this 
right  was  said  to  be  recognized,  but  gave  no  opinion  upon  it.'^*" 

In  Texas  it  is  held  that  the  mortgagee  may  purchase  at  his  own 
sale  upon  a  power,  if  there  be  no  unfairness  in  it.  It  is  declared  to 
be  for  the  interest  of  the  mortgagor  that  the  mortgagee  should 
enter  into  competition  at  the  sale.     The  sale,  being  open  and  made 

"i  Ramsey    v.    Merriam,    6    Minn.  "'Elliott  v.   Wood,   53   Barb.   285, 

168.  affirmed    45    N.    Y.    71;    Hubbell    v. 

"'Alien  V.  Chatfield,  8  Minn.  435.  Sibley,  5  Lans.   51;    Bergen  v.   Ben- 

"^  Richards    v.    Holmes,    18    How.  nett,    1    Caines   Cas.    1,    2    Am.    Dec. 

143;    Smith  v.  Black,   115  U.  S.   308,  281;   Slee  v.  Manhattan  Co.  1  Paige, 

6  Sup.  Ct.  50;   Felton  v.  Le  Breton,  48;    Casserly    v.    Witherbee,    119    N. 

92    Cal.    457,   28  Pac.    490,   per   Har-  Y.  522,  23  N.  E.  1000. 

rison,    J.  "*  Lansing  v.   Goelet,   9   Cow.   346. 

"*  Bloom  V.  Van  Rensselaer,  15  "» National  Fire  Ins.  Co.  v.  Loom- 
in.    503.  is,  11  Paige,  431. 

"'  Gaines  v.  Allen,  58  Mo.  537.  '"  Hyde  v.  Warren,  46  Miss.  13. 

"'3  R.  S.  6th  ed.  847,  §  7. 


1883.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS. 


838 


after  proper  publication  of  notice,  should  not  be  impeached  though 
made  to  the  mortgagee.^"  His  deed  as  trustee  to  himself  as  pur- 
chaser passes  the  legal  title.''*^ 

§  1883.  A  provision  in  express  terms  that  the  mortgagee  may 
purchase  is  usually  found  in  the  mortgage  deed  where  power  of 
sale  mortgages  are  in  general  use,  and  there  is  no  statute  authoriz- 
ing the  mortgagee  to  purchase  at  his  sale  under  the  power.  It  has 
sometimes  been  declared  that  this  privilege  should  be  strictly  con- 
strued and  should  not  be  favored;'*^  but  it  is  generally  held  that 
under  such  a  provision  the  court  will  not  interfere  with  a  purchase 
by  the  mortgagee  unless  there  be  some  other  objection  which  would 
invalidate  a  purchase  by  any  one  else  under  the  same  circumstances.^" 
The  right  of  the  mortgagee  to  purchase  under  such  a  provision  is 
fully  sustained  by  the  courts.     Lord  Eldon^*^  clearly  intimates  that 

'"Howards   v.   Davis,   6   Tex.   174;  pres    authority    of    his    cestui    que 

Connolly  v.  Hammond,  51  Tex.  635;  trust,    have    anything    to    do    with 

Bohn  V.  Davis,  75  Tex.  24,  12  S.  W.  the  trust  property  as  a  purchaser  " 

837.  In    Elliott    v.    Wood,    45    N.    Y.    71, 

''-Marsh  v.  Hubbard,  50  Tex.  203.  Mr.    Justice    Allen    said:       "Pov.^ers 

'"Munn    V.    Burges,    79    111.    604;  of   sale   are   construed    liberally   for 

Griffin  v.  Marine  Co.  52  111.  130.    A  the  purpose  of  effecting  the  general 

provision  in  a  mortgage  "that  any  object,   and   neither   the   interest   of 

irregularity    in    giving   notice   of   or  the  mortgagee  nor  mortgagor  will  be 

in    making    the    sale    shall    not    in  advanced  by  forbidding  purchase  by 

any    manner   affect    the    sale,"    does  the  mortgagee.     The  security  of  the 

not  of  itself  give  the  mortgagee  the  mortgagee   would    be    less   valuable, 

right  to  purchase  at  the  foreclosure  and   the   mortgagor   would   lose  me 

sale  under  the   power  contained   in  benefit    of    the    competition    of    the 

the     instrument.     British      &     Am.  mortgagee   upon    the   sale."     In   the 

Mort.    Co.   V.    Norton,   125    Ala.    522,  case  of  Griffin  v.  Marine  Co.  of  Chi- 

28  So.  31.  cago,    52    111.    130,    it   was   said    that 

'"Elliott  V.   Wood,    45   N.    Y.    71;  the     clause     conferring     upon     the 

Montgomery    v.     Dawes,    12    Allen,  mortgagee  the  right  to  purchase  at 

397;    Hall    v.    Bliss,    118   Mass.    554;  his  own  sale  is  subject  to  a  strict 

Davey    v.    Durrant,    1    De    G.    &    J.  construction,    and    to    be    regarded 

535;    Robinson  v.  Amateur  Asso.  14  with   disfavor  by   the   courts.     It   is 

S.  C.  148;  Kennedy  v.  Dunn,  58  Cal.  conceived  that  this  is  an  erroneous 

339;     Knox    v.    Armistead,    87    Ala.  view  of  the  subject,  whatever  may 

511,'  6  So.  311,  quoting  text;    Ellen-  be  thought  of  the  correctness  of  the 

bogen    V.    Griffey,    55    Ark.    268,    18  decision     of     the     case     before     the 

S.  W.  126.  court.     The  mortgage  there  author- 

"^Downes  v.  Grazebrook,  3  Mer.  ized  the  mortgagee  "to  become  pur- 
200.  He  says:  "A  trustee  for  sale  chaser  at  said  sale,  or  any  member 
is  bound  to  bring  the  estate  to  the  or  members  of  the  firm  of  H.  A. 
hammer  under  every  possible  advan-  Tucker  &  Co.  may  become  a  pur- 
tage  to  his  cestui  que  trust.  He  may,  chaser  at  such  sale,  provided  his 
if  he  pleases,  retire  from  being  a  or  her  bid  for  said  property,  or 
trustee,  and  divest  himself  of  that  any  portion  thereof."  It  was  held 
character,  in  order  to  qualify  him-  that  the  right  to  purchase  was  in- 
self  to  become  a  purchaser;  and  so  tended  to  be  upon  conditions  not 
he  may  purchase,  not  indeed  from  fully  expressed,  and  the  language 
himself  as  trustee,  but  under  a  not  being  intelligible,  the  clause 
specific  contract  with  his  cestui  que  should  be  disregarded  entirely,  and 
trust.  But  while  he  continues  to  be  therefore  that  the  mortgagee  had 
a  trustee,  he  cannot,  without  the  ex-  no  power  to  purchase. 


839  WHO    MAY    PURCHASE   AT    SALE    UNDER   POWER.        [S    188-J. 

under  such  authority  a  trustee  miglit  become  a  purchaser  of  the 
trust  property;  and  a  mortgagee  is  not  a  mere  trustee,  but  has  in- 
terests of  his  own  to  protect.^''*^ 

If  the  mortgagee  avails  himself  of  his  right  to  purchase  under  a 
provision  in  the  power  giving  him  this  privilege,  he  will  be  held  by 
a  court  of  equity  to  the  strictest  good  faith  and  the  utmost  dili- 
gence in  the  execution  of  the  power  for  the  protection  of  the  rights 
of  the  mortgagor,  and  his  failure  in  either  particular  will  give  occa- 
sion to  allow  the  mortgagor  to  redeem.'^*^  The  mere  fact  that  the 
land  did  not  sell  for  its  full  value  is  not  alone  sufficient  to  establish 
fraud  or  unfairness  in  the  mortgageeJ*^  A  stipulation  in  a  power  of 
sale  in  a  mortgage  authorizing  the  mortgagee  to  purchase  at  his  own 
sale  is  a  part  of  the  security,  and  passes  to  an  assignee  of  the  mort- 
gage/" 

A  provision  authorizing  the  mortgagee  to  purchase  at  his  sale 
under  the  power  of  sale  confers  upon  his  assignee  the  same  privilege 
though  this  is  not  in  express  terms  extended  to  the  assignee;  for  this 
privilege  is  regarded  as  being  as  much  a  part  of  the  security  as  the 
power  of  sale  itself,  and  passes  to  the  assignee.'^^" 

§  1884.     This  rule  has  no  application  to  a  subsequent  mortgagee 

who  buys  at  a  sale  under  a  prior  mortgage,  although  under 
his  own  security  he  holds  the  position  of  a  trustee  to  sell,  and  is 
debarred  from  purchasing  at  a  sale  under  his  own  power.'^^^  This 
decision  of  the  Master  of  the  Rolls,  in  the  leading  case  of  Shaw  v. 
Bunny,  was  affirmed  by  the  Court  of  Appeals  in  Chancery,''^^  where 

""Waters  v.  Groom,  11  CI.  &  Fin.  this  case   was   not  by   auction,   but 

684.  private.     Lord   Justice   Turner,   who 

"'  Montague    v.    Dawes,    14    Allen,  also  sat  in  this  case,  expressed  some 

369;    Chilton  v.  Broolts,  69  Md.  584,  doubt  as  to  the  view  taken  by  his 

16    Atl.    273;    Galvin   v.    Newton,    19  associate  and  by  the  Master  of  the 

R.    I.   176,   36  Atl.   3;    Jones  v.   Pul-  Rolls;     but    as    remarked    by    Lord 

len,    115    N.    C.    465,    20    S.    E.    624;  Chancellor  Cranworth,  in  Kirkwood 

Coleman  v.  McKee,  24  R.  I.  596.  v.  Thompson,  2   De  G.  J.   &   S.   613, 

'*' Matthews  v.  Daniels   (Arlv.),  21  the  authority  of  the   decision  is   in 

S.  W.  469.  no  way  affected  thereby.     The  Lord 

'"  Smith    V.    Lusk,    119    Ala.    394,  Chancellor    moreover    approved    the 

24  So.  256;  Ward  v.  Ward,  108  Ala.  decision,  and  supported  it  by  strong 

278,   19  So.  354.  arguments.     After    showing    that    a 

""  Ward    V.    Ward,    108    Ala.    278,  mortgagee    can    purchase    from    his 

19  So.  354.  mortgagor,     he     said:     "The     next 

'^^  Shaw   V.    Bunny,    33    Beav.    494,  step    is,    can    he   purchase    under    a 

2   De  G.   J.   &   S.   468;    Kirkwood  v.  power   of   sale    executed    by    a   first 

Thompson,  2  Hem.  &  M.  392,  11  Jur.  mortgagee? 

N.  S.  385,  2  De  G.  J.  &  S.  613;   Par-  "It   seems   to   me   to   follow   as   a 

kinson  v.  Hanbury,  2  De  G.  J.  &  S.  necessary     corollary,     because     the 

540.  sale  that  is  made  under  the  power 

'"  Shaw  V.  Bunny,   13   W.   R.   374,  of  sale  by  a  first  mortgagee  is  sub- 

2   De   G.   J.    &   S.   468.     The   sale   in  stantially  a  sale  by  the  mortgagor, 


§    1884.]        POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  840 

Lord  Justice  Knight  Bruce  said :  "There  being,  I  think,  not  any 
special  circumstance  in  the  present  instance  to  prejudice  or  affect 
the  purchaser's  right,  his  title  against  the  mortgagor  to  the  benefit 
of  the  purchase  seems  to  me,  also,  as  absolute  as  that  of  a  mere 
stranger  purchasing  would  have  been.  I  consider,  I  repeat,  in  ac- 
cordance with  the  view  of  the  Master  of  the  Eolls,  that  there  was 
nothing  to  preclude  the  second  mortgagee  from  buying  in  the  cir- 
cumstances in  which  he  bought,  and  retaining  his  purchase.  If 
indeed,  he  had  availed  himself  of  his  position  as  a  mortgagee  to 
procure  some  facility  or  advantage  leading  to  the  purchase,  or  con- 
nected with  it,  that  might  have  made  a  difference.  But  I  see  no 
such  case.  It  seems  to  me  immaterial  that  the  purchaser  would  not 
(if  he  would  not)  have  been  informed  of  the  intended  sale  had  he 
not  been  a  mortgagee." 

But  if  the  second  incumbrancer  is  not  merely  a  mortgagee,  but 
holds  the  equity  of  redemption  in  trust  for  third  persons  for  sale 
on  default  in  the  payment  of  the  debt,  he  is  incapacitated  from 
purchasing  at  a  sale  by  the  first  mortgagee.  He  is  in  such  case  a 
trustee.'^^^ 

The  circumstances,  however,  that  the  second  mortgage  is  in  the 
form  of  a  conveyance  in  trust  to  sell,  and  out  of  the  proceeds  to 
pay  the  debt  secured  to  the  grantee  and  all  other  incumbrances,  and 
pay  over  the  surplus  to  the  mortgagor,  does  not  prevent  his  pur- 
chasing under  the  prior  mortgage. '^^*  "As  between  the  mortgagor, 
the  person  conveying,  and  the  person  to  whom  it  was  conveyed  in 
trust  to  sell,  it  certainly  was  a  mortgage  as  far  as  he  was  concerned. 
He  took  possession,  and  he  taking  possession  would  be  liable  to  ac- 
count as  mortgagee.  It  cannot  be  contradicted  that,  between  the 
parties  conveying  and  the  parties  to  whom  it  was  conveyed,  it  cer- 
tainly was  a  mortgage.  It  is  possible — I  do  not  say  whether  that 
would  be  so — that  there  might  have  been  different  duties  as  be- 
tween him  and  the  mortgagor  if  he  had  sold  than  would  have 
existed  in  the  case  of  a  simple  mortgage.  But  what  took  place  is 
something  that  comes  in  paramount  and  prior  to  the  exercise  of  the 
duties  as  trustee;  he  never  can  sell,  because  persons  having  a  para- 

for  it  is  a  sale  made  under  an  au-  '"  Parkinson  v.  Hanbury,  2  De  G. 

thority  given  by  the  mortgagor  par-  J.  &  S.  450;  Van  Epps  v.  Van  Epps, 

amount   to   the   title   of   the   second  9  Paige,  237;    Bell  v.  Webb,  2  Gill, 

mortgagee.     It  seems  to  me  that  on  163;  Boyd  v.  Hawkins,  2  Ired.  (Eq.) 

the    principle    of    the   case   there    is  304;   Taylor  v.  Heggie,  83  N.  C.  244. 

no    difference    whatever    between    a  ""  Kirkwood    v.    Thompson,    2    De 

purchase  from  a  first  mortgagee  im-  G.  J.  &  S.  613. 
der  a  power  of  sale  and  a  purchase 
from   the   mortgagor  himself." 


841       WHO    MAY    PURCHASE   AT    SALE    UNDER    POWER.     [g§    1885,    1886. 

mount  title  to  his  title  choose  to  exercise  that  right,  and  therefore 
prevent  the  possibility  of  his  exercising  his  right,  which  is  a  trust 
only  to  arise  if  it  was  ever  in  his  power  to  sell,  which  it  was  not,  in 
consequence  of  the  sale  made  by  the  prior  mortgagees.""^ 

It  is,  moreover,  immaterial  that  the  second  mortgagee  is  in  posses- 
sion at  the  time  of  this  purchase  under  the  power  in  the  first  mort- 
gage. His  possession  creates  no  new  obligation  except  to  account. 
Otherwise  his  relation  as  mortgagee  remains  the  same  as  if  he  had 
not  been  in  possession.'^"  The  fact  of  his  possession  does  not  pre- 
vent his  purchasing  the  equity  of  redemption  on  an  execution  sale 
had  upon  a  judgment  in  favor  of  a  third  person. '^-'^'^ 

§  1885.  The  right  to  avoid  such  a  sale  is  waived  by  delay. 
When  a  mortgagee  purchases  at  a  sale  under  a  power  in  a  mortgage 
which  does  not  give  him  the  right  to  purchase,  the  equitable  owner 
may  set  it  aside  and  recover  the  property,  or  he  may  at  his  election 
affirm  it  and  have  the  price  obtained  applied  to  the  mortgage  debt, 
and  receive  the  surplus  if  there  be  any.  But  this  right  to  avoid 
the  sale  will  be  treated  as  waived  unless  asserted  within  a  reason- 
able time.'^^^  What  delay  will  be  regarded  as  a  waiver  of  this  right 
depends  upon  the  circumstances  of  the  case;  there  can,  of  course, 
be  no  fixed  rule.  After  a  lapse  of  thirteen  years,  during  which  no 
payment  of  interest  or  principal  had  been  made  or  offered  by  any 
one  on  account  of  the  mortgage  debt,  the  owner  of  the  equity  of 
redemption  was  not  allowed  to  redeem,  though  he  was  not  notified 
of  the  sale  and  had  no  actual  knowledge  of  it.'^^^ 

§  1886.  If  the  title  acquired  by  a  mortgagee  in  this  way  has 
passed  into  the  hands  of  a  bona  fide  purchaser  without  notice, 
and  for  an  adequate  consideration,  the  sale  cannot  afterwards  be 
impeached. '^®°     Such  a  sale  being  voidable  only,  and  not  void,  the 

'"Per      Lord      Chancellor      Cran-  Hill,   88  Ala.   488,   7   So.   238;    Ezzell 

worth    In    Kirkwood    v.    Thompson,  v.   Watson,   83   Ala.   125,   3    So.   309; 

2  De  G.  J.  &  S.  613.  Comer  v.  Sheehan,  74  Ala.  452.     See 

"•  Kirkwood    v.    Thompson,    2    De  Elrod    v.    Smith    supra,    as    to    ex- 

G.  J.  &  S.   613.  cuse  for  delay. 

^  Ten    Eyck    v.    Craig,    62    N.    Y.  In     Mississippi     the     doctrine     of 

406.  laches  does  not  prevail,  and  no  pe- 

'^*  Nichols  V.  Baxter,   5  R.   I.   491;  riod   short  of   the   ten  years'   limit- 

Munn  V.  Surges,  70  111.  604;   Joyner  ation  within  which  redemption  may 

V.    Farmer,   8   N.    C.    196;    Taylor  v.  be  had  bars  a  bill   to  redeem  from 

Heggie,  83  N.  C.  244.  a  voidable  sale.     Houston  v.   Build. 

"'Learned    v.    Foster,    117    Mass.  Asso.   80  Miss.   31,   31   So.   540:    Hill 

365.     In  Alabama,  in  the  absence  of  v.  Nash,  73  Miss.  849,  862,  19  So.  707. 

special    circumstances    excusing   the  """  Dexter    v.    Shepard,    117    Mass. 

delay,  the  rule  as  to  reasonable  time  480;  Burns  v.  Thayer,  115  Mass.  89; 

is   two   years.     Elrod   v.    Smith,   130  Montague      v.      Dawes,      12      Allen 

Ala.   212,   30   So.   420;    Alexander  v.  (Mass.)    397;    Benham    v.    Rowe,    2 


§    1887. J        POWER    OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  842 

title  passes  to  the  nominal  purchaser^  and  any  proceedings  to  set 
aside  the  sale,  to  be  effectual,  must  be  commenced  before  he  conveys 
to  another  who  purchases  in  good  faith. 

A  purchaser  in  good  faith  for  a  valuable  consideration  either  from 
the  mortgagor  at  the  foreclosure  sale,  is  not  affected  by  unfaithfulness 
on  the  part  of  the  mortgagee.'^*'^ 

§  1887.  A  mortgagor  may  purchase  at  a  sale  under  his  own  mort- 
gage;'"- and  the  deed  to  him  will  operate  as  a  conveyance  of  the 
title  and  not  as  a  discharge  or  release  of  the  mortgage.  Therefore 
if  before  such  purchase  a  creditor  had  levied  upon  the  equity  of  re- 
demption in  the  mortgaged  premises  and  after  the  foreclosure  sale  the 
officer  subsequently  sells  the  equity  of  redemption  levied  upon,  his  deed 
made  in  the  pursuance  of  the  levy  is  of  no  effect. '^'^^ 

But  if  the  mortgagor  has  given  a  subsequent  mortgage  upon  the 
same  propert}^,  his  purchase  will  not  defeat  this,  but  will  operate 
for  the  benefit  of  it  in  the  same  way  as  a  discharge,  or  a  transfer  of 
the  mortgage  to  himself.'^"*  He  cannot  set  up  against  his  own  incum- 
brance another  one  which  he  has  himself  created.  Whether  the 
mortgagor  would  stand  in  any  better  position  as  regards  the  sub- 
sequent incumbrancer  if,  instead  of  purchasing  directly  under  the 
power,  the  estate  had  been  sold  under  the  power  to  a  stranger  and 
subsequently  purchased  from  such  stranger  by  the  mortgagor,  is  a 
question  raised  but  not  decided  in  the  case  last  cited.     And  in  like 

Cal.    387,    56    Am.    Dec.    342;    Block-  "=Bensieck  v.   Cook,   110  Mo.   173, 

ley  V.   Fowler,   21   Cal.   326,   82   Am.  19  S.  W.   642;    Houston  v.   Nord,  39 

Dec.    747;    Rutherford    v.    Williams,  Minn.   490,    40   N.   W.    568;    Mooring 

42  Mo.   18;    Robinson  v.   Cullom,  41  v.  Little,  98  N.  C.  472,  4  S.  E.  485; 

Ala.    693;    Thurston    v.    Prentiss,    1  Coleman  v.  McKee,  24  R.  I.  596. 

Mich.  193;  Niles  v.  Ransford,  1  Mich.  ■«=' Lunt   v.    Cook,   175   Mass.    1,    55 

338,  51  Am.  Dec.  95.  N.  E.  468.     And  see  Capen  v.  Doty, 

In  Mississippi  a  mortgagee  who  13  Allen  (Mass.),  262. 
has  wrongfully  purchased  at  a  fore-  '"  Otter  v.  Vaux,  6  De  G.  M.  &  G. 
closure  sale  and  afterwards  sold  to  638;  Ayer  v.  Phila.  &  B.  Face  Brick 
an  innocent  purchaser  may  be  re-  Co.  157  Mass.  57,  31  N.  E.  717.  This 
quired  in  a  proceeding  to  redeem  principle,  that  a  mortgagor  cannot 
to  pay  the  sum  received  from  his  set  up  an  after-acquired  title  against 
vendee  to  the  mortgagor  or  his  his  own  incumbrancer,  has  been  car- 
grantee.  Houston  v.  Building  Asso.  ried  to  the  extent  of  holding  that 
80  Miss.  31.  a  mortgagee   purchasing  the   equity 

A  quit-claim   deed   executed   after  of  redemption  could  not  set  up  his 

a   voidable    purchase    by    the    mort-  own  mortgage  against  a  subsequent 

gagee  is  not  a  mere  assignment  of  mortgage  made  by  the  same  mort- 

the  right  to  maintain  a  suit  against  gagor.     But    in    Toulmin    v.    Steere, 

the  mortgagee,  but  operates  to  pass  3   Mer.   210,   the  correctness  of  this 

the   equity  of  redemption.     Cassedy  proposition     has     been     questioned, 

V.    Jackson,    45   Miss.    397;    Houston  and  cannot  now  be  regarded  as  law. 

v.  Building  Asso.  80  Miss.  31.  Otter  v.  Yaux,  6  De  G.  M.  &  G,  638. 

•'"  Silva  V.   Turner,  166  Mass.  407, 
413,  44  N.  E.  532. 


843 


WHO    MAY    PURCHASE   AT    SALE    UNDKK    POWEI!.        [g    1S88. 


manner,  if  a  purchaser  of  an  equity  of  redemption  subject  to  two 
mortgages,  botli  of  which  he  assumed  the  payment  of,  afterwards 
purchases  at  a  foreclosure  sale  under  the  senior  mortgage,  he  cannot 
set  up  the  title  acquired  by  such  last  purchase  as  against  the  junior 
mortgage,  but  his  purchase  will  be  considered  a  payment  of  the  prior 
mortgage. '^''^ 

A  subsequent  purchaser  of  an  undivided  lialf  of  the  mortgaged 
premises  may  purchase  them  at  a  sale  under  the  power.  His  rela- 
tions to  the  mortgagor  are  not  of  such  a  confidential  nature  as  to  pre- 
vent his  buying.'^'" 

A  director  of  a  corporation  may  purchase  at  a  foreclosure  sale 
property  of  the  corporation  mortgaged  by  vote  of  tlie  directors,  pro- 
vided good  faith  be  shown. ''^'' 

The  fact  that  a  mortgagor  does  not  see  fit  to  prevent  a  sale  under 
the  mortgage  in  no  way  prejudices  his  rights  against  one  whom  he 
seeks  to  hold  as  a  trustee  for  him  in  the  purchase  of  the  estate  at  the 
sale.  Where  one  is  enabled  to  purchase  land  at  a  foreclosure  sale  by 
virtue  of  an  understanding  amounting  to  a  promise  on  his  part  to 
purchase  it  for  the  mortgagor  and  the  latter  parted  with  his  interest 
in  the  land  on  tlie  faith  of  such  promise,  such  purchaser  may  be 
charged  as  trustee  for  the  mortgagor  who  is  entitled  to  relief  in 
equity  in  the  absence  of  any  denial  of  such  allegations,  or  upon  proof 
thereof.'^''^ 

§  1888.     The   wife   of   the  mortgagor  may   become   a   purchaser 

under  the  power  of  sale,  and  hold  the  estate  as  her  sole  and  separate 
property,  when  the  conveyance  is  made  to  her  in  the  name  of  the 
mortgagee,  and  not  as  attorney  of  the  mortgagor.  The  technical 
objection  that  a  husband  cannot  directly  convey  to  his  wife,  does 
not  apply. '"^  It  would  seem  on  principle  that  it  would  make  no  dif- 
ference as  to  the  wife's  right  to  purchase  whether  the  husband  had 
before  the  sale  parted  with  his  equity  of  redemption,  thougli  in  the 
case  cited  he  had  already  conveyed  his  interest ;  for  the  mortgagee 
had  the  legal  title,  and  he  could  without  doubt  assign  his  mortgage 

'"'^  Hilton   V.   Bissell,   1    Sandf.    Ch.  subsequently  conveyed  the  properry 

407;   Tompkins  v.  Halstead,  21  Wis.  to  the  grantor,  she  acquired  the  land 

118;   Stiger  v.  Mahone,  24  N.  J.  Eq.  freed  from  the  second  deed  of  trust, 

426;      Plum     v.      Studebaker     Bros,  and  could  convey  a  good  title. 

Manuf.  Co.  89  Mo.    162.     But  in  the  ™  Burr  v.   Mueller,   65   III.  258. 

latter  case  it  was  held   that  v/here  ""'  Saltmarsh     v.      Spaulding,     147 

land  incumbered  by  two  trust  deeds  Mass.  224,  17  N.  E.  316. 

given    by   a   married   woman    to   se-  ■"*  Coleman  v.  McKee,  24  R.  I.  598. 

cure    debts    of    a    third    person    was  ''''Field  v.  Gooding,  106  Mass.  310; 

sold     under     the     first     deed,     and  Gantz  v.  Toles,  40  Mich.  725. 
bought   in   by   the   beneficiary,   who 


I    1889.]        POWER   OF    SALE    MORTGAGES    AND   TRUST   DEEDS.  844 

to  the  mortgagor's  wife.  It  is  different  from  the  case  of  a  purchase 
of  an  eqnity  of  redemption  on  execution  by  the  wife  of  the  judg- 
ment debtor.  The  sheriff  has  no  title,  and  exercises  only  a  statute 
power;  and  the  husband  has  a  right  to  redeem,  which  he  could  not 
enforce  by  suit  against  his  wife.  Such  a  sale,  if  it  could  be  made, 
would  operate  as  a  conveyance  of  the  husband's  title  directly  from 
him  to  his  wife.^^° 


XII.     The  Deed  and  Title. 

§  1889.  The  holder  of  legal  title  should  make  the  deed  under 
the  power  of  sale.  The  assignee  has  the  same  authority  in  this 
respect  that  the  mortgagee  himself  had  if  the  power  is  expressly 
given  to  his  assigns.'^^^  Upon  the  death  of  the  assignee  his  executor 
or  administrator  may  execute  the  power,  though  it  be  only  to 
the  mortgagee,  "his  heirs,  executors,  administrators,  or  assigns.""^ 
Under  a  statute  providing  for  a  sale  under  the  power  by  a  sheriff  or 
other  officer,  such  officer  stands  in  the  place  of  the  mortgagee  in 
exercising  the  power  of  sale;  he  executes  the  deed  to  the  purchaser 
by  virtue  of  the  power.  The  provision  of  statute  has  the  same 
effect  as  if  made  part  of  the  mortgage  deed."^ 

So,  also,  a  trustee  selling  under  a  deed  of  trust  conveys  the  title 
and  estate  that  was  vested  in  him  by  the  trust  deed.  He  is  not 
required  to  enter  into  any  personal  covenants  himself  against  gen- 
eral incumbrances,"*  though  he  usually  covenants  against  such  as  are 
done  or  suffered  by  himself.  The  purchaser  is  bound  to  know  that 
there  can  be  no  personal  warranty  of  title.  He  is  also  bound  to 
take  notice  of  the  title  as  it  stands  in  the  trustee  with  all  its  defects 
as  it  appears  of  record.""  The  deed  of  a  trustee  after  the  grantor 
has  conveyed  his  equity  of  redemption,  which  recites  that  the  trus- 
tee  conveys   all  the  right,  title,   and   estate   of  the   grantor   in   the 

'"Stetson   v.   O'Sullivan,   8   Allen,  feree  of  the  mortgage,   and  having 

321.  no    title    in    himself    otherwise,    he 

'"  Heath    v.    Hall,    60    111.    344.     In  could     convey     none.       Johnson     v. 

Alabama    by    statute    the    equitable  Beard,  93  Ala.  96,  9  So.  535. 

assignee  without  the  legal  title  may  "'  Saloway  v.   Strawbridge,  1  Jur. 

make  the  deed.     See  §  1789.     In  the  N.    S.    1194,   7   De   G.    M.    &   G.    594, 

case  of  Sanders  v.  Cassady,  86  Ala.  1  K.  &  J.  371. 

246,   5   So.    Rep.    503,    an   auctioneer  "'  Hoffman  v.  Harrington,  33  Mich, 

who    sold    the    land    at    public    auc-  392. 

tion,  for  the  assignee  of  the  mort-  '"First  Nat.  Bank  v.  Pearson,  119 

gage,    made   the   deeds   in   his    own  N.  C.  494,  26  S.  E.  46. 

name  to  the  purchaser.     As  a  mat-  '"Barnard  v.  Duncan,  38  Mo.  170, 

ter  of  course,  not  being  the  trans-  90  Am.  Dec.  416. 


845  THE    DEED   AND   TITLE.  [§    1890. 

property,  is  sufficient  to  pass  the  title  and  cut  off  the  equity  of  re- 
demption.'^'^^ 

A  trustee  can  make  but  one  sale  and  deed,  and  if  he  attempts  to 
make  a  second  deed  the  grantee  will  take  no  titled"  A  sale  was 
made  under  a  deed  of  trust,  bringing  enough  to  pay  the  creditor 
and  leave  a  surplus  to  the  grantor,  who  had  fled  from  the  State. 
The  purchasers,  beJag  apprehensive  that  they  would  be  required  to 
pay  the  surplus  to  the  grantor's  creditors,  after  receiving  a  deed 
from  the  trustee  reconveyed  the  property  to  the  trustee  and  induced 
liim  to  sell  it  again,  and  at  such  sale  purchased  the  land  again  for  a 
trifling  sum,  and  received  a  second  deed  from  the  trustee.  The 
grantor  brought  suit  for  the  surplus  under  the  first  sale  and  re- 
covered, because  the  second  sale  was  a  nullity.'^" 

The  power  to  execute  a  conveyance  under  a  sale  by  virtue  of  a 
power  of  sale  will  be  inferred  as  a  necessary  incident  though  not 
expressed  in  the  power  of  sale.'^'^^ 

The  deed  should  recite  the  power  by  virtue  of  which  the  sale  is 
made,  though  perhaps  such  a  recital  is  not  necessary  as  a  matter  of 
law.^^"  If  the  deed  be  made  by  an  attorney  of  the  mortgagee,  his 
authority  should  be  evidenced  by  a  writing  under  seal,  although  the 
power  of  sale  expressly  authorizes  the  mortgagee,  his  legal  repre- 
sentatives or  attorney,  to  convey.  But  a  deed  executed  by  an  at- 
torney not  so  authorized  may  be  regarded  as  conveying  to  the  pur- 
chaser an  equitable  interest  in  the  premises,  which  he  may  set  up  in 
bar  of  a  suit  in  equity  to  have  the  sale  set  aside. ''^^^ 

If  a  mortgage  be  taken  by  one  m  his  capacity  as  administrator 
when  he  had  no  right  to  hold  real  estate  in  that  capacity,  upon  a 
sale  by  him  under  a  power,  the  deed  should  be  executed  by  him  in 
his  own  right  and  character.'^^^ 

§  1890.  If  the  mortgagee  be  a  married  woman  she  may  execute 
the  power  of  sale  in  her  own  name,  and  it  is  not  necessary  for  her 
husband  to  join  in  the  conveyance  or  consent  thereto  in  writing,  as 
is  provided  by  statute  in  case  of  a  conveyance  of  her  o^vn  real  prop- 

""Tyler    v.    Mass.    Mut.    Ins.    Co.  433;    Williams    v.    Otey,    8    Humph. 

108  111.  58.  563,   568,   47  Am.   Dec.   632;    Fogarty 

"'Koester    v.    Burke,    81    111.    436.  v.   Sawyer,   17  Cal.   589,   592;    Valen- 

But    see    Balfour-Guthrie    Inv.    Co.  tine  v.   Piper,  22   Pick.   433,   33  Am. 

V.  Woodworth,  124  Cal.  169,  56  Pac.  Dec.  715. 

891,    holding    a    trustee    could    exe-  "^''  Smith    v.    Henning,    10   W.    Va. 

cute  a  second  deed  for  the  purpose  596. 

of  correcting  an  inadvertence  in  the  ''^  Watson  v.  Sherman,  84  111.  263. 

first  one.  "^  Wilkerson  v.  Allen,  67  Mo.  502. 

"'  Gair  v.  Tuttle,  49  Fed.  198.  '«^  Cranston     v.     Crane,     97     Mass 

""Hunter    v.    Wooldert,    55    Tex.  459,  93  Am.  Dec.  106. 


§§    1891,    1892.]    POWER    OF    SALE    MORTGAGES    AND   TRUST    DEEDS.    8-lG 

§  1891.  When  the  power  authorizes  the  donee  to  execute  a 
deed  in  the  name  of  the  mortgagor,  or  as  his  attorney,  it  must 
be  so  executed;'*'  and  the  deed  of  sale  will  then  be  the  deed  of  the 
donor  of  the  power  and  not  of  the  donee.'*^  In  such  case,  if  the 
deed  be  in  the  name  of  the  mortgagee,  although  it  may  not  convey 
a  good  title  in  fee  simple  at  law,  it  will  pass  an  equitable  title  to  the 
grantee.'^*''  And  a  court  of  equity  may  aid  the  defective  execution  of 
the  deed,  and  establish  the  legal  title  to  the  land.'^^''  But  the  power 
was  formerly  and  is  now  more  frequently  given  to  be  exercised  by 
the  donee,  and  in  such  case  the  deed  of  sale  must  be  executed  in 
the  name  of  the  donee  of  the  power.'^*^  It  is  often  the  case  that  the 
power  is  given  in  the  alternative,  and  then  the  deed  of  sale  may  be 
executed  in  either  form,  or  in  both  forms.  When  the  power  is  "to 
make,  execute,  and  deliver  to  the  purchaser  or  purchasers  thereof 
all  necessary  conveyances,  for  the  purpose  of  vesting  in  such  pur- 
chaser or  purchasers  the  premises  so  sold  in  fee  simple  absolute,"  it 
may  be  executed  by  the  deed  of  the  mortgagee  in  his  own  name ; 
though  it  might,  perhaps,  be  executed  by  him  as  the  attorney  of  the 
mortgagor. '^®^ 

An  administrator  who  has  taken  a  power  of  sale  mortgage,  in 
which  he  is  described  as  administrator,  should  execute  a  deed  under 
the  power  contained  in  the  mortgage  in  his  own  name,  right,  and 
character,  and  not  as  administrator,  as  he  does  not  hold  the  land  in 
that  character,  and  cannot  exercise  the  power  in  that  capacity.'^^" 

The  mortgagor  may,  by  a  provision  in  the  mortgage,  authorize  the 
auctioneer  who  shall  sell  the  property  imder  the  power  to  execute  a 
conveyance  to  the  purchaser.  The  mortgage  then  becomes  a  power  of 
attorney  to  that  end.'^^^ 

§  1892.     A  mortgagee  purchasing  may  make  a  deed  to  himself. 

The  courts  have,  in  some  instances,  intimated  that  upon  a  sale 
under  a  power  in  a  mortgage,  the  mortgagee,  although  authorized 
by  the  terms  of  the  power  to  become  a  purchaser  at  the  sale,  can- 
not make  the  deed  directly  to  himself,  but  must  convey  to  a  third 
person.'^^^    But  in  a  recent  case  in  Massachusetts  it  was  decided  that 

■"Dendy   v.    Waite,   36    S.    C.    569,  "» Munn  v.  Burges,  70  111.  604. 

15  S.  E.  712.  '*"  Cranston  v.  Crane,  97  Mass.  459. 

'^''Speer  v.  Haddock,  31  111.  439.  ""  Wilkerson  v.  Allen,  67  Mo.  502. 

•^'Mulvey  v.  Gibbons,  87  111.  367;  "^Gamble  v.  Caldwell,  98  Ala.  577, 

Moseley  v.   Rambo,   106  Ga.   597,   32  12  So.  424. 

S.  E.  638.  •■■'-Dexter    v.    Shepard,    117    Mass. 

'"Gibbons  v.  Hoag,  95  111.  45.    See,  480;   Jackson  v.  Colden,  4  Cow.  266. 
however,   Dendv  v.   Waite,  36  S.   C. 
569,  15  S.  E.  7li2. 


847 


THE    DEED   AND   TITLE. 


[§    1893. 


under  a  mortgage  which  provided  that  the  mortgagee  might  pur- 
chase at  the  sale,  and  that  the  deed  to  the  purchaser  might  be 
made  by  the  mortgagee,  either  as  the  attorney  of  the  mortgagor  or 
in  his  own  name,  a  deed  executed  in  both  forms  to  himself  directly 
was  valid. ■'''^  From  the  principles  on  which  the  decision  is  based,  it 
would  seem  that  the  court  would  have  held  that  the  mortgagee  might 
have  made  the  deed  in  his  own  name  directly  to  himself,  and  that  the 
validity  of  it  did  not  depend  upon  the  execution  of  it  to  himself  in  tlie 
name  of  the  mortgagor.  It  has  been  suggested  that  the  mortgage 
should  contain  an  express  authority  for  the  mortgagee  to  do  this.'"* 

§  1893.  In  New  York  by  statute  no  deed  is  necessary  when  the 
mortgagee  himself  becomes  the  purchaser,  and  it  is  said  that,  under 
the  statutes  as  they  now  stand  no  deed  is  necessary  in  any  case  to 
perfect  the  title  in  the  purchaser.  The  affidavits  in  such  case  have 
the  force  and  effect  of  a  deed.''"^  Until  they  are  made,  no  title  vests 
in  the  purchaser.     The  mortgagee  in  such  case. 


in  order  to  main- 


"^Hall  v.  Bliss,  118  Mass.  554,  19 
Am.  Rep.  476.  "Such  a  mortgage," 
says  Gray,  C.  J.,  "vests  a  seizin  and 
a  conditional  estate  in  the  mort- 
gagee, with  a  power  superadded  to 
convey  an  absolute  estate  by  a  sale 
pursuant  to  the  terms  of  the  power. 
The  execution  of  the  power  does 
hut  change,  in  accordance  with  the 
terms  of  the  mortgage  deed,  the 
uses  upon  which  the  estate  is  to 
be  held.  The  purchaser  at  the  sale 
takes,  not  as  the  grantee  of  the 
mortgagee,  but"  as  the  person  des- 
ignated or  appointed  by  the  mort- 
gagee in  execution  of  the  power, 
and  derives  his  title  from  the  mort- 
gagor, as  if  the  designation  or  ap- 
pointment had  been  inserted  in  the 
original  deed,  and  the  seizin  or  in- 
terest to  serve  the  estate  is  raised 
by  that  deed.  .  .  .  The  decision  in 
Field  v.  Gooding,  106  Mass.  310, 
that,  upon  a  sale  under  a  power 
in  a  mortgage,  the  wife  of  the  mort- 
gagor might  be  the  purchaser,  and 
have  the  estate  conveyed  to  her,  is 
in  nowise  inconsistent  with  this 
view.  The  fact  that  the  husband 
had  previously  sold  the  equity  of 
redemption  relieved  that  case  from 
the  difficulties  which  might  have 
existed  if  he  had  owned  it  at  the 
time  of  sale.  See  Tucker  v.  Fenno, 
110  Mass.  311.  The  intervention  of 
the  mortgage  as  donee  of  the  power 


removed  the  technical  objection 
that  the  husband  could  not  convey 
directly  to  his  wife.  The  sugges- 
tions i  n  Dexter  v.  Shepard,  117 
Mass.  480,  and  in  Jackson  v.  Col- 
den,  4  Cow.  266,  that,  upon  a  sale 
under  the  power  in  a  mortgage,  the 
deed  could  not  be  made  by  the  mort- 
gagee to  himself,  were  by  way  of 
argument  only,  and  not  of  adju- 
dication; for  in  Dexter  v.  Shepard 
the  purchase  and  conveyance  were 
made  through  a  third  person;  and 
in  Jackson  v.  Golden  the  court  held 
that,  under  a  statute  containing 
provisions  similar  to  those  of  this 
mortgage,  no  deed  was  necessary 
when  the  mortgagee  became  the 
purchaser  at  the  sale;  and  al- 
though the  counsel  on  both  sides, 
and  the  other  judges,  assumed 
that  it  would  be  impossible  to 
make  such  a  deed,  Chief  Justice 
Savage  implied  that,  if  any  deed 
was  necessary,  a  deed  from  the 
mortgagee  to  himself  would  be 
valid.  And  see  Hood  v.  Adams, 
124  Mass.  481,  26  Am.  Rep.  687. 
The  case  of  Hall  v.  Bliss  was  ap- 
proved and  followed  in  Woon- 
socket  Inst.  Sav.  v.  Am.  Worsted 
Co.  13  R.  I.  255. 

"*  Jones  V.  Pullen,  115  N.  C.  465, 
20  S.  E.  624. 

""See  §  1660;  Jackson  v.  Golden, 
4  Cow.  266. 


§    1894.]        POWER   OF    SALE   MORTGAGES   AND   TRUST    DEEDS.  848 

tain  ejectment  upon  his  title,  must  show  that  all  the  requirements 
of  the  statute  have  been  complied  with  and  the  affidavits  completed 
before  the  commencement  of  the  action/''®  Unless  it  appears  by  the 
affidavits  on  file  that  the  notice  was  served  on  the  mortgagor,  the 
sale  will  not  give  any  title  to  the  purchaser.'^^^ 

In  Alabama,  also,  it  seems  that  a  deed  is  not  necessary  to  vest 
the  title  in  the  mortgagee  who  has  become  a  purchaser  at  a  sale 
under  a  trust  deed.  He  has  both  the  legal  and  equitable  title,  and 
can  recover  possession,  the  mortgagor  not  having  taken  steps  to 
redeem.'^®  At  any  rate,  after  such  a  sale  and  long  acquiescence  in  it, 
the  mortgagee  or  his  grantee  is  entitled  to  a  decree  vesting  in  him 
whatever  legal  estate  remained  in  the  mortgagee.'^""'  The  mortgagee  or 
his  assignee  ha.ving  received  a  certificate  of  purchase  from  the  auc- 
tioneer can  maintain  a  bill  for  a  specific  performance  and  compel  a 
conveyance. ^°° 

§  1894.  After  a  sale  under  a  power  the  title  as  a  general  rule 
remains  unaffected  until  a  deed  is  executed  and  delivered  by  the 
mortgagee  to  the  purchaser.  The  auction  sale  does  not  vest  the 
title  in  the  purchaser.^"^  Upon  the  delivery  of  the  deed  the  pur- 
chaser is  entitled  to  the  possession  of  the  property,  and  he  may 
maintain  a  writ  of  entry  or  an  action  of  ejectment  to  recover  it.^°^ 
He  need  not  give  the  mortgagor  or  other  occupant  of  the  premises 
notice  to  quit  before  bringing  a  suit  to  recover  possession  of  the 
premises,  though  the  mortgage  provides  that  the  mortgagor  may 
retain  possession  until  a  sale  is  made.  Notice  to  quit  is  neces- 
sary only  where  the  relation  of  landlord  and  tenant  exists.^°^  In  New 
York,  where  no  deed  is  necessary  to  the  passing  of  the  title,  the 
foreclosure  has  sometimes  been  said  to  be  complete,  so  far  as  to 
bar  the  equity  of  redemption,  as  soon  as  the  sale  is  made,'"*  though 
according  to  some  authorities  the  right  of  possession  remains  in  the 

'""Tiithill  v.  Tracy,  31  N.  Y.  157;  5°°  Woodruff  v.  Adair,  131  Ala.  530, 

Layman  v.   Whiting,   20  Barb.    559;  32  So.  515. 

Bryan  v.  Butts,  27  Barb.  503;   How-  «"  McClendon  v.   Equitable   Mortg. 

ard  V.  Hatch,  29  Barb.  297.  Co.   122    Ala.   384,   25    So.    30;    Tripp 

"'  Dwight    v.     Phillips,    48    Barb,  delivery     of     deed     under     judicial 

116.  sales. 

"'  Hambrick  v.   New  Eng.   Mortg.  "'"  Lydston    v.    Powell,    101    Mass. 

Co.  100  Ala.  551,   13  So.  778;   Amer-  77;  Cranston  v.  Crane,  97  Mass.  459, 

ican    Mortgage    Co.    v.    Turner,    95  93  Am.  Dec.  106. 

Ala   272    11  So.  212;  American  Mort-  ""^Waters   v.   Butler,   4   Cranch   C. 

gage   Co.   V.    Sewell,  92   Ala.   163,   9  C.  371. 

So.  143.  *°*Tuthill  v.  Tracy,  31  N.  Y.  157; 

""Brunson    v.    Morgan,    72    Iowa,  Mowry  v.   Sanborn,  7   Hun,  380,  68 

763,  4  So.  589.  N.    Y.    153. 


849  THE  DEED  AND  TITLE,  [§  1895. 

mortgagor  till  the  affidavits  are  made  and  recorded;^"®  and  until 
this  be  done,  there  is  no  transfer  of  title  sufficient  to  authorize  an 
action  of  ejectment  by  the  purchaser.  The  recorded  affidavits 
operate  as  a  statutory  transfer  of  title.^"''  In  Massachusetts  and  New 
York,  moreover,  the  purchaser,  instead  of  being  obliged  to  resort  to 
an  action  of  ejectment  to  enforce  his  right  of  possession  of  thw 
mortgaged  premises,  may  now  recover  possession  by  the  summary 
process  used  in  landlord  and  tenant  cases. ^^'^ 

§  1895.     The   deed   is   not   evidence    of   recitals   in   it.     A   deed 

made  in  pursuance  of  a  power  of  sale  by  the  mortgagee,  trustee, 
or  sheriff  is  by  itself,  in  a  suit  in  equity,  no  evidence  of  a  regular 
foreclosure  of  a  mortgage.^"^  It  is  sometimes  provided  in  deeds  of 
trust  that  the  recitals  contained  in  the  trustee's  deed  of  sale  under 
the  power  shall  be  prima  facie  evidence  of  the  facts  stated  in  it.®°^ 
But  in  the  absence  of  such  a  provision  the  recitals  are  either  re- 
garded in  equity  as  affording  no  evidence  of  their  truth,*^**  or  as  being 
at  most  prima  facie  evidence  of  the  faets  they  recite.^^^ 

In  an  action  at  law,  however,  the  trustee's  deed  made  under  a 
power  in  a  trust  deed  is  conclusive  evidence  of  the  sale  under  the 
power,  and  cannot  be  contradicted,  and  shown  to  have  been  executed 
in  violation  of  law,  and  therefore  fraudulent  and  void.^^^ 

^"^  Arnot  v.  McClure,  4  Denio,  41;         In  Mississippi  the  deed  is,  without 

Layman  v.  Whiting,  20  Barb.  559.  such     provision,     prima     facie    evi- 

**"  Mowry  v.   Sanborn,  7  Hun,  380,  dence  that  all  ministerial  acts  which 

68  N.  Y.  153.  are  conditions  precedent  to  a  valid 

^^  §   1741;   Laws  of  N.  Y.   1874,  oh.  exercise  of  the  power  of  sale  were 

208.  performed.     The  force  and  effect  of 

'"'*  Barman    v.    Carhartt,    10    Mich,  the  presumption   may  be   impressed 

338;    Hebert  v.  Bulte,  42  Mich.  489;  by    any    competent    evidence;     and 

Wood  V.  Lake,  62  Ala.  489.  when  such  evidence  leaves  the  pre- 

"'"  A    provision    that    the    recitals  ponderance   so   slightly   in   favor  of 

should    be    conclusive    proof    would  the    presumption    that    the    jury    do 

be     valid.       McCreary     v.     Reliance  not  believe  the  act  was  done,  their 

Lumber  Co.  16  Tex.  Civ.  App.  45,  41  verdict  should  be  against  the  regu- 

S.   V/.   485.     A   fortiori   a   provision  larity    of    the    sale.      Tyler    v.    Her- 

that  the  recitals  shall  be  prima  facie  ring,  67  Miss.  169,  6  So:  840,  19  Am. 

proof  is  effectual.     Swain  v.  Mitch-  St.  Rep.  297.    By  statute  in  Missouri 

ell,  27  Tex.  Civ.   App.  62,  66  S.  W.  R.   S.  1889,  §   7103,  see  Butler  Bldg. 

61.  &   Inv.    Co.    V.    Duns.worth,    146   Mo. 

^'oVail    v.     Jacobs,     62     Mo.     130;  361.  48  S.  W.  449. 
Neilson  v.  Chariton  Co.  60  Mo.  386;         '''^  §     1830;     Windett    v.     Hurlbut, 

Carter  v.  Abshire,  48  Mo.  300;  Han-  115   111.   403;    Fulton   v.   Johnson,   24 

cock  V.  Whybark,  60  Mo.  672.  W.  Va.  95,  108;  Dryden  v.  Stephens, 

''"Ingle    V.    Jones,    43    Iowa.    286;  19  W.  Va.  1;   Lallance  v.  Fisher,  29 

Beal  V.  Blair,  33  Iowa,  318;  William-  W.    Va.    512,    2    S.    E.    775;    Savings 

son   V.   Mayer,   117   Ala.   253,   23   So.  and   Loan    Soc.    v.    Deering,   66   Cal. 

3;   Naugher  v.  Sparks,  110  Ala.  572,  281,  5  Pac.  353;   Carico  v.  Kling.  11 

18  So.  45:   Tartt  v.  Clayton,  109  111.  Colo.  App.  349,  53  Pac.  390;    Ensley 

579;  Savings  &  Loan  Soc.  v.  Deering,  v.  Page,  13  Colo.  App.  452,  59  Pac. 

66  Cal.   281,   5   Pac.   353;    McConnell  225. 
V.  Day,  61  Ark.  464,  38  S.  W.  731. 


§§    189(),    1897.]    POWER   OF    SALE    MORTGAGES    AND   TRUST    DEEDS.    850 

The  deed  made  in  j)ursuance  of  the  power  usually  refers  to  the 
power,  and  recites  the  substance  of  it;  but  this  is  not  absolutely 
essential,  if  it  is  otherwise  manifest  that  the  intention  of  the  mort- 
gagee was  to  execute  the  power.  If  such  intention  is  not  mani- 
fest, a  simple  deed  by  the  mortgagee  will  be  held  to  convey  only  ' 
Tiis  mortgage  interest  subject  to  redemption. '^^'^  It  is  not  necessary 
for  the  deed  to  recite  the  exact  date  when  the  sale  took  place.^^*  A 
trustee's  deed  passes  the  legal  title  even  though  it  does  not  recite  that  it 
is  made  in  pursuance  of  the  power  of  sale.^^^  A  deed  which  represents 
the  sale  as  one  made  in  bulk  for  a  single  bid  is  not  a  proper  one  where 
the  sale  w^as  in  fact  in  separate  parcels  and  for  several  bids.^^^ 

§  1896.  The  deed  may  be  made  to  a  person  other  than  the 
purchaser  by  his  consent  and  direction.  It  is  often  the  case  that 
the  bidder  at  the  sale  transfers  his  bid  to  another,  and  directs  the 
deed  to  be  made  to  such  person,  and  if  there  be  no  fraud  in  the 
transaction,  and  no  loss  to  the  mortgagee  thereby,  there  can  be  no 
objection  to  the  transaction.  But,  even  if  objection  could  be  urged 
by  an  immediate  party  to  the  sale,  it  cannot  be  set  up  in  an  action 
of  ejectment  against  remote  purchasers  without  any  notice  of  the 
irregularity  to  defeat  their  title.^"  If  the  purchaser  die  before  the 
conveyance  is  executed  this  does  not  avoid  the  sale,  but  the  deed 
may  be  made  to  his  executor  or  administrator  in  his  official  capacity 
upon  payment  of  the  purchase-money.^" 

§  1897.  The  purchaser  takes  the  mortgagor's  title  divested  of 
all  incumbrances  made  since  the  creation  of  the  power.-^'*  ''It  has 
been  established  ever  since  the  time  of  Lord  Coke  that,  where  a 
power  is  executed,  the  person  taking  under  it  takes  under  him  who 
created  the  power,  and  not  under  him  who  executes  it."*^*'  The  pur- 
chaser takes  all  the  mortgagor's  equity  of  redemption,  and  all  the 
mortgagee's  title  under  the  mortgage.^^^  He  takes  the  estate  free  of 
a  reservation  made  by  the  mortgagor  to  release  certain  easements 
belonging  to  the  mortgaged  premises.     By  the  exercise  of  the  power 

"'^  Pease  V.  Pilot  Knob  Iron  Co.  49  389;    Bancroft   v.    Ashurst,    2    Grant 

Mo.  124.  (Pa.)    Cas.    513;    Sims    v.    Field,    C3 

"*  Jones  V.  Hagler,  95  Ala.  529.  Mo.  Ill;  Lowe  v.  Grinnan,  19  Iowa, 

«i=Hume  V.   Hopkins,   140   Mo.   65,  193. 

41  S.  W.  784.  *"'  Lord  Tenterden,  C.  J.,  in  Wigan 

''"Grover  v.   Fox,   36  Mich.   461.  v.  Jones,  10  B.  &'C.  459. 

"■Johnson  v.  Watson,  87  111.  535,  ^^^  Hall  v.  Bliss,  118  Mass.   554,  l^) 

8  Cent.  L.  J.  26.  Am.  Rep.  476;    Torrey  v.   Cook,  110 

""i  1652;   Lewis  v.  Wells,  50  Ala.  Mass.     163;     Brown    v.     Smith.     116 

198.  Mass.    108;    Aiken  v.   Bridgeford,   84 

«'»  §§      1654,      1853;      Doolittle     v.  Ala.   295,  4  So.   266;  Powers  v.   An- 

Lewi's,  7  Johns.  Ch.  45,  11  Am.  Dec.  drews,  84  Ala.  289,  4  So.  263. 


851  THE   DEED   AND   TITLE.  [§    ISO". 

of  sale,  the  reserved  power  is  extinguished,  and  a  subsequent  re- 
lease by  the  mortgagor  is  void.--'^  Ho  takes  it  free  of  any  claim  the 
mortgagor  may  make  for  improvements  placed  upon  the  land  by 
him.'^"  But  he  does  not  take  an  independent  title  acquired  bv  the 
mortgagee,  or  a  riglit  reserved  to  liira  as  grantor  in  the  original 
deed  to  the  mortgagor,^-'*  unless  in  express  terms  the  entire  estate  be 
pnt  up  and  sold.^^^  A  sale  regularly  exercised  under  a  power  is 
equivalent  to  strict  foreclosure  by  a  court  of  equity  properly  pur- 
sued,*-'' or  to  a  foreclosure  and  sale  under  a  decree  in  equity,  and 
cannot  be  defeated  to  the  prejudice  of  one  purchasing  in  good  faith.®-' 
The  sale  is  not  impaired  or  affected  in  any  way  by  reason  that  any 
person  interested  in  the  property  is  at  the  time  under  a  legal  dis- 
ability."® 

Where  a  mortgage  of  land  w^as  foreclosed  by  a  valid  sale  and  the 
land  was  thereafter  sold  to  bona  fide  purchasers  and  neither  the 
mortgagee  nor  the  purchaser  at  the  foreclosure  sale  knew  that  the 
mortgagor  after  giving  the  mortgage  had  bargained  the  land  to  another 
person  and  gven  a  bond  for  a  deed  of  the  same,  the  foreclosure  sale 
conveyed  a  good  title  and  the  obligee  of  the  bond  cannot  charge  a  new 
intending  purchase  with  any  duty  to  himself  by  notifying  him  before 
his  purchase  of  the  facts  with  reference  to  the  bond  for  a  deed. 

"When  the  mortgage  was  foreclosed  without  notice  of  the  existence 
of  the  bond,  and  the  land  sold  to  purchasers  who  bought  for  value  and 
in  good  faith  and  without  notice  of  the  plaintiff's  claim,  all  equitable 
right  in  the  plaintiff  to  require  a  conveyance  to  himself  was' gone. "*-^ 
The  doctrine,  that  a  purchaser  from  a  trustee  with  notice  of  the 
trust  shall  be  charged-  with  the  same  trust,  has  no  application  to 
sales  of  trust  estates  at  public  auction  under  the  terms  of  the  power 
contained  in  the  trust  deed.*^" 

Even  if  the  purchaser  under  the  power  omits  to  record  his  deed. 
a  subsequent  purchaser  from  the  mortgagor  has  no  right  of  redemp- 
tion.    The  record  of  the  mortgage  is  sufficient  to  put  all  persons 

«-- Bull's  Petition,  15  R.  I.  534,  10  4    So.    266;     Hunter    v.    Mellen,    127 

All.    484;    Savings   Inst.   v.   Worsted  Ala.  343,  28  So.  468. 
Co.  13  R.  I.  255.  "-''  Jackson    v.    Henry,    10    Johns. 

"-^Neal    V.    Hamilton    (Tex.),    7    S.  185,  6   Am.   Dec.   328.     And  see  De- 

W.  672;   Austin  v.  .Hatch,  159  Mass.  marest    v.    Wynkoop,    6    .Johns.    Ch. 

198.  129,  147,   8  Am.  Dec.  457;    Robinson 

'^-^  Walsh  V.   Macomber,   119  Mass.  v.  Amateur  Asso.   14  S.  C.  148.  152. 
73.  ""'*  Demarest  v.  Wynkoop,  3  Johns. 

'■'  Skilton    V.    Roberts,    129    Mass.  Ch.    129.  147,   8  Am.   Dec.  459. 
308.  ""  La  Fleur  v.  Chace,  171  Mass.  59, 

«-•'  Aiken  v.  Bridgeford,  84  Ala.  295,  50  N.  E.  456. 

"'MVood  v.  Augustine,  61  Mo.  46. 


§    lS97a.]     POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  852 

upon   inquiry   whether   any   proceedings   have   been   had   under   the 
power  of  sale.^^^ 

Of  course,  if  the  mortgage  was  void,  or  if  it  was  originally  valid 
but  the  remedy  upon  it  had  before  the  sale  become  barred  by  the 
statute  of  limitations,  the  purchaser  takes  no  title  or  interest  by  the 
sale.^^^ 

§  1897a.  Taxes  are  a  lien  upon  the  land,  and  if  unpaid  at  the 
time  of  the  sale  the  purchaser  takes  the  title  subject  to  such  lien,  and 
the  omission  to  state  this  in  the  deed  cannot  be  considered  as  mate- 
rial, because  it  could  be  sho^vn  by  oral  testimony  that  the  property 
was  sold  with  notice  of  such  lien,  and  with  the  understanding  on  the 
part  of  the  purchaser  that  it  was  to  be  conveyed  subject  to  the  lien. 
Such  evidence  does  not  tend  to  contradict  a  deed  which  contains  no 
covenants,  and  the  terms  of  sale  can  be  shown. ^^^ 

If  the  mortgagor's  assignee  in  insolvency  pays  a  claim  for  delin- 
quent taxes  on  the  mortgaged  premises,  which  was  proved  against 
the  mortgagor's  estate,  after  a  sale  under  the  mortgage  expressly 
subject  to  existing  liens,  the  amount  thus  paid  cannot  be  recovered 
of  the  mortgagee,  though  the  condition  of  the  sale  was  not  expressed 
in  the  deed.^^*  If  a  mortgage  sale  be  made  subject  to  outstanding  tax 
titles,  the  mortgagee  is  not  entitled  to  deduct  from  the  surplus  pro- 
ceeds of  the  sale  money  subsequently  paid  by  him  to  redeem  such  tax 
titles,  but  is  accountable  to  the  mortgagor  for  the  whole  proceeds  of 
the  sale.^^^  If  the  mortgagee  to  protect  his  title  had  before  the  sale 
paid  taxes  or  bought  up  a  tax  title  on  the  property  he  would  have  had 
the  right  to  add  the  sum  so  paid  to  the  amount  of  the  mortgage  and  to 
apply  the  proceeds  of  sale  to  the  payment  of  such  amount.^^^ 

A  bank  taking  a  mortgage  took  also  a  bond  with  sureties  to  save 

*"  Farrar    v.    Payne,    73    111.    82;  action  against  the  purchaser  at  the 

Heaton  v.  Prather,  84  111.  330.     See  sale  to  compel  him  either  to  pay  the 

§  557.  amount  of  the  taxes  or  to  have  the 

"-  Emory  v.   Keighan,   88   111.   482.  land  sold  and  the  proceeds  applied 

^^^  Brown  v.  Holyoke  Water  Power  towards  the  payment,  need  not  be 
Co.  157  Mass.  280,  32  N.  E.  2,  per  decided  in  this  case.  See  Fiacre  v. 
Field,  C.  J.  And  see  Preble  v.  Bald-  Chapman,  32  N.  J.  Eq.  463;  Sim- 
win,  6  Cush.  549;  Carr  v.  Dooley,  mons  v.  Lyle's  Adm'r,  32  Gratt.  752, 
119  Mass.  294;  Skilton  v.  Roberts,  763;  Greenwell  v.  Heritage,  71  Mo. 
129  Mass.  306;  Flynn  v.  Bourneuf,  t.9;  .Etna  Life  Ins.  Co.  v.  Middle- 
143  Mass.  277,  9  N.  E.  650;  Graffam  port,  124  U.  S.  534,  8  Sup.  Ct.  625; 
V.  Pierce,  143  Mass.  386,  9  N.  E.  819;  Hermanns  v.  Fanning,  151  Mass.  1 
Simanovich  v.  Wood,  145  Mass.  180,  23  N.  E.  493. 

13  N.  E.  391;  Spencer  Savings  Bank  "•'^^  Skilton    v.    Roberts,    129    Mass. 

v.    Coolev,    177    Mass.    49.  306;      Spencer      Savings      Bank      v. 

«=♦  Brown  v.  Holyoke  Water  Power  Cooley,  177  Mass.  49,  58  N.  E.  276. 

Co.  157  Mass.  280,  32  N.  E.  2.     The  *"' Skilton    v.    Roberts,    129    Mass. 

court    remarked    that    whether    in  306;   Morton  v.  Hall,  118  Mass.  511. 
equity  the  plaintiff  has  a  cause  of 


853  THE  DEED  AXD  TITLE.  [§  1898. 

the  bank  harmless  from  all  mechanic's  and  other  liens  on  the  property. 
The  mortgage  was  siibscquentl}^  foreclosed  by  the  bank  for  nonrpay- 
ment  of  taxes  and  interest.  In  the  notice  of  the  foreclosure  sale  it  was 
stated  that  the  "premises  will  be  sold  subject  to  all  unpaid  taxes, 
mechanic's  liens,  and  assessments."  At  the  sale  the  property  was  bid 
off  by  an  agent  of  the  bank  for  the  amount  of  the  mortgage,  interest, 
and  costs  of  foreclosure,  and  he  took  a  deed  in  his  own  name  and 
immediately  quit-claimed  to  the  bank.  After  the  foreclosure  judg- 
ments were  recovered  on  mechanic's  liens  against  the  property,  and 
the  principal  and  sureties  were  notified  to  defend  the  actions,  but  did 
not  do  so,  and  to  prevent  the  sale  of  the  property  the  bank  settled  the 
judgments,  the  bondsmen  having  refused  so  to  do  on  request.  It  was 
held,  that  the  bank  had  sustained  no  loss,  and  that  this  action  to  re- 
cover for  the  sums  thus  paid  could  not  be  maintained.^^'^  "In  other 
words,  the  bank  was  content  to  pay  for  the  property  a  sum  equal  to  the 
mortgage,  interest,  costs  of  foreclosure,  unpaid  taxes,  mechanic's  liens, 
and  assessments.  .  .  .  The  transaction  would  also  have  operated  as  a 
payment  of  the  mortgage.^^^  Manifestly  the  bank  cannot  occupy  a 
better  position  where  the  notice  expressly  states  that  the  property 
is  to  be  sold  subject  to  mechanic's  liens  than  it  would  if  the  notice 
did  not  contain  that  statement."^^^ 

§  1898.  Bona  fide  purchaser. — One  who  purchases  at  a  sale 
under  a  power  without  notice,  actual  or  constructive,  of  any  irregu- 
larity in  the  proceedings,  acquires  a  valid  title,^'*°  although  the  mort- 
gagor might  redeem  as  against  the  person  making  the  sale,*^*^  as 
where  payment  of  the  mortgage  debt  has  been  tendered  to  the 
holder  of  the  mortgage.  Where  the  powder  authorizes  the  mort- 
gagee to  become  a  purchaser,  and  title  is  made  to  him  accordingly, 
a  bona  fide  purchaser  from  him  without  notice  is  not  prejudiced  by 
such  irregularity  on  his  part  in  making  the  sale.^*-  Even  though  the 
title  is  voidable  because  the  mortgagee  was  the  purchaser,  under  a 
power  which  did  not  authorize  him  to  purchase,  yet  an  innocent 
purchaser  for  value  from  the  mortgagee  gets  a  good  title.^*^  To  de- 
feat  a   sale   under   the    power,   the   mortgagor    should    immediately 

'"Spencer   Savings  Bank  v.  Cooley,  Pierce,  98  III.  646;  Philips  v.  Bailey, 

177  Mass.   49,  58  N.  E.  276.  82  Mo.  639;  Carey  v.  Brown,  62  Cal. 

«^^Hood  V.  Adams,  124  Mass.  481.  373;    Sheridan   v.    Schimpf,   120   Ala. 

^''■>  Spencer   Savings  Bank  v.  Cooley,  475,  24  So.  940. 

177  Mass.   49,  51,  58  N.   E.  276,  per  '"  Shillaber  v.  Robinson,  97  U.  S. 

Morton,  J.  69. 

**'"  Jackson  v.  Dominick,  14  Johns.  *"'  Digby    v.    Jones,    67    Mo.    104. 

435;    Jackson    v.    Henry,    10    Johns.  '^^  Very  v.   Russell,   65   N.   H.   646, 

185,    6    Am.    Dec.    328;     Hosmer    v.  23  Atl.  522. 
Campbell,    98    111.    572;     Jenkins    v. 


§    1898.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  854 

follow  up  the  tender  by  a  suit  to  redeem;  otherwise  a  third  per- 
son without  notice  of  any  defect  in  the  proceedings,  or  of  any  facts 
that  should  put  him  as  a  reasonable  man  upon  inquiry,  may  gain  a 
good  title,  and  the  mortgagor  will  then  be  unable  to  redeem  against 
him,  although  he  might  against  the  purchaser  at  the  sale.***  If  the 
purchaser  be  cognizant  of  any  fraud  or  tmfair  dealing  in  the  sale, 
he  acquires  no  title  by  it;®*^  as  where  he  has  agreed  with  the  mort- 
gagee's agent  to  share  the  profits  of  the  purchase,  and  he  has  bought 
the  property  at  a  grossly  inadequate  price. ^*'' 

Although  the  mortgage  has  in  fact  been  paid,  if  not  discharged 
of  record,  a  sale  regularly  made  under  the  statute  to  a  bona  fide 
purchaser  is  held  to  be  equivalent  to  a  sale  under  a  decree  in  equity, 
and  is  therefore  an  entire  bar,  both  as  against  the  mortgagor  and 
all  persons  claiming  mider  him.***^  They  can  only  impeach  the  sale 
l)y  showing  that  the  proceedings  were  not  regular  and  efi^ectual  in 
form.  Fraud  on  the  part  of  the  mortgagee  or  holder  of  the  mort- 
gage will  not  defeat  the  title  of  such  purchaser.  Usury,  or  any  other 
matter  affecting  tlie  validity  of  the  mortgage,  will  not  affect  the 
validity  of  the  title  acquired  by  an  innocent  purchaser.***  If  the 
mortgage  be  void,  or  if  it  has  been  paid,  a  purchaser  with  notice 
acquires  no  title;  but,  the  mortgage  appearing  of  record  to  be  valid, 
a  purchaser  without  notice  does  acquire  title.****  Where  a  foreclosure 
sale  is  not  considered  complete  until  the  expiration  of  the  year  or 
other  time  within  which  redemption  may  be  had,  such  a  sale  under 
a  paid-up  mortgage  confers  upon  the  purchaser  a  valid  title  to  the 
property. upon  the  expiration  of  such  time  without  redemption.'*^*' 

Although  a  part  of  the  mortgaged  premises  has  been  released  from 
the  operation  of  the  mortgage,  if  the  release  be  not  recorded,  and  the 
part  released  be  sold  with  the  rest  to  a  bona  fide  purchaser  without 
notice,  he  will  hold  the  entire  property,  the  release  having  no  effect  as 
to  him.*^^ 

«"  Montague   v.    Dawes,    12    Allen,  under  the  sale,  the  mortgage  being 

397;    Hoit  v.  Russell,  56  N.  H.  559;  void    after    payment.      Cameron    v. 

Grover  v.   Hale,   107   111.   638.  Irwin,  5  Hill,  272. 

"^'•Jackson    v.    Crafts,     18    Johns.  ^^^  Elliott  v.   Wood,   53   Barb.   285; 

no.     And  see  Hamilton  v.  Lubukee,  Welsh  v.  Coley,  82  Ala.  363,  2  So.  733. 

51  111.  415,  99  Am.  Dec.  562.  '*■' Cameron   v.   Irwin,   5   Hill,   272; 

'^''  Mann  v.  Best,  62  Mo.  491.  Warner  v.  Blakeman,  36  Barb.   501, 

^"Warner  v.   Blakeman,   36   Barb.  4    Abb.    App.    Dec.    530;     Penny    v. 

501,     4     Keves,     487;     Merchant     v.  Cook.     19     Iowa,     538;     Ledyard     v. 

Woods,  27  Minn.  396,  7  N.  W.  826;  Chapin,  6  Ind.  320;  Wade  v.  Harper, 

Redin  v.  Branhan,  43  Minn.  283,  45  3  Yerg.  383. 

N.  W.  445.  *'"  Merchant    v.    Woods,    27    Minn. 

This   case   substantially   overrules  396,  7  N.  W.  826. 

the  dicta  of  Mr.  Justice  Cowen,  that  ^''  Palmer   v.    Bates,    2    Minn.    532. 
the  purchaser  would  acquire  no  title 


855  THE    DKKD   AND   TITLE.  [§§    1899,    1900. 

The  sale  imder  a  power  is  equivalent  to  a  foreclosure  and  sale  in 
equity,  and  a  bona  fide  purchaser  is  protected  in  the  same  manner  and 
to  the  same  extent. **"- 

§  1899.  The  title  of  one  purchasing  in  good  faith  under  a  power 
of  sale  is  unaffected  by  any  agreement  between  the  parties  to 
the  mortgage  that  the  sale  should  be  deferred  in  consideration  of  the 
payment  of  the  interest  due;®^^  or  that  no  sale  should  be  made  with- 
out giving  personal  notice  of  it  to  tlie  mortgagor  ;^^*  or  because  a 
tender  had  been  made  to  the  mortgagee  before  the  sale  of  the  amount 
due,  which  he  had  declined. ^^^  Those  who  have  bought  in  good  faith 
from  the  purchaser  at  the  sale  are  not  afEected  by  any  irregularities 
attending  it,  although  these  were  known  to  their  vendor,  or  he  had 
been  a  party  to  some  fraud  attending  it.^^*' 

In  Illinois,  however,  it  has  been  held  that  after  the  payment  of 
the  mortgage  debt  the  mortgage  itself  is  extinguished,  and  any  sale 
made  under  a  power  contained  in  it  is  void,  even  as  against  a  bona 
fide  purchaser.  After  such  a  sale,  the  purchaser  being  in  possession, 
a  court  of  equity  may  set  aside  the  sale,  and  compel  a  reconveyance 
of  the  legal  title,  in  order  to  remove  the  cloud.^"  If  the  legal  title 
passes  to  the  purchaser  he  will  hold  as  trustee  for  the  debtor;  but 
this  defect  will  not  be  inquired  into  at  law,  nor  can  the  trust  be 
established  except  in  equity.*^^ 

■  The  fact  that  by  mistake  more  land  is  sold  by  the  mortgagee  than 
his  mortgage  covers  does  not  afi'ect  the  validity  of  the  sale  as  to  so 
much  of  the  land  as  he  was  entitled  to.**^^ 

Where  a  statute  declares  a  note  tainted  by  usury  to  be  wholly 
void,  a  sale  under  a  power  in  a  mortgage  or  trust  deed  securing 
such  note  confers  no  title  when  the  mortgagee  or  beneficiary  be- 
comes the  purchaser.^''''  The  sale  would  be  a  conclusive  bar  only  in 
favor  of  a  bona  fide  purchaser  without  notice,  which  a  party  to  tlie 
usurious  contract  could  not  be. 

§  1900.  Tinder  the  English  practice  of  conveyancing,  it  is  gen- 
erally provided  in  the  mortgage  deed  that  the  purchaser  shall  not 

"-Jackson    v.    Henry,    10    Johns.  ••*■'' Redmond  v.  Packenham,  66  111. 

185,  6  Am.  Dec.  328;  Slee  v.  Manhat-  434.      And    see    per    Cowen,    J.,    in 

tan  Co    1   Paige  48.  Cameron  v.  Irwin,  5  Hill,  272;  Wood 

-^^^Beatie  v.  Butler,  21  Mo.  313,  64  v.   Colvin,  2   Hill,  566,   38  Am.    Dec. 

Am.  Dec.  234.  598. 

»*=■*  Randall    v.    Hazelton,    12    Allen,  '*"■'*§    1921;    Cliapin   v.    Bilhngs,    91 

412.  Ill-   539. 

«^=  Montague    v.    Dawes,    12    Allen,  "'"'  Klock  v.  Kronkhite,  1  Hill,  107. 

397,  ™  Penny    v.    Cook.    19    Iowa,    5''8; 

^'^''See    Hamilton    v.    Lubukee,    51  Jackson  v.  Dominick,  14  .Johns.  435; 

111.  415,  99  Am.  Dec.  562.  Hyland   v.   Stafford,   10  Barb.   558. 


g§    1901,    1902.]    POWER   OF    SALE    MORTGAGES    AND   TRUST    DEEDS.    856 

be  bound  to  inquire  whether  any  default  has  been  made,  or  whether 
any  money  remains  due  upon  the  security,  or  otherwise  as  to  the 
propriety  or  regularity  of  the  sale;  and  under  such  a  provision  the 
purchaser  acquires  a  good  title  by  a  sale  made  in  good  faith,  even  if 
nothing  remains  due  upon  the  mortgage. ^^^ 

§  1901.  Covenant  for  further  conveyance. — Sometimes  a  cov- 
enant is  inserted  in  the  mortgage  that  the  mortgagor  shall,  in  case 
of  a  sale  under  the  power,  make  such  further  conveyance  as  may  be 
necessary  for  better  effecting  it,  or  will  concur  or  join  in  the  sale. 
A  covenant  of  this  sort  is  for  the  benefit  of  the  mortgagee  with 
whom  it  is  made,  and  not  of  the  purchaser.^**-  As  a  matter  of  prac- 
tical conveyancing,  this  is  an  important  provision,  as  it  often  enables 
the  mortgagee  to  obtain  a  release  which  will  bar  all  inquiry  into 
irregularities  attending  the  sale. 

§  1902.  An  invalid  sale  may  operate  as  an  assignment  of  the 
mortgage  under  the  principle  of  subrogation.^^^  If  the  sale  under 
the  power  is  subsequently  declared  void  for  any  irregularity,  a  pur- 
chaser who  has  paid  the  purchase-money  is  subrogated  to  the  rights 
of  the  mortgagee  under  the  mortgage,  which  is  regarded  as  assigned 
to  him,  and  he  may  proceed  anew  to  foreclose,®^*  or  to  sell  under  the 
power.^''^  If  the  purchaser  has  subsequently  sold  the  property  by 
warranty  deed,  this  amounts  to  an  assignment  of  the  mortgage  to. 
such  grantee,  who  of  course  has  the  same  right  to  foreclose.*''^  Under 
a  deed  of  trust,  the  purchaser  is  subrogated  to  all  the  rights  of  the 
beneficiary.^"  A  trustee's  deed,  in  pursuance  of  sale  made  without 
notice,  passes  to  the  purchaser  the  legal  title,  and,  until  redemption  is 
had,   enables  him   to   maintain   possession.^''^     And   so,   if   the   sale 

'"'  Dicker  v.  Angerstein,  24  W.  R.  Russell    v.    Whitely,     59    Mo.    196 

844.  Stackpole  v.  Robbins,  47  Barb.  212 

^•''Clay    V.    Sharpe,    18    Ves.    346;  Robinson    v.    Ryan.    25    N.    Y.    320 

Corder  v.  Morgan.  18  Ves.  344.  Clark  v.  Wilson,  56  Miss.  753,  758 

^'"^  Holmes    v.    Turner's    Falls    Co.  State    Bank    v.    Chapelle,    40    Mich. 

142  Mass.  590,  8  N.  E.  646;  Dearnaley  447. 

V.   Chase,   136   Mass.   288;    Taylor  v.         **'■=  Bottineau  v.    -5:tna  L.    Ins.    Co. 

A.  &  M.  Asso.  68  Ala.  229;  Johnson  31  Minn.  125,  16  N.  \V.  849;   Brewer 

v.  Sandhoff,  30  Minn.  197,  14  N.  W.  v.   Nash,   16   R.    I.    458,   17   Atl.    857, 

889;   Rogers  v.  Benton,  39  Minn.  39,  quoting  text. 

38  N.  W.  765,   12  Am.  St.  Rep.  613;         ^'''^  Niles  v.  Ransford,  1  Mich.  338. 

Russell  V.  Lumber  Co.  45  Minn.  376,  51  Am.  Dec.  95;   Bottineau  v.  .'Etna 

48    N.    W.    3;    Green    v.    Stevenson  L.  Ins.  Co.  31  Minn.    125,  16  N.  W. 

(Tenn.)  54  S.  W.  1011.  849. 

^"*  §    1678;    Brown    v.    Smith,    116        *«■  Ingle    v.    Culbertson,    43    Iowa, 

Mass.     108;     Burns    v.    Thayer,    115  265. 

Mass.  89;   Johnson  v.  Robertson,  34        ^'^^  Wilson  v.  South  Park  Comm'rs, 

Md.   165;    Gilbert  v.   Cooley,  Walker  70  111.  46;   Wormell  v.  Nason,  83  N. 

(Mich.),  494;   Jones  v.  Mack,  53  Mo.  C.  32. 
147;  Honaker  v.  Shough,  55  Mo.  472; 


857  THE   DEED   AND   TITLE.  [§    1902. 

be  made  before  a  default,  the  trustee's  deed  confers  the  legal  title  in 
trust  for  the  benefit  of  the  grantor.**"" 

A  purchaser  at  an  irregular  foreclosure  sale  obtains  all  the  rights 
of  the  mortgagee,  although  the  sale  and  conveyance  are  not  made 
by  the  mortgagee  himself,  but  by  an  officer  acting  under  a  statute 
regulating  sales  under  powers  in  mortgages.  The  statute  in  such 
case  becomes  a  part  of  the  mortgage,  and  a  sale  made  in  pursuance 
of  it  is  an  exercise  of  the  power  conferred  by  the  contract.^'^"  "The 
officer  who  sells  merely  stands  in  the  shoes  of  the  mortgagee  and 
represents  both  parties."^^^ 

If  the  purchaser  under  a  power  of  sale,  fearing  that  the  sale  was 
irregular,  causes  the  land  to  be  resold,  and  again  buys  it  in,  such 
second  sale  does  not  estop  him  from  asserting  the  validity  of  the  first 
sale.^'^ 

When  a  mortgagee  becomes  a  purchaser  at  his  own  sale,  and  the 
sale  is  void,  he  acquires  no  rights,  either  legal  of  equitable,  by  means 
of  the  sale.  The  parties  after  the  sale  stand  as  they  did  before  the 
ineffectual  form  of  sale  took  place;  and  all  the  costs  and  expenses 
attending  it  must  be  borne  by  the  mortgagee.®"  But  the  purchaser's 
rights  as  mortgagee  enable  him  to  sell  again  under  the  power,  or  to 
foreclose  by  a  proceeding  in  equity. ^^* 

A  sale  made  by  a  person  without  authority  to  act  for  or  represent 
the  mortgagee  does  not,  of  course,  operate  as  an  assignment  of  the 
mortgage.®" 

A  mortgagee  who  takes  possession  of  the  mortgaged  premises 
under  a  void  sale  is  liable  for  the  rents  and  profits  received  by  him 
upon  a  subsequent  redemption  by  the  mortgagor.  But  to  make  him 
liable  he  must  have  had  actual  possession,  or  such  a  possession  as 
would  give  him  the  enjoyment  of  the  profits."*'  Such  mortgagee 
would  also  be  liable  for  waste  committed  or  suffered  by  him  while 
in  actual  possession  of  the  premises.  But  if  he  is  not  in  possession, 
and  the  injury  done  was  not  any  act  of  his,  or  one  which  he  could 
prevent,  as,  for  instance,  a  destruction  of  buildings  by  the  Confederate 
army,  he  is  not  responsible  for  it.®" 

If  a  third  party  who  has  purchased  imder  an  invalid  sale  enters 

«'"' Chicago,  Rock  Island  &  Pacific  «"  Queen   City   Perpetual   Building 

R.     Co.     v.     Kennedy,    70    111.     350;  Asso.  v.  Price,  53  Md.  397. 

Koester  v.  Burke,  81  111.  436.  "■*  Morse    v.    Byam,    55    Mich.    594, 

«"°  Hoffman  v.  Harrington,  33  Mich.  22  N.  W.  54. 

392.  *"  Hayes    v.    Lienlokken,    48    Wis. 

s'l  Hoffman  v.  Harrington,  33  Mich.  509,  4  N.  W.  584. 

392,   395,  per  Mr.   Justice  Campbell.  «'« Bigler  v.   Waller,  14  Wall.   297. 

"=  Ritchie  v.  Judd,  137  111.  453,  27  ""  Bigler  v.  Waller,  14  Wall.  297. 
N.  E.  682. 


i,'j^  l\)02a,  1303.]  POWER  of  sale  mortgages  and  trust  deeds.  858 

into  possession,  and  makes   valuable   improvements  upon  the  prop- 
erty, he  is  entitled  to  compensation  therefor.'^''* 

If  the  mortgage  debt  has  been  paid  before  the  sale,  the  purchaser 
obtains  at  most  only  a  bare  legal  title,  which  he  will  liold  for  the 
benefit  of  the  owner  of  the  estate ;  and  in  States  where  payment  alone, 
whenever  made,  is  sufficient  to  revest  the  title  in  the  mortgagor, 
the  sale  would  be  void.^^® 

§  1902a.  The  purchaser  at  the  sale  may  recover  possession  of 
the  land  by  an  action  at  law;  or  under  the  proceeding  by  statute  for 
forcible  entry  and  detainer;**'"  and  it  is  no  defence  to  such  action  by 
the  mortgagee  that  the  purchaser  reconveyed  the  land  to  him,  and  that 
the  purchaser  acted  in  the  purchase  as  the  mortgagee's  agent,  for 
the  mortgagee  is  entitled  to  recover  upon  the  strength  of  his  title  as 
mortgagee.^*^  It  is  not  incumbent  upon  the  purchaser  to  show  that 
he  was  not  the  agent  of  the  mortgagee  in  making  the  purchase.  He 
need  only  prove  the  regularity  and  fairness  of  the  sale  by  a  preponder- 
ance of  the  evidence.*®^ 

§  1903.  The  remedy  ag^ainst  a  purchaser  who  declines  to  complete 
a  purchase  made  at  a  sale  regularly  conducted  may  be  either  by  a 
bill  in  equity  for  a  specific  performance,  or  a  suit  at  law  for  dam- 
^gggsss  If  iiyQ  former  remedy  be  waived,  the  property  should  be 
sold  again ;  and  if  it  brings  a  less  sum,  the  former  purchaser  is  liable 
at  law  for  the  difference  in  price,  and  for  the  expenses  attending 
the  resale.^^*  If  the  purchaser  is  unable  to  complete  the  purchase, 
being  financially  worthless,  the  mortgagee  may  sell  the  property 
again  under  the  power;  and,  having  acted  in  good  faith,  and  notified 
a  surety  on  the  mortgage  note  of  all  the  proceedings  attending  the 
sales,  the  mortgagee  may  recover  of  him  a  deficiency  after  the  sale. 

^'*  Queen   City   Perpetual   Building  Sav.    Bank    v.    Flanders,    161    Mass. 

Asso.  V.  Price,  53  Md.  397;    Mickles  335,  37  N.  E.  307. 

V.  Dillaye,  17  N.  Y.  80;  Wetmcre  v.  «^' Wittkowsld    v.    Watkins,    4    N. 

Roberts,  10  How.  Pr.  51;  Higgenbot-  C.  456. 

tom  V.  Benson,  24  Neb.  461,  39  N.  E.  "^'  McMillan   v.   Baxley,    112    N.    C. 

418,  8  Am.  St.  Rep.  211.  578,   16  S.  E.  845. 

«■"  Furguson  v.  Coward,  12  Heisk.  In  Mississippi  a  purchaser  at  a 
572.  A  purchaser  at  a  trustee's  trustee's  sale  under  a  power  may 
sale  under  a  deed  of  trust  who  has  m-aintain  an  action  by  summary  pro- 
notice  that  the  debt  has  been  paid  ceedings  for  unlawful  detainer  to 
takes  no  title.  And  the  holder  of  obtain  possession  wrongfully  with- 
tne  note,  for  which  the  sale  is  m.ade,  held  by  the  mortgagor.  Code.  § 
is  chargeable  with  notice  that  it  has  2645;  Marks  v.  Howard,  70  Miss, 
been  paid.  Wells  v.  Estes,  154  Mo.  445,  12  So.  145. 
291,  55  S.  W.  255.  »"' Sherwood  v.  Saxton,  63  Mo.  78, 

*' Allen    V.    Chapman,    168    ]\Iass.  and  cases  cited.     See  §  16^0. 

442,  47  N.  E.  124;   North  Brookfield  ■''-^  Dover  v.  Kennerlv.  38  ^''o.  '?6:>; 

Gardner  v.   Armstrong,  31   Mo.   535. 


859  TIIK    AFFIDAVIT.  [g    11)04. 

The  mortgagee  in  such  case  need  not  bring  a  l)ill  for  specific  per- 
formance of  the  contract  of  purchase/'**^ 

It  is  a  sullicient  excuse  for  the  purchaser's  declining  to  complete 
his  purchase  that  the  auctioneer  ofi'ered  the  ])roperty  free  of  incum- 
brances, and  the  purchase  was  made  on  that  understanding,  at  the 
full  value  of  the  property,  when,  in  fact  the  property  was  incum- 
bered by  ])rior  mortgages  or  liens,  which  were  not  removed  before 
the  tendering  of  a  deed.^'^**  In  such  case  the  purchaser  is  entitled  to 
recover,  in  an  action  for  money  had  and  received,  the  amount  of  a 
deposit  made  in  accordance  with  the  terms  of  sale.^" 

But  the  bidder  at  the  sale  is  not  bound  by  his  bid  unless  there 
was  a  memorandum  of  sale  signed  by  him,  or  by  the  auctioneer 
acting  as  the  agent  of  both  parties.®** 


XIII.     The  Affidavit. 

§  1904.  Neglect  to  make  and  file  an  affidavit  of  sale  does  not 
invalidate  it.  In  Massachusetts,  where  a  statute  provides  that  the 
mortgagee,  in  case  he  sells  without  a  decree  of  court,  shall,  within 
thirty  days  after  selling  the  property  in  pursuance  of  the  power, 
file  a  copy  of  the  notice  and  his  affidavit,  setting  forth  his  acts  in 
the  premises  fully  and  particularly,  in  the  registry  of  deeds,®^^  it  is 
held  that  the  sale  is  good,  and  the  title  passes  without  complying 
with  this  provision,  which  is  regarded  only  as  directory,  and  not 
precluding  other  evidence  of  the  execution  of  the  power  of  sale.^"" 

Under  a  statute  requiring  an  affidavit  of  the  publication  of  the 
notice  of  sale  to  be  made  by  the  printer  of  the  newspaper,  an  affi- 
davit by  one  who  states  that  he   is  the  publisher  of  the  paper   is 

^''Fall  River  Sav.   Bank  v.    Sulli-  said:      "The    provision    is    intended 

van,   131   Mass.    537;    Wing  v.    Hay-  to    secure    the    preservation    of   evi- 

ford,  124  Mass.  249;  Hood  v.  Adams,  dence    that    the    conditions    of    the 

124  Mass.  481,  26  Am.  Rep.  C87.  power    of    sale    named    in    the    deed 

^'"  Mayer  v.   Adrian,   77   N.    C.   83;  have  been  complied  with.     It  is  for 

Callaghan  V.  O'Brien,  13G  Mass.  378;  the    protection     of    those     claiming 

Schaeffer    v.    Bond,    70    Md.    480,    17  under  the  sale,  and  to  prevent  litiga- 

Atl.  375.  tion.     The  title  passes   by  the  sale 

^^  Callaghan  v.  O'Brien,  136  Mass.  and  deed,  and  immediately  vests  in 

378.  the  purchaser.     It  wa.s  not  the  inten- 

*'"'  Cook  V.  Hilliard,  9  Fed.  Rep.  4.  tion  to  make  it  subject  to  a  condi- 

As   to  necessity   of  such    memoran-  tion    subsequent,    and    liable    to    be 

dum,  see  Burke  v.  Haley,  7  111.  614;  defeated  by  a  failure  of  the  mortga- 

Doty  v.  Wilder,  15  111.  407.  gee  to  perform  an  act  which  must 

'•^'G.    S.   ch.    140,    §   42.  follow    the   conveyance   in    point   of 

""» Field  V.  Gooding,  106  Mass.  310;  time,  and  thus  add  ta  the  conditions 

Learned    v.    Foster.    117    Mass.    365;  prescribed  by  the  mortgagor  in  the 

Burns  v.   Thayer,   115  Mass.   89.     In  deed." 
the  first  case  cited,  Mr.  Justice  Colt 


§    1905.]        POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS.  860 

sufficient,  as  the  publisher  and  printer  are  presumably  the  same.®^^ 
iSTeither  the  affidavit  nor  its  record  are  necessary  to  the  validity  of 
the  purchaser's  title.  If  the  affidavit  omits  to  state  that  the  no- 
tice was  published  once  in  each  week,  and  the  paper  in  which  it  was 
published  is  erroneously  stated,  the  fact  that  the  notice  was  properly 
published  may  be  otherwise  proved.^'*-  And  if  there  be  no  affidavit 
at  all,  the  publication  of  the  notices  and  the  circumstances  of  the 
sale  may  be  proved  by  common  law  evidence. ^^^ 

In  New  York  it  is  also  held  that  the  affidavits  of  publication  and 
affixing  notice  of  sale  are  sufficient  to  pass  the  title  without  being 
recorded. ^^*  The  fact  of  publication  may  also  be  shown  by  proof  in- 
dependent of  the  affidavit.  The  making,  filing,  and  recording  of 
affidavits  provided  for  by  statute  are  not  in  the  exercise  of  the  power 
of  sale  contained  in  the  mortgage,  which  must  be  strictly  pursued; 
but  they  are  the  mere  evidences  of  the  due  exercise  of  such  power, 
prescribed  for  the  benefit  of  the  purchaser  under  the  power,  and  to 
perfect  his  title  and  perpetuate  the  evidences  of  it.  The  power  is 
fully  exercised  when  the  sale  has  been  regularly  and  duly  made  pur- 
suant to  notice  published  and  served  as  required  by  law.®^^ 

Yet  it  has  been  held  that  if  the  mortgage  provide  that  an  affidavit 
of  the  proceedings  under  the  power  should  be  recorded  in  a  cer- 
tain county  within  one  year,  and  the  affidavit  be  not  made  and  filed 
within  such  time,  the  sale  will  be  treated  as  a  nullity.^^'^ 

If  the  notice  of  sale  under  a  power  of  sale  in  a  mortgage  states 
that  the  premises  will  be  sold  "for  breach  of  the  condition  of  said 
mortgage,"  a  statement  in  the  affidavit  of  sale  included  in  the  deed 
to  the  purchaser,  that  the  sale  was  for  "non-payment  of  interest  and 
taxes"  when  the  interest  had  been  paid,  will  not  make  the  sale 
invalid.^^^ 

§  1905.  In  order  that  the  affidavit  may  have  the  force  of  pre- 
sumptive evidence  of  the  facts  therein  stated,  it  should  be  made 
within  a  reasonable  time  after  the  sale.  If  made  seven  or  eight 
years  after  the  sale,  it  is  not  such  evidence.^^^  To  have  the  effect  of 
presumptive  evidence,  moreover,  the  affidavit  must  show  that  the 
requirements  of  law  in  regard  to  the  sale  have  been  complied  with; 

*"  Menard  v.  Crowe,  20  Minn.  448;  See  Mowry  v.  Sanborn,  68  N.  Y.  153, 

Bunce  v.  Reed,  16  BarD.  347;   Sharp  where  the  history  of  the  legislation 

V.  Daugney,  33  Cal.  513.  on  this  subject  is  given. 

""^  Golcher  v.  Brisbin,  20  Minn.  453.  "^^  Mowry  v.  Sanborn,  72  N.  Y.  534, 

'"'Arnot   V.    McClure,    4   Den.    41;  reversing  11  Hun,  545. 

Wilkerson   v.    Allen,    67    Mo.    502.  »'■"'  Smith   v.    Provin,   4    Allen,    516. 

«"Tuthill  V.  Tracy,  31  N.  Y.  157;  «»^  Silva  v.   Turner,  166  Mass.  407, 

Howard    v.    Hatch,    29    Barb.    297;  44  N.  E.  532. 

Frink    v.    Thompson,    4    Lans.    489.  ^^^  Mundy  v.   Monroe,    1   Mich.   68. 


8C1  SETTIXG   ASIDE   AXD    WAIVING    SALE.  [§    190G. 

as,  for  instance,  that  service  of  notice  has  been  made  in  the  manner 
prescribed.®®^  Even  when  the  aifidavits  are  presumptive  evidence  of 
the  facts  required  to  be  stated  in  them,  they  may  be  controverted  by 
the  mortgagor,  or  those  claiming  under  him.*^*^"  Where  the  affidavits 
may  be  filed  at  any  time,  it  would  seem  that  defects  in  the  original 
affidavits  may  be  corrected  by  new  affidavits."''^  But  defects  in  the 
affidavits  cannot  be  supplied  after  the  commencement  of  an  action 
in  which  they  are  material  for  the  support  of  the  title.  The  parties 
must  stand  on  the  affidavits  as  they  were  at  the  time  of  bringing 
the  suit.««=^ 

The  mortgagee  is  accountable  for  the  full  amount  bid  at  the  sale 
if  he  completes  it  by  a  conveyance,  whether  he  actually  receives  the 
purchase-money  or  not.  His  affidavit  need  not  state  the  rendering 
of  an  account,  or  the  disposition  that  has  Ijeen  made  of  the  purchase- 
money.''*'^  Where  the  whole  estate  is  sold,  the  purchase-money  is 
properly  applicable  to  the  payment  of  any  prior  incumbrances  upon 
the  property,  as  well  as  the  mortgage  under  which  the  sale  is  made, 
so  far  as  it  will  go;  and  it  is  only  in  case  the  consideration  of  the 
sale  exceeds  the  amount  of  such  incumbrances  that  he  is  accountable 
for  a  surplus.  A  second  or  subsequent  mortgagee  is  not  estopped, 
by  the  recital  in  his  affidavit  of  sale  of  the  amount  for  which  the 
sale  was  made,  to  show  that  the  sale  was  in  fact  of  the  whole  es- 
tate, and  that  less  than  the  whole  amount  of  the  incumbrances  was 
received."*'* 


XIV.     Setting  aside  and  waiving  Sale. 

§  1906.  A  mortgagee  or  trustee,  in  the  exercise  of  a  power  of 
sale,  must  act  fairly,  and  is  under  very  much  the  same  obligation  to 
other  parties  in  interest  as  a  trustee  in  other  cases."^^     So  far  as  other 

*»'  Mowry  v.  Sanborn,  65  N.  Y.  581.  of  notice  upon  the  mortgagor  might 

An  affidavit  on  information  and  be-  be  supplied  by  parol  evidence, 

lief   is    insufficient.  ""^  Childs    v.    Dolan,    5    Allen.    319. 

"""Arnot  V.  McClure,  4  Denio,  41;  ""*  Alden    v.    Wilkins,    117    Mass. 

Sherman   v.   Willett,   42   N.    Y.    146;  216.     As  to  immaterial  error  in  affi- 

Mowry  v.   Sanborn,   62  Barb.  223,  7  davit    see    Lewis    v.     Jackson,     165 

Hun,  3S0,  68  N.  Y.  153,  72  N.  Y.  534,  Mass.  481,  43  N.  E.  206. 

reversing  11   Hun,   545;    Maxwell   v.  »"^  Matthie  v.  Edwards,  2  Coll.  465, 

Newton,   65  Wis.   261,  27   N.  W.   31.  480.       "I     apprehend,"     says     Vlce- 

»»'  Bunce  v.   Reed,   16  Barb.   347.  Chancellor  Bruce,  "that  a  mortgagee 

""^Dwight  V.  Phillips,  48  Barb.  116;  having  a  power  of  sale  cannot,  as 
Mowry  v.  Sanborn,  7  Hun,  380.  But  between  him  and  the  mortgagor,  ex- 
see  62  Barb.  223,  65  N.  Y.  581,  11  ercise  it  in  a  manner  merely  arbi- 
Hun,  545,  68  N.  Y.  153.  trary,     but    is,    as    between     them. 

In  the  last  report  it  was  declared  bound   to   exercise   some   discretion, 

that  defects  in  an  affidavit  of  service  not  to  throw  away  the  property,  but 


g    I'JOG.J        rOWEIl    OF   SALE   MOKTUAUES    AND   TRUST    DEEDS. 


8G3 


persons  are  interested  in  the  property  tlie  power  is  regarded  as  a 
trust,  and  the  mortgagee  is  treated  as  a  trustee  in  the  exercise  of  it. 
Fairness  and  good  faith  are  demanded  of  him.''*'"'  The  grounds  for 
setting  aside  a  sale  under  a  power  are  not  merely  those  which  are 
recognized  as  sufficient  for  setting  aside  a  foreclosure  sale  made  under 
proceedings  in  equity;""^  but  there  are  also  others  which  arise  from 
the  trust  relation  in  wliich  the  mortgagee  acts  in  conducting  tlie 
proceedings.*''*'*  A  mortgagor  cannot  move  to  affirm  the  sale  in  part 
and  to  disaffirm  in  part.""'* 

But  only  the  mortgagor  or  some  one  claiming  under  him  can  im- 
peach a  sale  imder  the  power.  It  cannot  be  called  in  question  by  a 
stranger. °^° 

A  sale  will  not  be  set  aside  because  of  anything  pertaining  to  the 
original  terms  of  the  mortgage,  if  they  are  such  that  they  can  be 
legally  enforced.^^^  Thus  a  sale  will  not  be  set  aside  because  the 
terms  of  the  mortgage  loan  were  hard  and  the  interest  high.''^- 

But  a  sale  made  under  a  mortgage  which  is  void  for  want  of  any 

to  act  in  a  prudent  and  business-like 
manner,  with  a  view  to  obtain  as 
large  a  price  as  may  fairly  and 
reasonably,  with  due  diligence  and 
attention,  be  under  the  circum- 
stances obtainable."  This  statement 
of  a  general  principle  is  undoubtedly 
correct,  though  in  the  application  of 
it  to  the  case  in  hand  the  Vice- 
Chancellor  was  subsequently  over- 
ruled in  Jones  v.  Matthie,  11  Jur.  504 
In  Orme  v.  Wright,  3  Jur.  19,  Lord 
Langdale  said:  "A  trustee  should 
use  all  the  means  in  his  power  to 
get  the  fairest  and  best  price  for  the 
property." 

*'"  Ellsworth  V.  Lockwood,  42  N. 
Y.  89;  Jencks  v.  Alexander,  11  Paige, 
619,  624.  See  Soule  v.  Ludlow,  3 
Hun,  503,  6  T.  &  C.  24;  Longwith  v. 
Butler,  8  111.  32;  Weld  v.  Rees,  48  111. 
428,  437;  Waller  v.  Arnold,  71  111. 
350;  Grover  v.  Fox,  36  Mich.  461; 
Equitable  Trust  Co.  v.  Fisher,  106 
111.  189;  Chappell's  case,  42  Md.  166; 
Wicks  v.  Westcott,  59  Md.  270:  Lit- 
tell  V.  Grady,  68  Ark.  584;  Webber 
V.  Curtiss,  104  111.  309;  Rounsavell  v. 
Crofoot,  4   111.   App.   671. 

'■'"'  See  Leet  v.  McMaster,  51  Barb. 
236;  Hubbell  v.  Sibley,  5  Lans.  51. 

1108  rpj^g  obligations  of  a  mortgagee 
in  the  exercise  of  the  power  are 
forcibly  declared  by  Mr.  Justice 
Wells  of  Massachusetts.  "One  who 
undertakes  to  execute  a  power  of 
sale  is  bound  to  the  observance  of 


good  faith  and  a  suitable  regard  for 
the  interests  of  his  principal.  He 
cannot  shelter  himself  under  a  bare 
literal  compliance  with  the  condi- 
tions imposed  by  the  terms  of  the 
power.  He  must  use  a  reasonable 
degree  of  effort  and  diligence  to  se- 
cure and  protect  the  interests  of  the 
party  who  intrusts  him  v/ith  the 
power.  A  stranger  to  his  proceed- 
ings, finding  them  all  correct  in 
form,  and  purchasing  in  good  faith, 
may  not  be  affected  by  his  unfaith- 
fulness. But  whenever  his  proceed- 
ings can  be  set  aside  without  in- 
justice to  innocent  third  parties,  it 
will  be  done  upon  proof  that  they 
have  been  conducted  in  disregard  of 
the  rights  of  the  donor  of  the  power. 
When  a  party  who  is  intrusted-  with 
a  power  to  sell  attempts,  also,  to 
become  the  purchaser,  he  will  be 
held  to  the  strictest  good  faith  and 
the  utmost  diligence  for  the  protec- 
tion of  the  rights  of  his  principal." 
Montague  v.  Dawes,  14  Allen,  369. 
And  see  Hood  v.  Adams,  124  Mass. 
481,  26  Am.  Rep.  687;  Thompson  v. 
Hevwood.  129  Mass.  401;  Briggs  v. 
Briggs,  135  Mass.  306. 

'■>"■■'  Austin  V.  Stewart,  126  N.  C. 
525,  36  S.  E.  37. 

■""Wormell  v.  Nason,  83  N.  C.  32. 

'•'"Neal  V.  Bleckley,  36  S.  C.  46S, 
15  S.  E.  733. 

"'-  Robinson  v.  Amateur  Asso.  14 
S.  C.  148. 


8G3  SETTING   ASIDE   AND   WAIVING    SALE.  [§    190G. 

consideration  may  be  sot  asido,''^-''  and  there  can  be  no  valid  sale  after 
the  debt  secured  by  the  mortgage  has  been  paid.^^*  A  foreclosure  sale 
to  the  mortgagee  will  be  set  aside  where  a  condition  precedent  to 
the  delivery  by  the  mortgagee's  agent  of  the  mortgage  and  note  se- 
curd  was  not  complied  with,  so  that  there  was  no  legal  delivery  of 
the  mortgage ;  or  where  tlie  mortgagee  had  not  performed  his  part  of 
the  contract  so  as  to  entitle  him  to  a  foreclosure. ^^^ 

A  sale  will  not  be  set  aside  simply  upon  the  ground  that  at  the 
time  of  the  sale  the  property  was  incumbered  by  other  mortgage 
liens  and  by  judgment  liens,  especially  when  it  appears  that  there  is 
no  uncertainty  or  controversy  as  to  the  amounts  and  priorities  of  such 
liens."^"  But  it  is  incumbent  upon  the  mortgagee  or  trustee,  in  an- 
nouncing at  the  sale  the  amount  of  such  prior  liens,  to  see  that  his 
statement  is  approximately  accurate,  and  in  nowise  misleading.''^^  If 
a  mortgagee  at  the  sale  insists  upon  the  validity  of  a  chattel  mort- 
gage for  the  same  debt  of  machinery  attached  to  the  mortgaged  land, 
which  the  mortgagee  had  agreed  to  cancel,  leaving  the  machinery  as 
part  of  the  realty,  and  he  buys  at  the  sale,  the  mortgagor  may  have 
a  subsequent  sale  under  the  chattel  mortgage  set  aside.®^^ 

A  sale  conducted  in  entire  good  faith,  and  in  strict  compliance 
with  the  terms  of  the  power,  or  in  conformity  with  the  directions  of  a 
court  directing  the  sale,  will  not  be  set  aside  merely  because  the  re- 
sult of  the  sale  is  accidentally  a  hardship  upon  the  mortgagor,  but 
a  legitimate  result  from  his  contract;"^''  thus  the  court  will  not  set 
aside  such  a  sale  because  there  was  only  one  bidder  at  the  sale  and 
the  property  was  sold  for  less  than  its  value. ^-"  The  fact  that  the 
debtor  was  ill  at  the  time  of  the  sale  under  the  deed  of  trust,  and 
soon  afterwards  died,  is  not  a  ground  for  setting  aside  the  sale.^^^ 
'Not  is  it  a  groimd  for  setting  aside  a  sale  that  it  was  held  during 
Christmas  week,  the  day  of  the  sale  being  neither  Sunday  nor  a  holi- 
day."'" 

Where  a  power  in  a  mortgage  is  to  continue  as  long  as  any  part  of 

""^Walker  v.  Carleton,  97  111.  582.  gagor    from    bidding    at    the    sale. 

"'^Coler  V.   Barth,  24  Colo.   31,  48  This  was  evidently  what  the  mort- 

Pac.  65G;  Liddell  v.  Carson,  122  Ala.  gagee  intended,  and  his  object  was 

518,  26  So.  133.  accomplished. 

""'^  Davis  V.  Bower,  29  Colo.  422,  68  ""  Hunter  v.  Mellen,  127  Ala.  343, 

Pac.  292.  20  So.  468;  Savings  and  Loan  Society 

"'"Lallance   v.    Fisher,   29   W.    Va.  v.  Burnett,  106  Cal.  514,  39  Pac.  922; 

512,  2  S.  E.  775.  Dunn  v.  McCoy,  150  Mo.  548,  52  S. 

"'■Wicks  V.  Westcott,  59  Md.  271.  W.  21. 

""^  Dohm  v.   Haskin,  88  Mich.   144,  '■''"  See  §  1914a. 

50  N.  W.  108.     The  insistence  at  the  "-'  Bowles    v.    Brauer,    89    Va.    466, 

sale   of  the  validity   of  the   chattel  16  S.  E.  356. 

mortgage,    and    the   threat   to    fore-  "-  Mutual  Fire  Ins.  Co.  v.  Barker 

close  it,  might  well  deter  the  mort-  17  App.  D.  C.  205. 


'§§  1906a,  1907.]  power  of  sale  mortgages  and  trust  deeds.  864 

the  mortgage  debt  remains  unpaid,  it  can  be  exercised  in  spite  of  the 
pendency  of  a  bill  to  redeem  as  long  as  the  sum  due  on  the  mortgage 
has  not  been  paid  or  actually  tendered.  A  sale  made  under  such 
conditions  cannot  be  set  aside."-^ 

A  judgment  that  a  certain  sale  of  mortgaged  property  under  a 
power  contained  in  a  mortgage,  and  a  sheriff's  certificate  based  on  the 
sale,  are  null  and  void,  and  that  the  party  claiming  under  such  cer- 
tificate has  no  title  to  the  property  is  no  bar  to  an  action  subsequently 
brought  to  foreclose  the  mortgage.'*^* 

§  1906a.  Military  accupation  of  the  mortgaged  premises  at  the 
time  of  the  sale  under  the  power,  which  prevented  any  inspection  by 
possible  bidders,  would  be  a  ground  for  setting  the  sale  aside.  "The 
premises  were  guarded  by  soldiers  who  surrounded  the  buildings. 
The  mere  privilege  of  access,  when  encumbered  with  such  rigorous 
scrutiny  can  scarcely  be  called  either  open  or  general;  and  it  seems 
to  us  that  it  would  be  impossible  to  procure  under  such  circumstances 
a  fair  sale  when  free  competition  was  obstructed  by  a  barrier  so  im- 
passable as  the  bayonet.'"*^^ 

§  1907.  "Whether  a  sale  is  void  or  voidable  only  by  reason  of 
any  irregularity  depends  upon  the  nature  of  the  irregularity.^^^  A 
sale  before  the  happening  of  the  condition  precedent  to  the  right  to 
sell  is  void.°^^  A  mortgagee  of  land,  when  there  has  been  no  default 
or  breach  of  the  conditions  of  the  mortgage,  cannot  sell  the  land  under 
the  usual  power  of  sale  contained  in  a  mortgage,  so  as  to  pass  a  good 
title  even  to  a  bona  fide  purchaser  for  value,  or  to  any  subsequent 
purchaser  from  him.  An  action  may  be  maintained  by  a  mortgagor 
of  land  against  the  mortgagee  for  the  wrongful  execution  of  a  power 
of  sale  in  the  mortgage,  whether  a  subsequent  purchaser  from  the  pur- 
chaser at  the  sale  took  a  good  absolute  title  or  not;  and  the  plain- 
tiff, if  he  so  elects,  may  recover  full  damages  of  the  defendant, 
wEether  he  can  or  cannot  redeem  the  premises  from  such  purchaser. 
If  the  damages  recovered  are  paid,  the  effect  is  to  make  the  title 
of  the  purchaser  under  the  foreclosure  sale  or  that  of  a  subsequent 
purchaser  from  him  good  against  the  mortgagor.  Chief  Justice  Field, 
delivering  the  opinion  in  this  case,^^^  said:  "On  principle  we  think 
it  must  be  considered  that  in  this  Commonwealth  a  mortgagee,  when 

''^Stevens  v.  Shannahan,  160  111.  '^'Ehrman  v.  Alabama  Mineral 
330,  43  N.  E.  350.  Land  Co.  109  Ala.  472,  20  So.  112. 

"-*  Lindgren  v.  Lindgren,  73  Minn.  "'  Pierce  v.  Grimley,  77  Mich.  273, 
90,  75  N.  W.  1034.  4ci  N.  W.  932. 

"=  Green  v.  Alexander,  7  D.  C.  147.        "-^  Rogers  v.  Barnes,  169  Mass.  179, 

184,  47  N.  E.  602. 


865  SETTING   ASIDE   AND   WAIVING   SALE.  [§    1907. 

there  has  been  no  default  or  breach  of  the  conditions  of  the  mortgage, 
cannot  sell  the  land  mortgaged  under  the  usual  power  of  sale  con- 
tained in  a  mortgage  so  as  to  pass  a  good  title  even  to  a  bona  fide 
purchaser  for  value,  or  to  any  subsequent  purchaser  from  him.  The 
mortgagor  undoubtedly,  by  laches  or  by  acts  amounting  to  an  estoppel, 
may  be  prevented  from  contesting  the  validity  of  such  a  title.  He 
may  ratify  the  sale  and  the  deed  given  under  the  power  of  sale  by 
parol.  ]\IcInt}Te  v.  Park,  11  Gray,  102.  The  argument  certainly  is 
strong  that  a  bona  fide  purchaser  for  value  ought  to  be  protected  in 
his  title  by  what  appears  on  the  record  in  the  registry  of  deeds,  in 
the  absence  of  knowledge  to  the  contrary;  but  the  argument  is,  we 
think,  stronger  that  a  mortgagor  should  not  be  deprived,  without  his 
knowledge  and  assent,  of  his  equity  of  redemption  by  a  sale  under  a 
power  contained  in  a  mortgage  which  authorizes  a  sale  only  in  case  of 
a  default,  when  there  has  been  no  default.  A  majority  of  the  court, 
however,  do  not  think  that  the  decision  of  this  case  necessarily  depends 
upon  the  question  whether  the  subsequent  purchaser  took  a  good,  ab- 
solute title  or  not." 

The  distinction  is  taken  that  when  a  power  directs  the  doing  of  a 
specified  thing  in  a  particular  manner,  and  there  has  been  a  total 
failure  to  comply  with  the  direction,  the  execution  of  the  power  is 
void.  Failure  to  comply  with  a  statute  prescribing  the  contents 
of  the  notice  renders  the  sale  void.^^^  A  sale  by  a  substituted  trustee 
in  a  deed  of  trust  not  appointed  by  court  or  in  accordance  with  the 
deed  is  void.^^''  Thus  a  sale  wdthout  publication  of  notice  in  cer- 
tain newspapers  specified  in  the  power  was  held  void.^^^  But  when 
the  mode  and  manner  of  the  notice  of  sale,  or  of  the  place  of  it,  is 
left  to  the  discretion  of  the  trustee,  and  it  appears  that  there  ha5 
been  an  honest,  though  mistaken,  exercise  of  his  judgment  in  respect 
to  these  matters,  the  sale  is  not  regarded  as  absolutely  void,  but  is 
voidable  only  at  the  election  of  the  parties  interested.^^^  The  bur- 
den is  upon  the  party  who  asks  a  court  of  equity  to  set  aside  a  sale, 
on  the  ground  that  it  was  not  duly  advertised  and  properly  made, 
to  establish  such  ground  by  satisfactory  proof.®^^  And  so,  if  the  ob- 
jection to  the  sale  is  that  the  mortgagee  without  authority  in  the 
mortgage  or  otherwise  became  the  purchaser,  so  long  as  such  sale 
stands,  and  no  affirmative  legal  steps  are  taken  to  avoid  it,  such  pur- 

"^'Peaslee    v.    Ridgway,    82   Minn.  °"  Bigler  v.  Waller,   14  Wall.  297. 

288.  84  N.  W.  1024;   Swain  v.  Lynd,  "^^  Ingle    v.    Culbertson,    43    Iowa, 

74  Minn.  72,  76  N.  W.  958.  265,  273. 

»="  McNeill  V.  Lee,  79  Miss.  455,  30  "^^  Lallance   v.    Fisher.    29   W.   Va. 

So.  821;  Lucas  v.  Am.  Freehold  512,  2  S.  E.  775.  See  §§  1830,  1895. 
Mortg.  Co.  72  Miss.  366,  16  So.  358. 


§    1907.]        POWER   OF    SALE    MORTGAGBS   AMD   TRUST   DEEDS.  866 

chaser  must  be  regarded  as  the  owner  of  the  land,°^*  havmg  both 
the  legal  and  equitable  title.  The  sale  is  voidable  only  u^Don  pro- 
ceedings by  the  mortgagor,  or  some  one  claiming  under  him,  taken 
within  a  reasonable  time  after  the  sale. 

Where  by  statute  a  mortgagee  is  authorized  to  purchase  at  his 
own  sale  fairly  and  in  good  faith,  his  sale  to  himself  will  be  set 
aside  where  it  appears  that  the  mortgagee  instituted  and  con- 
ducted the  foreclosure  proceedings,  not  for  the  purpose  of  securing 
his  pay,  but  for  the  purpose  of  securing  title  to  the  land  without  the 
mortgagor's  knowledge;  that  he  selected  a  newspaper  published  in 
another  city  for  the  publication  of  his  notice,  and  tliereby  succeeded 
in  keeping  probable  or  possible  bidders  and  the  mortgagors  in  ig- 
norance of  the  fact  of  foreclosure;  that  he  purposely  refrained  from 
asking  for  the  money  due  him ;  that  he  discouraged  at  least  one  pos- 
sible bidder  by  telling  him  that  he  thouglit  there  was  nothing  in  it, 
and  that  he  would  have  to  bid  it  off  himself  to  get  his  money;  that 
he  swelled  the  amount  of  the  claim  in  his  notice  by  including  the 
principal,  which  was  not  yet  due,  and  by  including  also  a  solicitor's 
fee,  when  his  alleged  employment  of  a  solicitor  was  merely  nominal; 
that  he  made  no  effort  to  obtain  a  bidder,  but  bid  off  tlie  property 
at  about  one-sixth  of  its  real  market  value,  and  much  less  than  he 
himself  knew  was  its  true  value.''^^ 

Where  by  statute  it  was  required  that  the  mortgagee  make  a  re- 
port of  the  sale  to  the  court  having  chancery  jurisdiction  where  the 
sale  was  made  which  was  authorized  to  hear  and  decide  any  objec- 
tion thereto,  failure  to  file  the  mortgage  notes  with  the  court  was 
held  not  to  render  the  sale  invalid.^^® 

A  sale  by  a  mortgagee  of  an  undivided  interest  in  the  mortgaged 
premises  although  not  authorized  by  the  mortgage  is  not  absolutely 
void  but  voidable  only.®"  So  a  failure  on  the  part  of  the  trustee  to 
publish  notice  for  the  proper  length  of  time  does,  not  prevent  a 
purchaser  at  the  sale  from  acquiring  the  legal  title  to  the  property. 
This  legal  title,  however,  would  be  subject  to  an  equitable  right  of 
redemption  in  the  grantor.®^^ 

°^*  American  Mortgage  Co.  v.  Tur-         ^^^  Heider  v.  Bladen,  83  Md.  242,  34 

ner,  95  Ala.  272, 11  So.  211;  American  Atl.  836. 

Mortgage  Co.  v.  Sewell,  92  Ala.  163,        "' Ehrman     v.     Alabama    Mineral 

9  So.'l43;  Hambrick  V.  New  England  Land  Co.  109  Ala.  478,  20  So.  112. 
Mortg.  Sec.  Co.  100  Ala.  551,  13  So.        °=^  Fowler  v.  Carr,  63  Mo.  App.  486; 

778.  Kennedy    v.    Siemers,    120    Mo.    73; 

03=  Newman  v.  Ogden,   82  Wis.   53,  Springfield  Engine  and  Thresher  Co. 

51  ISl.  W.  1091,  partly  in  the  words  v.  Donovan,  120  Mo.  423,  25  S.  W. 

of  Winslow,  J.  536. 


867  SETTING  ASIDE  AND  WAIVING  SALE.  [§§  1908,  1909. 

§  1908.  When  the  owner  of  the  equity  of  redemption  becomes 
bankrupt,  and  foreclosure  proceedings  are  subsequently  instituted 
in  a  state  court  against  the  objection  of  the  assignee,  or  an  attempt 
is  made  to  foreclose  by  a  sale  under  a  power,  the  proceedings  are 
void  unless  made  with  leave  of  the  bankrupt  court.^^''  But  the  fact 
that  a  subsequent  mortgagee  is  a  bankrupt  is  no  objection  to  the 
execution  of  a  power  of  sale  in  a  prior  mortgage.^*" 

§  1909.  Allowing^  property  to  be  sacrificed. — A  mortgagee  with 
power  to  sell,  or  holding  under  an  absolute  conveyance,  must  sell 
fairly  and  for  the  best  price  he  can  obtain.  He  has  no  right  to  sell 
for  a  price  sufficient  to  pay  his  claim  without  reference  to  the  valuo 
of  the  property.  A  purchaser  who  knows  that  the  mortgagee  is 
sacrificing  the  property  for  a  small  fraction  of  its  value  is  not  an 
innocent  purchaser,  and  will  only  occupy  the  position  of  an  assignee 
of  the  mortgage  debt.'*''^  If  a  trustee  permits  property  to  be  sacriliced 
by  a  sale  for  a  small  fraction  of  its  value,  as  where  property  worth 
from  $5,000  to  $8,000  is  sold  for  $1,000,  the  sale  will  be  set  aside 
on  timely  application.*^*^ 

But  where  property  sells  for  two-thirds  of  its  value,  and  the  sale 
is  unattended  by  fraud,  the  inadequacy  of  price  does  not  authorize 
the  setting  aside  of  the  sale.^*^ 

When  the  notices  provided  for  by  the  power  have  been  properly 
given,  and  there  is  no  fact  underlying  the  formal  proceedings  show- 
ing bad  faith  on  the  part  of  the  mortgagee,  the  mortgagor  cannot 
have  relief  from  the  sale,  although  through  his  own  mistake  or  neg- 
ligence he  failed  to  attend  the  sale  or  to  protect  his  interest.  A  court 
of  equity  will  not  open  a  sale  for  any  such  reason.*^*^ 

Not  only  is  the  mortgagee's  misconduct  in  conducting  the  sale  a 
ground  for  setting  the  sale  aside,  but  it  may  be  also  a  ground  for  an 
action  at  law  by  the  mortgagor  against  the  mortgagee  for  loss  sus- 
tained by  such  misconduct.  Thus  a  mortgagor  who  has  conveyed 
his  equity  of  redemption,  and  who  after  a  sale  under  the  power  is 
obliged  to  pay  a  deficiency,  may  maintain  an  action  at  law  againsi 

'^="  Hutchings  v.  Muzzy  Iron  Works,    the  parties  intend  that  the  trustee 

6  Chicago  L.  N.  27;  In  re  Brinkman,     shall  be  a  nose  of  wax,  a  mere  fig- 

7  N.    Bank.    R.    421;    Mackubin    v.     ure-head,  in  the  hands  of  the  cred- 
Boarman,  54  Md.  384;   §§   1231-1236.    itor  and  of  the  auctioneer."    And  see 

""Long  V.   Rogers,   6   Biss.   416.  Meath  v.  Porter,  9  Heisk.  224;  Haz'- 

""Runkle  v.  Gaylord,  1  Nev.  123.  lin  v.  Nation,  126  Mo.  97,  27  S.  W. 

In  this  case  the  price  obtained  was  330;  Stacy  v.  Smith,  9  S.  D.  137,  68 

about  a  third  of  the  value  of  the  es-  Iv.  W.  198. 

tate,    and    five    months'    rent    of   it  ""Weld  v.     Rees,  48  111.  428.     See 

was  sufficient  to  pay  the  debt.  Klein  v.  Glass,  53  Tex.  37. 

'"^ail  V.  Jacobs,  62  Mo.  130,  per  »"  King  v.  Bronson,  122  Mass.  122; 

Sherwood,  J.    "Neither  the  law  nor  Weld  v.  Rees,  48  111.  428. 


§    1910.]       POWER  OF  SALE  MORTGAGES  AND  TRUST  DEEDS.  868 

the  mortgagee  to  recover  a  loss  sTistained  througH  the  misconduct  of 
the  latter  in  so  conducting  the  sale  that  the  mortgagor  was  obliged 
to  pay  a  deficiency.®*^ 

§  1910.  The  sale  is  avoided  by  a  secret  arrangement  to  prevent 
competition.-  Every  person  interested  in  the  equity  of  redemption 
has  a  right  tO'  claim  that  the  sale  shall  be  made  fairly,  and  with 
the  advantage  of  such  competition  as  the  sale  would  ordinarily 
command.  A  secret  arrangement  between  the  mortgagee  and  a  per- 
son interested  in  buying  the  property,  whereby  competition  is  pre- 
vented, avoids  the  sale;  as  where  by  such  arrangement  the  notice 
of  the  sale  was  published  in  a  newspaper  which  did  not  circulate 
in  the  region  where  the  mortgaged  premises  were,  and  the  sale  was 
fixed  at  an  unreasonably  early  hour  in  the  morning,  and  the  sale 
was  persisted  in  when  a  due  regard  to  the  interest  of  the  debtor 
required  a  postponement.®*^  On  this  ground  a  person  claiming  under 
the  mortgagor  was  allowed  tO'  redeem  after  a  sale  made  while  an  in- 
junction against  it  was  in  force,  under  an  arrangement  between 
the  mortgagor  and  the  person  who  procured  the  injunction  that 
the  sale  should  be  made,  and  that  he  should  bid  off  the  property  at 
a  certain  price,  and  the  injunction  suit  should  be  dismissed.®*''  A 
sale  was  held  fraudulent  and  void  where  the  assignee  of  the  mort- 
gage acting  as  auctioneer  seeing  the  owner  of  the  equity  approaching, 
immediately  knocked  down  the  property  to  his  own  brother  in  order 
to  prevent  competition.®*® 

If  an  agent  of  the  mortgagee  acting  under  the  power  in  making 
the  sale  has  previously  agreed  with  the  purchaser  to  furnish  half  of 
the  purchase-money  and  divide  the  profits,  the  sale  is  a  fraud  upon 
both  the  mortgagor  and  mortgagee.®*® 

The  burden  of  proof  is  upon  the  party  charging  fraud  and  collu- 
sion between  the  buyer  and  the  seller  under  a  power.®^® 

A  secret  agreement  between  the  purchaser  and  the  mortgagee 
made  before  the  sale,  to  the  effect  that  the  former  should  bid  a  cer- 
tain sum,  and  that  he  shoidd  have  it  at  that  price,  no  matter  what 
any  one  else  might  bid,  does  not  enable  the  purchaser  to  avoid  a  sale 
made  to  him  at  that  price,  if  it  appears  that  there  was  no  puffing, 

»'=  Fenton  v.  Torrey,  133  Mass.  138.  "'^  Jackson    v.    Crafts,    18    Johns. 

«"  Thompson      v.      Heywood,      129  110. 

Mass.  401;   Walker  v.  Brungard,  13  ""Mann  v.  Best,  62  Mo.  491. 

Sm.  &  M.  723.  ""Bush    v.    Sherman,    80    111.    160; 

'"  See  Mapps  v.  Sharpe,  32  111.  13.  Munn  v.  Burges,  70  111.  604. 


869  SETTING  ASIDE  AND  WAIVING  SALE.  [§    1911. 

that  his  bid  was  the  highest  bid  offered,  and  that  no  one  objected  to 
the  price  at  which  the  property  was  sold.**^^ 

§  1911.    Any  fraud  or  deception  practised  upon  the  owner  of  the 

mortgaged  premises,  in  consequence  of  which  lie  has  lost  his  rights, 
is  sufficient  ground  for  setting  aside  the  sale.^^^  The  power  of  sale 
in  a  mortgage  is  a  trust  power,  so  far  as  it  relates  to  the  interests 
in  the  property,  or  in  the  proceeds  of  it  above  the  amoimt  due  the 
mortgagee;  and  any  collusive  arrangement  between  the  mortgagee 
and  a  third  person,  so  to  execute  the  power  as  to  deprive  the  owner 
of  the  equity  of  redemption  of  his  rights  by  keeping  the  knowledge 
of  the  sale  from  him,  or  by  preventing  a  fair  competition  at  the 
sale  and  enabling  a  purchaser  to  obtain  the  premises  at  a  price  be- 
low their  value,  will  avoid  the  sale."^* 

Before  the  principal  of  a  mortgage  debt  was  due,  the  mortgagee 
attempted  to  foreclose  the  mortgage  for  a  default  in  the  payment 
of  six  months'  interest,  which  the  mortgagor's  agent,  who  had  paid  it 
on  former  occasions,  made  not  less  than  nine  attempts  to  pay  with- 
out being  able  to  find  the  mortgagee's  lawyer  in  his  office.  The  sale 
was  advertised  on  the  month  when  the  interest  fell  due,  and  no  notice 
was  given  of  the  fact  to  the  mortgagor.  In  the  notice  of  sale  the 
premises  were  stated  to  be  subject  to  large  mortgages,  which  in  fact 
had  been  paid  off  and  released  by  deeds  recorded  in  the  registry. 
The  sale  was  advertised  to  take  place  at  four  o'clock  in  the  after- 
noon of  a  day  in  November  on  the  premises,  which  were  a  deserted 
beach,  to  which  there  was  no  public  conveyance,  and  no  notice  of  the 
sale  was  put  up  there.  An  agent  of  the  mortgagee  was  the  only 
bidder,  and  he  bid  an  inadequate  price.  It  was  held,  on  a  bill  in 
equity  to  redeem  the  land  from  the  mortgage,  that  it  could  not  be 

»"  Gross  V.  Jancsok,  10  N.  Y.  Supp.  79;    Ferrand    v.    Clay,    1    Jur.    165; 

541.     The  evidence  showed  that  the  Soule   v.   Ludlow,   6  T.    &  C.    24,   3 

property  was  fairly  worth  more  than  Hun,  503;  Leet  v.  McMaster,  51  Barb, 

the  price  for  which  it  sold.    The  ras-  236;   Culbertson  v.   Young,  50  Mich, 

cality   of   the   understanding   which  190;   Equitable  Trust  Co.  v.  Fisher, 

defendant  claims  was  made  with  the  106  111.   189;  Webber  v.  Curtiss,  104 

mortgagee's  attorney,  by  which  he  111.    309;    Loeber   v.    Eckes,    55    Md. 

was  to  get  the  property  at  a  stipu-  1;    Long  v.   McGregor,  65  Miss.   70, 

lated  price,  was  equally  shared  by  3  So.  240. 

the   purchaser  himself.     He   should        ^"  Jencks  v.   Alexander,  11  Paige, 

not  be  allowed  to  avail  himself  of  619.     In  this  case,  Walworth,  Chan- 

his  own  wrong,   in   the   absence   of  cellor,    said:    "It    is    impossible    to 

any   deceit   practised    on    him.      To  wink  so  hard  as  not  to  see  that  the 

same  effect  see  Walker  v.  Brungard,  power  of  sale  was  executed  in  bad 

13  Sm.  &  M.  723.  faith."    Howard  v.  Ames,  3  Met.  308; 

*"Banta  v.  Maxwell,  12  How.  Pr.  Norton  v.  Tharp,  53  Mich.  146;  Pes- 

479;  Murdock  v.  Empie,  19  How.  Pr,  tel  v.  Primm,  109  111.  352. 


§    1911.]        POWER   OF   SALE    MORTGAGES   AXD   TRUST   DEEDS.  870 

said  that  these  facts  did  not  warrant  a  finding  that  the  sale  was  at 
least  voidable  at  the  choice  of  the  mortgagor.'-'-"'* 

If  the  owner  of  the  land  be  insane,  and  the  mortgagee  knowing 
the  fact  buys  the  property  for  less  than  half  its  value,  the  sale 
should  be  set  aside  as  fraudulent  and  void;  and  a  purchaser  from 
the  mortgagee  having  the  same  knowledge  has  no  better  right  to 
hold  the  property  than  the  mortgagee  himself.^^^ 

A  sale  imder  a  power  was  set  aside  where  the  mortgagee  filed  a 
bill  in  equity  to  foreclose,  making  a  junior  mortgagee  a  party  de- 
fendant, and  pending  this  suit,  to  which  the  junior  mortgagee  an- 
swered, the  first  mortgagee  sold  under  the  power  of  sale.  The 
resort  to  equity  to  foreclose  the  mortgage  had  a  tendency  to  lull 
the  junior  mortgagee  into  a  false  security  in  regard  to  any  sale 
under  the  power.®^® 

Failure  to  keep  a  promise  to  let  the  holder  of  a  note  secured  by  a 
mortgage  know  when  the  sale  took  place  so  that  he  miglit  protect 
his  interests  is  such  deception  as  to  justify  the  setting  aside  of  the 
sale.^^^ 

The  fact  that  one  of  two  joint  mortgagors,  upon  the  refusal  of 
the  other  to  pay  part  of  an  instalment  due,  refuses  to  pay  his  part 
and  suggests  a  sale  under  the  power,  is  no  evidence  of  his  fraudu- 
lently procuring  a  foreclosure  of  the  mortgage.®^^ 

An  estate  was  advertised  for  sale  under  a  second  mortgage  June 
23,  1900;  June  26,  1900,  it  was  advertised  for  sale  under  the  first 
mortgage.  The  sale  under  the  second  mortgage  was  fixed  for  July  14, 
1900,  and  that  under  the  first  mortgage  for  July  18,  1900,  the  earliest 
possible  date.  The  second  mortgagee  knew  nothing  of  the  sale  under 
the  first  mortgage.  The  father  of  the  mortgagor  secured  postpone- 
ment of  the  sale  under  the  second  mortgage  for  two  weeks,  carrying 
the  date  of  sale  beyond  that  of  the  first  mortgage.  The  sale  under  the 
first  mortgage  was  advertised  in  a  paper  of  small  circulation.  The 
property  was  sold  for  the  amount  of  the  first  mortgage,  being  less  than 
one-third  of  its  value.  The  only  persons  present  at  the  sale  were 
the  treasurer  of  the  bank  which  held  the  first  mortgage,  the  father 
of  the  mortgagor,  who  secured  a  postponement  of  sale  above  recited', 
the  brother-in-law  of  the  mortgagor,  who  bought  the  property,  and  an 
unknown  woman.     The  mortgagee's  deed  was  drawn  and  delivered 

•"  Long  V.  Richards,  170  Mass.  120,  Reynolds,    33    111.    481;    Warrick   v. 

48  N.  E.  1083.  Hull,  102  111.  280. 

'^''Encking    v.    Simmons.    28    Wis.  ""  Orr   v.    McKee,    134    Mo.    78,   34 

272.  S.  W.   1087. 

"^^  Hurd  v.  Case,  32  111.  45,  83  Am.  "'^  St.  Joseph  Manufacturing  Co.  v, 

Dec.    249.      And    see    Funk    v.    Mc-  Daggett,  84  111.  556. 


871  SETTING   ASIDE   AXD   WAIVING    SALE.  [§    1912. 

immediately.  It  was  held  that  the  sale  was  a  fraudulent  device  to  cut 
out  the  second  mortgage,  and  that  the  complainant  second  mort- 
gagee was  entitled  to  relief."'^^ 

Any  fraud  or  deception  practiced  on  the  holder  of  the  note  secured 
by  the  trust  deed  renders  the  sale  invalid.  Not  only  the  holder  of 
the  note,  but  the  owner  of  the  equity  of  redemption,  might  object  to 
a  fraudulent  sale  and  eacli  is  entitled  to  have  the  same  made  in  accord- 
ance with  the  power  whicli  the  trust  deed  conferred  upon  the  trustee. ^"^ 

§  1912.  The  conduct  of  the  purchaser  at  the  sale  may  avoid 
it;"*^^  as  where  he  expostulates  with  a  rival  bidder,  informing  him  of 
his  losses,  and  telling  him  that  on  account  of  them  he  ought  not  to 
bid  against  him,  and  thereby  causes  the  bidder  to  withdraw,  and 
obtains  the  land  at  a  price  much  less  than  its  value,  the  sale  will  be 
invalid  as  against  a  subsequent  mortgagee  who  seeks  to  redeem.^^'- 
But  while  the  mortgagee  or  trustee  in  making  the  sale  must  do 
nothing  to  prevent  competition,  or  to  deter  bidding,  it  is  his  right 
and  duty  to  state  what  the  property  is  that  is  offered  for  sale,  and 
what  liens  it  is  subject  to.  Thus  a  junior  mortgagee  in  making  a 
sale  has  the  right,  for  his  own  protection,  to  give  notice,  at  the  time 
of  the  sale,  of  other  liens  on  the  property,  and  of  the  estate  which 
is  offered  for  sale."''^  A  combination  by  the  purchaser  with  other 
bidders  at  the  sale,  for  the  purpose  of  obtaining  the  property  at  a 
price  below  its  value,  will  also  invalidate  the  sale.^®*  Thus,  two 
mortgagees  collusively  agreed  to  sell  the  land  at  the  same  time,  but 
at  different  places,  and  to  buy  it  in  and  divide  the  profits.  The 
mortgagor  was  about  to  sell  the  land  at  private  sale  for  much  more 
than  enough  to  pay  both  mortgages.  One  of  the  mortgagees,  to  pre- 
vent such  sale,  went  to  the  mortgagor  and  offered  to  buy  in  the 
land  under  his  trust  deed,  to  pay  the  other  mortgage,  and.  hold  the 
land  until  the  mortgagor  could  redeem.  The  mortgagor  consent- 
ing, the  mortgagee  bought  in  the  property  as  proposed,  and  after- 
wards refused  to  allow  the  mortgagor  to  redeem.  The  sale  was  set 
aside.^^^ 

While  a  purchaser  who  is  guilty  of  any  fraud,  trick,  or  device, 
the  object  of  which  is  to  get  the  property  at  less  than  its  value,  will 
not  be  permitted  to  enjoy  the  fruits  of  his   purchase  so  obtained, 

"="  Nichols   V    Flagg,    24   R.    I.    30.         °"  Meyer  v.  Opperman,  76  Tex.  105, 
'">  Cheney  v.  Crandell,  28  Colo.  383,    13  S.  W.  174. 
65  Pac.  56.  ""  Dover  v.  Kennerly,  44  Mo.   145, 

»«i  Sugden  on  Vendors,  30.  148, 

'*=  Fenner  v.  Tucker,  6  R.  I.  551.  '"''  Long  v.  McGregor,  65  Miss.  70, 

3  So.  240. 


§    1913.]        POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.  87^ 

yet  the  burden  of  showing  the  fraud  is  upon  the  person  setting  it 
up;  and,  to  justify  setting  aside  the  sale,  the  evidence  to  establish 
the  fraud  must  be  clear  and  convincing.''^'' 

An  agreement  between  a  mortgagee  and  a  prospective  buyer  by 
which  the  former  agrees  to  foreclose  and  the  latter  agrees  to  bid  at 
the  sale  the  full  amount  due  on  the  mortgage,  and  to  buy  up  certain 
conflicting  claims  to  the  land,  is  not  fraudulent  as  against  the  mort- 
gagor, in  case  it  contains  no  provision  that  the  land  shall  be  sold  to 
him  unless  he  is  the  highest  bidder.^" 

§  1913.  If  a  purchaser  buys  at  a  sale  under  a  power  with,  knowl- 
edge of  circumstances  sufficient  to  invalidate  the  sale,  as  that 
a  valid  tender  has  been  made  of  the  whole  amount  due  under  the 
mortgage,  he  thereby  becomes  a  party  to  the  transaction,  and  is  not 
protected  by  a  proviso  that  the  purchaser  need  make  no  inquiries. 
Such  knowledge  puts  him  in  the  same  situation  as  the  mortgagee  as 
to  the  validity  of  the  sale.'"'^  He  is  chargeable  with  notice  of  defects 
and  irregularities  attending  the  sale.  He  is  chargeable,  too,  with 
knowledge  whether  proper  notice  of  the  sale  was  given,  and  whether 
the  sale  was  made  at  the  time  and  in  the  manner  required  by  the 
power."^^  But  the  rule  is  different  as  regards  remote  purchasers, 
who,  having  no  notice  in  fact  of  any  irregularities,  will  be  protected 
as  innocent  purchasers.^'''' 

Where  the  advertisement  of  a  sale  makes  no  mention  of  improve- 
ments placed  on  the  land  by  the  mortgagor  subsequent  to  the  delivery 
of  the  mortgage,  this  fact  not  being  known  to  the  mortgagee  until 
the  day  of  the  sale,  the  sale  will  not  for  this  reason  be  set  aside  at  the 
suit  of  the  second  mortgagee,  it  appearing  that  the  improvements 
were  obvious  to  those  who  attended  the  sale,  and  there  being  nothing 
to  show  that  there  was  not  a  number  of  bidders  present,  or  that  the 
sale  was  not  conducted  as  an  auction  sale  should  be  conducted.^^^ 

Where  a  mortgagee  has  purchased  at  a  foreclosure  sale  for  the  full 
amount  of  the  debt  with  interest  and  costs,  he  cannot  insist  upon 
the  invalidity  of  the  proceedings,  if  the  mortgagor,  who  is  the  only 
other  person  who  could  question  the  validity  of  the  sale,  tenders  a 

»'°  Forrester    v.    Scoville,    51    Mo.  Cranston  v.  Crane,  97  Mass.  459,  93 

268-  Forrester  v.  Moore,  77  Mo.  651;  Am.  Dec.  106;   Chicago,  Rock  Island 

Jackson  v.  Wood,  88  Mo.  77;   Keiser  &    Pacific    R.    Co.    Kennedy,    70    111. 

V  Gammon,  95  Mo.  217,  8  S.  W.  350;  Grover  v.  Hale,  107  111.  6o8^ 
377;  Island  Sav.  Bank  v.  Galvin.  20  »'''' Gunnell  v.  Cockerill,  79  IH-  79^ 
R    I    347    39  Atl.  196.  ^'^  Gunnell  v.  Cockerill,  79  III.  79; 

'""Ritchie  v.  Judd,  137  111.  453,  27  McHany  v.  Schenk,  88  111.  357. 
Isf   E    682.  "^Austin  v.  Hatch,  159  Mass.  199, 

"'»« Jenkins  v.  Jones,  2  Giff.  99.   See  34  N.  E.  95. 


S73  SETTING   ASIDE   AND    AVAIVING    SALE.    [§§    1914-1915. 

deed  which  conveys  a  perfect  title  to  the  mortgagee.'*'^  A  mortgagee 
purchasing  cannot  have  the  sale  set  aside  by  reason  of  a  mistake  of  law 
on  his  part,  the  mortgagor  being  blameless  in  regard  to  it.**^^ 

§  1914.  Purchase  by  agent  without  authority. — A  trustee,  in 
whose  name  a  mortgage  was  taken  to  secure  the  payment  of  the 
separate  claims  of  several  creditors  of  the  mortgagor,  has  no  author- 
ity to  bind  them  by  a  purchase  of  the  property  at  the  foreclosure 
sale,  made  in  good  faith  and  for  the  protection  and  joint  benefit  o^ 
all  of  them ;  neither  can  a  majority  of  such  creditors  force  the 
others,  who  object  to  the  purchase,  to  enter  into  any  arrangement 
for  buying  the  lands  at  such  sale.  A  resale  of  the  property  will  be 
ordered  at  the  option  of  the  objecting  creditors."^* 

Whether  an  agent  of  the  mortgagee  for  the  sale  of  the  mortgaged 
property  under  a  power  is  authorized  to  purchase  for  the  mortgagee, 
where  no  express  authority  is  given,  is  a  question  for  the  jury.**^^ 

§  1914a.  The  fact  that  there  was  only  one  bidder  at  the  sale  is 
no  ground  for  setting  it  aside,  if  the  mortgagee  acted  in  good  faith 
and  fully  conformed  to  the  terms  of  the  power  in  the  mortgage.  The 
mortgagee  has  the  power  of  adjourning  the  sale,  but  he  is  not  obliged 
to  do  so,  in  the  absence  of  any  evidence  that  an  adjournment  would 
be  of  any  benefit,  merely  because  there  is  only  one  bidder  present.^^^ 
A  fortiori  when  there  are  two  bidders  the  sale  will  not  be  set  aside.^" 

§  1915.  Mere  inadequacy  of  price  is  no  ground  for  vacating  a 
sale  if  it  was  fairly  conducted  in  every  respect,''^*  unless  the  inade- 

""Saxe  V.   Rice,  64  Minn.   190,  66  District  of  Columbia:     Wheeler  v. 

N.  W.  268.  McBlair.  5  App.  D.   C.  375;    Hitz  v. 

»■=  Truesdale  v.  Sidle,  65  Minn.  315.  Jenks,  16  App.  D.  C.  530. 

"^'Bradley  v.  Tyson,  33  Mich.  337.  Illinois:     Hoodless  v.  Reid,  112  III. 

^"Hood  V.  Adams,  128  Mass.  207,  105;  Laclede  Bank  v.  Keeler,  109  111. 

26  Am.  Rep.  687.  385;    Hoyt    v.    Pawtucket    Inst,    for 

""Learned  v.   Geer,  139  Mass.   31,  Savings,    110    III.    390;     Cleaver    v. 

29   N.   E.   215;    Guinzburg  v.   H.   W.  Green,  107  111.  67;  Parmly  v.  Walker, 

Downs  Co.   165  Mass.   467,  43  N.  E.  102  111.  617. 

195;    Carroll  v.   Hutton,  91  Md.  379,  Kansas:      Means    v.    Rosevear,    42 

46  Atl.  967;   Mutual  Fire  Ins.  Co.  v.  Kan.  377,  22  Pac.  319. 

Barker,  17  App.  D.  C.  205.  Maryland:   Harnickell  v.  Orndorff, 

°'' Anderson  v.  White,  2  App.  Cas.  35    Md.    341;    Horsey    v.    Hough,    38 

D.  C.  408.  Md.  130;  Condon  v.  Maynard,  71  Md. 

"■'United  States:     Graffam  v.  Bur-  601,  18  Atl.  957. 

gess,  117  U.  S.  180;   Smith  v.  Black,  Massachusetts:      Austin  v.   Hatch, 

115  U.  S.  308.  6  Sup.  Ct.  50.  159  Mass.  198,  34  N.  E.  95;  Fennyery 

Alabama:    Ward  v.  Ward,  108  Ala.  v.  Ransom.  170  Mass.  303,  49  N.  E. 

278,  19  So.  354.  620;    Stevenson   v.   Dana,   166   Mass. 

California:     Kennedy  v.  Dunn,  58  163,  44  N.  E.  128;   King  v.  Bronson, 

Cal.  339.  122  Mass.  122;  Wing  v.  Hayford,  124 

Colorado:      Lathrop    v.    Tracy,    24  Mass.    249;     Learned    v.    Geer,    139 

Colo.  382,  51  Pac.  486;  Scott  v.  Wood,  Mass.  31,  29  N.  E.  215;  Clark  v.  Sim- 

14  Colo.  App.  341,  59  Pac.  844.  mons,   150  Mass.   357,  23  N.   E.   108. 


v^    1915,1        POWER   OF    SALE    MORTGAGES   AND    TRUST    DEEDS. 


874 


quacy  be  so  great  as  to  furnish  evidence  of  fraud."^"  And  even  in  a 
btate  where  the  sale  must  be  reported  to  the  court  and  confirmed, 
as  in  case  of  a  foreclosure  sale  in  equit}',  the  inadequacy  of  price 
must  be  very  material  to  prevent  a  confirmation  of  it,  and  such  in 
fact  as  to  furnish  evidence  of  fraud  on  the  part  of  the  trustee.  A 
sale  for  half  the  estimated  value  of  the  property  has  been  held  not 
lo  be  such  inadequacy.^*"  This  circumstance,  however,  when  taken 
in  connection  with  others  attending  the  sale,  may  be  considered  suf- 
ficient in  the  sound  discretion  of  the  court  to  call  for  its  equitable 
interposition  and  the  setting  aside  of  the  sale.^^^  A  sale  of  property 
worth  at  least  $8,500  for  $5,000  was  not  regarded  such  a  gross  in- 
adequacy of  price  as  to  authorize  equitable  interference;  but  when 
it  appeared  further  that  the  sale  was  made  at  an  unusual  hour,  and 
that  only  two  bidders  were  present,  the  sale  was  set  aside,  although 
it  was  not  shown  that  the  property  would  have  brought  any  greater 
sum  had  it  been  sold  at  the  usual  hour  of  sale.^^- 

If  the  mortgagee,  or  the  beneficiary  under  a  deed  of  trust,  has  ac- 
quired a  tax  title,  but  does  not  claim  to  hold  this  for  himself  but  for 
the  benefit  of  the  property,  and  afterwards  sells  under  the  power  for 


Missouri:  Landrum  v.  Union 
Bank  of  Mo.  63  Mo.  48;  Maloney  v. 
Webb,  112  Mo.  57.5,  20  S.  W.  683; 
Kline  v.  Vogel,  11  Mo.  App.  211;  Vail 
V.  Jacobs,  7  Mo.  App.  571,  62  Mo. 
131,  21  S.  W.  85;  Meyer  v.  Kuechler, 
10  Mo.  App.  371;  Hardwicke  v.  Ham- 
ilton, 121  Mo.  465,  26  S.  W.  342; 
Keith  v.  Browning,  139  Mo.  190,  40 
S.  W.  764:  Markwell  v.  Markwell, 
157  Mo.  326,  57  S.  W.  1078. 

North  Carolina:  McNair  v.  Pope, 
100  N.  C.  404.  6  S.  B.  234. 

South  Carolina:  Mills  v.  Williams, 
16  S.  C.  593. 

South  Dakota:  Trenery  v.  Am. 
Mortg.  Co.  11  S.  D.  506,  78  N.  W.  991. 
See  §  1670. 

Texas:  Klein  v.  Glass,  53  Tex.  37; 
Seip  v.  Grinnan  (Tex.)  36  S.  W.  349; 

West  Virginia:  Dryden  v.  Ste- 
phens, 19  W.  Va.  1;  Corrothers  v. 
Harris,  23  W.  Va.  177. 

"Wisconsin:  Maxwell  v.  Newton, 
65  Wis.  261.  27  N.  W.  31. 

"'"  Robinson  v.  Amateur  Asso.  14 
S.  C.  148;  Jenkins  v.  Pierce.  98  111. 
646:  Loeber  v.  Eckes.  55  Md.  1;  Scott 
V.  Wood.  4  Colo.  App.  341,  59  Pac. 
844;  Washburn  v.  Williams,  10  Colo. 
App.  153,  50  Pac.  223;  Nichols  v. 
Flasrg,  24  R.  I.  30;  Galvin  v.  New- 
lonri9  R.  I.  176,  36  Atl.  3:  Monroe 
V.  Fuchtler,  121    N.  C.  101,  28  S.  E.  63. 


"^^  Lallance  v.  Fisher,  29  W.  Va. 
512,  2  S.  E.  775:  Bradford  v.  McConi- 
hay,  15  W.  Va.  732;  Maloney  v. 
Webb,  112  Mo.  575,  20  S.  W.  683; 
Anderson  v.  White,  2  App.  Cas.  D. 
C.  408. 

"■"'Chilton  V.  Brooks,  69  Md.  584, 
587,  16  Atl.  273;  Condon  v.  May- 
nard,  71  Md.  601,  18  Atl.  957;  Ma- 
honey  V.  Mackubin,  52  Md.  357; 
Casserly  v.  Witherbee,  119  N.  Y.  522, 
23  N.  E.  1000;  Hubbard  v.  Jarrell, 
23  Md.  66;  Lalor  v.  M'Carthy,  24 
]\_inn.  417;  Keiser  v.  Gammon,  95 
Mo.  217,  8  S.  W.  377;  Hudgins  v.. 
Morrow,  47  Ark.  515,  2  S.  W.  104; 
Fry  V.  Street,  44  Ark.  502. 

"'=  Stoffel  v.  Schroeder,  62  Mo. 
147;  Chilton  v.  Brooks,  69  Md.  584, 
16  Atl.  273. 

In  Holsworth  v.  Shannon,  113  Mo. 
508,  21  S.  W.  85,  a  sale  was  set  aside 
where  it  appeared  that  it  was  made 
before  eleven  o'clock  in  the  morn- 
ing, when  the  custom  was  to  make 
sales  between  one  and  two  o'clock 
in  the  afternoon,  and  the  mort- 
gagee's agent,  who  arrived  at  the 
place  of  sale  after  it  had  been  con- 
cluded but  in  time  for  a  sale  at  the 
usual  hour,  was  prepared  to  bid  the 
whole  amount  of  the  mortgage  debt, 
though  the  sale-  v/as  actu-illy  made 
for  about  a  sixth  part  of  the  debt. 


875  SETTING   ASIDE   AND   WAIVING    SALE,  [§    1915a, 

a  greatly  inadequate  price,  bidding  being  prevented  by  the  fact 
that  he  holds  the  tax  title,  the  sale  will  be  set  aside."**^ 

The  owner  of  land  sold  under  a  power  of  sale,  who  attends  the 
sale  and  bids  upon  the  property,  and  allows  it  to  be  sold  to  another, 
will  not  be  permitted  years  afterwards,  when  improvements  have 
been,  made  upon  it,  to  impeach  the  sale  on.  account  of  inadequacy  of 
price.^^* 

A  mortgagor  is  not  entitled  to  have  a  sale  set  aside  for  inadequacy 
of  price,  when  this  has  resulted  from  his  own  conduct  in  twice  making 
a  bid  which  he  could  not  make  good,  and  in  protesting  against  the 
sale,  and  was  the  cause  of  the  land  being  bid  oR  at  several  thousand 
dollars  less  than  had  been  offered  before.'*®^ 

A  sale  by  a  trustee  under  a  trust  deed  will  not  be  set  aside  be- 
cause the  premises  were  sold  for  only  one-third  their  value,  the  pur- 
chaser being  a  stranger  to  the  transaction,  and  having  in  good  faith 
sold  the  premises  to  another;  nor  because  the  property  was  sold  in 
parcels  and  not  together  ;"^^  nor  because  the  trustee  requested  a  bid- 
der to  advance  his  bid;"^'^  nor  because  the  trustee  should  have  ad- 
journed the  sale  in  view  of  the  small  attendance  and  inadequate  price 
bid."^^  But  if  the  trustee  at  the  time  of  the  sale  had  knowledge  that 
the  creditor  was  willing  to  pay  five  times  the  amount  bid  at  the  sale, 
he  abuses  his  discretion  by  striking  the  property  off  at  such  bid,  and 
the  sale  will  be  set  aside.^*^  Objection  to  the  validity  of  the  sale 
comes  too  late  when  third  persons,  acting  in  good  faith,  have  ac- 
quired rights.®^*^ 

Where  by  statute  a  time  is  allowed  for  redemption  under  a  sale, 
mere  inadequacy  of  price  does  not  vitiate  the  sale,  because  the 
owner  of  the  equity  of  redemption  cannot  be  prejudiced,  inasmuch 
as  he  may  always  redeem  within  such  time  by  refunding  the  amount 
paid  with  interest,  according  to  the  statute.  It  is  only  his  failure  to 
do  this  that  can  occasion  him  any  loss.^®^ 

^  1915a.  The  fact  that  the  auctioneer  who  makes  the  sale  is  not 
duly  licensed  does  not  necessarily  invalidate  the  sale.  Although  a 
statute  provides  that  auctioneers  shall  be  licensed,  and  imposes  a  pen- 

"'^  Martin    v.    Swofford,    59    Miss.  »«« Shine  v.  Hill,  23  Iowa,  264. 

328.  "*"  Meyer    v.    Jefferson    Ins.    Co.    5 

»^*  Watson  V.  Sherman,  S4  III.  263.  Mo.   App.   245. 

'"'^Stevenson    v.    Dana,    166    Mass.  ""» Shine  v.  Hill,  23  Iowa,  264;  Sil- 

163,  44  N.  E.  128.  va  v.   Turner,  166  Mass.   407,  44  N. 

»'» Sternberg   v.    Valentine,    6    Mo.  E.  532. 

App.  176.  "'''  Cameron    v.    Adams,    31    Mich. 

»»'  Swenson    v.     Halberg,     1    Fed.  426. 
Rep.  444. 


§§    1916,    1917.]    POWER   OF    SALE   MORTGAGES   AND   TRUST   DEEDS.    870 

alty  upon  any  unlicensed  person  who  shall  sell  real  or  personal  prop- 
erty by  public  auction,  but  does  not  expressly  or  by  implication  make 
such  a  sale  invalid  the  sale  will  not  for  that  reason  be  declared  in- 
valid, if  the  mortgagee  was  ignorant  of  the  fact  and  the  mortgagor 
was  not  injured  by  it.^"^  It  has  been  questioned  whether  the  trustee 
himself  could  not  conduct  the  auction  sale  in  person  without  being 
liable  for  any  penalty,  even  though  he  were  not  duly  licensed  as  an 
auctioneer.®®^ 

§  1916.     Sale  waived  by  extending  time  of  redemption. — If  a 

mortgagee  who  has  purchased  the  premises  at  a  foreclosure  sale  dur- 
ing the  year  allowed  for  redemption  agrees  with  the  mortgagor  to 
extend  the  time  of  payment  beyond  the  year,  and  in  accordance  with 
the  agreement  accepts  money  from  the  mortgagor,  the  sale  is  thereby 
rendered  ineffectual;  and  the  mortgagee  cannot  afterwards  rely  upon 
the  sale  and  record  the  sheriff's  deed  as  being  of  any  force.®"*  But  if 
part  payments  are  made  and  received  after  the  sale,  with  the  under- 
standing that  the  whole  sum  necessary  for  that  purpose  is  to  be  paid 
within  the  year  allowed  by  statute,  they  do  not  avoid  the  sale,  but  are 
in  affirmance  of  it.®*^ 

A  foreclosure  may  be  opened  when  the  purchaser  has  agreed  with 
the  mortgagor  to  allow  him  to  redeem  the  estate  after  a  sale  under 
the  power;  or  a  specific  performance  of  the  agreement  may  be  de- 
creed.®®« 

§  1917.  A  promise  to  allow  the  mortgagor  to  repurchase  does  not 
waive  the  sale.  A  casual  remark  by  a  purchaser  under  a  deed  of 
trust,  who  was  also  the  beneficiary  under  it,  and  connected  with 
the  family  of  the  maker  of  it,  that  he  only  wished  by  the  purchase 
to  secure  his  debt,  and  when  that  was  paid  he  intended  to  reconvey 
the  property,  does  not  open  the  sale  or  make  the  purchaser  a  trus- 
tee of  the  property.®®^  Nor  would  the  promise  of  a  mortgagee,  made 
at  the  time  of  his  purchase  at  his  own  sale  under  the  power,  that 
he  would  allow  the  mortgagor  to  repurchase,  without  other  evidence 
of  such  intention,  remit  them  to  their  former  relation,  so  that  the 
mortgagor  could  redeem  after  waiting  several  years;  but  the  mort- 
gagee's refusal  to  allow  such  redemption  within  a  reasonable  time 

»»2  Learned  v.   Geer,  139  Mass.   31,  »^  Cameron    v.    Adams,    31    Mich. 

29   N.   E.    215;    Larned   v.   Andrews,  426. 

106   Mass.   435;    Williston  v.   Morse,  "•"'•  Orme    v.    Wright,    3    Jur.     19; 

10  Met    (Mass )  17.  Lockwood    v.    Mitchell,    7    Ohio    St. 

»"  Smith  v.  Olcott,  19  App.  D.  C.  387,  70  Am.  Dec.  78. 

Ql  »"  Mansur  v.  Willard,  57  Mo.  347. 

"*  Dodge  V.  Brewer,  31  Mich.  227. 


877  SETTING   ASIDE   AND   WAIVING    SALE.     [§§    1918,    1919, 

might  be  evidence  of  such  fraud  in  the  purcliase  by  the  mortgagee 
as  to  admit  the  mortgagor  to  his  right  of  redemption.^"^  Pending 
a  sale  under  trust  deed,  the  debtor  and  creditor  entered  into  nego- 
tiations for  a  settlement.  The  creditor  stated  that  he  wanted  his 
money  merely  and  not  the  land.  A  written  stipulation  was  pre- 
pared by  their  attorneys,  and,  although  it  was  not  signed  by  the 
creditor,  it  was  imderstood  that  he  would  do  so,  and  that  the  title 
would  be  purchased  by  him  at  the  sale,  and  held  only  as  security 
for  the  debt,  and  that  the  debtor  would  be  allowed  to  redeem.  The 
latter,  relying  npon  this  nnderstanding,  did  not  attend  the  sale,  or 
procure  the  attendance  of  bidders,  and  the  land  was  sold  en  masse 
to  the  creditor,  although  it  was  divided  into  ten  lots,  and  consisted  of 
two  tracts,  fronting  on  different  streets,  and  was  worth  nearly  four 
times  the  price  for  which  the  creditor  bid  it  in.  When  directly  after 
the  sale,  the  debtor  found  the  sale  was  to  be  treated  as  absolute, 
his  right  to  redeem  denied,  and  the  collection  of  the  unpaid  balance 
enforced  by  vigorous  legal  proceedings,  he  at  once  filed  his  bill 
attacking  the  sale.    He  was  allowed  to  redeem.^^® 

An  oral  promise  by  a  purchaser  nnder  a  foreclosure  sale  made  to  the 
mortgagor  before  the  purchaser  has  received  a  deed  from  the  mort- 
gagee, that  the  purchaser  would  sell  the  property  back  to  the  mort- 
gagor for  what  it  cost,  does  not  bind  the  purchaser  by  the  way 
either  of  contract  or  of  trust.  The  promise  was  without  consideration 
and  within  the  Statute  of  Frauds  as  to  the  sale  of  lands.^"**" 

^  1918.     A  suit  for  a  second  instalment  does  not  open  foreclosure. 

When  a  mortgage  is  foreclosed  for  an  instalment  due,  and  a  subse- 
quent suit  is  brought  to  recover  a  second  instalment,  such  suit  does 
not  open  the  foreclosure.  This  is  so  although  the  foreclosure  was 
made  by  taking  possession  of  the  premises  instead  of  selling  them; 
and  the  mortgagor  in  such  case  is  entitled  to  a  credit  on  the  debt 
of  the  value  of  the  mortgaged  property.^°°^ 

§  1919.  Not  waived  by  subsequent  entry  to  foreclose. — A  fore- 
closure sale  under  a  power,  voidable  by  reason  of  the  mortgagee's 
becoming  the  purchaser,  is  not  waived  or  opened  by  the  mortgagee's 
subsequently  entering  the  presence  of  two  witnesses,  in  accordance 
with  the  statute,  for  the  purpose  of  foreclosure,  provided  there  be  no 

''^Medsker  v.  Swaney,  45  Mo.  273.  "»"  Rose  v.  Fall  River  Five  Cents 

»»^Stinson  v.  Pepper,  47  Fed.  676;  Sav.  Bank,  165  Mass.  273,  43  N.  E. 

Place  V.  Briggs,  20  R.  I.  540,  40  Atl.  93. 

419;  Jenckes  v.  Cook,  9  R.  I.  520.  ""Wilson  v.  Wilson,  4  Iowa,  309, 


§§  1920,  1920a.]  power  of  sale  mortgages  and  trust  deeds.  878 

evidence  showing  an  intention  to  waive  or  abandon  the  rights  ac- 
quired b}^  the  sale.^°*'^ 

§  1920.  Waiver  by  agreement. — After  an  ineffectual  attempt  to 
foreclose  under  a  power  of  sale,  if  the  purchaser  waives  his  rights 
the  mortgagee  may  also  waive  the  sale,  and  proceed  anew  to  fore- 
close under  the  power,  or  by  suit  in  equity. ^""^  But  if  the  sale  be 
regular  and  complete  in  all  respects,  it  would  seem  that  the  mort- 
gagor might  insist  upon  its  standing.  At  any  rate,  when  the  sale 
is  for  a  sum  sufficient  to  pay  tlie  mortgage  debt  and  expenses,  al- 
though the  mortgagee  be  himself  the  purchaser  at  the  sale,  he  can- 
not, by  refusing  to  execute  the  deed,  rescind  the  sale,  and  maintain 
an  action  upon  the  mortgage  note."°*  He  is  bound  as  a  trustee  to 
execute  the  trust  with  due  regard  to  the  interests  of  the  mortga- 
gor, or  others  having  any  interest  in  the  property,  or  liable  for  the 
mortgage  debt.  Having  himself  become  the  purchaser,  he  is  bound 
to  carry  out  and  complete  his  purchase  to  the  same  extent  as  any 
other  purchaser.  The  proper  performance  of  his  duty  as  purchaser 
is  as  imperative  upon  him  as  the  proper  performance  of  his  duty 
as  seller.  The  fact  that  he  unites  tlie  two  characters  in  his  own 
person  cannot  give  him  any  additional  rights;  on  the  contrary,  he 
is  held  to  a  stricter  accountability  when  he  undertakes  to  buy.""^ 

A  foreclosure  is  waived  by  accepting  after  the  sale  a  payment  of 
money  to  be  applied  on  the  mortgage  debt."""  So,  also,  the  bring- 
ing of  a  suit  for  the  whole  amount  of  tlie  mortgage  debt,  and  ob- 
taining a  judgment  therefor,  opens  the  foreclosure  sale  and  lets  in 
the  equity  of  redemption. ^""'^ 

§  1920a.  A  mortgag^or  who  has  received  the  surplus  proceeds  of 
sale  is  estopped  from  denying  the  purchaser's  title,  though  he  re- 
ceived the  same  in  ignorance  of  defects  invalidating  the  sale,  if  he 
has  subsequently  acquired  knowledge  of  such  defects,  and  continues 
to  retain  the  proceeds.  He  cannot  at  the  same  time  repudiate  the  sale 
and  insist  upon  having  the  benefit  of  it."««     He  is  not  excused  from 

'''«2  Learned  v.  Foster,  117  Mass.  ""'Clarke  v.  Robinson,  15  R.  I. 
365.  231.  10  Atl.  642. 


I0o3 


See    §    1265;    Atwater    v.    Kin-  i""*  Brewer   v.    Nash,   16   R.    I.   458, 

man,  Harr.   (Mich.)  243.  17     Atl.     857;     McLaren     v.     Jones 

""'•'Hood  V.  Adams,  124  Mass.  481,  (Tex.),  32  S.  W.  17;  Price  v.  Blank- 

26  Am.  Rep.  687.  enship,  71  Mo.  App.  548,  citing  text; 

ic.n5  pgj.    Endicott     J.,    in    Hood    v.  Norwood  v.   Lassiter,   132   N.   C.   52, 

Adams    124  Mass.  481.  43  S.  E.  509,  where  an  attorney  had 

"""Scott  v.   Childs,   64  N.    H.   566,  advised  that  there  would  be  no  ea- 

15  Atl.  206.  toppel. 


879  SETTING  ASIDE   AND   WAIVING   SALE.  [§    1921. 

such  payment  or  tender  by  the  fact  that  he  has  spent  the  money  and 
is  too  poor  to  replace  it."°® 

§  1921.  Relief  by  setting  aside  the  sale  must  be  sought  in  equity 
only.^"^°  The  purchaser  at  the  sale  and  all  persons  claiming  under 
him  are  necessary  parties.""  The  sale  passes  the  legal  title  to  the 
purchaser,  and  a  court  of  law  will  not  inquire  whether  the  mortgagee 
or  trustee  has  complied  with  the  conditions  of  the  mortgage  or  deed 
of  trust."^^  Moreover  a  mortgagor  coming  into  equity  for  relief 
must  offer  to  do  equity."^^ 

If  the  sale  has  not  been  completed  by  the  payment  of  the  pur- 
chase-money, the  mortgagee  should  be  made  a  party.  After  the 
completion  of  the  sale  by  a  conveyance  from  the  mortgagee  to  tiie 
purchaser,  the  latter  will  as  assignee  hold  the  rights  of  the  mort- 
gagee even  if  the  sale  be  set  aside."^*  The  setting  aside  of  the  sale 
does  not  affect  or  impair  the  original  mortgage  lien."^^  If  one  who 
has  received  any  part  of  the  surplus  money  brings  an  action  to  set 
aside  the  sale,  he  will  be  required  to  refund  the  money  he  has  re- 
ceived before  the  sale  will  be  disturbed. "^^ 

In  some  cases  it  has  been  said  that  the  remedy  of  one  who,  having 
an  interest  in  the  equity  of  redemption,  wishes  to  test  the  validity 
of  a  sale  under  a  power,  is  by  a  bill  to  redeem,  and  not  by  a  l)ill  to 
set  aside  the  sale  and  have  the  property  resold;  and  this  is  the 
remedy  although  it  be  shown  that  the  mortgagee  has  used  his  power 
of  sale  inequitably,  and  has  unfairly  bought  in  the  property  him- 


1000 


Brewer  v.  Nash,  16  R.  I.  458,  bill  or  a  cross-bill  by  the  mortga- 
24  Atl.  832.  "That  the  respondents  gor,  asking  cancellation  of  the  mort- 
are  too  poor  to  replace  the  money  gage  contract  on  the  ground  of 
which  they  have  spent  is  their  mis-  usury,  which  does  not  offer  to  re- 
fortune,  but  it  does  not  take  away  pay  the  principal  of  the  loan  and 
the  equitable  right  of  the  com-  legal  interest,  should  be  dismissed 
plainant  Brewer  to  have  it  restored  for  failure  of  defendant  to  offer  to 
to  him  if  they  repudiate  his  title."  do    equity.     Approved    in    American. 

^"'o  Yale  V.  Stevenson,  38  Mich.  537;  Mortgage  Co.  v.  Turner,  95  Ala.  272, 

American   Mortg.    Co.   v.    Sewell,   92  11  So.   211. 

Ala.  163,  9  So.  143;  Damon  v.  Deeves,  Where    the    grantor    induced    the 

66  Mich.  347,  33  N.  W.  512.  irregularity  for  which  he  wishes  to 

"'^Candee  v.   Burke,  1   Hun,   546,  set   aside   the   sale,   he   is   estopped 

4  T.  &  C.  143;  Fairman  v.  Peck,  87  from    denying    the    validity    of    the 

111     156  sale.     Chandler  v.  Peters  (Tex.),  44 

""Reece  v.   Allen,    10   111.   236,   48  S.   W.    867. 

Am.    Dec.    336;    Graham    v.    Ander-  ^'"*  Robinson    v.    Ryan,    25    N.    Y. 

son,    42    111.    514,    517,    92    Am.    Dec.  320;   Jackson  v.  Bowen,  7  Cow.  13; 

89;    Dawson   v.   Hayden,   67   ill.    52;  Vroom  v.  Ditmas,  4  Paige,  526. 

Rice  V.  Brown,  77  111.   549;   Chapin  ^"'^  Stackpole  v.  Robbins,  47  Barb. 

v.  Billings,  91  111.  539.  212. 

""  American  Mortgage  Co.  v.  Sew-  '"""  Candee  v.   Burke,  1  Hun,   546, 

ell,  92  Ala.  163,  9  So.  143.    Thus  a  4  T.  &  C.  143. 


§    1922.]        POWER   OF    £ALE   MORTGAGES   AND   TRUST   DEEDS.  680 

self."^^  Other  cases  hold,  however,  that  for  an  abuse  of  the  power  of 
sale  the  mortgagor  is  entitled  to  have  the  sale  set  aside,^°^®  and 
that  in  a  bill  for  this  purpose  the  mortgagor  need  not  offer  to  le- 
deem.^°^^  If  the  foreclosure  sale  be  void  for  any  irregularity,  the  right 
of  redemption  remains  unchanged  in  the  mortgagor."-"  Redemption 
ordinarily  involves  a  tender  of  the  mortgage  debt."^^  But  sales  have 
been  set  aside  in  many  cases  without  an  offer  to  redeem.  When  the 
sale  is  fraudulent  in  fact,  and  therefore  void,  a  court  of  equity  will 
not  refuse  relief  because  the  debtor  cannot  fulfill  an  impossible 
condition  of  tendering  the  amount  of  the  mortgage  debt.  The  mort- 
gage debtor  has  a  right  to  insist  that  the  power  of  sale  shall  be  ex- 
ercised in  strict  accordance  with  law,  and  that  there  shall  be  no 
abuse  of  the  trust;  and  of  this  right  he  should  not  be  deprived 
merely  because  he  is  unable  to  redeem.  Under  such  circumstances, 
where  the  debt  exceeds  the  value  of  the  property,  the  assignee  of 
the  banlo-upt  mortgagor  may  maintain  proceedings  to  set  aside  the 
sale  without  offering  to  redeem."^^^ 

Pending  a  bill  to  set  aside  a  sale  on  account  of  fraud  participated 
in  by  the  purchaser,  the  latter  may  be  restrained  by  injunction  from 
committing  waste  upon  the  property."^^  The  bill  should  contain  a 
clear  allegation  of  the  defect  for  which  it  is  sought  to  set  aside  the 
sale.^24 

§  1922.  Delay. — Where  no  steps  had  been  taken  to  redeem  a 
mortgage  for  nearly  forty  years  after  its  maturity,  and  more  than 
thirty  years  after  an  open  attempt  to  foreclose  it,  it  was  said  that 
it  would  require  a  very  strong  showing  to  authorize  a  redemption."^^ 
A  delay  of  fifteen  or  seventeen  years  in  bringing  a  suit  to  avoid  a 
foreclosure  sale  constitutes  such  laches  as  will  bar  the  suit."^^  So 
a  delay  of  four  or  five  years  precludes  a  mortgagor's  redeeming  as 

i°"Schwarz       v.       Sears,       Walk.  "^' Kline    v.    Vogel,    11    Mo.    App. 

(Mich.),    170;    Tuthill   v.    Lupton,    1  211. 

Edw.  564.  ""Meyer   v.    Jefferson   Ins.    Co.   5 

lois'jyjeyer  v.   Jefferson   Ins.    Co.    5  Mo.  App.  245.                              ,..„-> 

Mo    App    245  ">==  Thompson     v.     Heywood,     129 

i°i»Briggs    V.    Hall,    16    R.    I.    577,  Mass.  401.              ^     ^  ^          ioc    rn 

18    Atl.     177.     "The    owner    of    the  ""Sawyer    v.    Bradshaw,    125    III. 

equity  is  entitled  to  have  the  mort-  440,  17  N.  E.  812. 

gagee,  if  he  undertakes  to  exercise  '""Hoffman     v.      Harrington,     dS 

the  pov/er,  exercise  it  honestly  and  Mich.  392.     See  §  1674. 

in  good  faith,  so  that  he  may  have  '"=»  Fennyery  v.  Ransoni,  170  Mass. 

the    benefit    of   the    best   price   that  803,  40  N.  E.  620;  Learned  v.  Foster, 

can  be  so  secured,  and  therefore  is  117  Mass.   366;    Crutchfield  v    Hew- 

entitled.  if  the  power  be  abused,  to  ett,  2  App.  Cas.  D    C.  373;   Kertoot 

have  the  sale  set  aside."     Meyer  v.  v.    Billings,    160    111.    563,    43    N^^  Hi. 

Jefferson  Ins.  Co.  5  Mo.  App.  245.  804;    Dimond  v.  Manheim,  61  Mmn. 

'»=»  Goldsmith  v.   Osborne,   1  Edw.  178.  63  N.  W.  495;    Southey  v.  Mc- 

560  Intire,  7  App.  D.  C.  447. 


881 


SETTING   ASIDE   AND   WAIVING    SALE. 


[§    1923. 


against  subsequent  purchasers  in  good  faith.^"-^  Acquiescence  for 
any  considerable  time  in  a  sale  whicli  is  voidable  only,  unless  ex- 
plained, is  deemed  a  waiver  of  all  mere  irregularities  attending  it  •,^''-^ 
and  ignorance  of  the  facts  which  are  claimed  as  vitiating  the  sale  is 
not  a  sufficient  explanation  of  such  acquiescence  when  such  igno- 
rance is  the  fault  or  negligence  of  the  party."^*^  It  is  not  permissible 
for  the  owner  of  the  equity  of  redemption  to  lie  by  and  await  events, 
and  have  the  power  at  any  future  time  to  let  the  sale  stand  or  to 
avoid  it,  according  as  it  may  be  found  to  be  for  his  interest  to  do. 
He  must  promptly  avail  himself  of  any  irregularities  in  the  sale 
within  a  reasonable  time.^°^°  Even  a  delay  of  a  year  after  the  sale 
before  an  action  to  set  it  aside  is  commenced  will  be  considered,  es- 
pecially if  the  purchaser  is  let  into  possession,  and  receives  the  rents 
and  profits,  and  there  is  no  claim  of  fraud  in  the  sale.  In  such  case 
the  mortgagor  is  estopped  from  denying  the  validity  of  the  sale.^*'^^ 
But  the  mortgagor  is  not  required  to  bring  an  action  to  set  aside  such 
unauthorized  sale  before  the  expiration  of  the  year  for  redemp- 
tion."32 


""§§  1054,  1161a;  Hamilton  v. 
Lubukee,  51  111.  415,  99  Am.  Dec. 
562;  Gibbons  v.  Hoag,  95  111.  45; 
Ryan  v.  Kales  (Ariz.)  20  Pac.  311; 
Hoyt  v.  Pawtucket  Inst,  for  Sav- 
ings, 110  111.  390;  Cleaver  v.  Green, 
107  111.  67.  A  delay  of  eight  months 
may  not  be  unreasonable.  Walker 
v.  Carleton,  97  111.  582;  McHany  v. 
Schenk,  88  111.  357. 

i''^*  Emmons  v.  Van  Zee,  78  Mich. 
171,  43  N.  W.  1100;  Cornell  v.  New- 
kirk,  144  111.  241,  33  N.  E.  37;  Hoyt 
V.  Institution  for  Savings,  110  111. 
390;  Speck  v.  Car  Co.  121  111.  33. 
60,  12  N.  E.  213;  Fitch  v.  Willard, 
73  111.  92;  Williams  v.  Rhodes,  81 
111.  571;  Dempster  v.  West,  69  111. 
613;  Nichols  v.  Otto,  132  111.  91,  23 
N.  E.  411;  Scott  v.  Freeland,  7  Sm. 
&  M.  409;  Bausman  v.  Eads,  46 
Minn.  148,  48  N.  W.  769;  Menard  v. 
Crowe,  20  Minn.  448;  Meier  v.  Meier, 
105  Mo.  411,  16  S.  W.  223. 

"28  Bush  V.  Sherman,  80  111.  160; 
Farrar  v.  Payne,  73  111.  82;  Caudle 
V.  Murphy,  89  111.  352;  Watson  v. 
Sherman,  84  111.  263;  Landrum  v. 
Union  Bank,  63  Mo.  48;  Connolly 
v.  Hammond,  51  Tex.  635;  Jenkins 
V.  Pierce,  98  111.  646;  Sloan  v.  Froth- 
ingham,  65  Ala.  593;  Abbott  v.  Peck, 
35  Minn.  499,  29  N.  W.  194;  Askew 
v.  Sanders,  84  Ala.  356,  4  So.  167; 
Norton    v.    Tharp,    53    Mich.    146; 


Welsh  V.  Coley,  82  Ala.  363,  2  So. 
733. 

In  Alabama  the  later  decisions 
have  inclined  to  fix  two  years  as 
a  reasonable  time,  by  way  of  anal- 
ogy to  the  time  fixed  by  statute  for 
the  redemption  of  realty  sold  un- 
der mortgages.  This  limitation  is 
prima  facie  applicable,  but  may  be 
shown  to  be  unreasonably  short. 
Ezzel  V.  Watson,  83  Ala.  120,  3  So. 
309;  Mason  v.  Am.  Mortg.  Co.  124 
Ala.  347,  26  So.  900;  Goree  v.  Clem- 
ents, 94  Ala.  337,  10  So.  906;  Boil- 
ing v.  Gantt,  93  Ala.  89,  9  So.  604; 
Ponder  v.  Cheeves,  90  Ala.  117,  7 
So.  512;  Douthit  v.  Nabors,  133  Ala. 
453,  32  So.  625;  Alexander  v.  Hill, 
88  Ala.  488;  Norton  v.  British  Am. 
Mortgage  Co.  113  Ala.  110;  Liddell 
V.  Carson,  122  Ala.  518,  26  So.  133. 

losoirigji  V.  Antioch  College,  126 
111.  474,  18  N.  B.  768;  Hoyt  v.  Paw- 
tucket Inst,  for  Savings,  110  111.  390. 

'"^'Neal  V.  Bleckley,  36  S.  C.  468, 
15  S    E    733 

'<^'  Hull  V.'  King.  38  Minn.  349,  37 
N.  W.  792.  Waiting  four  months 
after  the  period  allowed  for  redemp- 
tion barred  the  mortgagor's  right 
to  object  to  a  sale  which  was  void- 
able only.  Northwestern  Mortgage 
T.  Co.  V.  Bradley,  9  S.  D.  495,  70 
N.  W.  648. 


^    iy"i3.]        POWER    OF    SALE    :\10KTGAGES    AXD    TKL'ST    DEEDS.  882 

The  owner  of  the  equity  of  redemption  in  land  sold  under  a  power 
in  the  mortgage,  after  several  adjournments,  has  no  standing  nine- 
teen months  after  the  sale,  to  object  to  its  validity  on  the  ground  that 
the  adjournments  were  not  advertised,  if  they  were  all  made  at  the 
request  of  the  person  who  represented  him  and  the  title  in  all  matters 
relating  to  the  foreclosure,  and  who  consented  to  the  notices  in  the 
form  in  which  they  were  given,  and  knew  of  the  sale  and  made  no 
objection  to  it.^°^' 

Moreover,  if  the  mortgagor  receives  the  surplus  money,  although 
he  may  not  be  estopped  from  questioning  the  validity  of  the  sale, 
it  is  a  matter  to  be  considered  in  passing  upon  the  validity  of  it; 
and  he  would  be  required  to  refund  the  amount  received  before  hiy 
application  could  in  any  case  be  granted. ^°^* 

But  laches  cannot  be  imputed  to  one  who  has  delayed  invoking 
the  aid  of  a  court  of  equity,  relying  upon  an  agreement  with  the 
mortgagee  to  allow  him  the  privilege  of  redeeming  after  the  sale. 
In  such  case,  until  the  mortgagee  repudiates  the  arrangement,  laches 
ought  not  to  be  imputed  to  the  mortgagor. ^°^^ 

A  statute  providing  that  no  foreclosure  sale  shall  be  set  aside  for 
defect  in  notice  or  publication,  unless  the  action  shall  be  commenced 
within  five  years  from  the  date  of  the  sale,  applies  to  a  sale  under 
power,  where  the  notice  was  not  published  for  a  sufficient  length  of 
time."^^ 


XV.     Costs,  Expenses,  and  Proceeds  of  Sale. 

§  1923.  The  mortg-agee  is  not  entitled  to  compensation.  A  mort- 
gagee with  a  power  of  sale  is  treated  as  a  trustee  for  sale,  and  the 
general  rule  applicable  to  trustees,  that  they  shall  not  profit  by  the 
trust  excludes  him  from  claiming  compensation  for  his  services  in 
the  execution  of  his  power  of  sale.  He  is  to  consider  not  only  his 
obligation  to  the  purchaser,  but  his  liability  to  his  cestui  que  trust 
or  mortgagor. ^"^^  The  same  rule  applies  to  a  trustee  in  a  trust  deed. 
But  the  mortgage  or  trust  deed  may  provide  for  compensation  to  the 
mortgagee  or  trustee,  and  then  the  agreement  of  the  parties  will,  oi 
course,  govern.     Such  compensation  in  the  way  of  a  commission  or  an 

^""Way  V.  Dyer,  176  Mass.  448,  "^'Nichols  v.  Otto,  132  111.  91,  23 
57  N.  E.  678.  N.  E.   411. 

i«^*Candee   v.   Burke,   1   Hun,   546,         "'"  Mogan     v.     Carter,     54     Minn. 
4   T.    &   C.    143;    Joyner  v.    Farmer,     141,  55  N.  W.  1117. 
78  N.  C.  196.  "'"  §     1606;     Siigden    on    Vendors 

55;  Allen  v.  Robblns,  7  R.  I.  33. 


h8;3 


COSTS,    EXPENSES    AND   PROCEEDS     OF    SALE.  [§    liJ^iJa. 


attorney's  fee  is  wholly  dependent  u})on  the  contract.^"''"  A  provision 
is  frequently  inserted  in  the  mortgages  allowing  the  mortgagee  ou 
a  sale  to  eharge  a  commission  for  his  services;  and  in  such  case  it 
would  seem  that  a  charge  of  the  stipulated  commission  would  be 
allowed  in  addition  to  the  ordinary  expenses  and  counsel  fees.^"^"  But 
the  mortgagee  may  charge  and  be  allowed  for  all  proper  expenses  in- 
curred in  the  execution  of  the  power  of  sale,  whether  the  mortgage 
expressly  provide  for  the  payment  of  such  expenses  or  not.  He  may 
charg-e  for  expenses  of  advertising,  for  auctioneers'  fee?s,  and  for  coun- 
sel fees  for  advice  as  to  the  proper  execution  of  the  power.^"*''  Such 
expenses  are  properly  chargeable  under  the  mortgage,  though  the 
attempted  sale  be  discontinued  and  the  property  sold  in  some  other 
way,  especially  if  such  sale  be  discontinued  at  the  request  of  the  debtor 
or  in  his  interest."*^  A  stipulation  in  a  mortgage  for  an  attorney's 
fee  cannot  be  enforced  unless  an  actual  sale  be  made."*^  The  fee  can- 
not be  demanded  before  the  sale.^°*^ 

^  1923a.  Attorney's  fees  are  not  allowed  unless  provided  for  in 
the  mortgage  ;^"^*  and  they  are  not  allowed  under  a  provision  for  the 
"expenses  of  sale."  This  term  includes  only  the  ordinary  expenses 
and  costs  of  foreclosure.^"*^     A  provision  in  a  power  of  sale  mort- 

'"-'**  Dorsey  v.   Omo,   93   Md.   74,   48  Fowler  v.   Trust.  Co.   141  U.   S.   384, 

Atl.   741;    Johnson  v.  Glenn,  80  Md.  12  Sup.  Ct.  1;   Robinson  v.  Alabama 

369,  30  Atl.  993.  Manuf.    Co.    51   Fed.   268;    Dorsey   v. 

'"''"  Lime    Rock    Bank    v.     Phette-  Omo,    93    Md.    74,    48    Atl.    741.     See 

place,    8    R.    I.    56.     In    this    case    a  Dodge   v.    Tulley,   144   U.    S.   451,   12 

commission  of  five  per  cent,  on  the  Sup.    Ct.    729,   distinguished   in   pre- 

gross  proceeds  of  sale,  as  stipulated  ceding  case. 

in  the  mortgage,  was  allowed  in  ad-  '"^^  Thomas  v.   Jones,  84  Ala.   302, 
dition   to   the   expenses  and  counsel  4    So.    270.     A    trust    deed    made   in 
fees    paid.     It    was    contended    that  Illinois   provided    that,    in    the    case 
this  commission  was  in  the  nature  of   a   sale   by   the   trustee   at   public 
of  a  penalty,  which  the  court  should  auction      upon     advertisement,      all 
relieve  against;    but  it  was  allowed  costs,  charges,  and  expenses  of  such 
as   compensation   to   the   mortgagee,  advertisement,     sale,     and     convey- 
Rappanier  v.   Bannon    (Md.),   8  Atl.  ance,    including    commissions,    such 
555.     See   §    1606.     But  see  Duffy  v.  as  were  at  the  time  of  sale  allowed 
Smith,   132   N.    C.    38,   43   S.    E.    501,  by   the   laws   of   Illinois   to   sheriffs 
holding  that  a  trustee  must  pay  auc-  on  sale  of  real  estate  on  execution, 
tioneer    fees    out   of   his    own    com-  should  be  paid  out  of  the  proceeds, 
missions.     For     further     discussion  It  was  held  that  this  provision  did 
of    the    allowance    for    auctioneer's  not  impose  upon   the  borrower   the 
fees,    see   Smith    v.    Olcott,    19    App.  burden   of   paying   to   the    lender   a 
D.  C.  61.  solicitor's     fee     where     a     suit     is 
'"«' Allen   V.    Robbins,    7   R.    I.    33;  brought  for   foreclosure.     The  corn- 
Bangs    v.    Fallon,    179    Mass.    77,    60  missions    referred    to    in    the    deed 
N.  E.  403.  are    allowed    only    where   the    prop- 
""  Allen  V.  Robbins,  7  R.  I.  33.  erty  is  sold  upon  advertisement,  hy 
'""Myer  v.  Hart,  40  Mich.  517.  the  trustee,  without  suit    The  trust 
ia«  Philips  V.  Bailey,  82  Mo.  639.  deed    made    no    provision   for   a  so- 
iM*  §  1606;  American  Morta:.  Co.  v.  Hcitor's  fee  to  the  companv  in  the 
McCall,    96    Ala.    200,    11    So.    288;  event    suit    was    brought.  'That    a 


§  1933a.]    POWER  OF  sale  mortgages  and  trust  deeds.  88-1: 

gage  for  the  payment  of  ''all  costs  of  foreclosure,  including  attor- 
ney's fee,"  includes  such  a  fee  upon  a  sale  under  the  power,  but 
does  not  authorize  an  allowance  of  such  a  fee  for  filing  a  bill  of  fore- 
closure."^^ A  sale  for  the  purpose  of  settling  the  mortgagor's  es- 
tate, would  not  be  a  sale  under  the  power  authorizing  the  retention 
of  an  attorney's  fee  under  a  provision  to  that  efPect.^*^*'^  Where  there 
is  no  evidence  that  counsel  was  necessary  in  a  sale  under  a  trust  deed 
no  allowance  therefor  should  be  made  from  the  proceeds  of  such 
sale.^"*®  If  an  attorney's  fee  is  claimed  in  good  faith,  though  not 
authorized,  and  included  in  the  sum  for  which  the  land  is  sold,  the 
irregularity  does  not  avoid  the  sale.^°*^ 

If  the  provision  in  the  mortgage  for  the  payment  of  attorney's 
fees  differs  from  that  contained  in  the  mortgage  notes,  the  former 
will  control,  especially  as  against  the  mortgagor's  grantee.  Thus 
wliere  a  power  of  sale  mortgage  stipulates  that  the  proceeds  of  the 
sale  shall  be  applied,  first,  to  paying  the  expenses,  "and  all  attor- 
ney's or  solicitor's  fees,"  and  the  notes  secured  by  the  mortgage  pro- 
vide that,  in  case  they  are  not  paid  at  maturity,  the  mortgagor  shall 
pay  not  less  than  ten  per  cent,  for  collecting  them,  the  effect  of 
the  provision  in  the  mortgage  is  to  authorize  the  mortgagee  to  pay, 
out  of  the  proceeds  of  the  sale,  a  reasonable  compensation  for  the 
services  of  an  attorney  or  solicitor  rendered  in  and  about  the  sale 
made  under  the  power;  it  does  not  authorize  him  to  retain  ten  per 
cent,  of  the  proceeds  of  the  sale.  The  stipulations  in  the  notes  and 
the  mortgage  are  independent,  and  applicable  to  different  contin- 
gencies,— one  to  the  sale  under  the  mortgage,  the  other  to  collec- 
tion of  the  notes  by  suit."*^" 

In  Maryland,  where  the  power  of  sale  is  executed  under  the  direc- 
tion of  the  court,  the  trustee  for  sale  is  allowed  a  commission  of  five 
per  cent.  But  in  a  case  where  the*  owner  of  the  equity  of  redemp- 
tion requested  an  adjournment  of  the  sale,  and  agreed  to  pay  the 
usual  commissions  for  sale  and  the  expenses  of  the  adjournment, 
a  claim  for  commissions  in  addition  to  those  for  the  actual  sale  was 

suit    became    necessary    because    of  i""' Emmons  v.  Van  Zee,  78  Mich. 

the  refusal  of  the  trustee  to  act  is  171,  43  N.  W.  1100;  Millard  v.  Truax, 

no    reason    for    taxing    such    a    fee  50  Mich.  343,  15  N.  W.  501. 

against    the    mortgagor.     Fowler    v.  "=°  Tompkins  v.   Drennen,  95   Ala. 

Equitable   Trust  Co.   141   U.    S.   384,  463,  10  So.   638.     It  seems  a  proper 

12  Sup    Ct.  Rep.  1.  comment  upon  this  case  that,  as  be- 

",046  Bynum    v.    Frederick,    81    Ala.  tween    the    mortgagor    and    mortga- 

489    8  So    198.  see  at  least,  the  stipulation  in  the 

'"'"Walker   v.    Killian    (S.    C),   40  mortgage  and  the   notes  should   be 

S    E.  887.  construed    together   as   referring   to 

'"^•*  Duffy  v.    Smith,   132   N.    C.   38,  the  same  thing. 
43  S.  E.  501. 


885  cosTS^  Expenses  axd  proceeds  of  sale.         [§  1923b. 

disallowed,  though  the  expenses  of  the  ineffectual  sale  were  al- 
lowed.^°^i 

In  Minnesota  it  is  provided  by  statute  that  the  sums  retained  as 
attorney's  fees  shall  not  exceed  the  amount  expressed  in  the  mort- 
gage and  shall  not  be  taxed  or  retained  unless  they  are  actually  paid 
for  such  services.  Under  this  statute,  the  mortgagee  could  retain  at- 
torney's fees  though  the  attorney  was  employed  by  the  year  at  a  stated 
salary,  when  the  amount  retained  was  in  fact  turned  over  to  the  at- 
torney.^^^^  An  affidavit  of  the  amount  of  the  costs  and  disbursements 
must  be  filed  within  ten  days  after  the  sale,  to  entitle  the  mortgagee 
to  retain  them  out  of  the  proceeds.^"^^ 

The  mere  fact  that  one  is  named  as  trustee  in  a  deed  of  trust 
raises  no  implied  promise  on  the  j^art  of  the  beneficiary  to  pay  him 
for  his  services. ^°^* 

Where  the  mortgage  stipulates  that  in  the  event  of  a  sale  under 
the  power  in  the  mortgage  attorney's  fees  may  be  allowed,  a  sale  under 
the  power  is  a  prerequisite  to  the  allowance  of  such  fees;  and,  there- 
fore if,  after  a  sale  is  advertised,  a  settlement  of  the  mortgage  debt 
is  made  between  the  parties  without  a  sale,  the  mortgagee's  attorney 
or  trustee  is  not  entitled  to  such  fees  or  any  compensation."^^  But 
the  trustee  is  entitled  to  a  just  allowance  for  time,  labor,  services, 
and  expenses.^°^® 

§  1923b.  A  stipulation  far  the  payment  of  an  attorney's  fee 
may  have  reference  only  to  a  sale  under  the  power,  and  when  that 
is  the  case  it  cannot  be  enforced  when  resort  is  had  to  a  foreclosure 
by  suit,  unless  the  necessity  for  such  suit  be  shown.^^^'^     In  a  recent 

1051  Neptune  Ins.  Co.  v.  Dorsey,  3  property  is  offered  for  sal©  and 
Md.  Ch.  334;  Gustave  Adolph.  struck  off  to  the  purchaser,  but 
Asso.  v.  Kratz,  55  Md.  394.  And  see  from  the  time  the  foreclosure  sale 
Dorsey  v.  Omo,  93  Md.  74,  48  Atl.  is  completed  by  the  execution  and 
741.  recording  of  the  certificate  of  sale. 

1052  Morse  v.  Home  Sav.  &  Loan  Larocque  v.  Chapel,  63  Minn.  517, 
Ass'n,  60  Minn.   316,  62  N.  W.   112.  65  N.  W.  941. 

Only    one    fee    can    be    recovered,        "^*  Catlin  v.  Glover,  4  Tex.   151. 
though  several  parcels  are  covered        ^"^^  Dorsey  v.  Omo,  93  Md.  74,  48 

by  the  mortgage.     Eliason  v.   Sidle,  Atl.  741;   Pass  v.  Brooks,  118  N.  C. 

61    Minn.    285,    63    N.    W.    730.'    The  397,   24   S.   E.   736;    Fry   v.   Graham, 

attorney  fee  may  be  paid  as  part  of  122    N.    C.    773,   30   S.    E.    330.     See, 

a     fixed     annual     salary.     Swift    v.  also,    Whitaker    v.     Old    Dominion 

Board  of  County  Commissioners,  Guano  Co.  123  N.  C.  368,  31  S.  E.  629. 
76  Minn.  194,  78  N.  W.  1107.  i«5«  pj-y  y.   Graham,  122  N.  C.  773, 

1053  Brown  v.  Scandia  Bldg.  &  Loan  30  S.  E.  330. 

Ass.   61   Minn.   527,   63   N.   W.   1040;  ^""Bynum    v.    Frederick,    81    Ala. 

Brown   v.    Baker,    65    Minn.    133,    67  489,   8   So.    198;    Lehman   v.    Comer, 

N.   W.   793;    Johnson  v.   Northwest-  89  Ala.  579,  8  So.  241;  Bedell  v.  New 

ern  Loan  &  Building  Ass.  60  Minn.  Eng.  Security  Co.  91  Ala.  325,  8  So. 

393,    62    N.    W.    381.     The    ten    days  494.     Chief    Justice    Stone,    deliyer- 

begin  to  run,  not  from  the  day  the  ing  judgment,  said:     "We  can  im- 


^    rj;23b.]     POWER   OF    SALE    MORTGAGES   AND   TRUST    DEEDS.  880 

Alabama  case,  Mr.  J-ustice  Thornington  said:  "Stipulations  of  this 
character  usually  assume  one  of  two  forms:  First.  Where  the  right 
in  the  mortgagee  to  claim  such  counsel  fees  is  referable  alone  to  the 
power  of  sale  in  the  mortgage,  and  is  dependent  upon  a  sale  made 
pursuant  to  the  power.^''^^  Second.  Where  the  right  to  claim  such 
fees  may  be  exercised  either  upon  a  foreclosure  under  the  power  of 
sale  in  the  mortgage,  or  by  proceedings  in  a  court  of  chancery.^"^® 
.Another  class  of  such  cases  is  met  with  in  this  State  where  the  right  to 
claim  such  fees  in  proceedings  to  foreclose  the  mortgage  in  chancery 
is  made  to  depend  upon  the  existence  of  a  necessity  for  resorting  to 
that  mode  of  foreclosure.^*'*'''  Whether  a  case  falls  within  the  one 
class  or  the  other  depends  upon  the  phraseology  employed  in  the  note 
or  mortgage  in  each  particular  case.  No  general  rule  for  the  classifi- 
cation of  such  cases  can  be  laid  down  by  the  court,  but  the  intent  of 
the  parties  must  be  deduced  from  the  language  of  the  entire  con- 
tract." 

The  necessity  for  proceedings  in  chancery,  and  the  payment  of 
attorney's  fees  in  such  proceeding,  was  shown  where  a  bill  to  fore- 
close a  mortgage  containing  a  power  of  sale  alleged  that  the  prop- 
erty was  inadequate  to  pay  the  entire  debt;  that  the  mortgagors 
Avere  insolvent;  that  the  mortgage  conferred  no  power  on  the  mort- 
gagee to  purchase  at  a  sale  under  the  power;  that  the  mortgagors 
denied  the  validity  of  the  mortgage,  in  consequence  of  which  no  sale 
could  be  made  under  the  power  for  the  fair  value  of  the  property; 
and  that  it  was  necessary  to  apply  the  rents  to  the  mortgage  debt.^°" 

agine  many  states  of  attendant  facts  313;    Hardwick  v.   Bassett,  29  Mich, 

which     would     render     a     chancery  17. 

toreclosure  necessary.     Possibly  the  '""*  Such   are   several    of   the   cases 

case  may  be  put  in  chancery  by  the  cited  in  2  Jones  Mortg.  §  1606,  and 

mortgagors,    or   by   some   adversary  also  in  the  following  cases:     Tomp- 

claimant,  which,  per  se,  would  dem-  kins  v.  Drennen,  95  Ala.  463,  10  So. 

oastrate  the  necessity  for  an  attor-  638;   Lehman  v.  Comer,  89  Ala.  579, 

ney;     and    in    such    contingency    a  8  So.  241. 

cross-bill   for   foreclosure    might   be  i"""  Such    was    the    case    of    Bedell 

appropriate  and  advisable.     In  such  v.    Security    Co.    91    Ala.    325,    8    So. 

event,  it  would   seem  the  necessity  494. 

for  an  attorney  throughout  the  en-  ""■'  American  Mortgage  Co.  v.  Mc- 

tire  litigation  would  be  self-evident.  Call,  96  Ala.  238,  11  So.  288. 

Possibly    the   apparent   necessity   of  Where    there    was    a    stipulation 

allowing  the  mortgagee  to  bid  and  for    attorney's    fees    in    a   power    of 

purchase  in  order  to  realize  the  full  sale    mortgage,    and    the    mortgagee 

value   of   the    property,    or   possibly  purchased  at  the  sale  without  being 

some  obstacle  which  requires  equit-  authorized    to    do    so,    and    filed    a 

able   interposition   to  remove  it,   or  bill    to    compel    the    mortgagor    to 

possibly    conflicting    equities,    may  elect  to  affirm  or  disaffirm  the  sale, 

furnish  the  requisite  necessity."  it  was  held   that  the  mortgage  did 

'»•■'  Such  was  the  character  of  the  not  secure   attorney's  fees   for  that 

right    in   the   following   cases:     By-  purpose.     American    Freehold    Land 

num    v.    Frederick,    81    Ala.    489.    8  Mortg.    Co.    v.    Pollard,    120    Ala.    1, 

So.    198;    Sage    v.    Riggs,    12    Mich.  24  So.  736. 


887        COSTS,  EXPENSES  AND  PROCEEDS  OF  SALE.  [§  1924,  1925. 

§  1924.  Reasonable  expenses  incurred  in  advertising  a  sale,  and 
in  making  it  under  a  power  are  always  allowed.  These  include  an 
amount  necessary  for  the  payment  of  an  attorney's  fees  for  prepar- 
ing the  advertisements  of  sale,  and  for  drafting  the  conveyances  to 
the  purchasers  after  the  sale.^°®^  But  when  a  sale  has  been  enjoined 
after  it  was  advertised,  and  the  mortgagee  or  trustee,  in  anticipation 
of  the  action  of  the  court,  incurs  expense  in  advertising  an  adjourn- 
ment, he  is  not  entitled  to  have  this  allowed  to  him  on  the  dissolu- 
tion of  the  injunction;  but  reasonable  attorney's  fees  for  preparing 
the  advertisement  may  be  allowed."^^  If  the  person  who  obtains  an 
injunction  against  a  sale  allows  the  advertisement  to  continue,  he  is 
chargeable  with  the  whole  expense  of  the  publication.^^^*  The  ex- 
penses of  an  abortive  sale  must  generally  be  borne  by  the  mort- 
gagee.^**^^ 

As  to  the  fees  of  an  auctioneer,  only  the  sum  charged  by  the  auc- 
tioneer actually  making  the  sale  should  be  allowed.^°^^  Thus,  where 
the  auctioneer  employed  by  the  mortgagee  is  absent  at  the  time  of  sale, 
he  is  not  entitled  to  compensation.  The  auctioneers  who  actually 
made  the  sales  must  be  regarded  as  acting  in  their  own  characters, 
the  auctioneer  who  employed  them  not  being  present,  since  it  is  not 
in  the  power  of  an  auctioneer  to  appoint  a  deputy,  or  to  perform 
his  services  as  auctioneer  by  an  agent  or  employee,  unless  he  is  him- 
self present,  supervising  the  sale. 

The  mortgagee  is  entitled  to  retain  out  of  the  surplus,  for  auc- 
tioneer's fees,  only  the  sum  charged  by  the  persons  actually  con- 
ducting the  sale,  and  not  the  amount  he  had  contracted  to  pay  the 
auctioneer.^"^^ 

§  1925.  If  the  power  provides  that  the  mortgagee  may  retain 
all  costs  and  expenses  of  sale,  he  may  retain  a  reasonable  sum  for 
legal  advice  respecting  it,  and  also  for  his  own  time  and  trouble.^"^® 

^'™-  Snow    V.     Warwick     Inst,    for  tune  Ins.   Co.  v.  Dorsey,  3  Md.  Ch. 

Sav.  17  R.  I.  66,  20  Atl.  94.  334.     See  §  1607. 

""Marsh  v.  Morton,  75  111.  621.  "•'"Bangs  v.  Fallon,  179  Mass.  77, 

In    this    case    the    trustee    adver-  60  N.  E.  403. 

tised   sales   under   nine  trust   deeds  ™'  Snow    v.     Warwick     Inst,     for 

securing    debts    to    the    amount    of  Sav.  17  R.  I.  66,  20  Atl.  94. 

$50,000,    and    $150   was    allowed   for  ''^^Varnum    v.    Meserve,    8    Allen, 

preparing  them.  158. 

""  Collins    V.     Standish,    6    How.  In  this  case  the  judge  of  the  Su- 

Pr.   493.     See  opinion  of  Harris,  J.,  perior  court  found  to  be  reasonable 

in  this  case,  for  a  bill  of  costs,  such  in  amount  a  charge  of   thirty  dol- 

as    is    properly    allowable    in    Mew  lars    for    legal    advice    and    making 

York.  the    deed,    and    another    of    twenty 

""Sutton    V.    Rawlings,    18    L.    J.  dollars    for    the    mortgagee's    own 

(N.  S.)  Exch.  249,  3  Exch.  407;  Nep-  time  and  trouble  in  relation  to  the 

sale. 


§§  192G,  1926a.]  power  op  sale  mortgages  and  trust  deeds,  888 

If,  however,  the  sale  is  not  completed,  but  the  advertisement,  being 
imperfect,  is  withdrawn  after  a  single  pnblication,  no  attorney's  fees 
or  costs  can  be  collected.  A  tender  of  the  full  amount  of  the  debt 
is  good.^"''''  If  after  a  defective  foreclosure  the  mortgagee  for  any 
purpose  of  his  own  deems  it  important  to  proceed  to  a  new  foreclos- 
ure for  the  correction  of  an  error  in  his  own  proceedings,  he  can 
neither  legally  nor  equitably  charge  his  mortgagor  with  the  ex- 
pense.^°'^° 

Where  the  sale  was  made  after  the  death  of  the  mortgagor,  and 
before  his  estate  had  been  settled,  and  before  an  administrator  had 
been  appointed  upon  his  estate,  and  a  question  which  arose  in  re- 
gard to  the  surplus  was,  whether  it  should  be  paid  over  to  the  heirs 
immediately,  or  should  be  retained  to  meet  any  demands  which 
might  be  made  upon  it  in  the  settlement  of  the  estate,  and  the 
mortgagee  procured  the  advice  or  counsel  upon  this  question,  he 
should  be  allowed  so  much  as  he  has  properly  paid,  or  would  be 
required  to  pay,  for  such  advice.^°'^^ 

§  1926.  When  the  bankruptcy  court  orders  the  mortgaged  prop- 
erty to  be  sold,  and  the  mortgage  debt  to  be  paid  out  of  the  pro- 
ceeds, with  leave  to  the  mortgagee  to  buy  at  the  sale,  the  costs  and 
expenses  are  properly  payable  out  of  the  proceeds  of  the  sale,  although 
these  are  not  sufficient  to  satisfy  the  debt,  rather  than  out  of  the 
other  assets  of  the  bankrupt  estate.  Such  costs  do  not  pertain  to  the 
general  administration  of  the  bankrupt's  estate,  but  result  from  the 
enforcement  of  a  specific  lien  in  large  part  for  the  benefit  of  the 
mortgagee,  the  proceeding  being  substantially  one  mode  of  fore- 
closing the  mortgage.^"^^ 

§  1926a.  The  proceeds  of  the  sale,  after  deducting  all  lawful 
expenses  and  charges  incurred  in  making  the  sale,  are  applicable 
in  the  first  instance  to  the  payment  of  the  mortgage  debt;^''^^  and 
after  that  is  satisfied,  the  surplus  is  payable  to  the  subsequent  par- 
ties in  interest  according  to  their  respective  rights.  If  the  j)roceeds 
are  sufficient  to  pay  only  a  part  of  the  mortgage  debt,  the  holder 
of  the  mortgage  may  have  a  personal  remedy  against  the  mortgag 
ofr,  or  his  grantee  or  others,  for  the  deficiency.^*'''*     The  payment, 

1089  Collar  V.  Harrison,  30  Mich.  66.  previously  offered  to  take  the  prop- 

^"'o  Clark  V.  Stilson,  36  Mich.  482.  erty  in  satisfaction  of  the  debt,  but 

^0"  Snow    V.     Warwick    Inst,     for  the    assignee    declined    the    proposi- 

Sav.  17  R.  I.  66,  20  Atl.  94.  tion  in  the  hope  of  realizing  more. 

">"In  re  Ellerhorst,  2  Sawyer,  219.  ^"'^  See  §§    1682,   1683. 

The  mortgagee   in   this  case  had  "'■'See  §§  1709-1721. 


889  THE  SURPLUS.  [§§  192Gb,  1927. 

not  being  a  voluntary  one,  does  not  operate  to  take  the  debt  out  of 
•the  operation  of  the  statute  of  limitations.^"^^ 

The  application  of  the  proceeds  is,  however,  subject  to  the  stip- 
ulations contained  in  the  deed  or  mortgage;  and  a  stipulation  that 
the  proceeds  of  a  part  of  the  mortgaged  property  may  be  applied 
by  the  mortgagee  is  valid  and  may  be  carried  out.^"^'^  Where  a  trust 
deed  was  made  to  secure  the  payment  of  two  certain  notes,  the 
trustee  must,  in  the  absence  of  any  direction  as  to  priority  in  the 
deed  of  trust  itself,  apply  the  proceeds  pro  rata  if  they  are  sufficient  to 
pay  the  notes  in  full,^"^'' 

§  1926b.  Payment  of  prior  liens  upon  the  property. — If  the 
property  be  subject  to  taxes,  judgment  liens,  or  other  incmnbrances, 
and  the  sale  is  made  on  the  understanding  oi-  agreement  that  the 
purchaser  shall  take  a  clea^r  title,  the  mortgagee  or  trustee  mak- 
ing the  sale  must  discharge  these  liens  before  conveying  the  title 
to  the  purchaser.  But  ordinarily  the  purchaser  at  a  sale  under 
a  deed  of  trust  or  mortgage  takes  subject  to  the  existing  incum- 
brances upon  the  property.  A  trustee  under  a  deed  of  trust  mak- 
ing a  sale  cannot  reimburse  the  purchaser  from  the  proceeds  of 
sale  the  amount  paid  by  him  for  taxes  which  were  a  lien  upon  the 
property,  or  the  amount  paid  by  him  to  discharge  a  judgment 
lien.^°"  Where  the  mortgagee  pays  taxes  just  prior  to  the  foreclosure 
sale,  he  is  entitled  to  be  reimbursed  for  the  amounts  so  advanced  out 
of  the  proceeds  of  the  sale. 


1079 


XVI.     The  Surplus. 

§  1927.  Generally  the  mortgage  with  a  power  of  sale  provides  for 
the  disposal  of  the  surplus.  Different  terms  are  used  for  this 
purpose,  and  they  should  conform  to  the  disposal  that  the  law 
would  make  irrespective  of  the  provision  itself  ;^"^°  though  if  this 
provision  be  imperfect  in  not  meeting  the  circumstances  of  any 
particular  case,  or  if  the  direction  be  different  from  the  disposal 
that  would  be  made  of  the  surplus  under  general  principles  of 
law,  the  direction  in  the  deed  must  yield  to  the  equitable  rights 

"'5  Campbell  v.  Baldwin,  130  Mass.  "'*  Tanner     v.     Taussig,     11     Mo. 

199.  App.  534;   Scott  v.  Shy,  53  Mo.  478; 

"""Newburger  v.  Perkins,  62  Miss.  Schmidt  v.  Smith,  57  Mo.  135. 

534  >»'»  Gorham   v.   Nat.    Life   Ins.   Co. 

i«"  Wales  V    Gray,  109  Mich.   346,  62  Minn.  327,  64  N.  W.  906. 

67  N  W   334  "s^See  Forms  of  Mortgages,  §  60. 


§    1927.]        POWER   OF    SALE    MORTGAGES   AND   TRUST   DEEDS.  890 

of  the  persons  interested.  This  provision  may  be  very  short  and 
comprehensive;  and  in  the  best  forms  of  conveyance  it  is  simply  * 
that  the  surplus  shall  go  to  the  mortgagor,  his  heirs  and  assigns.^^^^ 
A  direction  that  it  be  paid  to  the  executors  or  administrators  of 
the  mortgagor  is  objectionable,  because,  if  the  sale  takes  place  after 
the  death  of  the  mortgagor,  the  land  has  already  passed  to  his  heirs 
or  devisees,  and  the  surplus  then  belongs  to  them,  notwithstanding 
such  direction ;  the  mortgage  cannot  alter  the  character  of  the  surplus 
as  between  the  personal  representatives  of  the  mortgagor  and  his 
real  representatives.  Objection  has  also  been  made  to  the  direction 
that  the  surplus  shall  be  payable  to  the  mortgagor,  his  heirs  or  as- 
signs; because  if  the  sale  should  be  made  in  his  lifetime,  but  his 
death  should  occur  before  the  payment  of  the  surplus,  this  would  then 
go  to  his  personal  representatives,  because  the  land  had  been  converted 
into  personalty  at  the  time  of  his  death.  This  form  is  also  open  to 
the  objection  of  not  being  strictly  correct  in  the  case  of  a  sale  made 
after  the  death  of  the  mortgagor,  when  he  has  by  his  will  directed  his 
executor  to  convert  his  real  estate  into  personalty.  The  terms  of 
the  mortgage  in  these  cases  would  have  to  yield  to  these  circum- 
stances under  which  they  do  not  meet  the  equities  of  the  parties. 
Although  the  direction  that  the  surplus  shall  be  paid  to  the  mort- 
gagor, his  heirs  or  assigns,  does  not  fully  meet  these  exceptional 
cases,  no  harm  can  come  from  this,  because  the  surplus  is  in  all 
cases  bound  by  the  actual  rights  and  equities  of  the  parties  inter- 
ested. Xo  form  of  words  can  be  used  which  will  in  every  case 
fully  point  out  to  the  mortgagee  the  persons  to  whom  he  is  to 
pay  the  surplus;  and  that  form  which  is  correct  generally,  and  is 
the  most  concise,  is  the  best."^^  The  mortgagee  cannot  be  relieved 
of  the  responsibility  of  determining  who  are  the  persons  entitled 
according  to  law,  unless  in  cases  of  doubt  he  refers  the  determin- 
ation of  this  question  to  the  courts.  Complications  may  arise  which 
may  make  such  a  reference  the  only  safe  course;  but  usually  there 
is  no  difficulty  in  determining  who  are  entitled  under  the  law,  and 
the  direction  to  pay  to  the  heirs  or  assigns  of  the  mortgagor  affords 
as  much  aid  as  any  other,  however  elaborate. 

"Whether  the  surplus  be  the  whole  sum  bid  for  the  property, 
less  the  amount  of  the  mortgage  with  the  costs  and  expenses,  de- 
pends upon  the  terms  of  sale.     If  the  title  put  up  and  sold  be  the 

"^'Wright  V.  Rose,  2  S.  &  S.  323;  the   surplus   to   the   mortgagor,   his 

Bourne   v.    Bourne,   2    Hare,   35;    In  heirs,   executors,    administrators,   or 

re  Smith,  7  Jur.   (N.  S.)   903.  assigns,  according  to  their  respect- 

10S2  rpjjg    statutory    power    of    sale  ive  rights  and  interests  therein. 
in  England  directs  the  payment  of 


891  THE  SURPLUS.  [§   1928. 

entire  estate,  without  deducting  prior  incumbrances,  the  proceeds  are 
primarily  applicable  to  the  payment  of  such  prior  incumbrances 
so  far  as  needed  for  that  purpose.  But  if  only  the  mortgage  title  be 
sold,  or  if  that  title  be  sold  expressly  subject  to  prior  incumbrances, 
the  purchaser  must  account  to  the  mortgagor  for  the  surplus  of  the 
purchase-mone3%  deducting  only  the  amount  of  the  mortgage  with 
costs  and  expenses.^^s  Thus,  if  land  is  sold  subject  to  outstanding 
tax  titles,  the  mortgagee  to  whom  the  sale  is  made  is  not  entitled  to 
deduct  from  the  proceeds  of  the  sale  money  subsequently  paid  by  him 
to  redeem  such  tax  titles;  and  evidence  that  it  was  understood  and 
agreed  prior  to  the  sale,  between  the  mortgagee  and  the  auctioneer, 
that  the  amount  of  the  outstanding  tax  titles  was  to  be  deducted  from 
the  bid  of  the  mortgagee,  is  inadmissible.^"^* 

If  a  mortgagee  claiming  a  sum  greater  than  is  authorized  by  the 
terms  of  the  mortgage,  bids  on  the  property  for  such  sum,  he  is  liable 
to  the  mortgagor  or  his  assigns  for  the  excess. ^°^^ 

'§  1928.  ■  If  the  surplus  in  the  hands  of  the  mortgag^ee  remains 
unproductive  while  adverse  claims  are  made  upon  him  by  different 
persons,  he  is  not  chargeable  with  interest  pending  the  determination 
of  their  rights."^"  It  may  happen  that  on  account  of  adverse  claims, 
or  on  account  of  the  absence  or  death  of  the  mortgagor  or  other  person 
entitled  to  the  surplus,  that  much  time  may  elapse  before  payment 
of  the  surplus  can  be  made,  in  which  case  it  is  advisable  either  to 
pay  the  money  into  court,  or  to  safely  invest  it  as  a  trust  fund  pend- 
ing the  settlement  of  the  question  to  whom  it  shall  be  paid,  or  the  aj)- 
pearance  of  the  rightful  claimant. 

But  if  the  mortgagee  retains  the  money  in  his  o-\\ti  hands,  there 
is  an  implied .  obligation  that  he  shall  pay  interest  from  the  time 
that  he  renders  an  account  to  the  persons  interested  in  the  surplus. 
He  thus  acknowledges  that  he  has  money  due  to  others  in  his  hands; 
and  it  does  not  matter  that  he  is  doubtful  of  the  validity  of  the 
claims  of  those  supposed  to  be  interested  in  the  surplus. ^°^^ 

""*^  Morton  v.  Hall,  118  Mass.  511;  109;    Perkins    v.    Stewart,    75    Minn. 

Alden    v.    Wilkins,    117    Mass.    216;  21,  77  N.  W.  4.34,  citing  text. 

O'Connell    v.    Kelly,    114    Mass.    97;  ""*"  Mattel    v.     Conant,    156    Mass. 

Story  V.  Hamilton,  20  Hun,  133.    See  418,  31  N.  B.  487.     In  this  case  the 

§   1853.  mortgagee  retained  the  surplus  sev- 

"'^  Skilton   V.    Roberts,    129   Mass.  eral     years.      "The     delay     was     a 

306.  breach  of  his  obligation,  and  inter- 

1085  Fagan  v.  People's  Sav.  «§;  Loan  est    is    the     measure     of    damages 

Asso.  55  Minn.  437,  57  N.  W.  142.  which  the  law  raises  a  promise  to 

""**■■  Mathieson    v.    Clark,    25    L.    J.  pay  for  the  detention  of  the  money 

(Ch.)   N.  S.  29,  4  W.  R.  30;    Wyatt  after   the   breach   of   an   express  or 

V.  Quinby,  65  Minn.  537,  68  N.  W.  implied  contract  for  payment,  if  no 


§    1929.]       POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.    ,  892 

§  1929.  The  surplus  proceeds  must  be  applied  according  to  the 
title  of  the  respective  parties  in  the  property  itself."^^  If  the  sale 
be  under  the  first  mortgage,  the  holders  of  the  second  mortgage 
are  first  entitled,  and  then  the  next  subsequent  mortgagees  in  their 
order,  and  last  the  mortgagor  or  owner  of  the  equity  of  redemp- 
tion. The  purchaser  of  the  equity  of  redemption  stands  in  place  of 
the  mortgagor  in  respect  to  this  right."*'*  But  the  consent  of  a  sec- 
ond mortgagee,  that  the  surplus  arising  from  a  sale  under  the  first 
mortgage  may  be  paid  to  a  purchaser  of  the  equity  of  redemption, 
will  not  authorize  such  payment  as  against  the  mortgagor,  without 
discharging  the  debt  secured  by  the  second  mortgage;  because  the 
mortgagor  is  entitled  to  have  the  mortgage  debts  on  which  he  is 
personally  liable  satisfied  before  anything  is  paid  over  to  one  who 
purchased  only  the  equity  to  redeem  both  mortgages.^^'"* 

The  right  to  the  surplus  passes  to  the  grantee  of  the  mortgagor 
by  a  conveyance  of  the  equity  of  redemption."''^  Such  grantee  is 
the  owner,  and  the  law,  independently  of  any  contract  in  the  mort- 
gage, makes  it  the  duty  of  the  mortgagee  to  pay  the  surplus  to 
such  owner.  "This  obligation  is  consistent  with,  but  does  not  spring 
from,  the  contract  made  with  the  mortgagor  by  accepting  the  power. 
It  is  immaterial  that  the  owner  is  a  stranger  to  the  contract  between 
the  original  mortgagor  and  the  holder  of  the  power,  and  it  is  of  no 
importance  whether  that  contract  is  a  simple  contract  or  a  contract 
imder  seal.""''^ 

A  subsequent  mortgagee  stands  in  place  of  the  mortgagor  to  the 

demand    is    necessary.    Before    the  911;   Nichols  v.   Tingstad,  10  N.  D. 

fund  came  into  his  hands  he  knew  172,  86  N.  W.  694. 

that   the   plaintiffs   were   interested        "=*''§    1688;    Knowles    v.    Sullivan, 

in   the   proceeds   of   the   sale   which  182  Mass.   318;    Cook  v.   Basley,   123 

he   proposed   to    make,   and    by   his  Mass.   396;    Buttrick  V.   Wentworth, 

course  of  dealing  with  them  in  re-  6    Allen,    79;    Foster    v.    Potter,    37 

si^ect    to    the    foreclosure,    and    in  Mo.    525,    534;    Reid    v.    Mullins,    43 

bringing   his   bill    in    equity,    he    so  Mo.   306;    Ballinger  v.   Bourland,   87 

recognized   their   claim   as   to   make  111.   513,  29  Am.  Rep.  69;    Brown  v. 

a  demand  upon  their  part  unneces-  Crookston   Ag.    Asso.    34   Minn.    545, 

sary.     Instead  of  paying  the  money  26  N.  W.  907;  Fuller  v.  Langum,  37 

into  court  when  he  brought  his  bill  Minn.  74,  33  N.  W.   122. 

of  interpleader,  he  has  kept  it  in  his        "'"  Andrews    v.    Fiske,    101    Mass. 

own  hands,  and,  now  that  the  plain-  422. 

tiffs'    claim    has    been    established,        >»»' Buttrick   v.   Wentworth,   6   Al- 

it  is  just  that  he  shall  pay   inter-  len,  79. 

est."     Per  Barker,  J.  ""'  Mattel    v.    Conant,    156    Mass. 

See,   also,  Perkins  v.   Stewart,  75  418,   31   N.   E.    487,   per   Barker,   J. 

Minn.  21,  77  N.  W.  434.  Wiggin  v.  Heywood,  118  Mass.  514 

1088  j3e  Wolf   V.    Murphy,   11   R.    I.  Gardner  v.   Barnes,   106   Mass.    505 
630;   Douglass'   Appeal,   48  Pa.   223;  Cook  v.  Basley,  123  Mass.  396;  Con- 
Fowler  v.  Johnson,  26  Minn.  338,  3  verse  v.  Bank,  152  Mass.  407,  25  N, 
N.   W.   986,   6   N.   W.   486;    Aultman  B.   733. 
V.  Siglinger,  2   S.  D.  442,  50  N.  W. 


893  THE  SURPLUS.  [§  1930. 

extent  of  his  interest.  But  if  the  lien  of  a  subsequent  mortgagee 
is  not  affected  by  the  sale,  by  reason  of  any  irregularity  in  it,  such 
as  a  want  of  notice  to  him  of  the  proceeding,  when  this  was  re- 
quired by  the  power  or  by  statute,  he  has  no  claim  upon  the  sur- 
plus.   His  claim  is  in  such  case  upon  the  land."^^ 

Where  husband  and  wife  mortgage  real  estate  held  by  them  in  en- 
tirety, with  power  of  sale,  the  holder  of  the  mortgage,  on  sale  under 
the  power,  can  retain  from  the  surplus  the  amount  due  him  on  mort- 
gages executed  by  the  wife  after  the  husband's  title  had  been  con- 
veyed to  her.  The  surplus,  after  satisfying  the  mortgages,  cannot 
be  recovered  in  an  action  brought  by  husband  and  wife  jointly.^^^"* 

When  the  deed  provides  that  the  surplus  shall  go  to  the  mortgag- 
or or  his  assigns,  the  purchaser  necessarily  has  notice  of  this  pro- 
vision, and  he  acts  at  his  peril  in  relying  upon  the  representations 
of  the  mortgage  trustee  or  any  one  else  that  such  surplus  should  be 
applied  to  the  satisfaction  of  certain  debts  of  the  mortgagor  in 
which  the  purchaser  is  interested,  to  the  exclusion  of  other  cred- 
itors of  the  mortgagor.^""^ 

Though  a  purchaser  at  a  sale  under  a  trust  deed  which  was  sub- 
ject to  a  prior  mortgage  bid  a  sum  sufficient  to  satisfy  the  prior 
mortgage,  as  well  as  the  trust  deed  under  which  the  sale  was  made, 
reljdng  upon  the  representations  of  the  trustee  that  he  had  author- 
ity to  sell  and  apply  the  surplus  to  the  payment  of  an  antecedent 
mortgage,  and  would  so  apply  it,  the  mortgagor  is  not  bound  there- 
by. The  purchaser  under  a  foreclosure  sale  cannot  be  relieved  from 
the  payment  of  the  surplus  bid  by  him,  on  the  ground  that  he  was  of 
opinion,  and  was  so  advised  by  counsel,  that  the  surplus  fund  would 
go  to  the  liquidation  of  the  prior  mortgage  debt.^^"® 

§  1930.  Notice  of  claims  to  the  surplus  money  must  be  given 
to 'the  mortgagee,  or  he  must  have  actual  notice  of  the  incumbrances 
on  which  such  claims  may  be  founded,  or  he  will  not  be  responsible 
for  not  applying  the  surplus  towards  their  payment.^"^'^ 

But  to  a  suit  by  a  mortgagor  for  a  surplus  of  proceeds  arising 

^'^'Winslow    v.    McCall,    32    Barb,  the  written  instrument."     Per  Phil- 

241.  ips,  J. 

^""^  Donahue  v.  Hubbard,  154  Mass.  Right  to  sue  for  surplus  assign- 

537,  28  N.  E.  909.  able.       Lynott     v.     Dickerman,     65 

'""^Gair  v.  Tuttle,  49  Fed.  198,  201.  Minn.  471,  67  N.  W.  1143. 

"It  is   nothing  more  nor  less  than  '"'■'°  Gair  v.  Tuttle,  49  Fed.  148,  §§ 

a  bald  attempt  to  ingraft  by  parol  a  1642,  1650. 

clause  upon   the   deed   of  trust  en-  ^""^  McLean   v.    Lafayette   Bank,   4 

larging  the   powers   of  the  trustee,  McLean,    430;    Norman    v.    Hallsey, 

and   giving  a  different  direction  to  132  N.  C.  6,  43  S.  E.  473. 
the   fund    than    that    prescribed    by 


§    1931.]       POWER   OF   SALE   MOETGAGES   AND   TRUST   DEEDS.  894 

from  a  sale  of  the  mortgaged  premises  it  is  not  a  good  defence  for 
the  mortgagee  that  a  third  person  holds  a  second  mortgage  on  the 
premises  which  has  not  been  satisfied;  for,  though  the  second  mort- 
gagee may  maintain  an  action  against  defendant  to  have  the  surplus 
applied  to  his  mortgage,  he  is  not  compelled  to  do  so,  but  may  col- 
lect the  entire  debt  from  the  mortgagor.^^^^ 

In  an  action  by  a  mortgagor  to  recover  the  surplus  arising  upon 
the  foreclosure  of  a  first  mortgage,  if  a  second  mortgagee  makes  no 
claim  to  the  surplus  and  he  is  not  made  a  party  to  the  action,  and 
the  defendant  makes  no  effort  to  bring  him  in  as  a  party  in  order  that 
his  rights  may  be  litigated,  the  existence  of  a  second  mortgage  is  no 
defence  to  the  action.^*^^^ 

If  a  creditor  of  a  mortgagor  of  land,  who  has  attached  the  latter's 
equity  of  redemption,  wishes  to  protect  any  interest  which  he  may 
have  in  the  proceeds  remaining  in  the  mortgagee's  hands  upon  a  fore- 
closure sale,  he  should  give  due  notice  to  the  mortgagee,  and  he 
cannot  maintain  a  bill  in  equity  against  the  mortgagee  to  recover 
such  proceeds  after  the  latter,  without  notice  of  the  former's  claim, 
has  paid  the  surplus  to  the  mortgagor  or  upon  his  order.  Mr.  Justice 
Morton,  delivering  the  opinion  of  the  court,  said:  "We  think  that 
the  reasoning  in  George  v.  Wood^^°'^  applies  to  the  case  of  an  attach- 
ment of  an  equity  of  redemption,  and  that  if  the  attaching  creditor 
wishes  to  protect  any  interest  that  he  may  have  in  the  proceeds  re- 
maining in  the  mortgagee's  hands  upon  a  foreclosure  sale,  he  should 
give  due  notice  to  the  mortgagee.  Upon  a  foreclosure  sale  the  at- 
tachment is  not  transferred  by  operation  of  law  to  the  funds  in  the 
hands  of  the  mortgagee.  It  is  only  by  due  proceedings  in  equity  that 
the  creditor  can  secure  the  benefit  of  his  attachment  if  there  should  be 
a  surplus  remaining  in  the  mortgagee's  hands  upon  the  foreclosure 
sale.  And  we  think  that,  as  said  in  George  v.  Wood,  he  can  easily  pro- 
tect himself  by  giving  notice  to  the  mortgagee,  and  that  it  is  more 
reasonable  to  require  him  to  do  so  than  it  is  to  compel  the  mortgagee 
at  his  peril  to  keep  run  of  all  attachments  and  conveyances  subse- 
quent to  his  mortgage."^^°^ 

§  1931.  A  surplus  arising-  on  the  sale  of  real  estate  under  a  power 
after  the  death  of  the  mortgagor  ]jelongs,  under  the  rule  in  Eng- 

1098  American  Mortg.   Co.  v.  Inzer,        ""^  Hardy      v.      Beverly      Savings 

98  Ala.  608,  13  So.  507.  Bank,  175  Mass.   112,   55  N.  E.   811, 

^™''  Itasca  Investment  Co.  v.  Dean,    citing    Jones,     Mortgages,     §     1930; 

84  Minn.  388,  87  N.  W.  1020;  Trues-     Fisher,   Mortgages,    §    846;    Robbins, 

dale   V.    Sidle,    65   Minn.    315,  67   N.     Mortgages,    914:     Thome    v.    Heard 

W.  1004.  (1895),  A.  C.  495;  M'Lean  v.  Lafay- 

"""g  Allen  (Mass.),  80,  84.  ette  Bank,  4  McLean,  430. 


895  THE  SURPLUS.  [§   1931. 

land,ii°2  adopted  also  in  New  York""-''  and  other  States,""*  to  liis  heirs 
or  devisees,  and  not  to  his  administrator,  who  cannot  maintain  an 
action  to  recover  it,  although  the  mortgage  itself  provides  that  the  sur- 
plus shall  be  paid  to  the  mortgagor,  his  executor  or  administrator. 
The  heirs'  or  devisees  are  also  entitled  to  the  profits  of  the  surplus 
in  the  mortgagee's  hands  until  legal  measures  are  taken  by  the  ad- 
ministrator of  the  estate  to  apply  the  surplus  to  the  payment  of  the 
debts  of  the  mortgagor.""^  In  support  of  this  view,  it  is  urged  that 
the  provision  in  the  mortgage  for  the  payment  of  the  surplus  should 
be  construed  that  the  payment  is  to  be  made  to  the  executor  or  ad- 
ministrator whenever  it  might  have  been  collected  by  the  mortgagor, 
as,  for  example,  when  the  land  is  sold  in  his  lifetime.  Moreover,  it  is 
to  be  observed  that  in  New  York  the  equity  of  redemption  is  the  legal 
estate,  and  the  mortgage  only  a  lien. 

In  ]\Iassachusetts,  on  the  other  hand,  it  is  held  that  the  action  in 
such  case  should  be  maintained  by  the  administrator,  who  will,  how- 
ever, hold  the  money  when  collected  in  trust  for  the  persons  who 
would  have  been  entitled  to  the  land  if  no  sale  had  been  made.^^°" 
All  the  cases  recognize  the  doctrine  that  the  surplus  is  equitable 
real  estate,  and  should  go  to  the  persons  who  would  be  entitled 
to  the  equity  of  redemption.  They  differ  as  to  the  mode  in  which 
the  parties  in  interest  shall  obtain  their  rights,  rather  than  as  to  the 
rights  themselves.  One  reason  why  the  administrator  should  be 
entitled  to  recover  is,  that  if  the  equity  of  redemption  had  not  been 

""-See  §   1695;   Wright  v.  Rose,  2  or  so  much  of  it  as  might  be  needed 

S.  &  S.  323.     "If  the  estate  had  been  to   pay   the   debts   of   the   deceased; 

sold  by   the  mortgagee  in   the  life-  and  that,  if  such  security  were  not 

time    of    the    mortgagor,    then    the  given,    the    surplus    should    be    paid 

surplus    moneys    would    have    been  into  court,   and   there   administered 

personal    estate    of    the    mortgagor,  as  the  probate  court  would  admin- 

and  the  plaintiffs  would  have  been  ister  it. 

entitled.    But  the  estate  being  un-        ""°  Varnum    v.    Meserve,    8    Allen, 

sold  at  the  death  of  the  mortgagor,  158.     The  surplus  in  such  case  be- 

the  equity  of  redemption  descended  longs  to  the  executor,  although  the 

to  his  heir,  and  he  is  now  entitled  mortgagor  by  will  devised  the  land 

to    the    surplus    produce."     Per    the  to    others;    and    he    will    hold    such 

Vice-Chancellor.     See,    also,     Polley  surplus,  first,  to  the  use  of  the  wid- 

v.  Seymour,  2  Young  &  C.  708,  721;  ow    having    a    paramount    right    of 

Bourne  v.  Bourne,  2  Hare.  35,  39.  homestead;  second,  for  the  payment 

^^"^  Dunning  v.   Ocean   Nat.   Bank,  of  debts;   and  third,  to  the  uses  of 

61    N.    Y.    497,    19    Am.    Rep.    293;  the  will. 
Sweezy  v.  Thayer,  1  Duer,  286.  In   Michigan   it   is   held    that   the 

""*  Chaffee   v.    Franklin,    11    R.    I.  surplus  is  personal  estate,  and  con- 

578:  Shaw  v.  Hoadley,  8  Blackf.  165.  sequently   that  the   personal    repre- 

"°=  Allen    V.    Allen,    12    R.    I.    301.  sentatives     of     the     owner     of     the 

It    was    further    held    in    this    case  equity    should    be    made    parties    to 

that    the    heirs    and    devisees    were  a   petition   for   the   surplus.     Smith 

entitled    to    receive   the   surplus   on  v.  Smith,  13  Mich.  258. 
giving  proper  security  to  repay  it, 


§§  1932,  1933.]  POWER  of  sale  mortgages  and  trust  deeds.  896 

sold  it  would  have  remained  subject  to  the  debts  of  the  deceased, 
and  might  have  been  sold  under  a  license  to  the  administrator,  if 
required  for  that  purpose;  and  therefore  the  administrator  should 
take  the  surplus  and  hold  it  until  it  is  certain  that  it  will  not  be 
required  for  the  payment  of  debts.  Moreover,  there  is  force  in  the 
fact  that  the  right  of  the  mortgagor's  personal  representative  to 
recover  is  direct  under  the  contract. 

§  1932.     In  case  of  the  insolvency  or  bankruptcy  of  the  mortgagor, 

a  provision  that  the  surplus,  after  satisfying  the  debt,  shall  be  paid 
to  the  mortgagor  without  naming  his  assigns,  does  not  create  any 
trust  for  his  benefit,  but  the  surplus  will  go  to  his  assignee  in  bank- 
ruptcy.^^°^ 

When  a  mortgage  is  foreclosed  after  the  death  of  the  mortgagor, 
and  his  estate  is  insolvent,  the  mortgagee  cannot  retain  a  surplus  in 
his  hands  and  apply  it  to  the  payment  of  a  simple  contract  debt  due 
him  from  the  mortgagor,  as  this  would  give  him  a  preference  over 
other  creditors,  but  he  must  hand  it  over  to  the  personal  representa- 
tives of  the  deceased.  The  mortgagee  is  merely  a  trustee  of  the 
surplus.^^*^^ 

When  the  mortgaged  land  is  sold  after  the  death  of  the  mort- 
gagor, the  heirs  are  nevertheless  entitled  to  the  surplus,  unless  the  sur- 
plus, or  some  portion  of  it,  is  needed  to  pay  the  debts  of  the  de- 
ceased mortgagor.  In  case  the  mortgagor  has  been  dead  many 
months  and  no  administration  has  been  taken  out,  it  may  be  pre- 
sumed that  the  surplus  will  not  be  required  for  that  purpose.^^*^^ 

§  1933.  Dower  in  surplus. — By  the  foreclosure  sale  the  mortga- 
gor's right  of  redemption  is  converted  into  a  claim  upon  the  surplus 
money  in  the  mortgagee's  hands.  It  is  personalty,  and  belongs  to 
those  who  are  entitled  to  his  personal  estate.  The  wife  of  the  owner 
of  the  estate,  subject  to  a  mortgage  valid  against  her,  has  no  claim 
to  any  part  of  the  surplus  proceeds  of  a  foreclosure  sale  under 
the  mortgage,  as  against  her  husband  or  his  assignees  in  bankrupt- 
cy.^"" The  sale  is  as  effectual  in  barring  all  claim  or  possibility 
of  dower  in  the  property  as  if  the  foreclosure  had  been  by  entry 
for  breach  of  condition  and  lapse  of  time.  The  death  of  the  hus- 
band after  the  sale,  but  before  the  distribution  of  the  money,  would 

""  Calloway  v.  People's  Bank,  54  case  the  mortgagor  had  been  dead 

Ga.  441,  450.  seventeen  months. 

'"^Talbot   V.    Frere,   L.    R.   9    Ch.  "^"  §§  1693,  1694;  Newhall  v.  Lynn 

D.  568.  Five  Cents  Savings  Bank,  101  Mass. 

""^  Snow    V.     Warwick    Inst,     for  428,  3  Am.  Rep.  387. 
Sav.  17  R.  I.  66,  20  Atl.  94.    In  this 


897  THE  SURPLUS.  [§  1934. 

not  avail  to  endow  the  widow  of  the  surplus,  as  the  rights  of  all 
parties  are  fixed  at  the  time  of  the  sale.  If  the  sale  take  place  after 
the  death  of  the  mortgagor,  then  his  widow  is  entitled  to  dower  in  the 
surplus.^^" 

Some  courts  have  held  that,  if  there  be  a  surplus  after  a  foreclos- 
ure sale,  the  wife's  inchoate  right  of  dower  will  be  protected  either 
by  investing  one-third  of  the  amount  to  await  the  perfection  or  cessa- 
tion of  such  right,  or  by  calculating  the  present  value  of  her  chance 
of  surviving  her  husband,  and  paying  to  her  at  once  such  sum."^- 
But  this  is  an  exceptional  holding. 

§  1934.  When  the  equity  has  been  sold  under  execution  or  is 
attached. — The  mortgage  usually  provides  that  the  surplus,  after 
payment  of  the  mortgage  debt  and  expenses,  shall  be  paid  to  the 
mortgagor  or  his  assigns;  and  in  such  case  the  surplus  belongs  to  the 
person  who  is  at  the  time  of  the  sale  the  owner  of  the  equity  of 
redemption.  If  the  equity  of  redemption  has  been  sold  on  execu- 
tion before  a  sale  of  the  land  under  a  power  in  the  mortgage,  the 
surplus  then  belongs  to  the  purchaser  at  the  execution  sale,  for  the 
sale  and  conveyance  on  execution  constitute  such  purchaser  the  owner 
of  the  equity  of  redemption.  But  if  the  equity  of  redemption  be 
attached,  and  pending  the  suit  the  mortgagee  sells  undci<  such 
a  power  in  the  mortgage,  and  judgment  and  execution  follow,  and 
the  execution  be  levied  by  a  sale  of  the  land,  the  levy  is  a  nullit\- 
so  far  as  respects  the  title  to  the  land;  and,  as  respects  the  surplus 
in  the  hands  of  the  mortgagee  of  the  proceeds  of  the  sale  under 
the  mortgage,  it  gives  the  purchaser  no  right  or  title;  and  he  can- 
not maintain  either  an  action  at  law  for  money  had  and  received, 
or  a  bill  in  equity  to  recover  such  surplus,  if  brought  or  filed  more 
than  thirty  days  after  judgment  was  recovered.^^^^ 

Whether,  by  any  form  of  process  at  law  or  in  equity  brought 
within  the  period  after  judgment  during  which  the  attachment  con- 
tinues a  lien,  the  creditor  could  reach  and  apply  to  his  claim  the 
surplus  in  the  mortgagee's  hands,  is  a  question  which  was  not  decided 
in  the  case  last  cited,  but  was  determined  in  a  case  which  arose  in 
the  same  court  soon  afterwards;  and  it  was  there  decided  that  when 
land  subject  to  a  mortgage  is  attached  on  mesne  process,  and  before 
judgment  is  recovered  the  land  is  sold,  under  a  power  of  sale  in  the 
mortgage,  for  more  than  enough  to  pay  the  debt  and  expenses  of 

""  Chaffee  v.  Franklin,  11  R.  I.  "'^  Gardner  v.  Barnes,  106  Mass. 
578.  505. 

"'=§    1694;    De   Wolf   v.    Murphy, 
11  R.  I.  630. 


§    1934.]        POWER   OF    SALE   MORTGAGES   AND   TRUST    DEEDS,  898 

sale,  the  attaching  creditor  may,  b}-  a  bill  m  equity  brought  within 
thirty  clays  after  judgment  in  the  action  in  which  the  attachment 
was  made,  enforce  his  lien  against  the  surplus"^* 

In  like  manner  a  mechanic's  lien  may  be  enforced  against  the  sur- 
plus.^^^^  Where  there  was  a  mechanic's  lien  on  land  subject  to  a 
mortgage,  a  decree  of  sale  was  obtained  by  the  lien-holder  and  a  sale 
was  made  thereunder,  at  which  the  lien-holder  piircliased.  The  mort- 
gage was  then  foreclosed,  the  proceeds  of  th-S  sale  l)eing  more  than 
sufficient  to  satisfy  the  mortgage  debt.  After  tliis  tlie  lien-holder 
received  the  deed  representing  his  purchaser  at  L':e  lien  sale,  and 
sued  the  mortgagee  to  recover  the  surplus  proceeds  of  the  foreclosure 
sale.  It  was  held  that  by  the  lien  sale  the  plaintiff  got  an  equitable 
title  to  the  premises  subject  to  the  mortgage,  which,  by  the  foreclosure 
sale,  was  transferred  to  the  surplus  proceeds,  and  the  deed  to  the 
plaintiff,  if  necessary  in  order  to  give  him  the  right  to  sue,  related 
back  to  the  time  of  the  lien  sale.^^^^ 

If  at  the  time  of  the  sale  under  a  trust  deed  the  property  has 
been  sold  under  a  junior  judgment,  and  the  title  has  become  abso- 
lute in  the  purchaser  by  the  expiration  of  the  time  allowed  for  re- 
demption, so  that  he  has  received  a  deed  of  the  property,  or  is  enti- 
tled to  one,  he  is  then  entitled  to  receive  the  whole  of  any  surplus 
there  may  be  after  discharging  the  debt  secured  by  the  trust  deed 
and  the  expenses;  but  if  the  land  has  been  sold  under  execution, 
and  the  time  for  redemption  has  not  expired,  and  the  purchaser  is 
not  entitled  at  the  time  of  the  sale  under  the  trust  deed  to  a  deed 
conferring  the  title  upon  him,  he  then  has  only  a  lien  upon  the  sur- 
plus, and  is  entitled  to  only  so  much  of  it  as  will  satisfy  the  amount 
of  his  bid  and  the  interest  thereon  allowed  by  statute.  In  the  lat- 
ter case  the  grantor  in  the  trust  deed  is  entitled  to  the  remainder 
after  satisfying  the  judgment  lien,  although  his  right  to  redeem  has 
expired,  but  the  purchaser's  right  has  not  become  absolute  by  the 
expiration  of  the  time  within  which  there  can  be  a  redemption  from 
him  by  any  one  else;  as  where  twelve  months  aie  allowed  the  debtor 
for  redemption,  and  three  months  more  for  redemption  by  a  cred- 
itor, and  the  sale  under  the  trust  deed  takes  place  during  these  three 
months. ^^^'^ 

""Wiggin  V.  Heywood,  118  Mass.  ""  Knowles  v.  S-iUivan,  182  Mass. 

514;    Judge    v.    Herbert,    124    Mass.  318;    65   N.    E.    389. 

330;    De  Wolf  v.    Murphy,   11   R.    I.  '"'Hart   v.    Wingart,    83    111.    282; 

630.  Remington    v.    Linthicum,    14    Pet. 

""Knowles  v.  Sullivan,  182  Mass.  84,    92;     Knowles    v.     Sullivan,    182 

318;   65  N.  E.  389.  Mass.  318.     A  previous  judgment  in 


899  THE  SURPLUS.  [§§  1935,  1936. 

§  1935.  Judgnnent  lien. — The  sale  cuts  olY  all  right  of  redemp- 
tion, and  prevents  any  levy  of  execution  upon  the  land  by  virtue 
of  the  attachment.  The  land  is  turned  into  money,  which  is  to  be 
applied  in  the  first  instance  to  the  payment  of  the  debt  and  ex- 
penses of  the  mortgagee,  and  any  surplus  to  the  same  persons  the 
land  belonged  to  before  the  sale.  Tlieir  respective  rights  in  the  fund 
are  not  affected  by  the  sale;  and  the  court  will  apply  the  money  ac- 
cording to  the  rights  of  the  parties  as  they  existed  before  the  real 
estate  was  turned  into  money."^^  If  there  be  a  judgment  lien  upon 
the  equity  of  redemption,  this  must  be  satisfied  before  the  owner  can 
claim  anything.^"®  A  mortgagee  having  purchased  the  mortgagor'^ 
equity  of  redemption  at  a  sale  on  execution  to  satisfy  another  debt 
due  him  from  the  mortgagor,  afterwards  bought  the  land  under  a 
power  of  sale  in  the  mortgage.  The  mortgagoi'.  having  the  riglit  to 
redeem  from  the  execution  sale  within  one  year  thereafter,  is  within 
that  time  entitled  to  maintain  an  action  for  a  surplus  in  the  mort- 
gagee's hands  in  excess  of  both  the  mortgage  and  judgment  debts. ^"° 

§  1936.  Where  the  payment  of  a  mortgaged  debt  has  been  charged 
upon  a  portion  of  the  mortgaged  premises,  by  reason  that  the  mort- 
gagor has  given  a  warranty  deed  of  the  othc;r  portion,  the  charge  in 
equity  attaches  to  the  surplus  arising  from  the  sale  of  the  land  by  a 
prior  mortgagee. ^^^^  Thus  where  a  mortgagor  mortgages  a  portion 
of  the  mortgaged  land  with  covenants  of  warranty,  the  second  mort- 
gagee, having  duly  recorded  his  mortgage,  on  a  sale  of  the  whole  prem- 
ises on  foreclosure  of  the  first  mortgage  is  entitled  to  be  paid  out  of 
the  balance  left  after  satisfying  the  first  mortgage,  before  any  part 
of  the  surplus  is  applied  on  a  third  mortgage  or  conveyance  covering 
the  same  premises  embraced  in  the  first.  The  surplus  cannot  be  ap- 
portioned between  the  second  and  third  mortgagees,  because  the  mort- 

this   case,   under  the   name  of   Solt  v.  Tingstad,  10  N.  D.  172,  86  N.  W. 

V.   Wingarte,    8   Chicago   L.    N.    179,  694;    Perkins    v.    Stewart,    75    Minn. 

2  N.  Y.  Weekly  Dig.  98,  which  was  U,    77    N.    W.    434.    citing    text.     A 

clearly    contrary    to    principle    and  lienor  under  a  prior  judgment  lien 

authority,  was  withdrawn.     In  sup-  has    no    standing    to    object    to   the 

port  of  the  text,   see,   also,   Snyder  application  of  proceeds  by  a  trustee 

V.  Stafford,  11  Paige,  71.  under   a   subsequent    deed    of   trust. 

'"^Astor    v.    Miller,    2    Paige,    68;  Nelson  v.  Turner,  97  Va.  54,  33  S.. 

Fry's  Appeal,  76  Pa.   St.   82;    Doug-  E.  390. 

■  lass's    Appeal,    48    Pa.    St.    223;    De  "'^  Eddy  v.  Smith,  13  Wend.  488; 

Wolf  V.  Murphy,  11  R.  I.  630;  Bart-  Hall    v.    Gould,    79    III.    16.     See   §§ 

left   v.    Gale,    4    Paige,    503;    Barber  1687,   1688. 

v.    Gary,    11    Barb.    549;    Brown    v.  "™  Johnson  v.  Cobleigh,  152  Mass. 

Crookston   Ag.    Asso.   34   Minn.    545,  17,  25  N.  E.  73. 

26  N.  W.  907;   Knowles  v.  Sullivan,  "=' Beard  v.  Fitzgerald,  105  Maea. 

182  Mass.  318;  Aultman  v.  Siglinger,  134. 
2  S.  D.  442,  50  N.  W.  911;   Nichols 


§    1937.]        POWER   OF   SALE   MORTGAGES   AND  TRUST   DEEDS.  900 

gagor,  in  conveying  a  portion  of  the  mortgaged  land  with  covenants 
of  warranty,  as  between  him  and  his  grantee,  chaij,ed  the  prior 
mortgage  wholly  upon  the  portion  retained  by  himself ;  and  his  sub- 
sequent grantee  with  notice  stands  in  no  better  position  than  the 
grantor  himself.^^^^ 

If  there  are  sureties  upon  part  of  the  debt  secured  by  the  mort- 
gage, upon  a  sale  of  the  property  the  mortgagee  becomes  a  trustee 
for  them  to  the  amount  of  the  funds  provided  for  their  indemnitv, 
and  must  see  that  their  just  proportion  of  the  proceeds  is  applied 
to  the  discharge  of  the  debt  upon  which  they  are  bound."-^ 

§  1937.  When  property  is  sold  under  a  mortgage  or  deed  of  trust 
to  satisfy  one  instalment  of  the  debt  before  the  others  have  matured, 
and  there  is  no  provision  that  the  whole  debt  shall  be  due  and  payable 
npon  a  default  upon  any  part  of  it,  the  trustee  holds  any  surplus 
there  may  be,  after  satisfying  the  expenses  and  the  part  of  the  debt 
then  due,  subject  to  the  same  lien  as  the  property  was."^*  The  mort- 
gagor has  no  claim  to  it.  When  the  mortgage  expressly  or  impliedh 
provides  that  the  whole  debt  shall  become  due  upon  any  default, 
either  the  mortgagee  or  his  assignee  is  authorized  to  exercise  the  op- 
tion to  declare  due  all  the  notes  secured  by  the  mortgage,  and  to  ad- 
vertise and  sell  the  premises  in  payment  of  the  whole  debt."^^  The 
trustee  in  a  deed  of  trust  has  the  same  right,  and  is  not  bound  to  give 
any  notice  to  the  debtor  of  his  election  to  treat  the  whole  debt  as 
due.ii" 

The  mortgage  lien  is  of  course  exhausted  by  a  sale  of  the  whole 
estate  for  the  payment  of  an  instalment  only  of  the  debt.  The 
same  land  cannot  be  sold  again  to  satisfy  a  subsequent  instalment. 
The  entire  title  and  interest  passes  by  the  first  sale.^^"  If,  however, 
the  foreclosure  sale  is  defeated  before  it  has  become  complete  by 
the  owner's  redeeming  within  the  time  allowed  by  statute,  the  same 
land  may  be  sold  again  for  the  satisfaction  of  the  other  instalments 
of  the  mortgage  debt."^^ 

ii^i^  Converse  v.   Ware  Sav.   Bank,  "^^  Princeton  Loan  &  Trust  Co.  v. 

152  Mass.  407,  25  N.  E.  733.  Munson,  60  111.  371. 

iiaa  §    1706-    Fielder  v.   Varner,   45  ""Fowler    v.    Johnson,    26    Minn. 

Ala.  429.       '  338,    3    N.    W.    986,    6    N.    W.    486; 

i'=M§   1699-1703;    Huffard  v.   Gott-  Standish  v.   Vosburg,  27  Minn.    175, 

berg    54  Mo.   271;    Standish  v.  Vos-  6   N.   W.   489;    Brown  v.   Brown,   47 

berg    27    Minn.    175,    6    N.    W.    489;  Mich.  385,  11  N.  W.  205. 

Fowier    v.    Johnson,    26    Minn.    338,  ""Standish  v.   Vosburg,  27  Minn. 

3  N.  W.  986,  6  N.  W.  486.  175,  6  N.  W.  489. 

"25  Heath  v.  Hall,  60  111.  344;  Fry- 
ar  V.  Fryar,  62  Miss.  205. 


901  THE  SURPLUS.  [§  1938. 

§  1938.  Payment  of  whole  debt  on  a  sale  for  an  instalment.— 
It  is  not  necessary,  in  order  to  authorize  a  sale  under  a  power 
and  the  payment  of  the  whole  debt  upon  default  in  the  payment 
of  an  instalment  of  the  debt,  before  the  whole  of  it  has  matured, 
that  there  should  be  an  express  provision  that  the  whole  may  in 
such  event  become  due  and  be  collected."^'*  Although  it  is  true  that 
a  power  to  sell  the  property  in  the  event  of  any  default,  and  out  of 
the  proceeds  to  retain  the  principal  and-  interest  then  due,  while  it 
authorizes  the  sale  of  the  entire  property,  does  not  make  the  entire 
debt  due  and  collectible  upon  the  first  default;  yet  if  the  property 
be  incapable  of  division  without  injury,  and  is  sold  upon  the  first 
default,  and  yields  a  fund  sufficient  to  pay  the  whole  debt,  it  may 
be  so  applied  at  once,  so  as  to  stop  interest  and  extinguish  the  whole 
liability. 

Generally  the  power  of  sale  authorizes  the  mortgagee,  upon 
making  a  sale,  to  retain  from  the  proceeds  the  whole  amount  of 
his  demand,  whether  it  be  due  or  not.  In  several  States,  as  in 
]\Iichigan,  Minnesota,  New  York,  and  Wisconsin,  the  statutes  reg- 
ulating sales  under  powers  provide  that,  if  the  premises  consist  of 
distinct  parcels  or  lots,  no  more  shall  be  sold  than  is  sufficient  to 
satisfy  the  amount  due  on  the  mortgage  with  interest  and  costs. ^^^"^ 
When  it  is  proper  to  sell  the  whole  mortgaged  premises  together, 
the  whole  debt  may  be  retained  from  the  proceeds.  These  stat- 
utes do  not  contemplate  a  sale  subject  to  instalments  not  due  at 
the  time  of  the  sale.^^^^  The  powers  are  never  drawn  with  a  view 
to  such  a  proceeding.  In  this  respect  the  effect  of  the  sale  in  the 
payment  of  the  debt  is  quite  different  from  that  of  a  foreclosure 
sale  in  equity,  where  provision  may  be  readily  made  for  further 

"^'  Olcott  V.  Bynum,  17  Wall.  44.  cipal  and  interest  which  shall  then 

The  power  was  as  follows:     "That  be  due  on  the  said  bond  or  obliga- 

if  default  shall  be  made  in  the  pay-  tion,    together   with    the    costs    and 

ment  of  the  said  sum  of  money,  or  charges   of  advertising  and   sale   of 

the    interest    that    may    grow    due  the    same    premises,    rendering    the 

thereon,  or  of  any  part  thereof,  that  overplus  of  the  purchase-money,   if 

then,  and  upon  failure  of  the  grant-  any   there   shall   be,    unto   the   said 

or   to   pay   the   first   or  any   subse-  Hovey,"    the    grantor.     Mr.    Justice 

quent    instalment,    as    hereinbefore  Swayne  said  that,  the  mortgagee  in 

specified,  it  shall  be  lawful  for  the  this   case   having   applied   the   fund 

trustee  to  enter  upon  all  and  singu-  as  a  court  of  equity  would  have  ap- 

lar    the    premises    hereby    granted,  plied   it,   there  was   no  ground   for 

and  to  sell  and  dispose  of  the  same,  complaint. 

and    all    benefit   and    equity   of   re-  ^'''' See    Statutes,    §§     1340,     1343, 

demption,    etc.,    and    to    make    and  1351,  1364. 

deliver    to    the    purchaser    or    pur-  "''  Cox  v.  Wheeler,  7  Paige,  248; 

chasers    thereof    a    good    and    sufii-  Jencks  v.  Alexander,  11  Paige,  619; 

cient  deed  for  the  same,  in  fee  sim-  Bunce  v.  Reed,  16  Barb.  347;  Barber 

pie,  and  out  of  the   money  arising  v.  Gary,  11  Barb.  549. 
from  such  sale  to  retain  the  prin- 


§   1939.]       POWER  OF   SALE  MORTGAGES  AND  TRUST  DEEDS.  903 

sales  to  meet  future  instalments,  or  for  the  care  of  the  money  re- 
ceived in  excess  of  the  amounts  due,  and  the  payment  of  the  in- 
stalments as  they  mature.  Except  under  the  statute,  there  can  be 
no  sale  of  the  mortgaged  estate  to  pay  the  amount  already  due,  sub- 
ject to  the  future  instalments.  The  mortgage  is  extinguished  by  such 
sale,  though  relief  might  be  had  in  equity  against  the  purchaser. 

§  1939.  If  a  sale  is  made  when  only  part  of  the  mortgage  notes 
have  matured,  under  a  notice  of  a  sale  to  be  made  subject  to  other 
notes  specified,  the  presumption  is  conclusive  that  the  land  sold  for 
the  amount  of  the  unpaid  notes  less  than  it  would  otherwise  have 
done.  The  mortgagor  may  then  insist  that  payment  of  such  notes 
shall  be  made  out  of  the  land  upon  which  they  have  become,  by 
the  mortgage  and  sale,  an  express  charge.  Therefore  there  can  be  no 
action  against  him  for  these  notes.  The  fact  that  the  mortgagees 
became  purchasers  under  the  foreclosure  sale  places  them  in  no  better 
position,  in  regard  to  collecting  the  notes  of  the  mortgagor,  than  if  a 
third  party  had  purchased  subject  to  the  notes.  If  the  mortgagor 
should  be  compelled  to  pay  the  notes  he  would  be  subrogated  to  the 
mortgage  security,  and  might  proceed  to  collect  the  amount  of  these 
notes  out  of  the  land.  To  prevent  circuity  of  action,  a  suit  upon  the 
notes  against  the  mortgagor  is  not  allowed.^^^^ 

If  a  trustee  under  a  deed  of  trust  made  to  secure  three  notes 
sells  for  the  payment  of  two  of  the  notes,  and  the  holder  of  these 
notes,  bidding  the  amount  of  them,  becomes  the  purchaser,  the 
other  note  being  held  by  a  third  party,  the  purchaser  in  effect  buys 
subject  to  the  right  of  such  third  party  to  enforce  his  note  against 
the  property;  but  neither  the  purchaser  nor  the  trustee  is  person- 
ally liable  to  such  third  party.  But  if  the  purchaser  afterwards 
sells  the  land  to  an  innocent  purchaser  for  value,  the  purchaser  at 
the  trustee's  sale  becomes  personally  liable  to  the  holder  of  the 
other  note.^^^^ 

As  already  noticed,  it  is  a  settled  rule  of  law  in  several  States 
that  where  a  mortgage  or  deed  of  trust  has  been  given  to  secure 
the  pavment  of  several  notes,  which  become  due  at  different  times, 
the  notes  have  priority  of  lien  in  the  order  in  which  they  become 
due'  and  payable.^^^*  Accordingly,  where  the  first  note  falling  due  of 
a  series  of  notes  secured  by  a  trust  deed  belonged  to  one  party,  and 

'"^Shermer   v.    Merrill,    33    Mich.  i^*  §   16S9;    Flower  v.  Elwood,   66 

284.     See  §  1459.  Ill-    438;    Herrington    v.    McCollum, 

»»« Wicks    V.    Caruthers,    13    Lea,  73  111.  476. 
353. 


903  THE  SURPLUS.  [§    1940. 

the  other  notes  to  another,  and  the  trustee,  at  the  request  of  the 
holder  of  the  note  first  due,  advertised  the  property  for  sale  U  pay 
his  note,  and  afterwards,  at  the  request  of  the  holder  of  the  other 
notes,  advertised  and  sold  the  property  at  an  earlier  day  to  the 
latter,  and  then,  upon  the  day  of  sale  under  the  first  advertisement, 
sold  the  property  again  to  the  holder  of  the  first  maturing  note,  it 
was  held  that,  although  the  purchaser  at  the  first  sale  took  the  legal 
title,  a  court  of  equity  would  set  aside  the  first  sale  and  order  an- 
other, from  the  proceeds  of  which  the  several  notes  should  be  paid 
according  to  the  order  of  their  maturity. ^^^^ 

§  1940.  The  rights  of  different  claimants  of  the  surplus  money 
may  be  determined  in  suits  brought  by  them  against  tlie  mortga- 
gee for  money  had  and  received  ;^^^®  or  he  may  himself  by  bill  of  in- 
terpleader bring  the  claimants  into  court  and  ask  for  its  direction  to 
Mdiom  to  pay  it.  He  is  in  some  sort  a  trustee  of  the  money  in  his 
hands  for  those  entitled  to  it,  and  shoiild  retain  it  until  tlie  rights 
of  the  parties  are  determined. ^^^^  But  the  pendancy  of  a  bill  in  equity 
by  the  mortgagee,  praying  that  the  mortgagor's  grantees  and  others 
interested  in  the  property  under  the  mortgagor  be  compelled  to 
interplead  and  have  their  rights  determined,  is  not  a  bar  to  such 
action  at  law.^^^^ 

The  grantor  and  not  the  trustee  in  a  deed  of  trust,  is  the  proper 
person  to  maintain  an  action  for  the  recovery  of  a  surplus  due  to 
the  grantor  after  satisfaction  of  the  debt  secured. ^^^^  And  the  mort- 
gagor, or  the  person  under  him  entitled  to  the  surplus,  should  bring 
suit  against  the  mortgagee  or  other  person  making  the  sale."^° 

If  the  second  mortgagee,  instead  of  selling  the  title  mortgaged  to 
him,  sells  with  the  assent  of  the  prior  mortgagee  the  entire  title  in 

"'"Koester   v.    Burke,    81    111.    436,  5    Ala.    292;    Austin    v.    Hatch,    159 

438.  Mass.  198,  34  N.  E.  95. 

"■"'Cope  v.  Wheeler,  41  N.  Y.  303;  "=•' Mattel  v.  Conant,  156  Mass. 
Matthews  v.  Duryee,  45  Barb.  69;  418,  31  N.  E.  487.  The  pendency  of 
Bevier  v.  Schoonmaker,  29  How.  Pr.  another  action  must  be  pleaded  in 
411;  Webster  v.  Singley,  53  Ala.  abatement,  and  not  in  bar,  and  this 
208;  Cook  v.  Basley,  123  Mass.  396.  plea  must  show  that  the  parties  are 
As  to  proceedings  in  New  York,  to  before  that  tribunal,  and  that  their 
determine  to  whom  the  surplus  be-  rights  may  be  determined.  More- 
longs,  see  Kirby  v.  Fitzgerald,  31  over,  the  pendency  of  a  bill  in  equity 
N.  Y.  417;  Matthews  v.  Duryee,  45  is  not  usually  a  sufficient  ground 
Barb.  69.  But  now  provision  is  for  sustaining  a  plea  in  abatement 
made  bv  statute,  which  see,  §  1751.  to  an  action  at  law. 

''"Bleeker  v.  Graham,  2  Edw.  647;         "^^  Gair  v.  Tuttle,  49  Fed.  198. 
People    V.     Ulster    Com.     Pleas,    18        ''*»  Reynolds  v.  Hennessy,  15  R.  I. 

Wend.  628;   Bevier  v.  Schoonmaker,  215,  2  Atl.  701;  Flanders  v.  Thomas, 

29  How.   Pr.   411;    Hayes  v.  Woods,  12  Wis.  410. 
72  Ala.  92,  95;  Yarborough  v.  Wise, 


§    1940.]        POWER   OF   SALE    MORTGAGES   AND   TRUST    DEEDS.  904 

tlie  land,  the  surplus  remaining  after  paying  the  first  and  second 
mortgages  belongs  to  the  next  subsequent  parties  in  interest,  and  a 
third  mortgagee  may  maintain  an  action  for  money  had  and  re- 
ceived. The  fact  that  the  sale  was  not  made  sul.)iect  to  the  first 
mortgage  does  not  affect  the  rights  of  the  third  mortgagee.^^" 

Suit  for  the  surplus  by  the  person  entitled  to  it  is  at  law  and  not 
in  equity. ^^*^  Assumpsit  lies  against  the  mortgagee  for  the  surplus 
arising  from  the  sale,  unless  his  obligation  to  pay  it  is  in  the  form 
of  a  covenant  or  agreement  under  seal."^'^  Where  by  statute  the 
mortgagee  is  authorized  to  pay  the  surplus  into  court,  or  to  the 
sheriff  or  other  officer  who  makes  the  sale,  such  payment  is  a  good 
defence  to  a  suit  brought  against  him  to  recover  the  surpkis.^^**  In  a 
suit  by  a  subsequent  mortgagee  to  recover  a  surplus  remaining  after 
satisfying  a  prior  mortgage,  the  complaint  should  show  (1)  that  a 
prior  mortgage  was  executed,  and  that  it  contained  a  power  of  sale; 
(2)  that  imder  and  by  virtue  of  such  power  of  sale  the  defendant 
sold  the  property  for  a  specified  sum,  which  was  paid  to  him;  (3) 
the  amount  remaining  in  his  hands  as  surplus;  (4)  the  mortgage  of 
plaintiff;  and  (5)   a  demand  and  refusal.^^*^ 

If  a  cestui  que  trust  upon  a  sale  imder  a  trust  deed  bids  more 
than  enough  to  pay  the  debt  secured,  he  is  legally  bound  for  the 
balance  of  his  bid,  and  upon  his  decease  the  liability  devolves  upon 
his  personal  estate,  and  should  be  enforced  by  suit  against  his  per- 
sonal representatives.  Eemedy  cannot  be  had  by  bill  in  equity 
against  his  heirs,  except  upon  an  allegation  of  the  want  or  suffi- 
ciency of  the  personal  estate. ^^^^ 

It  has  been  held  that  an  agreement  of  the  mortgagee  to  pay  the 
surplus  to  the  mortgagor  does  not  extend  to  subsequent  incum- 
brancers, so  as  to  give  them  any  right  of  action  for  a  surplus  not 
actually  received  by  the  mortgagee,  but  allowed  by  him  to  be  re- 
tained by  the  purchaser .  under  a  claim  of  his  own  upon  the  prop- 
erty. The  court  say  that,  although  a  trust  would  in  such  case 
arise  in  favor  of  the  mortgagor,  yet  he  cannot  be  regarded  as  a  trus- 
tee for  subsequent  incumbrancers  until  the  surplus  money  has  ax3- 
tually  been  received  by  him.^^*^  The  purchaser,  however,  would  be 
liable  to  the  incumbrancer  entitled  to  the  surplus. 

""  Cook  V.  Baslev,  123  Mass.  396.  R.    (Pa.)    434:    Cope  v.   Wheeler.   41 

"^^Ballinger    v.    Bonrland,    87    111.  N.  Y.  303;   Hayes  v.  Woods.  72  Ala. 

513,    29    Am.    Rep.    69:    Reynolds   v.  92.  95. 

Hennessy,   15  R.   I.   215,   2   Atl.    701,  ""Bailey  v.  Merritt,  7  Minn.  159. 

and  15  R.  I.  513;   Mattel  v.  Ccnant,  ''"  Aultman   v.    Siglinger,   2    S.   D. 

156  Mass.  418,  31  N.  E.  487;   Tomp-  442;   50  N.  W.  911. 

kins  V.  Drennen,  95  Ala.  463,  10  So.  ^'■"=  Laughlin  v.  Heer,  89  111.  119. 

638.  "'■  Russell  v.  Duflon,  4  Lans.  399. 
""  Stoever   v.    Stoever,    9   Serg.   & 


INDEX 


References  are  to  Sections, 

ABSOLUTE  DEED,  with  agreement  to  recovery  when  a  mortgage,  241. 
defeasance  in  same  instrument,  241. 

in  separate  instrument,  241. 

usual    form    of,    242. 

by  separate  instrument,  objection  to,  243. 
deed   and  separate  defeasance   amount  to   a   mortgage,   244. 

when  part  of  same  transaction,   245 
separate  defeasance  must  be  under  seal,  244. 

must  be  delivered  with  deed,  246. 

eifect  of  delivering  as  an  escrow,  247. 
instruments  must  show  security  for  a  debt,  24Ta. 
parol  evidence  to  connect  instruments,  248. 
defeasance,  expressing  illegal  condition,  249. 

once  established  makes  transaction  a  mortgage,  250. 
mortgagor   cannot   renounce   redemption   beforeliand,   251. 
subsequent   cancellation   of   defeasance,   252. 
recording  of  separate  defeasance,  253. 
actual  notice  of  defeasance,  253. 
when  record,  not  notice  of  a  mortgage,   254. 

when  notice  of  agreement  to  reconvey,  254. 
possession  of  mortgagor — notice  of  his   rights,   255,   328. 
When  deed  and  agreement  a  conditional  sale,  256-281. 

character  of  transaction  fixed  at  its  inception,   257,  263. 

different  views  at  law  and  in  equity,  257. 

intention,   the  criterion,   25S. 

in  doubtful  cases  a  mortgage  rather  tlinn  a  sale,  258. 

whether  security  or  an  actual  sale,  259. 

evidence  to  convert  a  conditional  sale  into  a  mortgage,  260. 

agreement  to  repurchase  may  leave  no  doubt,  260. 

may   show   the   parties   intend   a   sale,   261. 

actual  sale  will  be  enforced,   262. 

if  a   conditional  sale  in  beginning  it  remains   so.   263. 
made  for  s(^curity  is  a  mortgage,  264. 

905 


IXDEX. 


■Refci'cnces  are  to  Sections 


ABSOLUTE  DEED— co/i/inued 

existence  of  debt,   the   test,  265. 

note  or  written  evidence  of  debt  not  necessary,   265. 
absolute  deed  made  on  application  for  loan,  266. 
delivered  in  payment  of  an  existing  debt.   267. 
conditional  sale  if  payments  are  made  in  limited  ti.jie,  268. 

when    no   relation   of   debtor    and    creditor)    2(-'. 

when   there  is  no  continuing  debt,  269. 

agreement   that  grantee  may  buy  absokitely  r.t   futur?  day, 
270. 

that  grantee  may  sell  at  best  price,  271. 
^       when  there  is  no  agreement  for  pa.^Tnent  of     .    .,   -172. 
mortgage    indicated   from   fact   that    interest   is   p:  ■■ -.blc,    27S. 

from    continued   possession   of   grantor,    274-. 

from  inadequacy  of  price,  275. 

not  shown  from  record,  instrumeiit  as  a  mort:  i,?;e,  276. 
parol  evidence  to   show  character  of  conveyance,   -77. 
slight    circvimstances   may   determine,    277, 
absolute  deed,  278. 

when  doubtful,   treated   as  a  mortgage,   279. 
s-ame  considerations  apply  to  assignment  of  mortrrage,  280. 
when  a  mortgage  rather  than  a  trust.  281. 
Parol  evidence  to  shoiv  mortgage,  282-342. 

fraudulent  grantor  not  aided  in  redeeming,  283. 
English  doctrine,  284. 
doctrine   in   United   States    Courts,    285. 
in  the  different  States,  286,  320. 
review  of  law  and  classification  of  States,  321. 
Statute  of  frauds  does  not  stand  in  way,  322,  323. 
What  facts  are  considered,  324-342. 
true   character   of,   inquired   into,   324. 
evidence   of   continuance   of   debt,    325. 
based  on  preexisting  debt,  326. 
when  intention  was  to  secure  a  debt,  326. 
when  intention  was  to  extinguish  debt,  326. 
transaction  possibly  a  sale  though  lonn  applied  for,  327. 
continued  possession  of  grantor,  328. 
inadequacy  of  price  to  be  considered,  329. 
delay  in   asserting  it  to  be  a  mortgnge,  330. 
immaterial  that  it  is  made  by  debtor,  331. 
when  a  trust,  332 

evidence  to  show  assignment  of  mortgage  to  be  security,  333 

assignment    of   contract    of   purchase,    334. 

strict  proof  that  absolute  transfer  is  mortgage,  335. 
906 


INDEX. 

Tleferences  are  to  Sections. 

ABSOLUTE  BEET)— continued. 

grantor  redeeming  must  do  equity,  336. 

judgment  creditor  may  show  that  debtor's  deed  was  a  mortgage 
387. 

election  to  treat  conveyance  as  absolute,  338. 

as  to  third  persons  grantee   is  owner,  339. 

once  a  mortgage  always  a  mortgage,  340. 

grantee's  liability  for  land  sold,  341. 

bill  in  equity  to  redeem  as  from  mortgage,  342. 

effect  of  an  exchange  of  land  by  mortgage,  342b. 

in  some  States  such  mortgage  does  not  pass  legal  title,  342c. 

grantor  may  maintain  suit  to  redeem >   342d, 

an  alienation  within  terms  of  an  insurance  policy,  423. 

record   of   separate   defeasance,   548. 

purchaser  may  rely  upon  apparent  title,  548. 

when  agreement  to  purchase  is  usurious,  639. 

mortgagor  may  release  by  parol  agreement,  711. 

surrender  of  defeasance  equivalent  to  transfer  of  equity,  997. 

grantor  in  may  redeem  when  a  mortgage j   1060. 

grantee  in  possession  liable  to  account,  1117. 
ABSTORAOT  OF  TITLE,  mortgage  of,  148. 
AOOEPTANCE  OF  MORTGAGE,  essential  to  its  execution,  84. 

subsequent  does  not  date  back,  85. 

by  cestui  que  trust  presumed,  88. 

by  trustee  presumed,  1780. 
AOCESSIONS  to  mortgaged  property  covered  by  mortgage,  149. 

products   of  the   soil,   150. 

growing  crop,  151, 

to  the  franchise  of  a  corporation,  155. 

of  vender  in  possession,  234. 
ACCiIDENT  OR  MISTAKE,  ground  for  relief  from  foreclosure,  1275. 
ACCOMMODATION,  consideration  of  mortgage  made  for,  615. 

when  presumed,  84. 

fact  of  how  shown,  84. 
ACCOUNT,  of  mortgagee  in  possession,  1114-1143. 

reference  to  State,  1104. 

wholly  a  matter  of  equitable  jurisdiction,  1115. 

application  of  rents  to  mortgage  debt  essential,  1115. 

mortgagee  chargeable  only  upon  redemption,  1116. 

when  estate  is  leased  to  mortgagee,  1116, 

mortgagee  not  liable  in  use  and  occupation,  1116, 

trespass  quare  clausum  lies  not  against  mortgagee,  1116. 

prior  and  subsequent  mortgages,  1116, 

mortgagee  in  possession  of  manufacturing  plant,  1116, 

907 


INDEX. 

References  are  to  Sections. 

ACCOVNT.— continued. 

grantee  in  possession  under  absolute  deed,  1117. 

allowance  for  improvements,  1117. 

liability  to  subsequent  mortgagee,  1118. 

who  is  liable  to  account,  1118. 

mortgagee  holding  by  virtue  of  another  title,  1118. 

presumption  as  to  character  of  possession  after  default,  1118. 

junior  mortgagee  may  compel  account,  1118a. 

second  mortgagee  has  paramount  right  to  redeem,   1118a. 

right  to  account  by  second  mortgage  after  defective  foreclosure 

sale,  1118a. 
assignee  stands  in  place  of  assignor  respecting)   1119. 
no  liability  unless  possession  be  taken,  1120. 
mortgagee  entering  as  devisee,  1120. 
What  the  mortgagee  is  chargeable  with,  1121-1125. 

when  mortgagor  remains  in  possession,  1121. 

by  second  mortgagee,  1121. 

right  against  mortgagee  of  crop,  1121. 

after  equity  of  redemption,  1121. 

effect  of  taking  formal  possession,  1121. 

when  mortgagee  himself  occupies,  1122. 

accountable  only  for  actual  rents,  1123. 

liable  for  allowing  insolvent  tenant  to  remain,  1123. 

liable  for  rent  lost  by  mismanagement  1123. 

liable  for  fraud,  1123. 

except  in  case  of  wilful  default  or  negligence,  1123. 

qualification  of  the  general  rule,  1123a. 

mortgagee  in,  under  absolute  deed,  1123a. 

when  timber  is  cut,  1123a. 

mortgagee  must  account  for  waste,  1123b. 

when  he  has  kept  no  proper  accounts,  1124. 

working  of  a  mine,  1125, 
Allowances  for  repairs  and  improvements,  1126-1131. 

rule  as  to  repairs,  1126. 

mortgagee  responsible  for  neglect,  1126. 

effect  of  special  clause  in  decrfee  for  redemption,  1126. 

rule  as  to  improvements,  1127. 

not  chargeable  with  rent  for,  1127. 

exception  to  rule,  1128. 

bona  fide  claim  of  ownership,  1128. 

estoppel  against  mortgagor,  1128. 

necessary  and  ornamental  repairs,  1129. 

repairs  or  purposes  of  sale,  1129. 

when  property  is  intermingled,  1130, 
908 


INDEX. 

References  are  to  Sections. 

ACCOVNT— continued. 

expenses  of  running  a  church,  1131. 
Allowance  of  compensation,  1132,  1133. 

mortgagee  not  entitled  to,  for  his  own  services,  1132. 
rule  as  to  trustees,  1132. 
rule  in  Massachusetts  >   1133. 
rule  in  Connecticut,  1133. 
Allowance   for  disbursements,   1134-1138. 
taxes  paid  by  mortgagee,  1134. 
when  mortgagee  responsible  for,  1134. 
purchase  at  tax  sale,  1134. 
insurance  premiums,  1135. 
prior  incumbrances  paid,  1137. 
repairs  by  mortgagee  of  undivided  interest,  1137. 
counsel  fees  paid,  1138, 
Annual  rests,  1139-1143. 

rule  for,  in  stating  account,  1139. 
when  there  is  a  surplus  of  rents,  1140. 
contract  governs  rate  of  interest,  1141. 
binds  subsequent  incumbrancers,  1142. 
•   may  be  opened  for  fraud,  1143. 
ACCOITNTING,  payment  by,  919-923. 

of  mortgagor  to  purchase  at  sale.   1661-1666. 
ACKNOWLEDGMENT  essential  to  admit  to  record,  83. 
before  deed  is  written  not  valid,  83. 
a  requisite  to  registration,  488,  495. 
by  attorney,  495. 

officer  taking  must  be  qualified  j  496. 
is  a  ministerial  act,  497. 

certificate  of  official  character  of  officer,  498. 
of  officer's  personal  acquaintance,  499. 
of  not  conclusive,  500. 
a  mistake  in,  500. 
as  to  statement  of  facts,  500. 
fraud  in,  500. 

not  essential  to  foreclosure  by  unit  of  entry,  1292. 
of  right  of  redemption  by  mortgagee  in  possession,  1162-1171. 
ACTION,  when  right  accrues  on  debt,  76,  1174-1191,  1289. 
right  of  subject  to  mortgage,  159. 
defence  that  right  of  has  not  accrued,  1301. 
to  try  title  allowed  to  mortgagee,  1307. 
bill  to  foreclose  should  show  that  right  has  accrued,  1471. 
ADJOURNMENT  of  sale  under  decree  of  court,  1634. 
discretionary  power  of  officer  as  to,  1634. 

909 


INDEX. 

References  are  to  Sections 

.IDJOURNMENT— con^inwecZ. 

publishing  notice  of  adjourned  sale,  1634. 

sale  may  be  kept  open  when,  1635. 

of  sale  under  power,  1873-1875. 

mortgagee  may  exercise  discretion,  1873. 

whether  notice  of  required,  1874. 
ADMINISTRATOR     (See  Executor.) 
ADVANCES.     (See  Future  Advances.) 
ADVERSE  CLAIMANTS  cannot  be  made  parties  to  foreclosure  suit, 

1440,  1455,  1474,  1489.' 
ADVERSE  POSSESSION.     (See  Possession.) 
ADVERTISEMENT,  foreclosed  by.     (See  Power  of  Sale.) 

in  Maine,  1240. 

in  New  Hampshire,  1241. 
AFFIDAVIT  of  sale  under  power,  1904,  1905. 

omission  of  does  not  invalidate  title,  1904. 

what  required  to  make  it  presumptive  evidence,  1905. 
AFTER-ACQUIRED   PROPERTY,   when   subject  to   mortgage,   152. 

rule  as  to,  153. 

of  railroad  companies,  154,  156. 

of  corporation,  whether  incident  to  the  franchise,  155.     . 

property  not  essential  not  impliedly  covered,  156. 

when  mortgage  passes  without  particular  mention,   157. 

mortgage  of  attaches  subject  to  existing  liens,  158. 

as   affected  by  registration,   529. 
AFTER-ACQUIRED  TITLE  of  mortgagor  inures  to  mortgagee,  679, 
825. 

rule  does  not  apply  when  title  wrongfully  acquired,  679. 

by  tax  sale,  680. 

not  a  defence  in  foreclosure  suit,  1305. 

when  mortgagor  not  estopped  to  set  up,  1483. 

when  decree  of  sale  covers,  1581,  1656. 
AGENT.     (See  Attorney.) 

notice  to  affects  principal,  560. 

to  director  of  corporation,  570. 

when  fraud  of  avoids  mortgage,  612. 

taking  commission  from  mortgagor,  whether  usury,  642. 

authority  of  inferred  from  possession  of  securities,  964. 
AGREEMENT  to  give  a  mortgage  is  in  equity  a  mortgage,  163. 
need  not  be  in  writing,  164. 
by  corporation  entered  on  its  records,  165. 

affecting  a  mortgage  should  be  recorded,  478. 

fixing  priority   of   mortgages,   608. 

910 


INDEX. 

References  are  to  Sections. 

AGREEMENT— con/wwecZ. 

to  pay  taxes  on  mortgage  debt  not  usury,  636. 

of  grantor  to  discharge  a  mortgage,  766. 

by  parties  subsequent  to  mortgage  as  defence  to  foreclosure,  1613. 
AGEEEMENT  TO  RECONVEY,  when  a  mortgage,  241,  281. 
ALABAMA,  nature  of  a  mortgage  in,  18. 

power  of  a  married  woman  to  mortgage,  117. 

distinction  between  her  statutory  and  her  equitable  estate,  117. 

parol  evidence  to  prove  a  mortgage,  286. 

usury,  law  of,  633. 

assignment  of  debt  without  mortgage  in,  817. 

provisions  for  entering  satisfaction  of  record,  992. 

redemption  after  foreclosure,  1051,  1322. 

statue  of  limitations,  ten  years,  1193. 

statutory  provisions  relating  to  foreclosure*    1322. 

strict  foreclosure  in,  1542. 

power  of  sale  mortgages  and  trust  deeds  in,  1723. 
ALASKA  T.,  statutory  provisions  relating  to  foreclosure,  1322a. 
ALEIN S  may  hold  mortgages,  132. 

enemy,  exercise  of  power  against,  1800. 
ALLOWANCE    TO   MORTGAGEE   in  possession.      (See   Account.) 
ALTERATIONS  of  mortgage,  what  are  material,  94. 

by  mere  stranger  have  no  effect,  94. 

of  note  by  purchaser  of  equity,  94. 

which  do  not  change  legal  effect.  95. 

verbal,  after  execution,  without  effect,  96. 

by  written  agreement,  96. 

when  a  defence  to  a  foreclosure  suit,  353,  1492a. 
ANGLO-SAXONS,  mortgages  used  by,  1,  2. 
ANNUAL  RESTS,  in  stating  mortgagee's  account,  1139,  1140. 
ANNUITY  secured  by  mortgage,  343. 
ANSWER  in  foreclosure  suit,  1479-1515. 
ANTECEDENT  DEBT,  mortgagee  for  not  a  purchaser,  460. 
APPEAL  from  final  decree,  1600. 

does  not  affect  a  sale  previously  made,  1662. 
APPEARANCE  by  dependant  cases  defective  service,  1514. 
APPROPRIATION   OF  PAYMENT.    (See  Payment,  904-912.) 
ARIZONA  T.,  usury  laws  in,  633. 

compound  interest  allowed  in,  650. 

provisions  for  entering  discharge  of  record,  992a. 

statutory  provisions  relating  to  foreclosure,  1322a. 
relating  to  foreclosure  and  redemption,  1322a. 

power  of  sale  mortgages  and  trust  deeds  in,  1723a. 

911 


INDEX. 

References  are  to  Sections 

A'EKIANSAS,  nature  of  a  mortgage  in,  19. 

written  authority  for  filling  blanks,  90. 

parol  evidence  to  prove  a  mortgage,  287. 

iisury  laws  in,  633. 

compound  interest  in,  650. 

entering  discharge  of  record,  992. 

no  redemption  after  foreclosure,   1051,  1323. 

statue  of  limitations,  five  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1323. 

power  of  sale  mortgages  and  trust  deeds  in,  1724. 
AiSSIGNEE  of  bankrupt  mortgagor  has  only  rights  of  mortgagor,  475. 
ASSIGNEE  OF  MORTGAGE  is  a  purchaser,  482. 

priority  between  different  assigneees,  483. 

should  notify  owner  of  estate  of  his  rights,  791. 

stands  in  place  of  assignor  in  respect  to  accounting,  1119. 

party  to  foreclosure  suit,  1371-1373. 

holding  as  collateral  security  may  foreclose,  1374,  1375,  1375a. 

of  mortgage  without  note  cannot  foreclose,  1376. 

of  note  may  foreclose,  1377. 

of  junior  mortgage,  party  defendant  to  foreclosure  suit,  1427. 

title  of,  must  be  shown  on  foreclosure,  1457. 

defences  against,  in  foreclosure  suit,  1485. 

peed  not  have  paid  value,  1486. 

when  he  takes  free  from  equities,  1487. 

equitable  cannot  execute  power.  1789. 
ASSIGNMENT  of  rents  and  profits,  an  equitable  mortgage,  171. 

of  contract  of  purchase,  an  equitable  mortgage,  172,  173,  174. 

of  certificate  of  public  lands,  176. 

of  conditional  judgment  in  foreclosure  allowed,  1316. 
ASSIG-NMENT   FOR   BENEFIT    OF    CREDITORS,   when  fraudu- 
lent, 630a. 
ASSIGNMENT  OF  MORTGAGE,  with  agreement  to  reassign,  280. 

absolute  as  collateral  security,  333. 

of  contract  of  purchase  as  security,  334. 

recording  acts  apply  to,  479. 

record  of  not  notice  to  mortgagor,  480. 

effect  of  recording',  481,  534. 

assig-nee  siiing  for  possession  must  record,  1282. 
is  a  purchaser  within  recording  acts,  482. 

when  delivery  of  note  essential  to,  483 ;  804-807. 

manner  of  recording,  484. 

a  formal  assignment,  786. 

legal  title  transferred  by  deed  only,  787, 

912 


INDEX. 

,  Tleferences  are  to  Sections, ' 

ASSIGNMENT  OF  MORTGAGE  —continued. 
consideration  of,  788. 

mortgagee  disseised  cannot  make  an  assignment,  789. 
possession  of  mortgagor  no  obstacle,  789. 
delivery  is  essential  to,  790. 

assignee  should  give  notice  to  mortgagor,  791. 
whether  it  may  be  compelled  on  payment,  792,  8G3,  1086. 
when  it  may  be  compelled  in  equity,  793. 

effect  of  on  liability  for  not  entering  satisfaction  of  record,  991. 
Who  may  make,  794-803. 

a  joint  mortgagee,  794. 

one  of  several  trustees  cannot,  795. 

legatee  with  life  interest,  795. 

one  of  several  executors  may,  796. 

foreign  executor  cannot,  797. 

whether  officer  of  corporation  may,  798. 

by  unincorporated  association,  799. 

by  partnership,  800. 

by  attorney,  801. 

his  authority  need  not  be  in  writing,  801. 

when  a  mortgage  of  indemnity  is  subject  to.  802. 

indemnity  in  part  only,  802. 

of  mortgage  conditioned  to  support,  803. 
What  constitutes,  804-812. 

of  mortgage  without  the  debt,  804. 

right  of  assignee,  807. 

of  mortgage  generally  carries  the  debt,  805. 

intention  of  parties  governs,  808. 
,       delivery  of  mortgage  without  note  is  not,  806. 

English  doctrine,  806. 

assignment  of  mortgage  and  delivery  of  note,  807, 

when  debt  is  non-negotiable.  807. 

deed  of  release  or  quitclaim  is,  808. 

conveyance  of  right,  title  and  interest,  808. 

deed  of  heir  before  settlement  of  estate,  809. 

mortgage  by  mortgagee  constitutes,  810. 

devise  by  mortgagee  constitutes,  810a. 

deed  by  mortgagee  of  part  of  the  estate  is,  811. 

an  ineffectual  foreclosure  operates  as,  812,  820c,  1678. 
Equitalle,  813-822. 

what  constitutes,  813. 

by  married  woman,   813. 

mortgagee   cannot   discharge   after,    814, 

assignee  takes  free  from  equities,  814. 

913 


INDEX. 

References  are  to  Sections. 

ASSIGNMENT    OF   MORTGAGE—coriHnued. 
of  bond  for  a  deed,  815. 
by  power   of   attorney,   8lU. 
of  debt  without  mortgage,   817. 

does  not  carry  legal  estate,  817. 

rights  of  equitable  assignee,  818. 

naked  legal   interest  of  mortgagee,   818. 

mortgagee  holds  legal  estate  in  trust,  819. 

of  debt  secured  by  deed  of  trust,  81t>, 

effectual  as  to  whom,  820,  820a. 

purchaser  is  put  on  inquiry,   820b. 

of  note  after  foreclosure  of  mortgage,  820c. 

assignment  of  part  of  debt,  787,  821. 

when  assignee  of  one  note  has  priority,  822. 
Construction  and  effect  of  assignment^  823-833. 
law  of  place,  823. 

passes  nothing  beyond  the  mortgage  title,  824. 
no   implied  covenants,   824. 
no  implied  guaranty  of  debt,  824,  824a. 
covenants  by  assignor,  824a. 
passes   after-acquired  title  when,  824,   825. 
carries  power  of  sale,  826. 
as   collateral   security,    827. 
effect  of  foreclosure  by  such  assignee,  827. 
right   of   assignee   of   fraudulent    mortgage,    827a. 
induced    by    fraudulent    representations,    828. 
made  in  fraud  of  creditors,   828. 
passes  all  the  securities,  829. 

whether  it  carries  a  separate  contract  of  guaranty;    830. 
covenant    that    assignor    will    not    collect,    831. 
usury  in,  832. 
cancellation  of,   833. 
Whether  subject  to  equities,  834-847,  1507. 

of  negotiable  note  before  due  free  from  equities,  834,  1487. 
although  consideration  of  mortgage  void,  835. 
when  made  subject  to  rights  of  mortgagor,  836. 
when  note   indorsed   and  mortgage   delivered,   837. 
effect  of  prior  recorded  assignment,   837. 
doctrine   that   assignee   takes   subject   to   equities,    838. 
ground  of  this  doctrine,  839. 
when  assignee  is  a   purchaser  for  value,   838. 
doctrine   of   United    States   Supreme    Court,    840. 
when   note   is    overdvie,    841. 
when   interest   is  overdue,   841. 
914 


INDEX. 

References  are  to  Sections. 

ASSIGNMENT    OF   MORTGAGE— continued. 

when  note  is  non-negotiable,  841. 

if  no  note  has  been  given,  841a. 

of  bond  is  subject  to  equities  >    842. 

what  equities  are   included,  842. 

whether  rule  limited  to  equities  between  original  parties,  843. 

equities    in    favor   of    third   persons,    844. 

qualified    by   doctrine    of   estoppel,    844a. 

doctrine  approved  in  New  York,  845. 

no  parol   trust   can   attach,   846. 

equities  arising  after   assignment,   847. 

of  mortgage  to  one  co-tenant  no  merger,  849. 

to  wife  of  mortgagor  no  merger,  850. 

when  it  operates  as  a  discharge,  861,  864. 

to   one   who   has   assumed   the   mortgage,   865. 
cannot   be    compelled   upon   payment,    792,    793,    1086. 

doctrine  otherwise  in  New  York,  1087,   1447. 
after    entry    does    not    stay    foreclosure?     1266. 
writ   of   entry   after   assignment,    1281. 

as  collateral,  1282. 
pending  foreclosure  suit,  1282. 
defenses   against  assignee,   1485,  1487. 
to   attaching  creditor  no  defense   to   foreclosure,   1298. 
without   note  or   bond,  parties   to  foreclosure   suit,   1376. 
pending  foreclosure  suit,  1488. 

amount  of  decree   after  assignment   as   collateral,   1592. 
effected  by  invalid   foreclosure  sale,   1678. 
whether  priority  of  assignment  gives  priority,  1701. 
when  legal,  passes  power  of  sale,  1787. 
equitable,   does   not   pass   the   power,   1789. 
after   advertisement   under  power   of  sale,   1832. 
invalid   sale   under   power   operates   as,   1902. 
ASSISTANCE,  writ  of,  1.663. 

ASSUMPTION  OE  MORTGAGE.     See  Purchaser. 
by  married  woman,    116,  753. 
by  purchaser  of  equity  of  redemption,   740-770. 
mortgagor  becomes  surety  for  purchaser,  741. 
of  proportionate  part  of  mortgage,  743. 
agreement  to  pay  mortgage,  749. 
verbal  promise  to  assume,  750. 
grantee  bound  by  accepting  deed,  752. 
married  woman  bound  on  her  covenant  to  assume,  753. 
ground  on  which  mortgagee  may  take  advantage  of,  755. 
junior  mortgagee  not  liable  on  agreement  for,  756. 

915 


INDEX. 

References  are  to  Sections. 

ASSUMPTION  OF  MOHiTGAG^.— continued. 

in  absolute  deed  which  is  in  fact  a  mortgage,  757. 
ground  on  which  mortgagee  may  have  benefit  of,  758,  759. 

that  it  is  a  promise  for  his  benefit,  758. 

grantor  need  not  be  liable  for  debt,  760. 

promise  must  be  express.  761. 

doctrine,  New  York  and  other  States,  762. 
whether  grantor  can  release  the  purchaser,  763. 
when  grantor  may  release  the  purchaser,  763. 
condition  to  pay  or  assume,  765. 
remedy  of  grantor  on  agreement  of,  768. 
when  agreement  may  be  enforced,  769.  '' 

measure  of  damages  for  breach  of  agreement,  770. 
covenant  to  pay  at  earliest  opportunity,  981. 
purchaser  assuming  cannot  set  up  usury,  1494. 
effect  on  rule  of  sale  in  inverse  order,  1625. 
of  proceeds  of  foreclosure  sale,  1697. 
'ATTACHMENT  of  equity  of  redemption  enforced  upon  surplus,  665. 

none  of  mortgagee's  interest,  701. 
ATTORNEY  must  execute  deed  in  name  of  principal,  130. 
fees  of,  secured  by  mortgage,  359,  1606,  1923. 
fees  in  case  of  sale  under  power,  1923,  1923b. 
acknowledgment  by,  495. 
delivery  to,  501. 
notice  to  affects  principal  when,  560. 

on  what  principle  the  doctrine  rests,  561. 

must  be  in  the  same  transaction,  562. 

must  be  of  matter  material  to  the  transaction,  563. 

when  same   attorney   is   employed  by  both   parties,    564. 

when  agent  himself  is.  a  party,  565. 
provision  for  payment  of  fees  for  foreclosure  not  usurious,  635. 
assignment  of  mortgage  by,  801. 
authority  of  to  receive  pajTnent,  964.. 
mortgagee   allowed   fees  paid   for  collecting   rents,   1138. 
fees  in  foreclosure  suits,  1606.      (See  Costs.) 
stipulation  for  not  usury,  1606a. 
may  purchase  at  judicial  sale,  1635. 
fees  in  case  of  sale  under  power,  1923. 
fees  for  preparing  advertisement,  1924. 
AUCTIONEER  memorandum  of,  1613. 

may  be  authorized  to  execute  deed  under  power,  1891. 
BANKRUPTCY,  assignee  has  only  debtor's  rights,  475. 
mortgagee  may  prove  claim  in  or  not,  729. 
effect  of  upon  redemption  by  debtor,  1073. 
916 


INDEX. 

References  are  to  Sections. 

BANKRUPTCY— continued. 

discharge  of  debt  does  not  discharge  mortgage,  889. 
does  not  prevent  foreclosure  suit,  1231. 

agreement  to  mortgage  a  specific  lien,  1231. 

rights  of  surety  taking  mortgage,  1231. 

to  possession  between  assignee  and  mortgagee,  1231. 

in  what  court  lien  may  be  enforced,  1232. 

jurisdiction  as  to  homestead,  1232. 

suit  in  state  court  not  suspended,  1233. 

enjoining  sale  under  power,  1233. 

when  bankruptcy  proceedings  are  in  another  State,  1234. 

court  may  order  sale  subject  to  mortgage,  1235. 

priority  of  different  liens  adjudicated  how,  1235. 

how  mortgagee  may  prove  his  claim  in,   1236. 

assignee  in,  should  be  made  party  to  foreclosure  suit,  1438. 

no  appointment  of  receiver  after,  1528. 

sale   without  leave  of  court  in,  1908. 

surplus  proceeds  of  sale  under  power  belong  to  assignee,  1932. 
BANKS,   national,   prohibited  loaning  on  mortgages,   134. 

remedy  for  violation  of  this  provision,  134. 
BEQUEST  of  mortgage,  700. 
BID,  obligation  to  accept  highest,  1614. 

repudiation  by  maker  of  highest,  1865,  1869. 

highest  and  best  bid>  1865. 
BIDDEK,  single,  no  ground  for  setting  aside  sale,  1914a. 
BILL  OF  INTERPLEADER,  answer  to  foreclosure  suit  by,  1515. 
BLANKS  IN  MORTGAGE,  authority  to  fill  after  execution,  90,  91. 
BONA  FIDE  PURCHASER,  not  bound  by  equitable  mortgage,  162, 
710. 

must  have  paid  all  the  purchase-money,   342a. 
BOND,   for  conveyance  assigned   as   security,   173. 

subject  to  equities   in  hands  of   assignee,   842. 

decree  may  be  for  amount  in  excess  of  penalty  in,  1593. 
BONUS,  paid   for   extension  of  mortgage,   647,   648. 

application  of,  912. 
BUILDING,  mortgage  of,  as  part  of  the  realty,  142. 

removal  of  from  mortgaged  land,  143. 

floated  off  the  mortgaged  land,  144. 

on  leased  land,  mortgage  of,  146. 

on  mortgaged  land  a  fixture,  433. 

right  to   remove   settled   in  suit  to   foreclose,   1446. 
BUILDING   ASSOCIATIONS,    usury   in   mortgages   of,   638. 
BURDEN  OF  PROOF  that  a  mortgage  is  usurious,  634. 

917 


INDEX. 


Heferences  are  to  Sections. 


CALIFOKNIA,  nature  of  a  mortgage  in,  20. 

a   lien   not    a    title,    20. 

form  of  mortgage,  61. 

written  authority  for  filling  blanks,  90. 

parol   evidence    to    show    a    mortgage,    288. 

record   of    assignment   not    notice    to    mortgagor,    480, 

usury  law  in,  633. 

compound  interest  allowed  in,   650. 

assignment   of   debt   without   mortgage   in,    817. 

entering   satisfaction   of   record,   994. 

redemption  after  foreclosure,   1051  >    1324. 

when  right  to   redeem  barred   in,   1145. 

statute    of    limitations,    four    years,    1193. 

mortgage    barred   when    debt    is    barred,    1207. 

statutory   provisions   relating    to    foreclosure,    1324. 

strict  foreclosure  in,   1543. 

interest  on  taxes  not  allowed,   1594. 

power  of  sale  mortgages  and  trust  deeds  in,  1725. 
CERTIFICATE   of  purchase  by  officer,   mistake   in,   1051. 

of  witnesses  to  entry  for  foreclosure,  1259,  1260. 

of  mortgagor   to   entry   for   foreclosure,    1261. 
record  of,   1263. 
CESTUI  QUE  TRUST,  cannot  maintain  ejectment  against  mortgagor, 
719. 

suit  of  foreclosure  by,  1384. 

when  should  be  made  parties  to  suit  by  trustee,  1397-1399. 
CHANGES  in  form  of  debt.     (See  Payment,  924-942.) 
CHANGE   OF  NAME  of  newspaper,  1612. 
CHECK  certified  good,  1613,  1615. 

CLERICAL  ERROR  in  names  of  parties  to  foreclosure  sulc,  1464. 
CLOUD  ON  TITLE  from  mortgage  after  debt  barred,  removed,  1214a. 
COMPETITION,  secret  arrangement  to  prevent  avoids,   sale,  1910. 
CITY  HALL  as  place  for  holding  sale,  1850. 
COLLATERAL  SECURITY,  assignment  of  mortgage  as,  333,  1592. 

payments  on,  827,  910. 
COLORADO,  nature  of   a  mortgage   in,   21. 

right  of  possession  in  mortgagor,  21. 

parol  evidence  to  show  a  mortgage,  288a. 

usury  law   in,   633. 

entering  discharge  of  record,  995. 

redemption    after    foreclosure,    1051,    1325. 

statute  of  limitations,  six  years,  1193. 

statutory   provisions   relating   to   foreclosure.    1325. 

no   strict   foreclosure    in,    1543a. 

918 


INDEX. 

References  are  to  Sections. 

COLORADO— continued. 

power  of  sale  mortgages  and  trust  deeds  in,   1726. 
COMMUNITY    PKOPERTY,    parties    in    suit    to    foreclose,    1424. 

death   of   mortgagor   affects    power   liow,    17!)2. 
COMPENSATION  of  mortgagee   in  possession,   11:52,   li;3;3. 

of  mortgagee  for  selling  under  power,  102;3. 
COMPETITION,   secret  arrangement  to  prevent   avoids   sale,   lUlO. 
COMPOUND  INTEREST.     (See  Inti:rkst.) 
COMPUTATION  of  interest,  655. 

CONDEMNATION  of  land  for  street,  effect  upon  mortgage,  C81a,  708. 
CONDITION,  in  mortgage,  4. 

form  of,  69,  242. 

substance    rather    than    form    regarded,    69. 

must  give  reasonable  notice  of  the  debt,  70. 

illegal,  249. 

strict   performance   of   revests   title;    887. 

upon  what  breach  the  right  to  foreclose  accrues,   1174-1191. 

of  promptness   of   payment,   1179. 

default  at  election  of  mortgagee,   1182. 

provisions   against    forfeiture,    1184. 

court   will   not   relieve   against   forfeiture,    1185. 

waiver  of  default  of  credit,  1186. 

to   pay   or   save  harmless,   1188. 
CONDITIONxlL    SALE    distinguished    from    a   mortgage,    256-281. 

in  equity  the  tendency  is  to  make  the  transaction  a  mortgage,  257. 

intention  is  the  criterion,  258. 

in  doubtful  cases  the  transaction  is  regarded  as  a  mortgage,  258, 
279. 

will  be  upheld  when  clearly  intended,   259. 

the  evidence  should  be  clear,  260. 

the  intent  may  appear  by  the  instrument,  261. 

the  purchaser's  rights  are  to  be  regarded,   262. 

character   of   the   transaction   fixed   at   its   inception,   263. 

the  existence  of  a  debt  the  test,  265. 

where  the  contract  is  made  upon  an  application  for  a  loan,  266. 

when  an  existing  debt  is  not  cancelled,  267. 

purchase  for  benefit  of  another,  268. 

a   continuing  debt   shows  a  mortgage,   269. 

agreement  that  grantee  may  buy,  270. 
may  sell,  271. 

when  there  is  no  obligation  for  the  payment  of  any  debt,  272. 

payment  of  interest,  273. 

continued  possession  of  grantor,  274. 

inadequacy  of  price,  275. 

919 


INDEX. 


References  are  to  Sections. 


CONDITIONAL  SAL^— continued. 
recording  as  a  mortgage,  276. 
intention  may  be  shown  by  parol  evidence,  277. 
slight  circumstances  determine,  278. 
assignment  with  agreement  to  reassign,  280. 
CONFIEMATION   OF   SALE.     (See  Foreclosure   Sale,  1637-1641, 

1670.) 
CONFLICT  OF  LAWS  as  to  usury,  656-663. 

as  to  foreclosure,  what  law  governs,   1321. 
as  to  exercise  of  power  in  deed  of  trust,  1774a. 
CONNECTICUT,  nature  of  a  mortgage  in,  22. 
passes  the  legal  estate,  22. 
parol  evidence  to  show  a  mortgage,  289. 
statutory  provisions  as  to  fixtures,  443. 
usury  in,  633. 

entering  discharge  of  record,  996. 
redemption   after   foreclosure,   1051,    1326. 
statute  of  limitations,  fifteen  years,  1193. 
statutory  provisions  relating  to   foreclosure,   1326. 
strict   foreclosure,   the  usual   form   in,    1544. 
power  of  sale  mortgages  and  trust  deeds  in,  1727. 
CONSIDERATION.     (See  Debt.) 

description  of  in  mortgage,  64. 

mortgage  made  without,  to  raise  money,  86. 

mortgage    without    placed    in    escrow,    87. 

extension  of  time  of  payment  is,  461,   649. 

defence  of  want  or  failure  of,    610-616. 

money  consideration  not  necessary,  610. 

affidavit  of,  610. 

none  need  pass  at  time  of  execution,  611. 

misuse  of  proceeds  by  mortgagor's  agent,  612a. 

implied  from  seal,   613. 

mortgage  by  way  of  gift,  614. 

of   accommodation   mortgage,    615. 

when  mortgagor  estopped  to  deny,  616. 

iDegal  avoids  mortgage,  617. 

contrary  to  public  policy,  618. 

procuring  witness  to  testify,   618. 

composition  of  felony,  618. 

who  may  take  advantage  of  illegality  of,  619. 

when  it  can  be  separated,  620. 

rights  of  bona  fide  transferees,  835. 

valid  in  part  and  void  in  part,  621. 

burden  of  proof  of  upon  party  contesting,  622. 

920 


INDEX. 

References  are  to  Sections. 

CONSIDEKATION— continued. 

want  of  in  mortgage  assumed  no  defence,   744. 

of  assignments,  788. 

for  new  note  for  debt  secured  by  mortgage,  933. 

proof  of,  in  foreclosure  suit,   1470. 

want  of  a  defence  in  foreclosure  suit,  1297,  1490. 

one  buying  subject  to  mortgage  cannot  set  up   want  of,   1491. 
CONSOLIDATING  MORTGAGES,  the  English  doctrine,   1083. 

not  applied  in  America,  1083. 

redemption    of    other    claims    cannot    be    compelled,    1081 

in  one  foreclosure  suit,   1458. 
CONSTRUCTION,    note    and    mortgage    construed    together,    71. 

prin<!iples  of,   101. 

equivocal  language  taken  most  strongly  against  mortgagor,  101. 

intentions  governs,  101. 
CONTRIBUTION  TO  REDEEM,  1089-1092. 

when  the  right  arises,    1089. 

the  general  rule  respecting,  1090. 

portion  retained  by  mortgagor  first  liable,  1091. 
sold  liable  in  inverse  order,  1092. 

according  to  value  is  rule  where,  1626. 

valuation   to   be   made   of   what  time,   1627. 

sale   not  enjoined   to   allow,   1812. 
CORPORATION,   designation   in  mortgage  to,  63. 

habendum   in   mortgage  to,   67. 

may  make  a  mortgage,  102,  124. 

power   of  alienation   restrained,   124. 

de  facto  when  mortgage  of  good,  124. 

limitation  of  railroad  companies  to  mortgage,  125. 

surplus   lands    of   railroad   may   be   mortgaged,    125. 

religious,  may  mortgage,  126. 

trustees  presumed  to  have  power,  126. 

the  power  to  mortgage  resides  in  the   stockholders,    127. 

directors  have  power  by  statute  or  by  law,  127. 

must   use  corporate   seal,  128. 

may  take  mortgages,   134. 

national  banks  restricted  as  to  real  estate  security,  134. 

foreign,  loans  by,  134. 

not  bound  by  notice  to  director  of,  570. 

may  assign  a  mortgage,  798. 

authority  of  treasurer  of  to  assign,   798.  ' 

assignment  by  unincorporated  associations,   799. 

exercise  of  powers  of  sale  by,  1785. 

purchase   by   director   at   sale   under  power,    1880,    1887. 

921 


INDEX. 


References  are  to  Sections. 


COSTS,  incurred  by  refusal  of  sufficient  tender,  902. 
of  previous  foreclosure  upon  redemption,  1084. 
rule  respecting  in  bill  to  redeem,   886,   1111. 

of   suit   brought   without   previous    tender,    1112. 

when   mortgagee   has   refused   tender,    1113. 
mortgage  of,  providing  for  continuance  of  default,  for  a  period 

of   time,   1179. 
in  determining  amount  of  tender,  1450, 
on   decree   of   strict   foreclosure,   1568. 
of  previous  action  at  law  included  in  decree,  1598. 
In  equitable  suit  for  foreclosure,  1602-1607. 

grounds  for  denying  plaintiff  costs,  1602. 

appointments  after  partial  reversal,   1602. 

discretionary  with  court,   1603. 

disbursements   made  in   carrying   on   suit,   1603. 

where    mortgage    secures    two    debts,    1603. 

of  subsequent  incumbrancers,  1604. 

subsequent   purchaser   liable   for,    1604. 

prior  incumbrancers,  1604. 

of  defendants  who  appear  and  answer,  1605. 

counsel  fees,  1606. 

stipulation  for   in  mortgage,   1606. 

must  be   actually   paid,    1606. 

wholly  a  matter  of  contract,   1606. 

allowing  commission,  1606. 

stipulation  for  in  power  of  sale  mortgage,  1606. 

on  'condition  mortgage  is  "collected  by  suit,"  1606. 

statute  of  another   State,   1606. 

trustee   not   entitled   to,   1606. 

reasonable  fee  not  usurious,  1606a. 

what  fees  are  reasonable,   1606a. 

performance  of  condition  on  which  fee  is  payable,  1606a. 

for  wrongfully   enjoining   sale,   1820. 

allowance   for   in    foreclosure   suit,    1606b. 

of  resisting  bankruptcy  not  allowable,  1606b. 

of   procuring   abstracts   of   title   obnoxious  >    1606b. 

tender   good   without   fee   when,   1606b. 

of  irregular  attempt  to  foreclose,   1607. 
of    subsequent    mortgagees,    1708. 
of   sale   under   power,    1923,    1926. 
COUNSEL  FEES.     (See  Attorney.) 
COITNTEE-CLAIM,  1496. 
COUPOlYS   for  interest,  73,   653. 

assignment   of,   carries  probate   interest   in   the .  security,   821. 

922 


INDEX. 

References  are  to  Sections. 

COJJFO'^S— continued. 

draw    interest    after    maturity,    1141. 
COURT   HOUSE  DOOR  as  place  for  holding  sale,  1848,  1849. 
COVENANTS,    in    mortgage,    68,    1225. 

importance   of,   68. 

in   purchase-money   mortgage,    68. 
of   little   usC)    68. 

may  continue   after  discharge,   68. 

for  payment  of  the  debt,  72,   1225. 
of  taxes,  77. 

of  mortgagor  to  pay  debt,  none  implied,  678. 

implied  in  assignment,  824,  824a,  831. 

of  seisin  breach  of  as  ground  for  set-off,  1496. 

in  purchase-money  mortgages,  1501-1505. 

of   further    assurances    in    power   of    sale    mortgage,    1901. 

statute    against    implication    of,    1715. 
CREDIT,   foreclosure  sale   on,   1615. 

on  sale  under  power,  1868-1872. 
CREDITOR  without  lien  not  proper  party  to  foreclosure  suit,  1436a. 
CROPS,  growing,  may  be  mortgaged,  150. 

not  sown,  how  mortgaged,   151. 

registry  laws  apply  to  mortgage  of,  486. 

mortgagor  in  possession  entitled  to,  697. 

mortgagee  taking  possession  entitled  to,   697. 
entering  may  appropriate,  1116. 

purchaser    at    foreclosure    suit    entitled    to,    1658. 

unless    reserved    at   sale,    1658. 
CROSS-BILL,  when  necessary,   1479a. 

not  necessary  to  protect  second  mortgagee  who  has  answered,  1688. 
CURTESY,  tenant  by  may  redeem,  1067. 
DAMAGES  for  land  taken  by  the  right  of  eminent  domain,  681a,  708. 

for  injury  to  mortgaged  property,  695. 

measure  of  for  breach  of  agreement  to  pay  a  mortgage,  770. 
DATE  may  be  contradicted  and  true  date  shown  -    89. 

implied   from  date  of  note,   89. 

not  essential,  89. 
DEATH    of   mortgagor,   no   proof    against   his   estate    required,    1222. 
after  decree,  1584. 

moj:'tgage    on   devised   land   paid   from   personal    assets,    923a. 

surplus   of   sale  made   after,   in   real   estate,    1695. 

of   i^laintiff   after   decree,    1585. 

of  mortgagor  after  decree  of  sale,  1608,  1653. 

of  joint   trustee,    rights   of   survivor,    1790. 

of  mortgagor  does  not  revoke  power,  1792,  1794. 

923 


INDEX. 


References  are  to  Sections 


DEBT.     (See  Consideration.) 

secured,   description  of,  70,   343-395. 

requisites   of   description »    70. 

note  and  mortgaged  construed  together,  71. 

covenants   to   pay,   72,   1225. 

time   of   payment   should   be   fixed,   75. 

may  be  made  to  depend  upon  some  event,  75. 

provision  that  whole  shall  become  due  on  any  default,  76. 

need  not  be  in  note  or  bond,  76. 

on  default  in  payment  of  taxes,  77. 

covenant   for    such   payment   expires    with   mortgage,    77. 

on   default   in   payment   of    insurance   premium,    78. 
general   description   of   sufficient,    343. 
consideration  named  does  not  limit  debt,  343, 
amount  of  ascertained  debt  should  be  stated,  344. 
strictness  in  stating  debt  in  some  states,  344. 
must   come  fairly  within  terms   used;    345. 
unliquidated,   like  open  account,  346. 
antecedent,  347,  459,  460. 
when  mortgage   is   larger  than;   348. 

valid  to  extent  of  actual  debt,  348. 
description   of  note,   349. 

not   necessary   to   give   all   particulars   of,   360. 
notes  are  evidence  of  amount  of,  351. 
note  and  mortgage  construed  together,  351. 
when  a  variance  note  governs,  351. 
parol  evidence  to  identify  note,  352. 
when  mortgage  is  by  absolute  deed,   352a. 
mortgage  without  note  or  bond  valid,  353. 
note  destroyed  and  new  note  given,  353. 
mistakes  in  description  of,  354. 
renewal  of  note  does  not  affect.    355. 
several  mortgages  securing  one  debt,  356. 
enlarging  terms  of  mortgage,  357. 
taxes  and  assessments,  358. 
solicitor's  fee,  359. 
tacking  other  debts,   360. 
♦     increasing   rate   of   interest,   361. 
a  further  debt  secured,  363. 
future   advances,   364-378. 
always  sanctioned  by  common  law,  365. 
statutory    provisions    against,    366. 
future  liabilities  should  be   described,  367. 


924 


INDEX. 

"References  are  to  Sections. 

DEBT — continued. 

parol  evidence  to  identify,  307. 

made   after   notice   of   subsequent   liens.    368. 

where   further   advances   are   not   obligatory,    369. 

obligatory  advances  are  secured,  370,   371. 

advances  before  actual  notice  of  subsequent  mortgage,  37^ 
mortgage   for   definite   advances   has   priority,   373. 

need  not  state  that  it  covers  advances,  374. 
verbal   agreement   for   advances,   375. 
amount   and  times  of  may  be   shown,   376. 
express   limitations   must   be   observed,   377. 
when  only  part  of  advances  are  made,  378. 
indemnity,  379-388. 
general    description    sufficient,    579. 
recital  of  in  mortgage,  677. 
no  covenant  of  implied,  678. 
barred  by  statute,  lien  may  be  enforced,  1204. 
remedy   for    debt    and   upon    lien    concurrent,    1215-1220. 
foreclosure  suit  no  bar  to  suit  for  debt,  1222,  1223. 
personal  remedy  excluded  when,  1226. 

after  foreclosure,  1227. 
description  of,  must  be  set  out  in  bill  to  foreclose,  1466. 
not   extinguished    by    strict   foreclosure,    1567. 
DECREE  in  suit  to  redeem,  1106. 

should  fix  time  for  redemption,  1107. 

failure   to   pay»    works   foreclosure,   1108. 

of   foreclosure   before    sale   as   bar   to    suit   for   debt,    1224. 

in  favor  of  mortgagor  no  bar  to  suit  by  holder  of  debt,  1427. 
in  suit  for   strict   foreclosure,   1561,   1569,   1572. 
Of  sale,  1571-1607. 

form  and  requisites  of,  1574-1586. 

description  of  property,  amount  of  debt,  &c.,  1574. 

personal   judgment  when,    1574. 

by  court  of  equity  without  the   aid  of  statute,   1573. 
of  forfeiture  as  upon  a  condition  subsequent,   when,   1573. 
Form  and  requisites  of,  1574-1586. 

may  follow   terms  of  mortgage.    1575. 

what  constitutes  a  sufiicient  description,  1575. 

sale   of  land  not  included   in  mortgage   of  no  effect,  1575. 

surplusage   in   decree,   1575. 

should  provide   order   of  sale,   1576. 

where  only  part  of  debt  is  due,  1577. 

sale  in  parcels  if  possible,  1577. 

when  balance   of  debt  matures  before   decree,   1577. 

925 


INDEX. 

References  are  to  Sections. 

X>EC'R'EE— continued. 

necessity   for   recital   of  partial   sale   in   certificate   of   pur- 
chase,  1577. 

of  sale   for   instalment   passes  entire  property,   1577. 

another  subsequently  maturing  mortgage  may  be  included, 
1577a. 

of  sale  subject  to  part  of  debt  not   due,   1577. 

for   only   the   relief  sought   for,   1578. 

should  protect  other  interests,  1579. 

protection  of  prior  mortgagees,   1579. 

of  subsequent  mortgagees,  1579. 

when  junior  mortgagee   forecloses,   1580. 

redemption    from    prior    mortgage,    1580. 

prior  mortgagee  not  barred,  1580. 

after-acquired    title    when    covered,    1581. 

debt   not    apportioned   between    co-tenants  j    1582. 

one  decree  for  entire   debt  when,   1583. 

separate   decrees  when,   1583. 

where  there   are  two  mortgages,   1583. 

death  of  mortgagor  as   aifecting,   1584. 

plaintiff  as  affecting,  1585. 

no   time   for   redemption   allowed,   1586. 

discretion  in  court  of  equity,   1586. 

how   affected  by   statutes,   1586. 
Conclusiveness  of,  1587-1589. 

cannot  be  attacked  collaterally,   1587. 

right  of  persons  not  served  with  summons,  1587. 

when  mortgage   was   invalid   in   origin,    1587. 

decree   entered   before    debt    is   due,    1587. 

interlocutory   in  what   respect,    1587. 

irregularity  in  decree  of  Federal  Court,  1587. 

decree  capable  of  amendment,  1587. 

while  unreversed,  1588. 

when  claim  of  paramount  title  has  been  set  up,  1588. 

entered  under  mistake   as  to   effect   on  homestead-    1588. 

liens   allowed   cannot   be   disputed    for   fraud,    1588. 

presumption   of   validity   after  la])se   of   time,   1588. 

prior   and   adverse   rights   not    affected,    1589. 

adverse  claimant  cannot  be  made  a  party,  1589. 

outstanding  life  estate,  1589. 
dower  right,  1589. 

contingent   remainder  men,   1589. 

controversy  between  principal   and  surety,   1589. 


926 


INDEX. 

References  are  to  Sections. 
DECREE — continued. 

prior  mortgage  not  affected  by  decree  on  junior  mortgage, 
1589a. 

although  he  hold  third  mortgage  also,  1589a. 

decreeing  dower  in  surplus  to  widow,  1584. 
Amount  of,  1590-1601. 

should  be  fixed,   1590. 

reference  to  determine  amount,  1590. 

subsequent    instalment    included,    1590. 

all  items  should  be  included,  1590. 

charging  mortgagee  with  profits,  1590. 

effect   of   agreement   to   sell   mortgage   at   discount,    1590. 

when  part  not  due,  1591. 

election    to    regard    entire    debt    due,    1591. 

when  mortgage  held  as  collateral,  1592. 

supplemental  bill  for  balance,  1592. 

may  exceed  penalty  of  bond,   1593. 

when  bond  is  for  double  the  debt,  1593. 

interest,  1594. 

at  rate  specified  in  mortgage,  1594. 

on  mortgage  for  purchase-money,  1594. 

on  amount  paid  for  taxes,  1594. 

exchange,  1595. 

insurance,  1596. 

paid  during  year  allowed  for  redemption,  1596. 

rent  of  leasehold,   1596. 

taxes,  159Y. 

when  illegally  assessed,  1597. 

failure  to  include  amount  paid  for,  1597. 

payment  of  out  of  proceeds  of  second  mortgage  foreclosure 
sale,  1597. 

costs   of   previous   action   to   foreclose,   1598. 

disbursements  by  plaintiff,  1599. 

for    repairs    and    improvements,    1599, 

final,   when,   1600. 

appeal  from,  160(? 

effect  on  previous  sale,  1600. 

no  stay  of  on  account  of  controversy  between  subsequent  in- 
cumbrancers,  1601. 

costs,  1602-1607.     (See  Costs.) 

for  deficiency,  1709-1721. 
DEED,  and  passing  of  title  under  foreclosure  sale,  1652.     (See  Fore- 
closure   Sale.) 
substituting  another  fbr  purchaser,  939. 

927 


INDEX. 

Refereiices  are  to  Sections. 

DEED — continued. 

delivery  of  deed,  1653. 

title  relates  back  to  execution  of  mortgage,  1654 
errors  in  deed,  1655. 
certificate  of  purchase  1661. 
Under  power  of  sale,  1889-1903. 

holder  of  legal  title  should  make  deed,  1889. 
by   assigns,   executors   and   trustees,    1889. 
no   personal   warranty   of   title,   1889. 
only  one  sale  and  deed  can  be  made,  1889. 
proper   recitals   in   deed,   1889. 

mortgage  taken   in   capacity   of   administrator,   1889. 
married  woman  may  make  deed,  1890. 
mortgagee  may  make  deed  to  himself,   1892. 
title  passes  by  delivery  of,  1894. 
not  evidence  of  recitals  in  it,  1895. 
DEED  ABSOLUTE  and  agreement  to  reconvey,  241-255. 
when   a  conditional  sale,   256-281. 
parol  of  evidence  to  prove  a  mortgage,  282-323. 
DEED  OF  TEUST,  legal  effect  of,  62. 

how  it  differs  from  a  mortgage,  62. 

conveys  a  defeasible  title,  62. 

omission  of  words  of  importance  in,  67. 

acceptance   of  by  beneficiary,   88. 

to  secure  beneficiaries  described  but  not  named,  135. 

all  creditors  of  the  grantor,  how  enforced,  1448. 
is  a  mortgage  in  legal  effect,  1769. 
m^erely  gives  lien  when,    1769. 
entry  of  satisfaction  here  made,  1769. 
authority  to  mortgage  justifies  execution  of,  1769. 
often  preferred   to   mortgage,   1770. 
rights  and  duties  of  trustees,  1770,  1771. 
trustee  is  agent  of  both  parties,  1771. 
effect  of  ownership  by  trustee,  1772. 
reversal  of  parties,  1772. 

trustee's  right  to  compensation  when  no  sale,  1772. 
appointment  of  new  trustee,  1774. 
by  cestui  que  trust,  1774. 
power   conferred   by   special   provision,    1774. 
prescribed  mode  strictly  followed,  1774. 
provision   that   sheriff   shall    act,    1774. 
refusal  of  original  trustee  to  acts   1774. 
necessity  for,  1774. 
what  constitutes,  1774. 

928 


INDEX. 

References  are  to  Sections. 

DEED  OF  TUV ST— continued. 

administrator   of  trustee   cannot   act,   1774. 

conflict  of  laws,  1774a. 

when  court  executes  the  power,  sale  is  by  virtue  of  that,  1775. 

when  debt  is  unliquidated,   1770. 

acceptance   of   trust,   1780. 

cannot  be  assigned  without  authority,  1788. 

to  two  or  more  must  be  executed  by  all,  1790. 

insolvency  of  trustee  no  ground  for  enjoining,  1816. 

trustee  should  be  personally  present  at  sale,  1862. 

buying  at  sale  under  power,  1880. 
sale   under  must  be   fairly  executed,   1906. 
DEFAULT   in  payment  of  interest,   1176,   1177. 

discrepancy  between  note  and  mortgage,  as  to,  1179a. 
provision   for   continuance   of,   1179a. 
at   election   of   mortgagee,    1182. 
of  credit,  waiver  of,  1186. 
meaning  of  term,   1191. 
DEFEASANCE,  essential  to  a  mortgage,  241. 

in  favor  of  grantor  or  of  third  person,  241. 
usual  form  of,  69,  242. 
separate   instrument   of,   241. 
must  be  to  grantor,  not  to  a  third  person,  241. 
separate,   objections   to,    243. 
And  deed  constitute  a  mortgage,  24:4:. 

when  part  of  one  transaction,  245. 
when  delivered  at  same  time,  246. 
delivered  as  an  escrow,   247. 
not  a  mortgage  at  law  if  debt  not  shown,  247a. 
parol  evidence  to  connect  with  deed,   248. 
illegal    condition,    249. 

when  once  established  gives   right  of  redemption,   250. 
mortgagor   cannot   renounce   redemption  beforehand,   251. 
cancellation    of,    252. 
substitution   of   new    defeasance,    252. 
recording  of,  253,  513. 

when  not  recorded  grantee  may  convey  good  title,  514,  940. 
surrender   of,    928,    977. 

of  equivalent  to  conveyance  of  equity,  977. 
DEFECT  in  title  excuses  purchaser  when,  1645,  1646. 
DEFENCES,  to  bill  to  redeem,  1105. 

to  writ  of  entry  to  foreclose,  1296-1305. 
to    bill    in    equity    for    foreclosure,    1479-1515. 
DEFICIENCY  after  foreclosure,  liability  of  married  woman  for.  111, 
1718.  923 


INDEX. 


R&feren'ces  are  to  Sections. 


BEFlCm'NCY— continued. 

no  decree  for,  after  debt  is  barred,  1206. 
suit  at  law  for,  after  sale  under  power,  1227. 

after  foreclosure  sale,  1228. 
personal  judgment  for,  must  be  asked  for,   1477. 
appeal  from  judgment  for,  1600. 
judgment  for  against  indorses  parties,   1434. 
rule  of  United  States  Supreme  Court,  1709. 
Procedure  for  obtaining  judgment  for,  1709a. 
balance  must  be  ascertained,   1709a. 
amount  stated  by  sheriff  or  referee »    1709a. 
no  notice  prior  to  execution  for,  1709a. 
rendered  only  by  virtue  of  statute,  1709a. 
subsequent  litigation  over,   1709a. 
decree   of  foreclosure  must  proceed,   1709a. 
ascertained  in  prior   foreclosure   suit,   1709a. 
failure  to  serve  one  defendant,  1709a. 
sale  price  the  test  of  value,  1709a. 

provided  sale  stands,  1709a.  _   ■ 

judgment  for,  in  equitable  suit,  1709-1721. 
statutory   provisions   in   several    States,    1709. 
sale  must  be  under  same  decree,  1709b. 
cross-bill    by   second   mortgagee,    1709b. 
rights   of  persons   secondarily   liable,   1709b. 
judgment  against  one  of  joint  makers  of  note,  1709b. 
liabilty  of  indorser,   1709b. 
disaffirmance  by  infant  principal,  1709b. 
mortgage  covering  land  in  two  States »    1709b. 
third  persons  liable  may  be  joined,   1710. 
remedy   by  separate  action,   1710. 

decree  against  one  releases  other  joint  obligors  1710. 
loss  of  right  by  delay,  1710. 
guaranty  of  mortgagee  as  basis  for,  1710. 
decrees  against  partnership,  &c.,   1710. 
effect   of   agreement   not   to    take,    1710. 
court  of  equity  cannot  give  judgment  without  aid  of  statute, 

1711. 
when   mortgage  debt   is   itseK  enforceable   in   equity,    1711. 
power  of  equity  after  property   is  exhausted,   1711. 
scope   of   rights   against   third   persons   given   by   statute,   1711. 
one  who  has  bought  subject  to  the  debt  not  liable  for,   1712. 
alternative    judgment    valid,    1712. 
when  purchaser  is  bound  to  pay  the  debt,  1713. 
enforcement    of   such    liability,    1713. 
930 


INDEX. 

References  are  to  Sections. 

DEFICIENCY— continued. 

partial  assumption  of  debt,    1713. 

though    conveyance    be    merely    for    security,    1714. 

when  there  is  no  bond  or  note,  1715. 

agreement  to    look   to   property   alone,    1715. 

debt   barred    by    statute    of   limitations,    1715,    1719. 

none  against   persons   not   appealing   in   mortgage,    1715. 

statutes  against  implication  of  covenants,   1715. 

no    judgment    for    against    non-resident,    1716. 

invalid  decree  bars  subsequent  suit,  1716. 

no   judgment    against    administrator,    1717. 

when  debt  is  barred,  1717. 

rights   against   other   surplus   money,    1717. 

no  judgment  against  wife  except  for  her  own  debt,  1718. 

joint  note  by  husband  and  wife,  1718. 

no   judgment    for   parts    of   debt   not   due,    1719. 

unpaid   taxes    should   be   deducted,    1719a. 

even    after   conveyance   of   equity >    1719a. 

charging   owner   of   equity   with   rents   and   profits,    1719a. 

when  judgment   for  becomes  a   lien,   1720. 

statutory  modification,  1720. 

clerk   may   issue   without   further   order   of   court,   1720. 

on    redemption    homestead    takes    priority    over,    1720. 

personal    remedy    may    be    enforced    without    foreclosure,    1721. 
DELAY,  in  redeeming  after  foreclosure  sale,  1054,  1161a. 

in  setting  aside  irregular  sale  under  power,  1922. 

in    objecting   to    purchase   by   mortgagee   under   power,    1\385. 

in  setting  aside  irregular  sale  under  power,  1922. 

right   of   subrogation   lost   by,    855a. 
DELAWAEE,  nature  of  a  mortgage  in,  24. 

usury   in,   633. 

entering  satisfaction  of  record,  998. 

no   redemption    after   foreclosure,    1051,    1328. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions   relating  to   foreclosure,   1328. 

power    of    sale    mortgages    and    trust    deeds    in,    1729. 
DELIVERY  of  mortgage  essential,  84,  85,  501. 

may   be   to   agent,   84. 

proof   of,    85,    86. 

of   mortgage   made   for   purpose   of   sale,    86. 
valid   only   from   delivery   to   purchaser,   86. 

in  escrow,   87. 

not   valid    if   delivered   without    authority,    87. 


931 


INDEX. 

References  are  to  Sections. 

B'EIIV'E'RY— continued. 

registration   does  not  operate   as,   501. 

to   an   agents    501. 

after    recording,    502. 

to  a  stranger,  502. 

presumption   as   to,   502. 

subsequent,   when   becomes   operative,   503. 

essential    to    assignment,    790. 
DEPOSIT   of  money  required   on  foreclosure  sale,   1613,   1614. 

forfeiture   of,   1644. 

at   sale   under   power,    1866. 
DEPOSIT    OF    TITLE    DEEDS,    an   equitable   mortgage,    179-188. 
DESCKIPTION,   of  the  parties,   63. 

of   the   debt.      (See   Debt.) 
Qf   the  premises,  what  is  requisite,   65,  489. 
uncertainty   in>    66. 
apparent  error  in,  490. 
must  be  set  out  in  bill  to  foreclose,  1462. 
in  the  decree  of  sale,   1574. 
error  in  master's  deed,  1655. 
of   property    in   notice    of   sale,    1840. 
DESTRUCTION   of   record   of  mortgage,   526. 
DEVISEE    should   redeem   when,    1062. 

entitled   to   have   mortgage   paid   from   personal   estate,    923a. 

may   mortgage   his   interest,    136. 

necessary   party  defendant   to   foreclosure   suit,    1418. 
DISABILITIES    of    insanity,    infancy,    etc.,    103-105. 

none  to  prevent  the  taking  of  a  mortgage,  131. 

successive,    effect    on    right    to    redeem,    1151. 
DISBURSEMENTS    by   mortgagee   in   possession,    1134-1138. 

by   plaintiff   in   foreclosure   proceedings,    1599. 

in   repairs   or   improvements,    1599. 
DISCHARGE,  mortgagee  cannot  make  after  assignment  of  note,  814 

operates   as   an   assignment  when,   858. 

assignment  to  one  bound  to  pay  operates  as,  864,  865. 

payment   on  law   day  effects,   886. 

when    payment    operates    as,    888,    889. 

by  tender   after  law  day,   892,   893. 

who  may  make,   956-965. 

owner  of  debt  should  make,   956. 

when   made  by   person   other   than   mortgagee,   957. 

when  mortgage  is  held  by  two  or  more  jointly,  958. 

one  of  two  executors  may  make,  959. 
trustees  cannot  make,  959. 

932 


INDEX. 

References  are  to  Sections. 
BlSClIAItGE— continued. 

by    one   holding   mortgage    as    "trustee,"    959. 
whether   foreign    executor    can    make,    960. 
assignee  may  make,  961. 

holding  as  collateral  may  make,  963. 
obtained  through  fraud  or  made  by  mistake,  966. 
bona  fide  purchaser  may   rely  on  record,   966. 
proof  of  fraud,  966. 

induced    by    mortgagor's    fraudulent    representations,    966a. 
undelivered   discharge   not  binding,   966a. 
entered  without  fraud  or  mistake,  966b. 
sufficiency  of  consideration,  966b. 
fraudulent,   is  not  payment,   967. 
by    trustee,    967. 

rights   of  bona  fide   purchaser,   967. 
rights   of  judgment   creditor,   967. 

personal  judg-ment  when  mortgage  cannot  be  reinstated,  968. 
when  made   through  mistake   of  fact  may  be  cancelled,    969. 
what  constitutes  mistake   of  fact,   969. 
when   assignment   was   intended,    970. 
proof   of  mistake,    970. 

mortgage  substituted  in  ignorance  of  an  intervening  lien,  927a, 
971. 

intervening  homestead  rights,  971. 
prior  mortgagee  cannot  be   compelled  to  repay,   971a. 
forged  discharge  never  effectual,   971b. 
Forin  and  construction  of  discharge,  972-988. 

mode   of  effecting,   972. 
■  receipt  of  payment  under  seal  not   sufficient,   972. 

deed  of  release  or  quitclaim,  972. 

effect    of    erroneous    recital,    972. 

attachment    not    discharged    by,    972. 

after   payment,    mortgagee    trustee   of   legal   title,    973. 

where  mortgage  is  regarded  as  mere  lien,  974. 

no   writing   necessary,    974. 

judgment  satisfied  out  of  other  property,  974. 

bequest    of    a    mortgage    to    the    mortgagor,    974a. 

in    case    of    a    mortgage    of    indemnity,    975. 

whether   a    general   release    discharges   mortgage,    976. 

admission  of  parol  evidence,   976. 

where  clause  of  defeasance  is  not  recorded,   977. 

by    foreclosure    of    prior    mortgage,    978. 

rights   of  mortgagor   and  purchaser  of  equitj-,   978. 

verbal  agreement  to  release,  979. 

933 


INDEX. 

References  are  to  Sections. 

BISCRARGE— continued. 

recorded   written   agreement   to   release  part,   979. 

may  be  limited  in  its  operation,  980. 

as  to  particular  persons,  980. 

as    to    amount    of    property,    980. 

of   a   portion   of  the  mortgaged  premises,   981. 

of   two   or  more   mortgages?    981. 

power  to  convey  free  from  lien  on  certain  conditions,  981. 

agreement   to   release   on   demand,   981. 

effect  of  release  of  personal  liability  of  mortgagor,  983. 

surrender  of  note   construed  to   be,   983. 

release   of   security   does   not   necessarily   release   debt,    984. 

evidence  of  payment,  984. 

leaving  note  outstanding,  984. 

effect  of  upon  title  of  person  to  whom  it  is  made,  985. 

through   representations   or   conduct   of   mortgage,    986. 

wrongfully  obtained,  987. 

by  undue   influence  void,   987. 

rights   of  bona   fide  purchasers,   987. 

forged   release,   987. 

debtor    should    tender    the    instrument,    988. 

bill  in  equity  to  compel  cancellation  of  paid  mortgage,  988a. 
Entry  of  record,  989-991. 

penalty   for   neglecting   to   make,   990. 

when  holder  of  mortgage  liable   to   penalty*    991. 

assignment    affects    liability   how,    991. 
Statutory  provisions  for  entering  in  the  several  States,  992-1037. 
defence  of  must  be  clearly  set  up,   1512. 
DISSEISIN  of  mortgagee  by  mortgagor,  708,  1211. 

what  constitutes,   1211a. 
of  mortgagee  prevents  a  valid  assignment,   789. 
DISTEICT  OF  COLUMBIA,  registration  in,  488. 
usury   in,   633. 

entering  satisfaction  of  record,  999. 
statutory  provisions  relating  to   foreclosure,   1329. 
power   of   sale   mortgages   and   trust   deeds   in,   1730. 
DOWER,  fraudulent  release  of  after  execution,  95. 
exoneration    of   wife's    inchoate    right,    114. 
dower  interest  may  be  mortgaged*    136. 
purchase-money   mortgage  not   subject  to,   468. 
mortgagor's  widow  entitled  to,  666. 
in  equity  of  redemption,  666. 
principle  of  merger  as  applied  to,  666,  866,  867. 
not  cut  off  by  re-issue  of  mortgage,  949. 
934 


INDEX. 

References  are  to  SectiooB. 

DOWEK — continued. 

gives  right  to  redeem  mortgage,  10G7. 

wlien   mortgagor's    wife    made   party   to    foreclosure   suit,    1420, 
1421. 

outstanding  not  cut  off  by  foreclosure,  1589. 

interest  sufficient  to  invoke  rule  of  inverse  order,  1621. 

sufficient  interest  in  applying  for  resale,  1669. 

in    surplus    proceeds    of    foreclosure    sale,    1584,    1693,    1694. 
of  sale  under  power,  1933. 
DURESS   avoids  mortgage  obtained  by,   626. 

in   obtaining   wife's   execution   of   deed?    538,   626. 

by  equitable   suit  to  foreclose,   1447. 

does  not   avoid  mortgage   unless  mortgagee  knew   of   it,   626. 

by  imprisonment,  626. 

by  criminal  prosecution,   626. 

recovery  of  money  paid  under,  1819. 
EARNINGS   of  railroad  may  be  mortgaged,   160. 
EASEMENT    not   reserved   in   mortgage   extinguished   by   foreclosure, 
1654. 

presumed   abandoned   when   not   reserved,    1654. 
EJECTMENT,   mortgagor   cannot   maintain    against   mortgagee,    674. 

mortgagee  may  recover  possession  by,  719. 

against  mortgages,  no  bar  to  foreclose  suit,   1511. 

by  purchaser  at  sale,  1661,   1667. 
ELECTION    of   mortgagee   to    consider    mortgage    due,    1182. 
EMBLEMENTS,  mortgagor's  right  to  until  possession  taken,   697. 

ceases  when  he  surrenders  possession,   697. 

personal  property  when  severed?    697. 

niortgage  may  waive  right  to,  698. 

mortgagor's    tenant    has    no    right    to    against    mortgagee,    780. 

pvirchaser  under  foreclosure  sale  entitled  to,   1658. 
EMINENT   DOMAIN,   damages   for   land   taken   by,    681,    681a,    708. 
ENFORCEMENT   of  mortgage,   when  right   of   accrues,   1174-1191. 

remedies  for,  1215-1236. 

of    foreclosure    sale    against    purchaser,    1642-1651. 

injunction  against  removal  of,  1658. 

trees   and   shrubs   in   nursery,   1658. 

rule  in   States  where  mortgage  is  a  lien,  1658. 
ENTRY  to  foreclose  mortgage,   1246-1257. 

to   entitle   mortgagee   to   rent   from   tenant,    771-775. 

of  satisfaction  of  trust  deed  how   made,   1769. 

to   foreclose   waives   not   prior   sale,   1919. 
ENTRY  AND  POSSESSION.     (See  Foreclosure  by.) 
ENTRY  OF  SATISFACTION  of  record.     (See  Discharge.) 

935 


INDEX. 

References  are  to  Sections. 

EQUITABLE  ASSIGNMENT  of  mortgage,  813-822. 
EQUITABLE  MORTGAGE,   various  kinds  of,  162-188. 

by  agreement  to  give  a  mortgage,  163. 

by  parol  agreement,   164. 

by  entry  of  agreement  on  records  of  company,   165. 

by  informal  deeds,  166,  168. 

which  do  not  convey  legal  estate,  166. 

covenant  of  debtor  to  execute,   166. 

agreement  charging  land  with  debt,  167. 

by  deed   defectively   executed   in   agent's   name,   169. 

by  implied  trust,   170. 

by  an  assignment  of  rents,  171. 

by   assignment   of   contract   of   sale,   172,   173. 
although    conditional,    174. 
or    a   partial    interest,    175. 

Dy  assignment  of  certificate  of  public  land,   176. 

by  preemptor  of  public  land,  177. 

by  deposit  of  title  deeds,  179. 

doctrine  established   in  England,   180. 

legal  effect  of  the  deposit,  181. 

law  of  place  of  contract  governs,  184. 

doctrine  not  generally   adopted  in  America,   185. 

written  memorandum   of,   187. 

how  enforced,  188. 

within  the  recording  acts,  476. 

for  precedent  debt,  477. 

mortgage  definitely  recorded,  522. 
EQUITY    OF   REDEMPTION,    growth    of    the    doctrine    of,    6. 

an  estate  in  the  land,  6. 

when  first  established,  7. 

what  it  is,  8. 
ERASURE  when  presumed  to  have  been  before  execution,   94. 

mortgagee   may   purchase,   711. 
ESCROW,  delivery   in,  87.' 

ESTATE   TAIL,   may  be  the   subject  of   a   mortgage,   137. 
ESTOPPEL  of  mortgagor  in  the  case  of  irregular  filling  of  deed,  92. 

when   it  may  be   set   up   in   such   case,    93. 

of  owner  by  mortgage  of  third  person,   138a. 

grantor  by  absolute  deed  may  show  true  character  of,  323. 

to   deny   consideration,   616. 

to   claim   invalidity  of  mortgage,   631. 

it  was  made  to  defraud  a  creditor,  632. 

to   set   up   defence   of   usury,   by   certificate,   645. 

to  deny  his  title,  682,  1483. 

936 


indet:. 


References  are  to  Sections. 


ESTOPPEL— conh'mtecZ. 

to  deny  validity  of  mortgage,  683,  1482. 

of  mortgagee   to   assert  his  mortgage,  734. 

of  assignee   to   claim  a  merger,   853. 

of  purchaser  to   claim  merger,   854. 

of  mortgagor  to   redeem,   1049. 

to  set  up  equities  against  assignee,  844a. 

of  mortgagor  to  show  payment  after  reissue,  948. 

of   mortgagee   to    foreclose,    1189. 

of   mortgagor   to    deny   his   title,    1483. 

by   his    declaration   or    agreements    to    take    defences,    1484^ 
to  deny  validity  in  assignee's  hands,  1484. 

of  purchaser  subject  to  mortgage  to  set  up  usury,   1494. 

against    mortgagor    by    receipt    of    surplus,    iy20a. 

of  mortgagor   to   set  up   usury,   1495. 

what  essential  to  create  estoppel,  1495. 

of  purchasers  to   object   to   restriction,   1645. 

of  purchaser  to   open  sale,   1650. 

to  object  to  irregular  foreclosure  sale,  1674. 
EXAMINATION    OF    TITLE,    time   for    after   sale,    1867. 
EXCHANGE,  payment  of  not  usurious,  637. 

not   allowed   on  .mortgage   debt,    1595. 
EXECUTION    OF    MORTGAGE,    81-99,    527-541. 

proof  of,  1455. 
EXECUTION   SALE   of  equity  of  redemption,   effect  of,   665. 

though  mortgage  secures   support  of  mortgagee,   665. 

rights  of  purchaser,  736,  747. 

of  mortgagee's   interest,   701. 

of  mortgaged  premises  for  same  debt,  1229. 

may  be  made  of  other  land,  1230. 
EXECUTORS  AND  ADMINISTRATORS,  mortgages  by,  102,  102a. 

under   license    of   court,    102a. 

under   authority   of  will,   102a. 

acquiescence  of  creditors  in  mortgages  by  executor,   102a. 

expenses    of    administration    on    mortgagor's    estate    subject    to 
prior  mortgage,  487a. 

assignments   by,   796. 

foreign  assignments  by,  797. 

paying  mortgage  by   accounting,   919-923. 

purchasing  mortgage  on  estate  of  deceased,  921. 

mortgagee   administering   mortgagor's   estate,    922. 

one  of  two  executors,  etc.,  may  discharge,  959. 

whether    foreign    executor,    etc.,    may    discharge,    960. 

may   maintain  writ   of      entry   to   foreclose,   1288. 

937 


INDEX, 


References  are  to  Sections. 


EXECUTOES  AND  ADMINISTEATORS— conh'nuecZ. 

proper  parties  to  maintain  equitable  suit   for  foreclosure,   1388. 

foreign,  cannot  maintain  foreclosure  suit,  1389. 

mortgage   to,   how  foreclosed,    1390. 

a  mortgagee  purchasing  at  foreclosure  sale,  1636. 

may  purchase  at  judicial  sale,  1635. 

no  deficiency  judgment  against,  1717. 

of  trustee  cannot  sell  under  power  of  sale,   1774. 

of  mortgagee,   may   exercise   power,    1785,    1786. 

deed   under   power   by,    1889,    1891. 

whether   entitled    to    surplus    of    sale,    1931,    1932. 
EXONERATION   from   mortgage   debt   in   favor  of  heir,    751. 
EXTENSION  of  mortgage  by  husband  in  behalf  of  wife,  115. 

makes  a  valuable  consideration,  461,   649. 

agreement  for   should  be   recorded,   532. 

usury  paid  for  to  be  credited,  648. 

when  agreement  for   is   void   on  account   of  usury,   649. 

by  purchaser,   when   it  discharges   the   mortgagor,   742. 

when  it  does  not  impair  security,  942. 

extends  right  of  redemption,  1053. 

estops  mortgagee  to  foreclose,  1189,  1190. 

a   consideration  necessary  to   support,   1190. 

by   parol    agreement,    1191. 

effect  of  upon  homestead  right,   1106. 
FICTITIOUS  MORTGAGE  when  valid  between  parties,  81. 

made  to  one  ignorant  of  the  transaction,  86. 
FINAL  DECREE,  what  is  a,  1600. 
FIXTURES,  severed  from  realty,  whether  personal  proi^erty,   144. 

what  are  covered  by  mortgage,  428. 

building  erected  on  land  without  consent,  428. 

intention    largely  ■  determines,    429. 

a  mixed  question  of  law  and  fact,  429, 

principles   by   which   to    determine,   428. 

criterion   adopted   by    several    courts,    429a. 

custom  to  treat  certain  articles  as  removable  chattels,  429a, 

enumeration  of  some  excludes  others,  430. 

mortgaged   before    attached    to    realty,    431. 

by  agreement,   character  of  personalty   impressed,   431a. 

hired,  not  subject  to  mortgage,  432. 

buildings  erected  on  mortgaged  land,  433. 

in  and  about  a  house  or  store,  433a. 

in   a  plantation  or  farm,   433a. 

trees  and  shrubs  in  a  nurserj',  435. 

annexed  before  mortgage,  434. 

938 


INDEX. 


References  are  to  Sections. 


FIXTV'RES— continued. 

annexed  after  mortgage,  436. 

track   of   railroad   on   mortgaged   land,   436. 

gas   company's  works,   436. 

by    agreement,    character    of    personalty    retained,    436a. 

two   contrary   views   as   to   effect   of  chattel   mortgage,   436b. 

the  Massachusetts  doctrine,  436b. 

that  chattels  annexed  to  the  realty  cannot  be  removed,  436b. 

though    subject    to    chattel    mortgage    when    annexed,    436b. 
contrary  doctrine  that  personal  character  is  retained  by  agree- 
ment, 436b. 

or   by    chattel    mortgage    before    annexation,    436b. 
mortgage  after  chattels  are  annexed  subject  to  chattel  mortgage, 

436c. 
without  notice  of  chattel  mortgage,  436c. 
under  an   equitable  mortgage,  437. 
agreement  of  parties  as  affecting  rule,  438. 
annexed  by  tenant  of  mortgagor,  439. 

permanent  structures  by,  439. 

purchase   of   reversion   by,   439. 

lessees's    surrender    of    term,    440. 
rule  as  to  trade  fixtures  not  applicable,  441. 

in  Vermont  exceptional  as  to,  442. 

required  to  be  substantially  attached,  442. 
statutory  provisions   in   Vermont   and   Connecticut,  443. 
distinction  between  indispensable  things  and  those  that  are  not, 

444. 
machinery    in    mill,    rule    of    intention    respecting,    444. 

movable  machinery,  444. 

rule  in  New  York  and  Ohio,  444. 
machinery  put  in  to  replace  old,  444. 
mortgage   of   realty   preferred   to   one   of  fixtures,   445. 
steam  engine  and  boiler  may  be,  446. 
shingle  machine,  447. 
looms  in  mills,  448. 
cotton  looms,  449. 
machinery  of  silk-mill,  450. 
rolls  of  iron-mill,  451. 
rolling  stock  of  railways,  452. 
reinedies  for  removal  of,  453,  695. 
replevin   by   mortgagee   for   fixtures   removed,   453. 
remedy  in  equity  for  house  removed,  453. 
action   for   damages   for   removal   of,   454,   695. 

939 


INDEX. 


References  are  to  Sections. 


JIXTUBJES— continued. 

measure  of  damages,  454. 
there  can  be  but  one  recording,  454. 

by  mortgagee  not  in  possession,  455. 

trespass,    trover    or   replevin,    455. 
pass   to   purchaser   under   foreclosure   sale,    1657. 
wrongfully  severed  before  foreclosure,   1657. 
remedy  when  wrongly  severed,   1657. 
FLORIDA,  nature  of  a  mortgage  in,  25. 
vendor's  lien   adopted  in,   191. 
parol   evidence  to   show   a  mortgage,   291. 
usury   in,   633. 

entering   satisfaction   of   record,    1000. 
no  redemption  after  foreclosure,  1051,  1330. 
statute  of  limitations,  twenty  years,  1193. 
statutory    provisions    relating    to    foreclosure,    1330. 
no  strict  foreclosure  in,   1544a. 
power  of  sale  mortgages  and  trust  deeds  in,  1731. 
FORCIBLE  ENTRY  AA'D  DETAINER,  not  applicable  to  recovery 
of  possession  by  mortgagee,  720. 
by  purchaser  at  sale,  1666. 
FORECLOSURE,    opened    by    accepting    payments    on    debt,    949a. 
does  not  constitute  payment,  950-955. 
strict  foreclosure  is  not  payment,  950. 
by  entry  and  possession  is  payment  pro  tanto  only,  952. 
sale  is  payment  pro  tanto,  953. 
sale  under  power  is  payment  pro  tanto,  953. 
redemiition   after   imperfect,   1048. 

after  foreclosure  of  part,  1074. 

after  sale  under,  1051,  1075. 
results   from  failure   to   redeem   according   to   decree,    1108. 
and  redemption  reciprocal,  1146. 
When  the  right  of  action  accrues,  1174-llDl,  1289. 

necessity  for   demand,   1174. 

mortgagor's  agreement  binds  purchaser,  1174. 

upon   what    breaches    of   condition    it    accrues,    1175. 

on  breach  of  executory  contract,  1175. 

on  alienation  of  property,   1175. 

on  non-payment  of  taxes,   1175. 

what  taxes  included,   1175. 

default  in  payment  of  interest,  1176. 

giving  chattel  mortgage  no  waiver  of  default,   1176. 

instalment    notes    do    not   postpone    running    of    limitation, 
1176. 
940 


INDEX. 

References  are  to  Sections. 
FORECLOSVRE— continued. 

when  whole  debt  becomes  due,  1176,  1177. 

agreement   to   give   mortgage   need  not   contain,    1177. 

when  default  in  interest  not  enough,  1178. 

promptness    of    payment    a    condition,    1171). 

waived  by  i)arol,  1179. 

provision  in   both  mortgage  and  note  not  essential,   117!)a 

effect  of  discrepancy  between  two,  1179a. 

demand  after  default  not  necessary,   1179b. 

time  for  protest  changed,  1179b. 

provisions   for   continuance   of   default,    1179b 

whole  debt  due  on  any  default,   1180,   1181. 

effect   of   such  provision   in   power   of   sale   mortgage,   1180. 

where   one   note   is   only  payable  on   condition,   118G 

such  provision  not  a  penalty,  1181. 

default  at  election  of  mortgagee,  1182. 

provision    for    compounding    interest,    1182. 

what  constitutes  waiver,   1182. 

when  limitation   begins,   1182. 
no    notice    of    election    necessary,    1182a. 
Wisconsin   doctrine,    1182a. 
what   constitutes   notice,   1182a. 
who  may  take  advantage  of  default,  1183. 
provisions    against    forfeiture,    1184. 
court  will  not  relieve  from  default,  1185. 
waiver  of  default,  1186. 
parol   extension,   1186. 
death  of  mortgagee,   1186, 
accepting  interest,   1186. 
what   tender  sufHcient,   1186a. 
guarantor   must   pay  principal   debt,   1187. 
when  conditicfn  is  to  pay  or  save  harmless,  1188. 
mortgagee   estopped   by  agreement,   1189. 
when  time  of  payment  is  extended,   1190. 
validity  and  sufficiency  of  agreement,  1190. 
by  parol,  1191. 

presumption  of  payment,   1191. 
When  the  right  of  is  barred,  1192-1214. 

statute  of  limitations  applies  by  analogy,   1192. 

tendency   to   shorten  period   of  limitation,   1193. 

periods   of   limitation   in   the   several    States,   1193. 

early  view   of  doctrines   of  presumption   of  payment,   1194 

modern  view,  1195. 

applies  in  favor  of  bill  for  reconveyance,  1195. 

941 


INDEX. 


References  are  to  Sections. 


FOKECLOSUEE— con^iniiec^. 

liresumption  of  payment  not  conclusive,  1196. 

effect  of  acknowledgment,   1196. 

validity  of  new  promise,   1196. 

presumption    of   payment   repelled   by   circumstances,    1197. 

state  of  warfare,  1197. 

absence  from  State,  1197. 

payment  of  interest  renews,  1198. 

by   life   tenant,   1198. 

by  widow  of  mortgagor,  1198. 

rights  of  surety,   1198. 

by  one  of  several  joint  promisors,  1198. 

by   purchaser    of   part    of   equity    of   redemption,   1198. 

by  m.ortgagor   after   sale   of   premises,   1198. 

by  one  tenant  in  common,  1199. 
statute  does  not  run  during  life  estate  of  mortgagee,  1198. 
payment   of   taxes,    1200. 

by  second  mortgagee,  1200. 
purchaser   assuming   payment   recognizes   mortgage,   1201. 

has  no  greater  rights  than  mortgagor,   1202. 
mortgagor    cannot    revive    against    purchaser,    1202. 

can  revive  against  junior  mortgagee,  1202. 
exception   in   California,   1202. 
mortgage  lien  enforced  though  the  debt  is  barred,  1204. 

rule  otherwise  in  what  States,  1207. 
presumptions   of  payment,   1204. 
right  of  mortgagee  in  possession,  1205. 

statute   runs  from  time  the   right  of  action   accrues,   1210. 
proof  of  maturity  necesary,   1210. 

stipulation  giving   immediate   right   of   foreclosure,    1210. 
not   waived   by    the   recovery   of   judgment   for    debt,    1218. 
nor   by   proof    of    claim    against    es£ate,    1218,    1222. 
Statutory  provisions  of  the  several  States  relating  to,  1317-1366. 
the    statutes   generally,    1317. 
codes   of  procedure,   1318. 
by  special  statute  not  allowed,  1320. 
law    in   force   when   mortgage   was   made   governs,    13^1. 
Alabama,  1322. 
Alaska  T.,  1322a. 
Arizona  T.,  1322a. 
Arkansas,   1323. 
California,    1324. 
Colorado,  1325. 
Connecticut,  1326. 
942 


INDEX. 

References  are  to  SectionB. 

YOBECLOSVRE— continued. 
Delaware,   1328. 
District   of   Columbia,  1329. 
Florida,   1330. 
Georgia,  1331. 
Hawaii   T.,  1331a. 
Idaho,    1332. 
Illinois,  1333. 
Indian  T.,  1333a. 
Indiana,  1334. 
Iowa,  1335. 
Kansas,   1336. 
Kentucky,  1337. 
Louisiana,  1338. 
Maine,   1339. 
Maryland,  1340. 
Massachusetts,  1341. 
Michigan,   1342. 
Minnesota,    1343. 
Mississippi,    1344. 
Missouri,    1345. 
Montana,    1346. 
Nebraska,   1347. 
Nevada,   1348. 
New    Hampshire,    1349. 
New  Jersey,   1350. 
New  York,  1351. 
North  Carolina,   1352. 
North   Dakota,    1352a. 
Ohio,  1353. 
Oklahoma   T.,   1353a. 
Oregon,  1354. 
Pennsylvana,  1355. 
Ehode  Island,   1356. 
South    Carolina,    1357. 
South  Dakota,   1357a. 
Tennessee,   1358. 
Texas,  1359. 
Utah   T.,   1360. 
Vermont,    1361. 
Virginia,  1362. 
Washington,  1363. 
West  Virginia,  1364. 
Wisconsin,  1365. 
Wyoming,   1366.  g^g 


INDEX. 


References  axe  to  Sections. 


FOEECLOSUEE    BY   ENTEY    AND    POSSESSION,    1237-1267. 
is  payment  pro  tanto  of  mortgage  debt,  952. 
nature   of   the   remedy,   1237. 
where  used,   1238. 
statutory  provisions  in  Maine,  1239. 

foreclosure  by   advertisement,    1240. 
statutory   provisions   in   New   Hampshire,   1241. 

when  mortgagee   is  in  possession,   1242. 

provisions  of  statute  to  be  strictly  followed,   1243. 
statutory   provisions   in   Massachusetts,    1244. 

in  Ehode  Island,  1245. 
The  entry,  1246-1257. 

mortgagor   becomes   tenant   at   sufferance    after,    1246. 

effect  of  registry  system  on  entry^  1246. 

should  be  by  holder  of  legal  title,  1247. 

ratification  of  attorney's  act  by  corporation,  1247. 

by  executor,  etc.,  of  mortgagee,   1248. 

after  partial  assignment,   1248. 

foreclosure  of  part   of   the   premises,   1249. 

assignment  of,   1250. 

effect  of  collateral  agreement,   1250. 

by   second  mortgagee,    1251. 

by  married  woman,   1252. 

may   be   made   at   any   time   after   breach,    1253. 

upon  ■  a  part  of  the   land,   1254. 

continued  possession  by  mortgagor  does  not  defeat,  1254. 

manner  of  making,   1255. 

what  is  peaceable,  1256. 

what  is  open,   1257. 

presumption   as  to   purpose  of  entry,   1257. 
The  possession,  1258. 

constructive  only,   1258. 

when   there    are    competing   mortgagees,    1258. 
The  certificate  of  witnesses,  1259,  1260. 

what  it  must  state,  1259. 

stating  entry  to   be   "open  and  peaceable,"   1259. 

is   conclusive,    1260. 
the  certificate  of  mortgagor,   1261. 
when  the  limitation  of  three  years  commences,   1262. 
foreclosure   defeated   by   tender   within   three   years,   1262. 
record  of  the  certificate,  1263. 

effect  of  the  foreclosure  upon  the  mortgage  debt,  1264. 
Waiver  of  entry  und  possession,  1265-1275,  1569, 

by  express   or   implied   agreement.   1265. 

944 


INDEX. 


References  are  to  Sections. 


FORECLOSUEE  BY  ENTRY  AND  POSSESSION— con^tnwei. 

waiver   for   unlimited   period,    1265. 

assignment   of   mortgage   after   entry,    1266. 

fraudulent  assignment   to   prevent  redemption,   1206. 

waiver  must  be  by  holder  of  mortgage,   1267. 

by  guardian   of   spendthrift,   1267. 

previous  purchase  under  power  not  waived  by  entry,   1268. 

payment   is   a   waiver,    1269. 

deed  to  one  of  two  joint  mortgagors  after  foreclosure,  1269. 

when  the  intention  of  the  parties  is  doubtful,  1270. 

release  of  judgment  not  a  waiver,  1270. 

rendering  account,   1271. 

conditional  waiver,   1272. 

writ   of  entry   no   waiver,   1273,   1286. 

conditional  judgment  on  writ  is  waiver,   1273. 

recovery  of  judgment  for  debt  opens,   1274. 

relief  in  case  of  accident  or  mistake,  1275. 

entry  to  foreclose  not  power  of  sale,  1796. 
FORECLOSURE  BY  WRIT   OF  ENTRY,  1276-1316. 
nature  of  process  and  where  used,  1276-1279. 
Who   may  maintain,  1280-1289. 

a  legal  interest  essential,   1280. 

after   cancellation   of   assignment,   1281. 

after   assignment  as   collateral,   1282. 

when   others   are   beneficially  interested,   1282. 

joint  mortgagees   or   assignees,    1283. 

when  separate  debts  are  secured,  1283. 

when  mortgage   is   to   unincorporated   association,    1283. 

two  mortgages  held  by  one  person,   1284. 

jv^nior  mortgagee,   1285. 

when  first  mortgagee  is  in  possession,  1285. 

mortgagee  of  interest   in  remainder,   1285. 

existence  of  homestead  no  objection  to,  1286. 

prior  entry  to  foreclosure  no  objection  to,  1287. 

power  of  sale  in  mortgage  no  objection  to,  1287. 

executor   or   administrator  of  mortgagee,   1288. 

when  right  of  action  accrues,  1289. 

notice  to   quit  unnecessary,   1289. 
Against  whom  the  action  may  he  brought,  1290-1292. 

the  tenant  of  the  freehold,  1290. 

who  -is,  1290. 

the  wife  of  the  mortgagor,   1291. 

mortgagor  may  be  joined  after  he  has  conveyed  equity,  1292. 

after  conveyance  of  equity  in  parcels,  1292. 

945 


INDEX. 

References  are  to  Sections. 

FOEECLOSUKE  BY  WRIT   OF  ENTIiY— continued. 
Pleadings  and  evidence,  1293-1295. 
the  declaration,  1293. 
answer,  1294. 
evidence,   1295. 
The  defences,  1296-1305. 

equitable    defences   allowed,    1296. 

by  married  woman,   1296. 

want  of  consideration,  1297. 

after  bona  fide  purchase,  1297. 

payment,   1298. 

assignment   to   attaching  creditor,   1298. 

mortgage  conditioned  on  something  other  than  payment  of 
money,  1298. 

surrender  obtained  by  fraud,  1299. 

usury,  1300. 

right  of  action  not  accrued,  1301. 

defence  as  to  part  of  premises,  1302. 

by  purchaser  subject  to  mortgage,  1303. 

promise  not   to  enforce,   1304. 

after-acquired  superior  title,   1305. 
The    conditional  judgment,   1306-1315. 

condition  to  pay  within  two  months,  1306. 

effect  of  error  in  date  of,  1306. 

recorded    in    Massachusetts,    1306. 

action  to  try  title,  1307. 

judgment  in  common  form  must  be  entered,  1307. 

note  should  be  produced,  1308. 

amount  of  judgment,  1309. 

when   condition   is   not   for  payment  of  money,   1310. 

court  may  liquidate,   1310. 

questions  of  fact  for  jury,  1310. 

sums  paid  to  protect  the  estate,  1311. 

in  case  of  an  indemnity  mortgage,  1312. 

set-off,  when  allowed,  1313. 

in  case  of  joint  tenants,  1314. 

when  nothing  is  due,   1315. 

judgment  may  be  assigned,  1316. 
FORECLOSURE  BY  EQUITABLE  SUIT. 

parties  to,  1367-1442.     (See  Parties,  Etc.) 
jurisdiction  and  object  of  suit,  1443-1450. 

courts  of  equity  have   inherent  jurisdiction  of,   1443. 

right  to  jury  trial,  1443. 


946 


INDEX. 


References  are  to  Sections. 


FOEECLOSURE  BY  EQUITABLE   S^mT— continued. 
statutory   mortgage   of   Louisiana,   1443. 
remedy  concurrent  with  power  of  sale,  1443. 
venue,  1444. 

railroad  passing  through  two   States,   1444. 
decree   affecting   property   out   of   jurisdiction,    1444. 
claim  of  paramount  title  cannot  be   tried,   1445. 
tax  title,  1445. 

questions  of  priority  may  be  determined,  1445. 
right   of   prior   mortgagee   to   foreclose    by    an    independent 

suit,  1445. 
right  of  mortgagee  to  remove  building  determined,   1446. 
stay  of  proceedings  when  process   improperly  used,   1447. 
trust  deed  for  grantor's  creditors  enforced  in  equity,  144S: 
title  bond  may  be  foreclosed  in  equity,  1449. 
right  of  assignee  of  note,   1449. 

tender  of  payment  not  accepted  does  not  prevent  suit,  1450. 
pendency  of  bill  to  redeem,  1450. 
costs,  1450. 
The  hill  or  complaint,  1451-1478. 
general  principles,  1451. 
general  requisites  of  complaint,  1453. 
facts  not  inconsistent  with   bill  may   be  proved,   1453. 
what  allegation  of  execution  and  delivery  suificient,  1454. 
allegation  of  title  in  mortgagor  unnecessary,  1454. 
note  or  bond  a  part  of  comi^laint,  1454. 
proof  of  execution,  1455. 
complainant  must  show  title,  1456. 
need  not  anticipate  defence,   1456. 
assignee's  title,  1457. 
allegation  of  assignment  of  bond  or  note,  1457. 

of  record  unnecessary,  1457. 

of  liens  on  property,  1457. 
complainant  having  two  mortgages  on  same  premises,  1458 
consolidation   of    actions,    1458,    1460. 
foreclosure   for   instalment,   1459. 
sale  of  portion  of  property  allowed,  1459. 
provision   for   paying   overdue   instalments,   1459. 
when  whole  debt  becomes  due  on  default,  1459. 
bill  by  holder  of  one  of  several  mortgage  notes,  x^tGO. 
when  one  mortgagor  is  not  liable  for  the  debt,  1461. 
description  of  the  property,  1462. 
reference  to  a  recorded  deed  is  sufficient,  1462, 


947 


INDEX. 

References  are  to  Sections. 

FOBECLOSUKE   BY   EQUITABLE   SUIT— continued. 

insufficient    description    in    mortgage    aided    by    comiplaint, 

1462. 
may  omit  part,  1463. 

right  to  judgment  for  deficiency  in  such  case,  1463. 
reforming  description,   1464. 
after  foreclosure  decree,  1464. 
averment   of   record,   1465. 

when  bill*  is  against  purchaser  of  equity,  1465. 
sufficiency  of  averment,   1465. 
description  of  debt,  1466. 
when  due  on  open  account,  1466. 
reference  to  determine  amount  of  debt,  1467. 
report  of  master  and  procedure,   1467. 
renewal  of  note  should  be  alleged,  1468. 
proof  of  note,  1469. 

of  title  of  non-negotiable  note,  1469. 
note  or  bond  must   be  produced,   1469a. 
proof  of  consideration,   1470. 

must  show  that  right  of  action  has  accrued,  1471. 
demand  need  not  be  alleged,  1471. 
excuse  for  delay  in  payment  of  interest,  1471. 
payment  of  indemnity  secured  should  be  alleged,  1472. 
allegation  that  defendant  has   a  subsequent  lien,   1473. 
defendant  cannot   dismiss,   1473. 
infancy  of   a   defendant  should   appear,   1473. 
must  show  that  defendant's  interest  is  subordinate,  1474. 
all  relief  sought  should  be  prayed  for,   1475. 
essential  grounds  of  relief  should  be  set  out,   1476. 
personal   judgment    for    deficiency,    1477. 
against   one   assuming   mortgage,    1477. 
when  some  of  the  notes  are  not  due,  1478. 
Answer  and  defence,  1479-1515. 
general  defences,   1479. 

impeaching  co-defendant's  mortgage,  1479. 
cross-bill  confined  to  subject-matter,  1479a. 
mechanic's  lien,  1479a. 

founded  on  written  instrument  should  be  set  out,  1480. 
conclusions  of  law  insufficient,  1480. 
denial  of  allegation  must  be  explicit,  1481. 
defence  must  be  set  up   in  answer,   1481. 
mortgagee's   title   cannot   be   questioned,    1482. 
mortgage  by  him,   1482. 
usury  as  a  defence,  1482. 
948 


INDEX. 

References  are  to  Sections. 

FOKECLOSIIEE   BY  EQUITABLE   SVIT— continued. 

mortgagor  estopped  to  deny  his  own   title,   1483. 

subsequently  acquired  title,   1483. 

wife  joining  in  deed,  1483. 

defence  by  married  woman  specially  pleaded,   1483i 

by  his  declarations,  etc.,  1484. 
married  woman  estopped  to  set  up  suretyship,   1484. 
defences  against  assignee,   1485. 
mortgage  payable  to  mortgagee  alone,  14S5. 
absence  of  formal  assignment,   1485. 
proof  of  assignment,   1485. 
mortgagor's  administration   as   assignee,   1485. 
motive  of  assignee  immaterial,   1485. 
absence  of  consideration,  1485. 

estoppel  by  failure  to  secure  discharge  of  record,  1485. 
assignee  need  not  have  paid  value,  14S0. 
gaming  debt  as  consideration,  1486. 
when  assignee  takes  free  from  equities,  1487. 

payment   after   assignment,    1487. 

duress  or  fraud  in  execution  of  mortgage,   1487. 

assignee  after  maturity,   1487. 
transfer  of  mortgage  pending  suit,  1488. 
assignment   after  bill   to   foreclose   has   been   taken  as  con- 
fessed, 1488. 
indemnity  mortgage,  1489. 
nature  of  shown  by  parol  evidence,  1489. 
lost  mortgage,  1489. 
want  of  consideration,   1490. 
how  proved,  1490. 
future  advances,  1490. 
set  up  by  junior  mortgagee,  1490. 

want   of  consideration   in  a   mortgage   assumed,   1491. 
fraud  is  a  good  defence,  1492. 
burden  of  proof  as  to,  1492. 
set  up  by  wife  in  answer,  1492. 

by  subsequent  mortgagee  when,  1492. 
fraudulent  foreclosure  suit,   1492. 

alteration,  1492a. 
forgery,  1492a. 

fraud  against  creditors,  1492b. 
usury  is  a  defence,  1493. 
used  to  protect  wife's  dower  interest,  1493. 
how  pleaded,  1493. 
whether  a  personal  privilege,  1493. 

949 


INDEX. 


References  are  to  Sections. 


FORECLOSUKE   BY   EQUITABLE   S\j IT— continued. 
availed   of   by   judgment   creditor,   1493. 
not  available  after  foreclosure,  1493. 
usury  set  up  by  ijurchaser  subject  to  moitgage,  1494. 
what  constitutes  usury,  1494. 

mortgagor  may  be  estopped  from  setting  up  usury,  1495. 
set-off,  1496,  1497. 
of  joint  bond,  1496. 

against  prior  holder   of  mortgage,   1496. 
for  breach  of  covenant  of  seisin,  1496. 
claims  for  shortage,  1496. 
overpayment  by  mistake,  1496. 
partnership   debts,   1496. 

when  suit  not  brought  in  name  of  real  owner,  1497. 
foreclosure  when  regarded  as  proceeding  in  rem,   1498. 
what  debt  may  be  set  off,  1498. 
illegal  interest  previously  paid,   1499. 
defence  to  purchase-money  mortgage,   1500. 
defence    of    outstanding    incumbrance    rests    on    covenants, 

1501. 
lease  on  part  not  a  breach,  1501. 
implication  of  covenants,   1501. 

unauthorized  agreement  by  president   of   corporation,   1501. 
eviction  necessary  before  failure  of  title  will  avail,  1502. 
what  constitutes  eviction,  1502. 
rights  of  purchaser  of  the  equity,  1502. 
cases   exceptional   to   rule,   1503. 
where  vendor  is  insolvent,   1503. 
breach  of  covenant  of  seisin,  1504. 
what  constitutes  a  breach,  1504. 
mere  possession  by  third  person,  1504. 
tax  liens,  1504. 

breach  of  independent  covenant  no  defence,   1505. 
when  sale  was  effected  by  vendor's  fraud,   1506. 
counter-claim   for   damages    caused   by   fraud,    1506. 
fraud  in  sale  of  one  of  several  tracts,   1506. 
mutual  mistake  as  to  quantity  of  land,  1506a. 

as   evidence   of   fraud,   1506a. 

must  be  specially  pleaded,  1506a. 

purchaser  assuming  mortgage  has  no  standing  to  com- 
plain, 1506a. 
not  good  against  assignee  of  mortgage  before  due,  1507. 
validity  of  title,  when  a  condition  precedent,   1508. 
statute  of  limitations,  1509. 
950 


INDEX. 

References  are  to  Sections. 

FOEECLOSUEE   BY  EQUITABLE   SmT~continued. 
insanity  of  mortgagor,  1510. 
burden  of  proof,   1510. 

recovery  of  judgment  on  mortgage  note  iio  defence,  1511. 
pendency  of   suit   for  debt  no   defence,   1511. 
judgment  against  mortgagee   in   ejectment  no   bar   to   fore- 
closure suit,   1511. 
liability  in  garnishee  or  trustee  process  as  defence,   1511a. 
defence  of  discharge  must  be  clearly  set  out,   1512. 
payment  is  a  defence,  1512. 
what  constitutes  proof  of  satisfaction,  1512. 
agreement  of  parties  subsequent  to  the  mortgage,  1513. 
want  of  service   on   another   defendant,   1514. 
bill  of  interpleader,  1515. 
EOEECLOSUEE  SALE,  ineffectual,  operates  as  an  assignment,  812. 
irregular,  must  be  taken  advantage  of  when,  1054. 
ordered   without   giving  mortgagor   time   to   redeem,   1563. 
a  substitute  for  strict  foreclosure,   1571. 
judgment  for  balance  of  debt,  1571. 
practice  in  England,  1572. 
effect  of  infancy,   1572. 

court  of  equity  may  decree  without  aid  of  statute,  1573. 
decree  necessary  unless  sale  is  specially  authorized,   1573. 
postponement  of  sale,   1573. 

foreclosure   decree   not   prevented   by   judgment    lien     on    other 
land,  1573. 
gives  no  lien  on  other  land,  1573. 
form  and  requisites  of  decree  for,  1574-1586.     (See  Decree.) 
when  part  only  of  debt  or  interest  only  is  due,  1577. 
conclusiveness  of  decree  for,   1587-1590. 
Mode  and  terms  of  sale,  1608-1615. 
nature  of,  1608. 
unlike  a  sheriff's  sale,  1608. 
not  outlawed  by  twenty  years,   1608. 
no  revival  necessary   after,  death   of  mortgagor,   1608. 
what  may  be  sold,   1609. 
leasehold,   1609. 

only   interest   covered   by   mortgage,   1609. 
only  land  covered  by  mortgage,  1609. 
when   subesequent   incumbrances   provided   for,    1610. 
when  questions  of  priority  should  be  settled,  1610,   1611. 
settling  rights  of  riparian  owner,  1611. 
notice  of,  1612. 
publishing  advertisement,  1612. 

851 


INDEX. 

References  are  to  Sections. 

FORECLOSURE   SALE— continued. 
contents  of  notice,  1612, 
change  of  name  of  newspaper,  1612. 
length  of  publication,  1612. 
personal  notice,  1612. 
terms  of,  1613. 

memorandum  of  auctioneer,  1613. 
deposit  required,  1613,  1614. 
obligation  to  accept  highest  bid,  1614. 
on  credit,  1615. 

lien  for   unpaid  instalments,   1615. 
certified  check,   1615. 
Sale  in  parcels,  1616-1619.     (See  Sale.) 

may  be  required  by  statute  or  court,  1616. 
when  wishes  of  mortgagor  to  be  followed,  1617. 
when  determined  by  court  or  reference,  1618. 
on  subsequent  default,   1619. 
Order  of  sale,  1620-1632. 

when   mortgagor  has  made   sales   in   distinct   parcels,   1620. 
land  held  by  mortgagor  sold  first,  1620. 
stipulation  for  release  of  mortgage  on  parcels  sold,  1620. 
rule  of  inverse  order,  1621. 

of  property,  1621. 

not  applicable  to  tenants  in  common,  1621. 
dower   interest   to   invoke   rule,   1621. 
in  what  States  this  rule  prevails,  1621. 
applies  to  subsequent  mortgages  as  well  as  sales,  1622. 
when  portions  have  been  sold  under  judgment,   1623. 
time  dates  from  origin  of  lien,   1623. 
record  of  subsequent  deed  not  notice  to  mortgagee,  1624. 
actual  notice  necessary,  1624,  1629. 
priority  affected  by  record,  1624. 

when  the  mortgage  is  made  a  common  charge,  1625. 
specific  agreement  in  mortgage,  1625. 
assumption   of   mortgage   by   purchaser,   1625. 
contribution   according   to    value,    1626. 
valuation  to  be  made  as  of  what  time,  1627. 
when  other  security  to  be  first  applied,  1628. 
not  to  detriment  of  first  mortgagee,  1628. 
knowledge   of  second  mortgagee  not   material,   1628. 
exoneration  of  land  owned  by  surety,  1629,  1630. 
rights  of  tenants  in  common,   1629,  1630a. 
where  mortgagee  has  a  lien  upon  other  property,  1629. 

holds  two  mortgages,  1630. 
952 


INDEX. 

References  are  to  Sections. 

FOEECLOSUEE  SALE— continued. 

when  mortgagee  has  released  part  primarily  liable,  1G31. 

determination  of  value,  1631. 

negligent   loss  of  personal  security,   1631. 

agreement  to  release  on  certain  payment,   1631. 

when  part  of  premises  is  homestead,  1632. 

rule  never  invoked  in  favor  of  mortgagor,   1632. 

marshalling  not  invoked  against  homestead,  1632. 

mortgagor   must   seasonably   assert   this   right,    1632a. 
Conduct  of  sale,  1633-1636. 

officer  conducting  should  be  present,  1633. 

sale  must  be  to  highest  bidder,  1633. 

adjournment,  1634. 

publishing  notice  of  adjourned  sale,  1634. 

sale  may  be  kept  open,  1635. 

objection  to  mortgagee's  buying,  1636. 

mortgagee  may  generally  purchase,   1636. 

administrator   may   purchase,    1635. 

attorney  for  mortgagor  may  purchase,  1635. 

officer  of  corporation  may  purchase,  1635. 

creditors   of  mortgagor  may  purchase,   1635. 

mortgagee's  heirs  may  purchase,  1635. 

life  tenant,  1635. 

mortgage  debtor  may  purchase,  1635. 
Confirmation  of  sale,  1637-1641. 

sale  incomplete  until  confirmed,  1637. 

title  relates  back,  1637. 

cure  of  irregularities,  1637. 

right  to  redeem,  1637. 

usury  not  taken  advantage  of  in  this  way,  1637. 

error  in  description,  1637. 

rests  wholly  in  discretion  of  court,  1638. 

notice  necessary,  1638. 

formal  order,  1638. 

interlocutory  when,  1638. 

resale  may  be  asked  for  by  whom,  1639. 

grounds  for,  1639. 

mode  of  application,  1639. 

court  may  reopen  biddings  before  confirmation,  1640. 

great  inadequacy  of  price  may  be  urged  against,   1641. 
Enforcement  of  sale  against  purchaser,  1642-1651. 

purchaser  becomes  quasi  party,   1642. 

statute  of  frauds,  1642. 

acting  for  another,  1642. 

953 


INDEX. 

References  are  to  Sections. 

rOEECLOSUEE  SALE— continued. 

rights  and  liability  of  purchaser  making  default,   1642. 
liability  of  mortgagor,  1642. 
rights  and  liability  of  second  mortgagee,  1642. 
m.ortgagee  liable  to  pay  over  surplus  of  his  bid,  1642. 
performance  enforced  by  attachment,  1643. 
in  what  tribunal  1643. 
proceedings  by   rule,   1643. 
showing  cause  against  order,  1643. 
terms  of  resale,  1643. 
forfeiture  of  deposit,  1644. 
applied  in  deficiency,  1644. 
estoppel  to  object  to  restriction,   1645. 
who   bears  expenses  of  mistake,   1645. 
when  there  is  a  defect  in  title,  1645. 
defect  in  title  prior  to  mortgage,  1646. 
rights  of  purchaser  to  get  good  title,  1646. 
presumption  of  knowledge  of  defects,  1646. 
effect  of  false  representations,  1646a. 

purchaser  not  relieved  by  reason  of  his  own  mistake,  1646a. 
effect  of  failure  to  record,  1647. 
errors  in  decree  or  proceedings,  1647. 
reference  as  to  title,  1648. 

purchaser  not  obliged  to  accept  bad  title,  1648. 
incumbrance  of  taxes,  1649. 

purchaser  may  be  concluded  by  his  conduct,  1650. 
on  what  ground  purchaser  may  refuse  to  complete  sale,  1651. 
recovering  surplus  bid  by  mistake,  1651. 
Deed,  and  passing  of  title,  1652-1662. 

another  person  may  be  substituted  for  purchaser,  1652. 

delivery  of  deed,  1653. 

effect  of  death,   1653. 

relation  back,  1653. 

titl^   is  clear   and  absolute,   1653. 

right  of  junior  mortgagee  to  redeem,  1653. 

title   of  purchaser  relates  back   to   execution  of  mortgage, 

1654. 
all   adverse  rights   extinguished,   1654. 
title  not  bound  by  judgments,  1654. 
all  parties  to  suit  estopped  to  dispute,  1654. 
forged  mortgage,  1654. 
mechanic's   lien   against   property,    1654. 
errors  in  deed,  1655. 
after-acquired  title,  1656. 

954 


INDEX. 

References  are  to  Sections. 

FOEECLOSUEE  S ALII— continued. 
fixtures,  1657. 

remedy  for  wrongful  removal,  1657. 
erections  during  pendency  of  foreclosure  suit,   1657. 
emblements,  1658. 

injunction  against  removal  of,   1658. 
trees  and  shrubs  in  nursery,  1658. 
rule  in  States  where  mortgage  is  a  lien,  1658. 
rents  accruing,  1659. 
payment  in  advance,  1659. 
liability   of  judgment   debtor,   1659. 
when  mortgagee  purchases,   no   deed   required,    1660. 
purchaser's  certificate  of  purchase,   1661. 
ejectment  by  j)urchaser,   1661,   1667. 
accountability   of   mortgagor,    1661,    1666. 
liability   for   waste,   1661,   1666. 
appeal  does  not  affect  sale  already  made,  1662. 
where  purchaser  was  a  party,  1662. 
Delivery  of  possession  to  purchaser,  1663-1667. 
obtained  by  order  of  court,   1663. 
enforced  by  injunction,  1663. 

or  writ  of  assistance,  1663. 
granted  on  ex  parte  motion,   1663. 
entry  of  special  order,   1663. 
stranger  in  possession,  1663,  1664. 
tenant  in  possession,  1663,  1664. 
prior   unforeclosed  mortgage,   1663. 
may  be  compelled  by  writ  of  assistance,  1663. 
against  one  who  has  entered  pending  suit,   1664. 
when   person   in   possession   shows   paramount   title,    1665. 
mortgagor  in  possession  under  agreement   to  redeem,   1665. 
wife  entitled  to  homestead,  1665. 
•  purchaser,  when   entitled  to   order  for  possession,    1666. 

forcible   detainer  by  purchaser,   1666. 

summary  proceedings  do  not  preclude  remedy  by  suit,  1667. 
Setting  aside  of  sale,  1668-1681. 

when   fraudulently   conducted,    1668. 

application  for  resale  must  be  by  party  in  interest,  1669. 

applicant  holding  collateral  security,  1669. 

inchoate  dower  right,  1669. 

on  court's  own  motion,  1669. 
not  for  party  whose  own  misconduct  has  occasioned  irreg- 
ularity, 1669a. 
after  confirmation,  inadequacy  of  price  not  sufiicient,  1670. 

955 


INDEX. 


References  are  to  Sections. 


FOKECLOSTJRE  SALE— continued. 

what  constitutes   inadequacy,   1670. 
as  evidence  of  fraud,  1670. 

sale  may  be  set  aside  at  instance  of  mortgagee,  1670a. 
discouraging  bidders  a  ground  for,  1670a,  1671. 
when  holder   of   mortgage   becomes   purchaser,    1671. 
neglect  of  officer  selling,  1672. 
what  constitutes  neglect,  1672. 
selling  at   inopportune   time,    1672. 
failure  to  give  personal  notice,  1672. 
rights  of  purchaser  always  taken  into  account,  1673. 
insufficient  grounds  for  setting  aside,  1673. 
waived  by  delay,  1674. 
combined  with  estoppel,   1674. 
mistake  or  accident,   1675. 
surprise,  1675. 

"gold  clause"  in  mortgage,  1675. 

purchaser  may  have  sale  set  aside  for  mistake  in  quantity, 
1675a. 
in  location,  1675a. 
anortgagor's  absence,  1676. 
guardian    mortgagor,    1676. 
when  misled   by   mortgagee,   1676. 
insanity  of  mortgagor  ground  for,  1676a. 
few  bidders,  1677. 
combination  among,  1677. 
invalid   sale   transfers   mortgage,   1678. 

order  compelling  purchaser  to  complete  his  purchase,  1678. 
second  action  to   foreclose,   1679. 
supplemental  bill  to  bring  in  other  parties,  1679. 
redemption  can  be  had  only  by  satisfying  debt,  1680. 
title  of  purchaser  vacated  when  sale  is  set  aside,  1681. 
purchaser   protected    against    loss,    1681. 
allowance  for  improvements,  1681. 
liability  on  covenants,  1681. 
Application  of  proceeds  of,  1682-1708. 

according    to    decree    of    court,    1682. 
prior   liens   and    charges    paid    by   mortgagee,    1683. 
taxes   and  assessments,   1683. 
prior  liens  not  paid  by  mortgagee,  1683. 
application   of   payment   by   creditors,   1683a. 
pro  rata  distribution,   1683a. 
Disposition  of  surplus,  1684-1698. 

usually  paid  into  court,  1684. 
956 


INDEX. 

References  are  to  Sections. 

FOEECLOSUEE   SALE— continued. 

death  of  mortgagor  ends  not  power  of  court,   1684. 

mission  to  disjjose  of  works  not  reversal,  1684. 

court   may    appoint    referee    to    settle    claims,    1G85. 

proof   of   claims,    1685. 

costs    and   expenses,    1685. 

exceptions  allowed  to  referee's  report,  1686. 

amendment    to    report    allowed,    1686. 

only  claims  that  are  absolute  liens  can  be  considered,  1687. 

mechanic's  lien,  1687. 

proceeds  of  sale  stand  in  place  of  equity  of  redemption,  1687. 

several    liens    discharged    according    to    priority,    1688. 

priority  depends  on  time  of  record,  1688. 

to  be  determined  in  same  suit,  1688. 
fund  collected  by  receiver,  1688. 
simultaneous    mortgages,    1689. 
rights   of  joint  mortgagors   as   to,   1689. 
complainant  himself  may  present  claim,  1690. 
surplus    after   payment   of    instalment,    1690. 
equities  of  subsequent  incumbrancers  to  be  regarded,  1691. 
sale  an  inverse  order  when,   1690,   1691. 
doctrine  of  marshalling  securities  does  not  apply,  1691a. 
prior    unrecorded    mortgage    preferred    to    judgment,    1692. 
dower  in  surplus,   1693. 
homestead  in  surplus,   1693. 
inchoate  right  of  dower,  1694. 

surplus   of   sale   after   death   of   mortgagor,   1695. 
lessee  for  years  not  entitled  to  any  part,  1696. 
attachment  of  proceeds  of  sale,  1697. 
surplus  of  sale  under  junior  mortgage,   1698. 
Priorities  between  holders  of  several  notes,  1699-1707. 
note  first  maturing  to  be  paid  first,  1699. 
effect   of   assignment   of  notes,   1699. 

provision  that  all  notes  mature  on  any  default,  1699,  1703. 
payment    of    notes    not    due,    1700. 
agreed  priority  on  assignment,   1700. 
whether  priority  of  assignment  gives  priority,  1701. 
rights   of   assignee   holding   mortgage,    1701. 
competition  between  mortgagee  and  assignee  of  part,  1701. 
pro   rata   division,   1701a,   1703. 

parties  may  change  order  of  priority  by  agreement,  1702. 
when    mortgagor    has    right    of    set-off,    1704. 
mortgage  securing  debts  of  both  principal  and  agent,  1705. 


957 


INDEX. 

References  are  to  Sections. 

FOKECLOSUKE  SALE— continued. 

rights    of    sureties,    1706. 

effect   of   usury,    1706. 

guaranty  of  payment  of  interest,   1706. 

costs   of  subsequent  mortgagees,   1708. 
FOEECLOSUEE   WITHOUT    SALE,    OE    STEICT    FOEECLOS- 
UEE.      (See  Decree   of   Sale,   1571-1607.J 
is  payment  pro  tanto,  590. 

failure   to   pay,    decree   of   redemption   operates   as,    1108. 
nature  and  use  of  this  remedy,   1538-1541,   1572. 
historical,  1538. 
when  proper,  1540. 
in   case   of   land   contract,   1541. 

of  mortgage  for  support,  1541. 
in  what  States  it  is  used,  1542-1556. 
Pleadings  and  practice,  1557-1568. 

whole   debt   must   be   due,   1557. 

parties  to  the  bill,   1558. 

mortgagor  and  his  assignee,  1558. 

subsequent   incumbrancers,   1558. 

heirs   of  mortgagee  necessary  parties,   1559. 

pleadings,   1560. 

offer  to  take  property  for  debt,  1560. 

prayer  for  specific  remedy,  1560. 

judgment  bars  equity  of  redemption,  1561. 

interlocutory  in  form,  1561. 

becomes  final  without  further  order  of  decree,   1561. 

effect  of  redemption  by  consent  after  expiration  of  period, 
1561. 

delivery  of  possession,  1562. 

time   allowed   for   redemption,    1563. 

Vermont  statute,   1563. 

different   practice   where   sale    is    decreed,    1563. 

when   defendant   is    an    infant   heir,    1564. 

time  for  redemption  always  allowed,   1565. 

runs    not    during    injunction    against    decree,    1565. 

dismissal  of  bill  to  redeem  works,  1566. 

effect   is  not  to  distinguish   debt,   1567. 

except  by  agreement,  1567. 

no  judgment  for  deficiency  in  this  form  of,  1567. 

costs,    1568. 
Setting  aside  and  opening,  1569,  1570. 

position  analogous  to  mortgagee  purchasing,  1569. 

958 


INDEX. 

References  are  to  Sections. 

rORECLOSUEE  WITHOUT  SALE,  OE  STEICT  FOEECLOSUEE 
— continued. 

not  dependent  on  irregularity,  1569. 
opened  by  agreement,   1509. 
unforeseen  event  preventing  redemption,   1569. 
omission   of    time    for    redemption    from    decree,    1569. 
for  want  of  service  on  defendant,   1570. 
FOEEIGN  COEPOEATIONS,  loans  by  on  mortgages,  134. 

discharged  only  upon  payment,  134. 
FOEFEITUEE.     (See  Interest.) 

of   credit   under   mortgage,   1179-1186. 
provision  for  is  not  a  penalty,  1181. 
who   may   take   advantage   of,   1183. 
may  affect  foreclosure  proceedings  only,  1183. 
mortgagor   cannot   take   advantage   of   the   stipulation,    1183a. 
provisions    against,    1184. 
court   cannot   relieve   from,    1185. 
waiver    of,    1186. 
of   deposit,    1644. 
FOEGEEY,   ratification   of,   81. 

of  a  mortgage,  971a,   1492a. 
effect  on  foreclosure   sale,   1654. 
notice  passes   by  foreclosure   sale,   1654. 
FOEM  OF   COVENANT   in  mortgage  to  pay  debt,   72. 

of  interest  clause  that  whole  debt  shall  be  due  on  any  default, 

76. 
of  purchaser's  agreement  to  assume  mortgage,  735. 
of   assignment  of  mortgage   used  in   New   England,   786. 
in  New  York,  786. 
in  Maryland,  786. 
of  discharge   of   mortgage,   972. 
in    Maryland,    1010. 
in  Wisconsin,  1036. 
of   certificate    by   witnesses    of   mortgagee's   entry,    1260. 
of  mortgagor  of  mortgagee's  entry,  1260. 
FOEM   OF  MOETGAGE,   60. 

of  power  of  sale  mortgage,  60. 
statutory   forms  of  mortgage,   61. 
description    of    the    parties,    63. 
designation   of   junior,    63. 
married   woman,   63. 
description   of  consideration,   64. 
Fraud,  ground  of  constructive  notice,  572. 
as    affecting  priority,   602,    603. 

959 


INDEX. 

References  are  to  Sections. 

FORM  OF  MOBTGAGE— continued. 

concealing    mortgage    upon    the    property,    602. 

in    concealing    incumbrance,    602. 

inducing  another  to  purchase  the  property  as  incumbered,  603. 

representing  mortgage  as  having  been  satisfied,  603. 

not  the  same  as  negligence,  603. 

negligence  may  be  evidence  of,  604. 

in    chaining    mortgage    avoids    it,    624,    968. 

intent  of  on  part  of  mortgagee,   625. 

in   obtaining  mortgage   from   wife   by   duress,   626. 

fraudulent  preference  under  bankruptcy   act, 

as    respects    creditors,    627. 

a  particular  creditor,  628. 
in  preference  of  a  creditor  contrary  to  law,  629. 
who  may  take  advantage  of   fraudulent  preference,   630. 
against  whom  defense  can  be  raised,  827a. 
fraudulent   assignment  for  benefit  of   creditors,   630a. 
mortgagor  may  be  estopped  from  setting  up,  631. 

not  allowed  to  invalidate  his  own  deed,  632. 
in   obtaining   discharge   of  mortgage,    966,    967,   1299. 
in  inducing  assignznent  of  mortgage,  828. 
a  defence  in  foreclosure  suit,  1303,  1492. 
burden  of  proof   as  to,   1492. 
set  up  by  wife  in  answer,  1492. 

by  subsequent  mortgagee  when,  1492 
fraudulent    foreclosure    void,    1492. 

alteration,  1492a.  4 

burden   of   proof   as    to,    1492a. 
made  by  one  not  party  to  instrument,  1492a. 
fraud  on  creditors  as  a  defense,  1492b. 
by   vendor,    effect    on   purchase-money   mortgage,    1506. 
counter-claim  for  damages,  1506. 
in  sale  of  one  of  several  tracts,  1506. 
as  ground  for  setting  sale  aside,  1668. 

foreclosure  sale,  1911. 
FURTHER   ADVANCES,    redemption    after,    1079. 
FUTURE    ADVANCES,    mortgage   may   secure,    364-378. 
sanctioned   by   the   common   law,   365. 
statutory   requirement   that   amount  be  ■  expressed  in  mortgage, 

366. 
description   of   the   intended   advances,   367. 
parol  evidence  to  identify,  367a. 
after  notice  of  subsequent  liens,  368. 
when  mortgagee  is  not  bound  to  make,  369. 
960 


INDEX. 

References  are  to  Sections. 

FUTUKE  ADYAl^CES— continued. 

when  obligatory,  mortgage  is  a  lien  from  its  execution,  370. 

the  English  rule,  371. 

mortgage   not   affected   by   the  record   of  subsequent   liens,   372. 
to  secure  is  a  conveyance  within  recording  acts,  372. 
for  definite  advances  has  priority,  373. 
need  not  disclose  that  it  is  for,  374. 

verbal  agreement  for,  sufficient,  375. 

amount  and  times  of  may  be  shown,  376. 

express  limitations  m^ust  be  observed,  377. 

when  only  part  of  the  advances  are  made,  378. 

when   a  valid  consideration,   612. 

redemption  of  mortgage  given   to   secure,   1079. 
GAMBLING  CONTEACTS,  619. 
GAENISHMENT,   foreclosure   by,   in  Indiana,    1334. 

liability  of  mortgagor  on  as  defence  to  foreclosure,   1511a. 
suspends  not  power  of  sale,   1797. 

of   balance  of   loan  from  mortgagee   to   mortgagor,   1855. 
GEOKGIA,  nature  of  a  mortgage  in,  26. 

a  mere  security  for  the  debt,  26. 

written  authority  for  filling  blanks,  90. 

parol  evidence  to  show  a  mortgage,  292. 

mortgage   for   future   advances   in,   366. 

usury  in,   633. 

entering  satisfaction  of  record,  1001. 

no   redemption   after  foreclosure,   1051,    1331. 

statute   of  limitations,   twenty   years,    1193. 

statutory  provisions  relating  to  foreclosure,  1331. 

power  of  sale  mortgages   in,   1732. 
GIFT   of  mortgage  made   by  way   of,   614,   700. 
GOLD   CLAUSE,  effect  of  in  mortgage,  1675. 
GRACE    allowed    on  mortgage   note,    75. 
GEOVVING   CEOPS.     (See  Crops.) 
GUAEANTOE  not  proper  party  to  foreclose  suit,  1432,  1433. 

heirs  of  not  proper  parties,  1433. 
GUAEANTY.     (See  Surety.) 

of  the  mortgage  debt  by  assignor,  824. 

whether    assignment    carries    separate    contract    of,    830. 

gives  no  right  to  foreclose  until  payment  of  principal  debt,  1187. 

guarantor  not  proper  party   to   foreclosure   suit,   1432. 
GUAEDIAN,  mortgage  by,  102b. 

to   secure  guardian's   own   creditor,   102b. 
.failure  of  to  give  bond  does  not  invalidate  mortgage,  102b. 

statutory  authority   necessary,   102b. 

961 


INDEX. 

References  are  to  Sections. 

GUAEDIAN — continued. 

mortgaging  for  purchase-money  conveyed  to   ward,   104. 

may   redeem,    1062. 

of  spendthrift,  may  waive  entry,  1267. 

ad  litem  for  infant  defendant,  1442a. 
for  person  not  in  being,  1442a. 
HABENDUM,   office  of,  67. 

in  mortgage  to  a  corporation,  67. 
HAWAII  T.,  power  of  sale  mortgages  in,  1732a. 

statutory   provisions    relating    to    foreclosure,    1331a. 
HEIKS  exonerated  from  payment  of  assumed  mortgage,  751. 

whether  entitled   to   surplus   sale,   1931,   1932. 

of  mortgagee  cannot  make  an  effectual  entry  to  foreclose,  1054. 
necessary  parties  in   strict   foreclosure,   1559. 

when   necessary   parties    to    suit    to    foreclose,    1414-1417. 

of  mortgagee  cannot  sell  under  power,  1786. 

notice  of  sale  to  in  place  of  administrator,  1822. 
HOMESTEAD,  how  barred,  88a. 

mortgage  of,  void  in  Texas,  83a. 

incumbered  by  wife's  joining,  83a. 

act  of  United  States,  mortgages  before  issue  of  patent,  176. 

subject  to  purchase-money  mortgage,  468. 

release   of  wife   obtained  by   fraud,   626. 

included   with   other   realty   in  mortgage,   731,    1286. 

acknowledgment   of   wife   required   in   some   States,   538. 

sale  under  execution  does  not  affect,  665. 

none  between  discharge  of  old  and  taking  new  mortgage,  927. 

revivor   or   renewal  of  mortgage   as   affecting,   947,   949. 

holder  of  may  redeem,  1067. 

no  defence  to  a  writ  of  entry  to  foreclose  a  mortgage,  1286. 

whether   it   makes   wife   a   necessary   party   to   foreclosure    suit, 
1423. 

decree  affecting  entered  under  mistake,  1588. 

allotting  to  mortgagor  on  sale,  1617. 

order  of  sale  as  affecting,  1632. 

doctrine  of  marshalling  not  allowed  against,  1632. 

mortgagee  owes  no  duty  to  protect,  1632a. 

defeats  not  writ  of  assistance,  1665. 

in    surplus   proceeds    of    foreclosure    sale,    1693. 

as  affected  by  judgment  lien  for  deficiency,  1720. 
HUSBAND,    whether    necessary   party    to    foreclose    wife's    mortgage, 

1424. 
HUSBAND  AND  WIFE  executing  joint  mortgage,  liability  for  debt, 
1225a. 

962 


INDEX. 

References  are  to  Sections. 

ICE   cut  by  lessee  before  foreclosure,  697. 
IDAHO,   usury   in,   633. 

compound  interest  not  allowed  in,  650. 

entry  of  satisfaction  of  record,  1002. 

statute  of  limitations,  five  years,   1193. 

statutory  provisions   relating  to  foreclosure,  1332. 

power  of  sale  mortgages  in,  1732b. 
ILLINOIS,  nature  of  a  mortgage  in,  27. 

mortgagor  entitled  to  possession,  27. 

mortgagor  legal  owner  except  as  against  mortgagee,  27. 

written  authority  for  filling  blanks,   90. 

parol  evidence  to  show  a  mortgage,  293. 

usury  in,   633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry   of   satisfaction   of   record,    1003. 

redemption  after  foreclosure,  1051,  1333. 

statute    of   limitations,    ten    years,    1193. 

statutory  provisions  relating  to  foreclosure,  1333. 

strict   foreclosure   in,    1545. 

power  of  sale  mortgages  and  trust  deeds  in,  1733. 
IMPEOVEMENTS,   mortgage   of,    146. 

mortgage  covers,   147. 

by  mortgagor  enure   to  mortgagee,   681. 

mortgagor's  tenants  not  allowed  compensation  for,  779. 

allowance  for   on   redemption,   1081. 

failure  to  mention  as  ground  for  setting  aside  sale,   191^ 

by  mortgagee  in  possession,  1126-1131. 

what  he  may  be  allowed  for,  1127,  1128. 

allowed  to  mortgagee  in  foreclosure  decree,  1599. 
INCOME.     (See  Eents  and  Profits.) 
INDEMNITY,  description  of  in  mortgage,  379. 

general  description  of  sufficient,  380. 

limitations  must  be  observed,  381. 

mortgage  for  a  continuing  security,  382,  384. 

assignment  carries  mortgagee's  rights,  382. 

lien  from  time  of  execution,  383. 

parol  evidence  to  fix  amount  secured,  384. 

when  principal  creditor  is  entitled  to  the  security,  385, 

whether  surety  may  release  security,  386,  387. 
not  after  liability  is  fixed,  387. 

mortgage,  assignment  of,  802. 

performance  of  condition  of,  887. 

discharge  of  mortgage  for,  934,  975. 

mortgage  for  covers  successive  renewals    934. 

963 


INDEX. 


References  are  to  Seotions. 


IKDEMNlTY-continued. 

when  right  of  action  on  accrues,  1213. 

conditional   judgment    upon   mortgage    for,    1312. 

bill  to  foreclose  mortgage  of,  1472. 

defence  that  mortgage  was  given  for,  1489. 
INDEX,  no  part  of  the  record,  518. 

damages  for  errors  in,  519. 

descriptive,  errors  in,   520. 
INDIAN  T.,  power  of  sale  mortgages  in,  1733a. 

statutory  provisions  relating  to  foreclosure  1333a. 
INDIANA,  nature  of  a  mortgage  in,  28. 

form  of  mortgage,  61. 

verbal  authority  to  fill  blanks,   90. 

mortgage  by  married  woman,   113. 

parol   evidence  to  show  a  mortgage,   294. 

record  of  assignment  not  notice,  479. 
to  mortgagor,  480. 

usury  in,  633. 

assignment  of  debt  passes  mortgage,  817. 

entry  of  satisfaction  of  record,  1004. 

redemption  after  foreclosure,  1051,  1334. 

statute  of  limitations,  twenty  years,   1193. 

statutory  provisions  relating  to  foreclosure,  1334. 

strict  foreclosure  in,  1545a. 

power  of  sale  mortgages  and  trust  deeds  in,  1734. 
INDOKSEMENTS  of  payments  are  merely  admissions,  918. 
INDOKSEE,   failure  to  charge  does  not  affect  mortgage,  941. 

when   entitled   to   foreclose   mortgage   to   indemnify,   1187. 

not  proper  party  to  suit  to  foreclose  mortgage,  1434. 
INFANCY,   infant  cannot  disaffirm  mortgage  and  retain  land,   103a. 

disability  of,  104,  105. 

when  infant  must  make  restitution,  104. 

effect   of   on   foreclosure    sale,   1572. 

as  affecting  a  purchase-money  mortgage,  104. 

power  of  sale  in  infants  mortgage  invalid,   104. 

ratification  of  mortgage  voidable  for,   105. 

by  payment   of   interest,   105. 

right  to  avoid  a  mortgage  a  personal  privilege,  105. 

coverture  does  not  remove  disability  of,  105. 

certificate  of  magistrate  that  wife  is  of  age,  500. 

of  a   defendant  in  foreclosure,   should  appear,   1473. 
INFANT,  mortgage  by  guardian,  102b. 

guardian  ad  litem  for,  1442. 

entitled  to  day  in  court  after  strict  foreclosure,  1564. 
964 


INDEX. 

References  are  to  Sections. 

INFOKMAL  MOETGAGE,  may   be  good  in  equity,   168. 

executed   in  name  of  agent,   109. 
INJUNCTION,  to  restrain  removal  of  fixtures,  453. 

to  restrain  mortgagee  from  doing  injury,  075b. 

against  waste  by  mortgagor,  (j84. 

not  against  removal  of  timber  cut,  685. 

no  duty  on  part  of  mortgagee  to  obtain,  686. 

against  exercise  of  power  of  sale,  1801-1820. 
INJUKY  to  mortgaged  property,  mortgagee's  right  of  action  for,  695. 
INSANITY,  disability  of,  103. 

weakness  of  mind  does  not  invalidate  mortgage,  103. 

as  ground  for  setting  aside  sale,  1676a. 

dealing  in  good  faith  with  insane  person,  103. 

of  mortgagor,  defence  in  foreclosure  suit,  1510. 

burden  of  proof,  1510. 

ground  for  setting  aside  foreclosure  sale,   1676a. 
does  not  revoke  power,   1793. 

sale  not  enjoined  because  of,  1867c. 
INSTALMENT,  foreclosure  for,   1459. 

sale  of  portion  of  property  allowed,  1459. 

provision  for  paying  over  one,  1459. 

when  whole  debt  becomes  due  on  default,   1459. 

decree  for,  1577,  1591. 

sui-plus  proceeds  of  sale  applied,  how,  1707,  1937. 
INSURANCE,  condition  to  effect,  78. 

breach  of  such  condition  gives  right  to  foreclose,  78. 

a  contract  of  indemnity,  396. 

interests  covered  by,  397. 

trustee  has  insurable  interest,  397. 

mortgagee's  insurable  interest,  397. 
may  insure  as  general  owner,  397. 

mortgagor's  interest  insurable,  398. 

application  for  should  disclose  incumbrance,  399. 

by  mortgagor  for  benefit  of  mortgagee,  400. 

by  mortgagor's  assignee  for  creditors,  400. 

mortgagor's  verbal  agreement  to  insure,  400. 

when  no  covenant  to   insure  for  the  benefit  of  mortgagee,  401. 

mortgagee's  equitable  lien   on   mortgagor's  policy,   402. 
how  far  others  affected  by,  403. 

valid   against   mortgagor's    assignee    in   baiikruptcy,   404. 
statutory  provision  for  in  Maine,  405. 

loss  payable  to  mortgagee,  406. 

protection  against  alienation  by  mortgagor,  406. 
provision  that  sale  shall  vitiate  mortgagee's  right,  406a. 

965 


INDEX. 


References  are  to  Sections. 


mS'UnA'NCE— continued. 

policy  to  mortgagee  "as  his  interest  may  appear,"   406b. 

equivalent  to   assignment,  407. 

who   may    sue   for,    408. 

when  mortgagee  may  maintain  suit,  408a. 

when  mortgagor  may  sue,  408a. 
mortgagee  must  apply  to  debt,  409,  1136. 
when  insurance  is  upon  personal  and  real  property,  409a. 
when  loss  is  payable  to  mortgagee  "as  his  interest  may  appear," 
408a. 

when   debt  not  due,   410,   910. 
insurers  not  subrogated  to  mortgagee's  rights,  411. 
agreement  to   assign   to   insurers,   412. 
acts    of   provision   against   for    future    owner   in   derogation   of 

policy,   413. 
subrogation  of  insurers  to   rights  of  mortgagee,  413. 
condition  against  other  insurance,  413a. 
by  acts  of  mortgagor,  413a. 

when  mortgagee   may   charge   for   insurance,  414,   1135,   1596. 
taken  out  by  mortgagee  goes  in  discharge  of  debt,  1136. 

under  a  condition  to  insure,  415. 
when  mortgagee  liable  as  insurer,  416. 
return  premium,  417. 

obtained  by  mortgagee  presumed  to  be  under  mortgage,  418. 
mortgagee   not   chargeable    with    negligence   in    selecting   insur- 
ance, 418. 
of  morgagee's  interest,  not  of  the  debt,  419. 
when  insurer  subrogated  to  mortgagee's  rights,  420. 
insurers  paying  loss  entitled  to  be  subrogated,  421. 
mortgage  not  an  alienation,  422. 

unless  by  deed  absolute,  423. 

entry  to  foreclose  not  an  alienation,  424. 

policy   made   void   by   foreclosure    proceedings,    424a. 

when    title    becomes    absolute    by    strict    foreclosure,    425. 
alteration  of  ownership,  426. 
assignment   of  policy   with   consent,   427. 
INTEREST,  form  of  provision  to  pay,  73,  75,  76. 
coupons  for,  73. 
when  rate  not  named,  74. 
not  stipulated  for  allowed  after  default,  74. 
higher  rate  after  default,  74. 
increasing  rate  of,  361. 
on  sum  limited  under  indemnity  mortgage,  380. 


966 


INDEX. 


References  are  to  Sections. 


INTEREST— con^muccZ. 

as  shown  by  record,  533. 
rates  of  in  the  several  States,  633. 
Compound,  whether  usurious,  650. 

provisions  as  to   in  the  several   States,  650. 

while  agreement  for  is  executory,  651. 

accrued  interest  is  a  debt,  652. 

in  advance  for  an  ordinary  term,  652a. 

coupons  for,  653,  11-il. 

may  be  enforced  as  it  matures,  654. 
computation  of,  655. 

rule  for  where  there  are  partial  payments,  655. 
ceases  from  time  of  sufficient  tender,   899. 
payments   appropriated  before  principal,   911. 
no  presumption  of  payment  of,   914. 
taking  new  note  for,  932. 

foreclosure  opened  by  accepting  payment  of,  949a. 
rate  allowed  in  stating  mortgagee's  account,  1141. 

on  interest  coupons,  1141. 
when  default  in  payment  of  authorizes   foreclosure,   1176-1178. 
payment   of  prevents   running   of   statute   of   limitations,    1198. 
decree  of  sale  should  include,  1594. 
at  rate  specified  in  mortgage,  1594. 

on  mortgage   for  purchase-money  from   what   date,   1594. 
on  amount  paid  for  taxes,  1594. 
INTERVENE,  persons  allowed  to   in  suit  to  foreclose,  1378,  1385. 
INTERPLEADER  bill  of  in  foreclosure,  1515. 

INTERVENING  LIEN,  eifect  of  substitution  of  new  mortgage,  927a. 
when  done  by  hand,  accident  or  mistake,  971. 
right  against-  attaching  creditor,   927a. 

dower  and  homestead   interests,   927a. 
INVERSE   ORDER  of  liability  of  purchasers,   1092. 
an  equitable  rule,  1620. 
land  held  by  mortgagor  sold  first,  1620. 
stipulation  for  release  of  mortgage  on  parcels  sold,  1620. 
where  the  rule  prevails,  1621. 
rule  not  applicable  to  tenants  in  common,  1621. 
dower  interest  sufficient  to  invoke  rule,   1621. 
rule  applies  to  mortgages,  1622. 
when  judgment  sale  datefe  from,  1623. 

record  of  subsequent  deed  not  notice  to  mortgagee,  1624. 
actual  notice  necessary,   1624. 
priority  affected  by  record,  1624. 
when  a  mortgage  made  a  common  charge,  1625. 

967 


INDEX. 


References  are  to  Sections. 


INVERSE  OUBER— continued. 

specific   agreement   in   mortgage,   1625. 

assumption  of  mortgage  by  purchaser,  1625. 

contribution  according  to  value,  1626. 

valuation  as  of  what  time,  1627. 

mortgagee  having  other  security,  1628,  1629. 

knowledge  of  second  mortgage  not  material,  1028. 

where  mortgagee  has  a  lien  on  other  ])roperty,  1629. 

exoneration  of  land  owned  by  surety,  1629,  1630. 

rights  of   tenants   in   common,   1629,   1630a. 

release  of  part  primarily  liable,  1631. 

determination  of  value,  1631. 

negligent   loss   of   personal   security   1631. 

agreement  to  release  on  certain  payment,  1631. 

when  part  of  premises  is  a  homestead,   1632. 

rule  never  invoked  in  favor  of  mortgagor,  1632. 

rule  of  marshalling  not  applied  against  homestead,  1632. 

when  foreclosure  sale  made  in,  1691. 
IOWA,  nature  of  a  mortgage  in,  29. 

regarded  as  a  lien  only,  29. 

form  of  mortgage,   61. 

parol  evidence  to  show   a  mortgage,   295. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of   record,   1005. 

redemption  after  foreclosure,   1051,   1335. 

statute  of  limitations,  ten  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1335. 

strict   foreclosure  not  known   in,   1546. 

power  of  sale  mortgages  and  trust  deeds  in,  1735. 
JOINT  MORTGAGEES,  135. 

deed  to  one  of  after  foreclose,  1269. 

writ  of  entry  by,  to   foreclose  mortgage,   1283. 

whether  joint  tenancy  or  tenancy  in  common,   135. 

equitable  suit  to  foreclose  by,  1381,  1382. 

parties   to   foreclosure    suit,    1435. 

right  to  surplus  after  foreclosure  sale,  1689. 
JOINT  TENANTS  making  mortgage,  form  of  conditional  judgment 

against,   1314. 
JOINTRESS   may   redeem,    1067. 
JUDGMENT,  for  mortgage  debt  does  not  discharge  it,  936. 

for  portion  of  mortgage  debt,   937. 

imder    trustee   process   payment    pro    tanto,    938. 

relesse  of  discharges  debt,  940. 
968 


INDEX, 

References  are  to  Sections. 

JTJDGME^T-continued. 

does  not   waive   foreclosure,   1270. 
for  the  mortgage  debt   does   not  waive   the  right  to  foreclose, 

1218. 
right  of,  when  mortgage  by  deed  absolute  in  form,   1221. 
recovery  of  opens  foreclosure,  1274. 

conditional,   in   suit   to   foreclose    by   writ   of   entry,    1306-1310. 
may  be  assigned,  1316. 

for  deficiency  must  be  asked  for  in  foreclosure  suit,   1477. 
after  decree,  parties  to  foreclosure  suit,   1437. 
on  note  or  bond  no  defence  to  foreclosure  suit,  1511, 
against  mortgagee  in  ejectment  suit  no  bar  to  foreclosure,  1511. 
in  strict  foreclosure,  1561. 
bars  equity,  1561. 
form  of,  1561. 

effect   of   redemption   after   lapse   of   period   allowed,    1561. 
none   for   deficiency   in   strict   foreclosure,    1561. 
in  foreclosure  suit  when  final,   1600. 
For  deficiency,  1709-1721. 
statutory   provisions   concerning,    1709. 
rule  in  United  States  Supreme  Court,  1709. 
proceeding  for  obtaining  judgment  for,  1709a. 
balance  must  be  ascertained,  1709a. 
amount  stated  by  sheriff  or  referee,  1709a. 
no  notice  prior  to  execution  for,  1709a. 
rendered  only  by  virtue  of  statute,   1709a. 
subsequent  litigation  over,   1709a. 
decree  of  foreclosure  must  precede,  1709a. 
ascertained  in  prior  foreclosure  suit,  1709a. 
failure  to  serve  one  defendant,  1709a. 
sale  price  the  test  of  value,  1709a. 
provided  sale  stands,  1709a, 

lien  on  equity  of  redemption  effect  on  surplus  after  sale,  1935. 
sale  must  be  under  same  decree,  1709b. 
cross-bill  by  second  mortgagee,   1709b. 
rights  of  persons  secondarily  liable,   1709b. 
judgment  against  one  of  joint  makers  of  note,   1709b. 
disaffirmance   by   infant  principal,   1709b. 
mortgage  covering  land  in  two  States,   1709b. 
remedy  by  separate  action,  1710. 
decree  against  one  releases  joint  obligors,   1710. 
loss  of  right  by  delay,  1710. 
decrees  against  partnership,  &c.,  1710. 


969 


INDEX. 

References  are  to  Sections. 

JJJBGMEl^T-contmued. 

effect  of  agreement  not  to  take,  1710. 

third  persons  may  be  joined,  when,  1710. 

court  of  equity  acting  without  authority  of  statute,  1711. 

if  there  be  no  bond  or  note,  1715. 

against  non-resident,  1716. 

upon  decease  of  mortgagor,  1717. 

personal  judgment  against  wife  erroneous,  1718. 

when  it  becomes  a  lien,  1720. 
JUDGMENT  CKEDITOK,  may  show  absolute  deed  a  mortgage,  337. 

not  a  purchaser  within  the  recording  acts,  462. 

mortgagee  has  priority  of,  when,  463,  464,  465. 

notice  of  unrecorded  mortgage,  557. 

may  redeem  mortgage,  1069. 

proper  party  to  foreclosure  suit,  1439. 
JUNIOR  or  second,  no  part  of  man's  name,  63. 
JUNIOR  MORTGAGEE,  rights  of,  725,  730,  732,  733,  756. 

made  party  to  foreclosure  suit,  1439. 

may  take  advantage  of  usury  in  mortgage  when,  493. 
JURISDICTION  of  suits  to  foreclose  mortgages,  1443. 

KANSAS,  nature  of  mortgage  in,  30, 

legal  estate  remains  on  mortgagor,  30. 

written   authority   to   fill   blanks,   90. 

parol  evidence  to   show  a  mortgage,  296. 

record   of   assignment   not   notice   to   mortgagor,   480. 

entry  of  satisfaction  of  record,   1006. 

no   redemption   after   foreclosure,    1051,   1336. 

statute    of   limitations,    fifteen   years,    1193,    1207. 

statutory  provisions  relating  to  foreclosure,  1336. 

power  of  sale  mortgages  and  trust  deeds  in,  1736. 
KENTUCKY,  nature  of  a  mortgage  in,  31. 
a  mere  security  for  the  debt,  31. 

written  authority  to  fill  blanks,  90. 

mortgage  by  married  woman,  113. 

parol  evidence  to  show  a  mortgage,  297. 

usury  in,   633. 

assignment   of   debt   passes   mortgage   in,   817. 

entry  of  satisfaction  of  record,   1007. 

no   redemption   after  foreclosure,   1051,   1337. 

when  right  to   redeem  barred  in,   1145. 

statute  of  limitations,  fifteen  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1387. 

970 


INDEX. 

References  are  to  Sections. 

KENTUCKY— con/in  u  ed. 

strict  foreclosure  in,   1547. 

power  of  sale  mortgages  and  trust  deeds  in,  1737. 

LACHES  in  claiming  that  a  deed  absolute  is  a  mortgage,  330 

in  redeeming   not  excused  by   accident   or  mistake,   J30. 
after  foreclosure  sale,  1054,  1161a. 

in  setting  aside  foreclosure  sale,   1674. 
sale  under  power,  1922. 

right  of  subrogation   lost  by,   855a. 
LAND  GEANT  subject  to  mortgage,  157. 
LAW   OF  PLACE,  as  regards  usury,  656-663. 

in  force  at  time  of  execution  of  mortgage  governs,  663,  1051,  1822. 

as  regards  assignments,  823. 
LEASE,  mortgage  of,  how  foreclosed,  1449. 
LEASEHOLD  ESTATES,  mortgage  of,  within  recording  acts,  478. 

mortgagor   in  possession  entitled   to   rents,   670. 

when  mortgagee  liable   for  rent,   785. 

mortgagee  entitled  to  the  rents,  785. 

appointment  of  receiver  in  mortgage  of,  1518. 

mortgage  of,  allowance  for  rent  in  foreclosure  decree,  1596. 

may  be  sold  on  foreclosure  decree,  1609. 
LEGATEE,  when  necessary  party  to  foreclosure  suit,  1419. 
LESSEE,  of  mortgaged  estate,  his  rights  and  liabilities,   771-785. 

mortgagor  in  possession  not  liable  for  rent,   771. 

entitled  to  rent  from  tenant  till  entry  or  foreclosure,  771,  772. 

on  mortgagor's  bankruptcy  right  to  rents  vests  in  assignee,  772a. 

made  before  mortgage  not  affected  by  it,  773. 

when  mortgage  an  assignment  of  the  reversion,  774. 

rent  accrued  does  not  pass  by  the  assignment,  774. 

rights  of  mortgagee   as  assignee   of  the  reversion,   774,   775. 

sufficiency  of  entry  to  entitle  mortgagee  to  rents,  775. 

of  mortgagor  after  mortgage  is  subject  to  it,  776. 

effect  of  receipt  of  rent  by  mortgage,  776,  778. 

attornment   by,   777,   778. 

mortgagee  may  treat  lessee  as  trespasser,   777. 

tenants  not  allowed  compensation  for   improvements,   779. 

mortgagee  not  liable  for  mortgagor's  misrepresentations  to  ten- 
ants, 779. 

emblements,   780. 

no  one  but  mortgagee  can  take  advantage  of  invalid  lease,  781. 

provision  authorizing  mortgagor  to  bind  mortgagee  by  lease,  782. 

lease  by  mortgagee  in  possession  terminated  by  redemption,  783. 

971 


INDEX. 

References  are  to  Sections. 

LESSEE— con  ^mwefZ. 

assignment  by  mortgagee  no  transfer  of  .rent  due,  784. 
for  years,  not  entitled  to  any  part  of  surplus,  1696. 
LEX  FOEI,  as  regards  usury,  656-663. 

LEX  LOCI  CONTKACTUS  governs  as  to  usury,   when,   656-66L 
LEX  EEI  SIT^  governs  as  to  general  validity  of  mortgage,  662. 
as  to  proceedings  for  foreclosure  and  redemption,   1051. 
LIEN.     (See  Mechanic's  Lien.) 
LIEN  OF  VENDOR,  189. 
LIMITATIONS,  STATUTE  OF, 

when  mortgage  debt  barred  by,  915. 
discharge   of  debt  does  not  bar  mortgage,   889. 
applies  by  analogy  to  right  of  redemption,  1144. 
the  statute  in  force  governs,  1145. 
special  statutes  relating  to   redemption,   1145. 
when   mortgagee's  possession  not   adverse,   1140. 
adverse  possession  operates  against  married  woman,   1150. 
successive  disabilities  of  mortgagor,  1151. 
When  it  begins  to  run  against  redemption,  1152. 
not  while  mortgage  relation  exists,  1152. 
void  foreclosure  statute  does  not  run  till  notice  of,  1152. 
under  Welsh  mortgage,  1153. 

when  mortgagor  retains  possession  of  part,   1155. 
runs  from  time  of  entry  of  mortgage,  1156. 
mortgagee  entering  under  other  right,  1156. 
presumption  that  right  is  barred  after  twenty  years,  1157. 
under  de  facto  but  void  foreclosure,   1157. 
constructive  possession  not  sufficient,  1158. 
effect  of   temporary   interruption,   1158. 
when  notice  to  mortgagor  necessary,  1159. 
when  right  is  barred  after  imperfect  foreclosure,  1161. 
lapse  of  time  less  than  that  prescribed,   1161a. 
What  prevents  the  running  of,  1162-1173. 

acknowledgment  of   mortgagee,   1162. 
to  a  third  person,  1164, 
binding   upon   all   claiming   under,    1165. 
by   rendering  account,   1166. 
by  letter,  1167. 

by  assignment  of  mortgage,  1168. 
by  recital  in  deed,   1169. 
by  suit  to  enforce,   1170. 
verbal,   1171. 
filing  of  bill  to  redeem  stops,  1172. 


972 


INDEX. 

References  are  to  Sections. 

LIMITATIONS,  STATUTE  OF— continued. 
how  pleaded,  1173. 
When  the  right  to  foreclose  is  harred,  1192-1214. 

statute  applies  to  mortgages  by  analogy,  1192. 
tendency   to  shorten  period   of,   1193. 
presumption  of  payment  from  lapse  of  time,  916. 
of  payment  not  conclusive,  1196. 
repelled  by  circumstances,  1197. 
payment   of  interest  renews,   1198. 

by  one  tenant  in  common,  1199. 
payment  of   taxes,   1200. 
statute  does  not  discharge  the  debt,   1203. 
modern   legislation   in   England,   1203. 
running   of   statute    stopped   by   death,    1203. 
by  foreclosure  proceedings,   1203. 
though  debt  be  barred  lien  may  be  enforced,  1204. 
presumption   of  payment,   1204. 

in  what  State  rule  is  otherwise,   1207. 
posting  notice  of  sale  not  equivalent  to  institution  of  action, 

1207. 
statute  suspended  as  to  both  debt  and  mortgage,  1207. 
adverse  possession  by  several  persons  successively,   1208. 

prior  to  the  mortgage,  1208. 
lien  for  purchase-money  barred  when  debt  is  barred,  1209. 
statute  runs  from  time  right  of  action  accrues,  1210. 
proof  of  maturity  necessary,   1210. 

stipulation  giving  immediate  right  of  foreclosure,   1210. 
possession  of  mortgagor  presumed  to  be  subordinate,  1211. 
when  possession  becomes  adverse,   1211. 
mortgage   in  form  of  absolute   conveyance,  1211. 
special   statute   of   limitations,   1214. 
mortgage  may  be  cancelled  after  debt  barred,  1214a. 
who  may  plead  statute  of  limitations,  1214b. 
defence   of,   in  bill  to   foreclose,   1509. 
no  deficiency  judgment  after  debt  barred  by,  1715,  1719. 
LIS  PENDENS,  doctrine  of  as  regards  registration  and  notice,  585. 
as  regards  new  parties  in  interest,  1411,  1442. 
necessity  for  record  of  suit  to  foreclose,  1411. 
LOAN  ASSOCIATIONS,  usury  in  mortgages  of,  638. 
LOSS  OF  MOETGAGE,  decree  for  making  a  new  one,  100. 
LOST  MOETGAGE,  foreclosure  of,  1489. 
LOUISIANA,  nature  of  a  mortgage  in,  32. 
usury  in,  633. 

973 


INDEX. 


References  are  to  Sections, 


J.0VIS1AN  A-continued. 

compound  interest  cannot  be  recovered,   G50. 
assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,   lOOS, 
no  redemption  after  foreclosure,   1051,   1338. 
statutory  provisions  relating  to  foreclosure,  1338. 
equitable  jurisdiction  to  foreclose,   1443. 
power  of  sale  mortgages  and  trust  deeds  in,   1738. 
LUMPING   SALES.     (See   Sales  in  Parcels.) 

MAINE,  nature  of  a  mortgage  in,  33. 

mortgagee  lias  legal  estate  on  condition,  33. 

verbal  authority  to  fill  blanks,  90. 

parol  evidence  to  show   a  mortgage,   298. 

statutory  provisions  as  to  insurance,  405. 

usury  in,  633. 

assignment  of  debt  without  mortgage   in,  817. 

entry  of  satisfaction  of  record,  1009. 

redemption  after  entry  to  foreclose,  1051,  1339. 

statute   of  limitations,   twenty  years,   1193. 

provisions  for  foreclosure  by  entry  and  possession,  1239,  1240. 

writ  of  entry  to  foreclose  mortgage,1276,  1277. 

statutory  provisions  relating  to  foreclosure,  1339. 

power  of  sale  mortgages  and  trust  deeds,  1739. 
MAEEIED  WOMAN,  description  of  in  mortgage,  63. 

acknowledgments  by,  83. 

in  mortgages  of  homestead,   83a. 

must  join  in  execution  of  homestead  mortgage,  83a. 

tenant  in  common  with  husband  must  join,   83b. 

disability  of  at  common  law,  106, 

coverture  does  not  remove  disability  of  infancy,  105. 

liability   of   in  equity   for   her   contracts,   107. 

English  rule  of  liability  of  her  property,  108. 

American  rule,   109. 

can   bind   herself  personally   on   what    contracts,    110. 

when  joining  in  husband's  mortgage  does  not  bind  personally, 
110. 

liability  for  a  deficiency  after  a  foreclosure.   111. 

doctrine  of  her  liability  for  her  general  debts,  112. 

her  mortgage   to   secure  her  husband's   debt,   113. 
taken   in  good  faith  not  set  aside,   113, 
not  valid  unless  for  a  valid  consideration,  113a. 

when  a  surety  for  her  husband,   114,  949. 

when  her  relation  to  debt  not  that  of  surety,  114. 
974 


INDEX. 

References  are  to  Sections. 

MARKIED  WOMAN— continued. 

when  to  be  exonerated  out  of  husband's  estate,  114. 

husband's   authority   to   extend   wife's  mortgage,   115 

mortgage   for   purchase   price,   116. 

may  assume  a  mortgage,  116,  753. 

capacity  of  determined  by  lex  rei  sitae,  118a. 

may  take  mortgages,  133. 

bound  by  lien  reserved  in  deed  to,  231. 

mortgage  of,  obtained  by  duress  or  fraud,  626. 

entitled  to  the  benefit  of  payments  on  her  mortgage,  949. 

equitable  assignment  of  mortgage  by,  813. 

defence  by   against   writ   of  entry,   1296. 

right  to  redeem  barred  in  spite  of  coverture,  1150. 

cannot   enter  against   husband   to   foreclose,   1252. 

holding  mortgage,  may  foreclose,   1393. 

wife  of  mortgagor  party  to  foreclosure  suit,  1420-1422. 

forbidden  to  be  surety,  estoppel  against,   1484. 

not  liable  to  personal  judgment  for  deficiency,  1718. 

may  confer  a  valid  power  of  sale,  1777a. 

may  make  deed  under  power,  1890. 
MARSHALLING  SECURITIES,  as  between  different  creditors,  875. 

when  mortgagee  has  other  security,  1628,  1629.      (See  Inversi 
Order.) 

when  mortgagee  holds  two  mortgages,   1630. 

after  release  by  mortgagee  of  part  primarily  liable,  1631. 

doctrine  not  applied  to  surplus  on  foreclosure  sale,  1691,  1G9U„ 

not  done  against  homestead,  1632. 
MARYLAND,  nature  of  a  mortgage  in,  34. 

mortgagee  has   legal   estate,  34. 

form  of  mortgage,  61. 

written  authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  299. 

statute  as  to  mortgages  to  secure  future  advances,  366. 

record  of  assignments  provided  for,  479. 

affidavit  of  consideration,  610. 

usury   in,   633. 

entry  of  satisfaction  of  record,  1010. 

no  redemption  after  foreclosure,   1051,  1340. 

statutory  provisions  relating  to  foreclosure,   1340. 

power  of  sale  mortgages  and  trust  deeds  in,  1740. 

exercise  of  power  by  corporation,  1785. 

former  insolvency  law  affected  power  how,   1793a. 
MASSACHUSETTS,  nature  of  a  mortgage  in,  35. 

legal  estate  and  possession  in  mortgagee,  35. 

975 


INDEX. 


References  are  to  Sections. 


MASSACHUSETTS— con^mwed 

form   of   mortgage,   60. 

written  authority   to   fill  blanks,   90. 

parol  evidence   to  show  a  mortgage,   300. 

usury  in,   633. 

assignment  of  debt  without  mortgage  in,  817. 

entry   of   satisfaction   of   record,   1011. 

redemption  after  entry  to  foreclose,   1051,  1341. 

statute  of  limitations,  twenty  years,  1193. 

provisions  respecting  foreclosure  by  entry  and  possession,  1244. 

writ  of  entry  to  foreclose  mortgage,  1276,  1777. 

condition   judgment   recorded   in,   1306. 

statutory  provisions  relating  to  foreclosure,  1341. 

strict  foreclosure   in,   1574a. 

power  of  sale  mortgages  and  trust  deeds  in,  1741. 
MECHANIC'S   LIEN,  vendor  reserving  legal  tiltle  not  affected  by, 
227. 

mortgage   for   obligatory   advances   has   precedence,   370. 

subject  to   purchase-money   mortgage,   468. 

purchase-money   mortgage   has   precedence,   487. 

attempt   to   defeat   by   fraudulent   mortgage,    628. 

mortgage   executed   before   commencement   of  building,    609. 

general  view  of  statutes  affecting  priority  of  mortgages,  487. 

from  commencement  of  the  work,  487. 

what  the  commencement  of  a  building  is,  487. 

commencement  of  alteration,  487. 

for  repairs  not  paramount  to  existing  mortgage,  487. 

proof  requisite  to  establish,  487. 

upon   building  distinct  from  land,  487. 

transferred  to  surplus  money  after  foreclosure,  1687. 

assignee  of  as  party  to  foreclosure,  1425. 
MEEGER,  doctrine  of,  848-873. 

at  law  and  in  equity,  848. 

requirements  for  merger  to  take  place,  848. 

effect   of   intervening   encumbrance,    848. 

none  on  assignment  to  co-tenant,  849. 
to  wife  of  mortgagor,  850. 

none  on  marriage  of  mortgagor  and  mortgagee,  851. 

none  when  equitable  estate  has  been  extinguished,  852. 

when  assignor  is  estopped  to  claim,  853. 

estopped  by  selling  the  estate  free  of  incimabrances,  854. 

intention  governs  as  to,  855. 
proof  of,  855. 

intention  expressed,  856, 

976 


References  are  to  Sections. 

MERGER — continued. 

intention  exi)ressed  against  merger,  857. 

a  release  may  operate  as  assignment,  858. 

deed  of  quitclaim   from  mortgagee,   859. 

bequest  of  mortgage  to  mortgagor,  860. 

parol   evidence   of    intention,    8G1. 

when  the  property  is  sold  subject  to  the  mortgage,  861a. 

in  new  security  or  judgment,  862. 

mortgage  will  not  be  kept  alive  to  aid  in  a  wrong,  £G3. 

or  in  violation  of  a  trust  relation,  863. 
when  debt  is  paid  by  one  bound  to  pay  it,  864. 
when  mortgage  assigned  to  one  who  has  assumed  it,  865. 

purchase  at  void  foreclosure  sale,  865. 
when  mortgage  paid  by  owner  of  equity  of  redemption,  865. 
with   reference   to   right  of  dower,   866. 

payment  by  one  who  has  warranted  against  incumbrances,  867. 
assignment  to  subsequent  purchaser,  868. 
payment  by  purchaser,  869. 

payment  by  volunteer,  869. 
acquisition  of  equity  of  redemi:)tion  by  mortgagee,  870. 

after  transfer  of  mortgage,  870. 
no   merger   against   pledgor,   870a. 
mortgagee  purchasing  and  giving  up  note,  871. 
merger   between   successive   mortgages,    871. 
purchaser  cannot  rely  upon  record  as  showing,  872. 
whether  extinguishment  of  equity  or  merger  of  mortgage,  873. 

when  mortgage  is  regarded  as  a  lien,  873. 

effect  of  intervening  lien,  873. 
merger  of  note  in  judgment  does  not  extinguish  debt,  936. 
MICHIGAN,  nature  of  a  mortgage  in,  36. 
mortgagor  has  legal  estate,  36. 
parol  evidence  to  show  a  mortgage,  301. 
record  of  assignment  not  notice  to  mortgagor,  480. 
usury   in,   633. 

compound   interest   allowed   in,    650. 
assignment   of  debt   passes  mortgage   in,   817. 
tender  of  payment   discharges   debt   in,   893. 
entry  of  satisfaction  of  record,   1012. 
redemption   after   foreclosure,   1051,    1342. 
statute  of  limitations,   fifteen  years,   1193. 
statutory  provisions   relating  to   foreclosure,   1342. 
no  strict   foreclosure   in,   1547b. 
power  of  sale  mortgages  and  trust  deeds  in,  1742. 


9' 


INDEX. 

References  are  to  Sections. 

MILITAEY  OCCUPATION  as  ground  for  setting  aside  sale  vinder 

power,   1906a. 
MINNESOTA,  nature  of  mortgage  in,  37. 

mortgage  a  lien  merely,  37. 

parol  evidence  to  show  a  mortgage,  302. 

record  of  assignment  not  notice  to  mortgagor,  473. 

usury   in,   633. 

entry   of   satisfaction  of   record,   1013. 

redemption   after   foreclosure,    1051,    1343. 

statute  of  limitations,  ten  years,   1193. 

satutory  provisions   relating  to   foreclosure,   1343. 

strict  foreclosure  in,  1548. 

power  of  sale  mortgages  and  trust  deeds  in,  1743. 
MISSISSIPPI,   nature  of  mortgage  in,   38. 

mortgagee  has  legal  title  as  security,  38. 

written  authority  to  fill  blanks,   90. 

power  of  married  women  to  mortgage,   118. 

parol  evidence  to  show  a  mortgage,  303. 

usury   in,   633. 

assignment   of   debt  passes  mortgage   in,   817. 

entry  of  satisfaction  of  record,  1014. 

no  redemption  after  foreclosure,  1051,  1344. 

when  right  to  redeem  barred  in,   1145. 

statute  of  limitations  in,  1193. 

statutory  provisions  relating  to   foreclosure,   1344. 

power  of  sale  mortgages  and  trust  deeds  in,  1744. 

damages  for  wrongfully  enjoining  sale,  1820. 
MISSOURI,  nature  of  a   mortgage  in,   39. 

legal  title  in  mortgagee  after  conditions   broken,  39. 

form  of  mortgage,  61. 

parol  evidence  to  show  a  mortgage,   304. 

usury  in,   633. 

compound  interest  allowed  in,  650. 

assignment  of  debt  passes  mortgage  in,  817. 

entry   of  satisfaction  of  record,   1015. 

no  redemption  after  foreclosure,   1051,  1345. 

statute  of  limitations,  ten  years,   1198. 

statutory   provisions   relating   to   foreclosure,    1345. 

strict  foreclosure  not   allowed   in,   1549. 

power  of  sale  mortgages  and  trust  deeds  in,  1745. 
MISTAKES,    in   drawing   mortgage,    97. 

in   describing  debt,  354. 

discharge  made  by,  966-971. 

only  mistake  of  fact  in  making  discharge  entitles  to  relief,  699. 

978 


INDEX. 

MISTAKES— continued. 

in  making  discharge  when  assignment  was  intended,  970. 

in  substituting  new   mortgage   when   a  lien   intervenes,   971. 

in  quantity  of  land  conveyed,  eii'ect   on   purclui.se-nioney   mort- 
gage, 506a. 

in  entering  decree  affecting  homestead,   1588. 

when  ground  for  setting  aside  foreclosure  sale,   1675. 

in  quantity   of  land,   1675a. 

in  location  of  land,   1675a. 

in   advertisement   of   sale,    1851. 
MONEY,  tender  may  be  made  in  what,  901. 
MONTANA,  nature  of  a  mortgage  in,  39a. 

mortgagor  entitled  to  possession,   39a. 

parol  evidence  to  show  absolute  deed  a  mortgage,  304a. 

usury  in,   633. 

entry  of  satisfaction  of  record,  1016. 

statute  of  limitations,  three  years,   1193. 

statutory  provisions  relating  to  foreclosure,   1346. 

power  of  sale  mortgages  and  trust  deeds  in,  1746. 
MORTGAGE,   used   by   the   Anglo-Saxons,   1. 

in  nature  of  the  Welsh  mortgage,  3. 

the  mortuum  vadium,  4. 

unlvnown  under  feudal  system,  5. 

forfeiture  absolute  at  first,  6. 

at  law  and  in  equity,  8-16,  59. 

common  law   doctrine   of,    11. 

not  a  mere  security,  12. 

equitable  view  of  in  New  York,  13. 

the   different   theories   of,   14. 

practical   distinctions   between,    15. 

definition  of  at  present  day,   16. 

nature   of   in   the  different  States,    17-59. 

summary  as  to  nature  of  a  mortgage,  58. 

mortgagee's  legal  title   is  only  for  protection,   58. 
,  form  of,  60. 

how  it  differs  from  a  deed,  60. 

statutory   forms  of,   61. 

description  of  the  parties,  63. 

parol  evidence  to  identify,  63. 

by  owner  under  assumed  name,  63. 

by  "undersigned"  valid,  63. 

to  partnership  in  firm  name,  63. 

omission  of  mortgagee's  name,  63. 

consideration  named  in,  64. 

description  of  premises,   65. 

979 


INDEX. 


References  are  to  Sections. 


MORTGAGE,  continued. 

uncertainty  in  description,  66. 

erroneous    description,    when    sufficient,    66. 

habendum  office  of,  67. 

when  reformed  to  convey  a  fee,  67. 

in  mortgage  to  corporation,  67. 

words  "successors  and  assigns"  not  necessary,  67. 

covenant  in,  68. 

purchase-money  mortgage,  68. 

of  little  use,  68. 
may  be  made  to  continue  after  discharge  of  mortgage,  68a, 
condition  in,  69. 

substance  and  not  form  regarded,  69. 
description  of  debt  secured,  70. 
formal  exactness  not  required,  70. 
literal  exactness  not  required,  70. 
must  give  reasonable  notice  of  debt,  70. 
note  not   executed   with   the   mortgage,   70. 

subsequently  executed,  70. 

and  mortgage  construed  together,  71. 
covenant    for   payment    not   necessary,    72. 
recital  of  debt  sufficient,  72. 
for  payment  of  the   debt,  72. 
a  recital  of  the  indebtedness   sufficient,  72. 
provision  as  to   interest,  73. 
when  rate  of  interest  not  named,  74. 
interest  at  higher  rate  after  default,  74. 
time  of  pa;^Tnent  of  debt,  75. 
made  payable  upon  default,  75. 
payment  of  taxes,  77. 
insurance  clause,   78. 
special  provisions,  79. 
for  partial  releases,  79. 
mortgagor's   possession,   80. 
made  under  fictitious  name,  81, 
sealing  is  essential,  81. 
signing  is  requisite,  81. 
witness  to,  82. 
acknowledgment  of,  83. 
witness  necessary  as  between  parties,  83, 
by  married  women,  83. 
delivery   of   essential,    84. 
subsequent  acceptance  of,  85. 
executed  to  be  sold,  when  a  lien,  86. 
980 


INDEX. 

References  are  to  Sections. 

MOB.TGAG'E— continued. 

delivery  in  escrow,  87. 

date  of  not  essential,  89. 

filling  blanks  after  execution  of,  90. 

written  authority  essential  to  filling,  91. 

otherwise  in  a  few  States,  91. 

mortgagor  estopped  to  object,  92. 

mortgagee  not  protected  when  negligent,  93„ 

by  mere  stranger  without  effect,   94. 

alteration  of,  94,  95. 

.cannot  be  varied  by  parol,  90. 

reforming   a   mortgage,   97-99. 

loss  of   before   recording,   100. 

principles  of  construction,  101. 

legal  capacity  to  execute,  102. 

by  executor,  102a. 

by  guardian,  102b. 

of  partnership  real  estate,  119-123. 

by   corporation,   124-128. 

who  may  make,  102-130. 

power   to  execute,   129. 

mode  of  executing  power,  130. 

who  make  take,  131-135. 

aliens  may  take,  132. 

married  woman  may  take,  133. 

corporation  (may  take,  134. 

national  bank  may  take  as  additional  security,  134. 

foreign  corporations,  134a. 

to  joint  mortgagees,  135. 

what  may  be  the  subject  of,  136-161. 

of  any  kind  of  interest  in  real  property,  136. 

of  bond  or  agreement  for  title,  136. 

of   an  option  to  purchase,   136. 

of  an  unassigned  right  of  dower,  136. 

of   a   devisee's   interest,   136. 

not  of  a  mere  possibility,  136. 

of  any  vested  contingent  or  future  interest,   137. 

of  mortgagor's  interest  whatever   it  may  be,    138. 

of  part  owner  may  cover  entire  interest,  141. 

of  moiety  by  tenant  in  common,  141. 

of  house  moved  from  mortgaged  land,  143. 

of  fixtures  covered  from  realty,  144. 

of  growing  wood  or  timber,   145. 

of  improvements,  146,  147. 

981 


INDEX. 

Keferences  are  to  Sections. 

MOBTGAGi:— continued. 

of  accessions  to  mortgaged  property,  149. 

of  products  of  the  soil,  150. 

of  crops  not  sown,  151. 

of  after-acquired  property  of  railroads,  154,  156. 

when  incident  to  franchise,  155. 

not  within  terras  of  mortgage,  157. 

subject  to  existing  liens,  158. 

of  equitable  right  of  action,   159. 

of   future   earnings   of   corporation,    160. 

equitable,  162-188. 

informal,  and  agreements  to  give,  163. 

defectively  executed  by  agent,   169. 

by  assignment  of  contract  of  purchase,  172. 

of  bond,  for  deed,  173. 
of  partial  interest  in  contract,  175. 
of  certificate  of  purchase  of  public  lands,  176. 
by  preemption  of  public  lands,  177. 
by  act  of  legislature,  178. 
by  bonds  pledging  real  estate,  178. 
by  deposit  of  title  deeds,  179-188. 
df  a  mortgage,  138,  139. 
*f  rents,  140. 

of  building  may  pass  the  land,  142. 
securing    debt    to    another   besides    the    mortgagee,    170. 
statutory,   178. 

by  absolute   deed  and  agreement  to   reconvey,   241-281. 
distinguished   from   conditional   sale,   241-281. 
cannot  be  shown  by  parol  to  have  been  intended  as   sale,  277. 
dintinguished  from  a   trust,   281,   332. 
parol  evidence  to  prove,  282-342. 
once  a  mortgage  always  a  mortgage,  340. 
the  debt  secured  by,  343-395. 
redelivery  of  for  new  obligation,  362. 
to  secure  future  advances,  364-378. 
of  indemnity,  379-387. 
for  support,   388-395. 

not  an  alienation  within  terms  of  insurance  policy,  442. 
what  fixtures  covered  by,  428-452. 
registration  of,  456-537. 
for  purchase-money,  468. 
«roid  and  voidable,  610-632, 
usurious,  633-663. 
before  foreclosure  is  personal  assets,  700. 

982 


INDEX. 

References  are  to  Sections. 

MORTGAGE— con^inwed 

of  premises  leased  is  an  assignment  of  the  reversion,  774. 
for  support,  assignment  of,  803. 
assignment  of   without  debt,   805. 
payment  of,  886-942. 
revivor  of,  943-949. 

foreclosure  of  is  not  payment,  950-955. 
who  may  receive  payment  of,  956-965. 
discharge  of,  956-1037. 
redemption  of,   1038-1113. 
when  right  to  redeem  is  barred,   1144-1173. 
when   right   to  foreclosure   accrues,    1174-1191. 
MORTGAGEE,  at  common  law  has  legal  estate,  11. 

his   right  of  possession   in   the   several   States,   17-59. 
filling  in  name  after  execution,   90,   91. 
Insurable  interest  of,  397. 

equitable   lien  of,   upon  insurance,   402. 

loss  payable  to,  406-410. 

when  liable  as  insurer,  416. 

insurance  obtained  by,  418-421. 

a  purchaser  within  the  recording  acts,  459. 

but  not  when  the  mortgage  secures  a  preexisting  debt,  459. 

further   time   is   a   good  consideration,   459. 
mortgagor's  possession  not  adverse  to,  672. 
not  liable  to  ejectment  by  mortgagor,  674. 

to  mortgagor  in  trespass,  675. 
mortgagor's  personal  liability  to,  677. 
right  of  action  for  waste,  687-691. 
remedy  of,  for  injury  by  mortgagor,  695. 

for   permanent   injuries   by   stranger,    695a. 

right  does  not  pass  to  purchaser  at  foreclosure  sale,  695. 

for  wilful  injury  done  the  security,  696. 

when  action  on  the  case  is  the  proper  remedy,  696. 
His  rights   and   liabilities,  699-734. 

not  in  general  sense  owner  of  the  property,  699. 

at  least  before  he  has  taken  possession,  699. 

his   interest  personal   assets,   before   foreclosure,   700. 

and  pass  to  his  executor  or  administrator,  700. 
cannot  be  levied  upon  or  attached,   701. 

the  interest  of  a  beneficiary  in  trust  deed  cannot  be  levied 
upon,  701. 

when   entitled   to   possession,    702. 

has  remedies  of  owner  for  the  enforcement  of  the  debt,  702. 

may  maintain  ejectment  in  some   States,  702. 

983 


INDEX. 


References  are  to  Sections. 


MORTGAGEE— continued. 

when  in  possession  after  default  cannot  be  ejected,  702. 

cannot  be  disseised  by  mortgagor,  703. 

but  may  be  by  stranger,  703. 

joint   tenants   when   debt   secured   are   first,    704. 

tenants   in   common  where  debts  secured   are  due   to  them 

severally,  704. 
when  may  have  partition,  705. 

when  bound   by  partition   between   mortgagors,   70d 
when  partition  may  be  had  by  mortgagees,   706. 
partition  when  a  specific  part  of  common  property  is  mort- 
gaged,  706a. 
His  rights  against  mortgagor,  707-721. 
entitled  to  whole  security,  707. 

an  award  of  damages  to  property,  708. 

balance  after  sale  for  taxes,  708. 
an  essential  party  to  proceedings  affecting  his  rights,  709. 
a  purchaser  to  extent  of  his  claim,  710. 
may  purchase  mortgagor's  equity,  711. 
or  acquire  any  title  adverse  to  mortgagor,  711. 

although  in  possession,  712. 

may  purchase  on  judgment  for  another  debt,   712. 

limitation  of  this  right,  713. 
may  purchase  at  tax  sale,  713. 
acquiring  tax  title,  714. 
when  not  his  duty  to  pay  the  taxes,  714. 
may  redeem  from  tax  sale,  714. 

agent  of  cannot  acquire  tax  title  and  hold  against  him,  714a. 
cannot  be  divested  of  possession  until  payment,  715,  716. 

rule  otherwise  in  Michigan,  717. 
writ  of  entry  by,  to  recover  possession,  718. 
ejectment  by,  against  mortgagor  after  maturity,  719. 
forcible  entry  and  detainer  by,  against  mortgagor,  720. 
in  possession  may  maintain  trespass  for  mesne  profits,  721. 
His  liability  to   third  persons,  722-734. 

for  releasing  part  of  security  without  payment,  722. 
knowing  that  parts  of  the  land  have  been  conveyed  or  mort- 
gaged, 722. 
provision  for  release  of  parts  at  fixed  prices,  722. 
what  notice  of  others'  rights  affects,  723. 
cannot  release  to  prejudice   of  surety,  724. 

nor  to   prejudice   of  junior  mortgagee,   725. 
principal   creditor  entitled  to   surety's   mortgage,   726. 
for  release  of  mortgagor  from  personal  liability,   727. 

984 


INDEX. 


References  are  to  Sections. 


'MORTGAGEE— continued. 

for  application  of  other  security,  728. 

doctrine  of  marshalling  one  of  equity,  728. 

proof  of  claim  in  bankruptcy,   729. 

proving  claim  must   release   security,   729. 

cannot   change   terms   of   mortgage    as   against   subsequent 
mortgagee,   730,   732. 

when  homestead  is  included  in  mortgage,  731. 
junior  mortgagee's  rights,  725,  730,  732,  733,  756. 
owner  of  one  lot  may  have  amount  on  his  lot  declared,  733. 
when  estopped  to  assert  mortgage,  734. 
when  entitled  to  rents  of  mortgaged  premises,  772-775. 
lease  by  mortgagee  in  possession,  783. 
whether  liable  for  rent  of  leasehold  estate,  785. 
whether  he  can  be  compelled  to  assign  on  payment,  792,  793. 
legal  interest  of  after  assignment,  818,  819. 
purchasing   equity   of   redemption,   when   a   merger,    871. 
junior  may  redeem,  1064. 

liability  to  account  for  rents  and  profits,  1114-1143. 
his   remedies  for  enforcing  mortgage,   1215-1236. 
whether  liable  for  acts  of  receiver,  1537a. 
death  of  effect  on  foreclosure  suit,  1584. 
Buying  at  foreclosure  sale  under  decree,  1636. 

generally  no  objection  to,  1636. 

no  deed  necessary  to  pass  title,  1660. 

court  more  ready  to  open  sale,  1671. 
Buying  under  power  of  sale,  1876-1888. 

generally  not  allowed  to  buy,  1876. 

sale  voidable  only,  1876. 

precludes   subsequent   sale,   1876. 

relief  on  application  of  mortgage,  1876. 

pledgee  of  mortgage  cannot  purchase,  1876. 

partners  of  mortgagee  cannot  purchase,  1876. 

may  'purchase  of  mortgagor,  1876. 

may  purchase  of  purchaser,  1876. 

right  of  mortgagor  to  disaffirm,  1876. 

accountability    of   mortgagee,    1876a. 

purchase  voidable  though  no  fraud  be  shown,  1877. 

rule   applies   to  mortgagee's  solicitor,   1878. 
or  agent,  1879. 

authority  a  question  for  jury,   1879. 

indirect   purchase   in   behalf   of  mortgagee,    1879. 

less   strictness  than   in  case  of  trustee,    1881. 

no  restriction  when  the  sale  is  judicial,  1882, 

985 


INDEX. 


References  are  to  Sections. 


MORTGAGEE— continued. 

provision   in   mortgage   enabling,    1883. 
rule  has  no  application  to   subsequent  mortgagee,   1884. 
right  to  avoid  waived  by  delay,   1885. 
may  deed  to  himself,  1892. 

liability  for  wrongful  exercise  of  power  of  sale,  1907,  1909. 
sale  by  unlicensed,  1915a. 

not  entitled  to  compensation  for  selling,  1923. 
fees  for  selling,   1924. 
MOETGAGOR,  the  legal  owner  except  as  to  the  mortgagee,  11. 
where  his  interest  is  regarded  as  the  legal  estate,  13. 
provision  for  his  retaining  possession,   80. 
when  estoppel  to  take  advantage  of  irregular  execution,  92. 
when  bound  by  mortgage  by  another,   138a. 
cannot  renounce  right  of  redemption  in  mortgage,  251. 
interest  of  insurable,  397. 

how   long   it  remains   so,   398. 
insurance  by,   for  benefit   of   mortgagee,   400. 
His  rights  and  liabilities,  664-698. 

his  right  of  possession  as  against  third  persons,   664. 
may  dispose  of  the  products  of  the  land,  664. 
may  recover  for  waste  against  stranger,   664. 
•    his  equity  of  redemiDtion  may  be  sold  on  execution,  665. 
his  widow  entitled  to  dower  in  equity  of  redemption,  666. 
his  right  of  possession  against  mortgagee,  667. 
where  a  tenant  at  will  of  mortgagee,  667. 
agreement  that  he  may  retain  possession,  667. 
need  not  be  in  mortgage,  668. 
may   be   implied   when,   668. 
as  modified  by  statute,   669. 

his  right  to  rents  and  profits  while  in  possession,  670. 
mortgagee  has  no   right  to  rents  before  taking  posses- 
sion,  670. 
royalties   of  coal  mine,   right  to,   670a. 
whether   liable    to    mortgagee    for   rent,    671. 
his  possession  not  adverse   to   mortgagee,   672. 
remedy  of  to  recover  possession  from  mortgagee,  673. 
.annot  maintain  ejectment  against  mortgagee,   674. 
bill  to  redeem  is  his  remedy,  674. 
cannot  maintain    trespass   against   mortgagee,    675. 
action   for   damages    against   mortgagee    not    in    possession, 

675a. 
injunction  to  restrain  mortgagee   from  doing  injury,    675a. 
has  perfect  right  to  convey  his  equity,  676. 
986 


INDEX. 


References  are  to  Sections. 


MORTGAGOR— continued. 

agreement   that   mortgagee   may   sell,   G7G. 

his  personal  liability  to  mortgagee,   077. 

released   without   extinguishing  mortgage,   983. 

no  covenant  to  pay  implied  by  mortgage  in  some  States,  678. 

recitals  may  not  be  evidence  of  existing  debt,   678. 

right  to  have  property  applied  to  debt,  678a. 

effect  of  release  of  part  of  premises  by  mortgagee,  678a. 

subsequently  acquired  title  of  inures  to  mortgagee's  benefit, 

679. 
rule  does  not  apply  as  to  a  title  vprongfully  acquired,  679. 
cannot  set  up  tax  title  against  mortgagee,  680. 
mortgagee  may  hold  tax  title  against  mortgagor,  680. 
his  improvements  are  subject  to  mortgage,  681. 
not   allowed   for   im^jrovements   against   mortgagee,   681. 
damages  under  right  of  eminent  domain,  as  to  mortgagee, 

681a. 
in  Massachusetts  damages   assessed  to  mortgagor,   681a. 
is  estopped  to  deny  his  title,  682. 

his  covenant  of  warranty  not  destroyed  by  banlvruptcy,  682. 
equitable  estoppel  to  deny  validity  of  mortgage,   683. 
Waste   l>y   mortgagor,   68'l-698. 

injunction  against,  684-686. 

cutting  timber,  removing  fixtures,  &c.,   684. 
when   remedy   in   damages   is  made   inadequate,   684. 
one  holding  relation  of  surety  of  mortgage  debt  may   ask 

for,   684. 
his  removal  of  timber  already  cut,  684,  685. 
right  but  not  duty  of  mortgagee  to  enjoin  waste,  686. 
trespass  for  waste  in  cutting  wooden  timber,   687. 
this  action  must  be  after  condition  broken,   687. 
when  replevin  for  timber  cut  may  be  had,  688. 
mortgagee  may  claim  timber  cut  in  hands  of  purchaser,  689. 
no  right  of  action  after  payment,  690. 
must  account  for  any  sum  received,  691. 
may  have  license  to   cut  wood,   692. 
his  abuse  of  license  to   cut   wood,   693. 
his  right  to  wood  for  his  own  fires,  694. 
liability  of,  to  action  for  injury  to  property,  695,  696. 
his  right  to  emblements,   697. 
may  waive  right  to  emblements,  698. 
release  from  personal  liability,  727. 
in  possession   entitled   to   the  rents,   771,   1120. 

987 


INDEX. 


References  are  to  Sections. 


MOnTGAGOTi-conUnued. 

lease  by,  after  mortgage,  776. 
not  bound  by  stipulation  not  to  redeem,  1039. 
effect  of  death  on  decree  of  sale,   1608,   1653, 
surplus   from   sale   after   death,   real   estate,   1695. 
upon  death  of,  no  proof  required  against  his  estate,  1222. 
death  of,  effect  on  foreclosure  suit,  1584, 
absence  of  as  ground  for  setting  aside  sale,  1676. 
guardian  mortgagor,   1676. 
when   mailed   by   mortgagee,   1676. 
death   of  does  not  revoke  power,   1792,   1794. 
may  purchase  at   sale  under  power,   1887. 
MOKTUUM  VADIUM,   2,  4. 
MULTIFARIOUSNESS,  none  in  bill  to  foreclose  several  mortgages, 

1083,   1458. 
MUNICIPAL   CORPORATION   may  mortgage   its   land,   124. 
NAMES,  clerical  error  as  to  in  foreclosure  suit,  1464. 
NATIONAL   BANKS   prohibited   from   taking  mortgages   134. 

except  as  security  for  prior  loans,  134. 
NATURE  OF  A  MORTGAGE,  159. 
at  law  and  in  equity,   8-16. 
in  the  different  States,  17-59. 
NEBRASKA,  nature  of  a  mortgage  in,  40. 
mortgage  creates  a  lien  only,  40. 
parol  evidence   to   show   a   mortgage,   305. 
record  of  assignment  not  notice  to  mortgagor,  473. 
usury  in,  633. 

entry   of   satisfaction   of   record,   1017. 
no   redemption   after   foreclosure,    1051,    1347. 
statute   of   limitations,   ten   years,    1193. 
mortgage  barred  when   debt  barred,   1207. 
statutory  provisions  relating  to  foreclosure,  1347. 
strict  foreclosure  in,  1550. 

power   of   sale  mortgages   and   trust   deeds   in,    1747. 
NEGLIGENCE,   as  affecting  priority,  604-609. 
is  not  fraud,  but  evidence  of  it,  604. 
in  dealing  with  mortgaged  property,  605. 
in  cancelling  a  mortgage  and  taking  a  new  one,  605. 
in  taking  one  of  several  notes  secured,  606. 
NEVADA,   nature  of  a  mortgage   in,  41. 

title  in  mortgagor  till  breach  of  condition,  41. 
paroL  evidence  to  show  a  mortgage,   306. 
usury  in,   633. 
entry  of  satisfaction  of  record,   1018. 

988 


INDEX. 

References  are  to  Sections. 

XEVADA — continued. 

redemption   after   foreclosure,   1015,    1348. 

statute  of  limitations,  four  years,   1193. 

mortgage  barred  when  debt  barred,  1207. 

statutoiy   provisions    relating   to    foreclosure,    1348. 

power  of  sale  mortgages  and  trust  deeds   in,   1748. 
NEW  HAMPSHIEE,  nature  of  a  mortgage  in,  42. 

mortgagee  has  legal  estate  and  right  of  possession,  42. 

parol  evidence  to  show  a  mortgage,  307. 

mortgage   for   future   advances   in,   366. 

mortgage  for  support,  how   regarded,   388. 

usury  in,  633. 

assignment   of  debt   passes   mortgage,   817. 

entry  of  satisfaction   of   record,   1019. 

redemption  after  entry  to  foreclose,  1051,  1349. 

statute  of  limitations,   twenty   years,   1193. 

provisions  for  foreclosure  by  entry  and  possession,  1241-1243. 

writ   of  entry   to   foreclose   mortgage,   1278. 

statutory   provisions   relating   to   foreclosure,    1349. 

power  of  sale  mortgages  and  trust   deeds  in,   1749. 
NEW  JEESEY,  nature  of  a  mortgage  in,  43. 

mortgagee   has   legal   estate   and  right   of  possession,   43. 

parol   evidence   to   show  a  mortgage,   308. 

usury  in,  633. 

rules  as  to  tender  of  payment  in,  892. 

entry  of  satisfaction  of  record,   1020. 

no   redemption  after  foreclosure,   1051,   1350. 

when  right  to  redeem  barred  in,  1145. 

statute  of   limitations,   twenty   years,   1193. 

statutory   provisions   relating   to   foreclosure,   1350. 

strict  foreclosure   in,   1550a. 

power  of  sale  mortgages  and  trust  deeds  in,  1750. 
NEW   MEXICO,   nature   of  a   mortgage  in,   43a. 

mortgagor  entitled  to  possession,  43a. 

provisions   respecting  mechanics'   liens   in,    510. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1021. 
■NEW  PAETIES  may  be  joined  in  foreclosure  suit,  1441,  1442. 
NEW  PEOMISE  to  take  mortgage  out  of  statute  of  limitations,  196. 
NEW  YOEK,  nature  of  a  mortgage  in,  44. 

mortgage  merely  a  security,  44. 

parol  evidence  to   show  a   mortgage,   309. 

record  of  assignment  not  notice  to  mortgagor,  480. 

usury  in,  633. 

989 


INDEX. 


References  are  to  Sections. 


NEW  YOUK— continued. 

assignment   of   debt    i)asses   mortgage    in,    817. 

tender   of  payment   discharges   debt   in,    8U3. 

entry   of  satisfaction  of  record,   1022. 

no  redemption   after  foreclosure,   1051,   1351. 

redemption  barred  in  ten  years   in,   1147. 

statute   of  limitations,   twenty  years,   1193. 

statutory  provisions  relating  to   foreclosure,   1351.  ■ 

strict   foreclosure   in,   1551. 

power  of  sale  mortgages  and  trust  deeds  in,  1751. 
NEWSPAPER,   change   of  name,   1G12. 
NON-RESIDENT,   no    deficiency   judgment   against,    1716. 
NORTH   CAROLINA,  nature  of  a  mortgage  in,  45. 

mortgagee  the  legal  owner,  45. 

written  authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  310. 

doctrine  of  notice  under  the  registry  laws,  573. 

usury  in,   633. 

assignment   of   debt  passes  mortgage   in,   817. 

entry  of  satisfaction  of  record,  1023. 

no  redemption  after  foreclosure,  1051,  1352. 

when  right  to  redeem  barred  in,  1145. 

statute  of  limitations,  ten  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1352. 

strict  foreclosure  in,  1552. 

power  of  sale  mortgages  and  trust  deeds   in.   1752. 
NORTH  DAKOTA,  nature  of   a  mortgage   in,   45a. 

mortgagor  has  right  of  possession,  45a. 

form  of  mortgage,  61. 

parol  evidence  to  show  a  mortgage,  310a. 

usury  in,  633. 

entering  discharge  of  record,   1023a. 

statute   of  limitations,  twenty  years,   1193. 

statutory  provisions  relating  to  foreclosure,  1352a. 

power  of  sale  mortgages  and  trust  deeds  in,  1752a. 
NOTE  secured  construed  with  mortgage,  71. 

not  essential  to  validity  of  mortgage,  71. 

must  be  produced  on   foreclosure,   71. 

parol  evidence  to  identify,  71,  352. 

secured  by  express  lien,  order  of  payment,   236. 

description  of  all  particulars  not  necessary,  350. 

is  evidence  of  amount  of  debt,  351. 

not  essential  to   a  mortgage,   353. 

destroyed  and  new  note  given,  353. 
990 


INDEX. 

References  are  to  Sections. 

l>lOTE—coniinued. 

renewal  does  not  affect  security,  355. 

assignment  of  mortgage  without,  804-807,  817-822. 

negotiable  before  clue  not  subject  to  equities,  834,  1487. 

overdue  subject  to  equities,  841. 
substituted  in  place  of  original  note  secured,  925-927. 
incorporating  additional  loan  in  new  note,  930. 
new   note   for   different   amount,   931. 

for  interest,  932. 
consideration  of  new  note,   933. 

renewal  of  note  for  which  mortgage  is  indemnity,  934. 
surrender   of,    983. 

should  be  produced  in  foreclosure  suit,  1308,  1469a. 
prima  facie  evidence  when  produced,   1469a. 
when  declared  void  for  alteration,  1469a. 
secondary  evidence  of  note,  1469a. 

renewal  of  should  be  alleged  in  bill  to  foreclose,  1468. 
joint  and  several,  parties  to  foreclosure  suit,  1432. 
proof  of  in  foreclosure  suit,  1469. 
foreclosure   of   several,   some   not   due,   1478. 
NOTICE,  of  partnership  equities,  119. 

of  separate  defeasance  by  record,  254. 
by  possession,  255,   600. 
by   registration,   456-537. 

takes  effect  from  filing  deed  for  record,  504. 
record  is  constructive,  523. 

of  contents  of  deed,   523-529. 
subsequent  records  are  not,   to  prior  mortgagee,   530,  723. 
As  affecting  priority  under  registry  acts,  538-542. 
under  the  registry  acts,   538. 
is  notice   to   all  the  world,   538. 
any  other  notice  is  limited,  538. 
notice  of  a  void   deed   is  without  effect,   538. 
ground  of,  538. 
policy  of,  538. 

doctrine  of  is  for  prevention  of  fraud,  538. 
exception   in   some   States,   539. 
actual   notice   does  not   avail   against  record,   539. 
practical  effect  of,  540. 

record  does  not  avail  when  there  is  actual  notice,  540. 
examination  of  record,  541. 
for   inctmibrances  not  of  record,   541. 
recitals  in  deeds  are  notice,  541. 
of  secret  trust,  542. 

991 


INDEX. 

References  are  to  Sections. 

I^OTICE— continued. 
Actual,  543-559. 

different  kinds   of,   actual,   implied,   constructive,   543. 
degrees  of  actual,  644-546. 
does  not  imply  actual  knowledge,  544. 
notice   implied  by   circumstances,   545. 
includes   means   of  knowledge,    545. 
rumor   or   suspicion   is   not,   546. 

what  is  sufficient  to  put  purchaser  upon  inquiry,  547. 
anything  that  an  intelligent  man  should  act  upon,  547. 
from   inadequate   price,   547. 
must  be  sufficient  to  make  inquiry  upon,  548. 
of  intention  of  owner  to  execute  a  lien,  549. 
deed  not  in  the  line  of  title,  550. 
of   outstanding  equitable   interest,   550. 
inquiry  must  be  prosecuted  by  reliable  information,  551. 
inquiry  must  be  prosecuted  with  diligence,  55-'. 
ambiguous  or  inconsistent  description,   552. 
presumption  of  notice  rebutted  by  showing  due  inquiry,  553. 
burden  of  proof  upon  the  person  who  charges  notice,  554. 
has  effect  if  received  before  completion  of  trade,  555. 
payment   of  part  of  purchase-money  before  iiotice,   556. 
mortgage  with  non-negotiable  note  given  before  notice,  556. 
one  with,  may  acquire  good  title  from  one  without,  557. 
one  without,  may  acquire  good  title  from  one  witli,  558,  559. 
attaching  creditor  without  notice  of  unrecorded  deed,   559. 
Implied,  560-570. 

arises   out   of  relation   of  party  without   notice  with  party 

with  notice,  560. 
notice  to  principal,  from  notice  to  agent,   560. 
upon  what  principle  doctrine  rests,  661. 
must  be  in   same  transaction,   562. 
must  be  matter  material  to  transaction,  563. 
when  agent  is  employed  by  both  parties,  564. 
when  agent  is  the  mortgagor,   565. 
when   agent   is   guilty   of   fraud,   566. 
agent  acting  for  himself,  not  for  his  principal,  566. 
not  implied  out  of  relationship  of  husband  and  wife,   567. 
purchaser  from  one  of  two  joint  owners  chargeable  with  no- 
tice of  other's  interest,  568. 
knowledge  that  land  is  partnership  property,  569. 
to   affect   corporation,   570. 
must  be  brought  home  to   officers,   570. 

992 


INDEX. 

References  are  to  Sections. 

NOTICE — continued. 

Constructive,    571-582. 

general  principles,   571. 

is   imputed  upon  strict  legal  inferences,   571. 
on  ground  of  fraud  or  negligence,  572. 

of  existence  of  lien  without  particulars,  573. 

from  recitals  in  deeds,   574. 

trust  imputed  from  description  of  grantee  as  trustee,  574. 

recital  that  premises  are  subject  to  a  mortgage,  575. 
(mortgage  is  subject  to  another,  575. 

from  recital  in  a  prior  deed  that  sale  was  upon  credit,  576, 
578. 

recitals   that  lead  to   inquiry  whether   purchase-money   was 
paid,  576. 

from  sale  of  mortgaged  premises  in  parcels,  577. 

involving  rule  of  inversion  of  alienation,  577. 

notice  of  mortgage  is  notice  of  recitals  in,  578. 

what  sufficient  to  put  upon  inquiry  as  to  debt  secured,  579. 

use  of  reasonable  diligence  necessary,  580. 

from  conveyance   subject  to  mortgage,   581. 

release  of  all  interest  is  subject  to  unrecorded  mortgage,  582. 
Lis  pendens,  what  is,  583-585. 

arises  from  time  of  service  of  writ,  584. 
is  notice  only  of  pending  proceeding,  585. 
as  affected  by  actual  notice,  585. 
Possession  is,  how  far,  586-601. 
by  one  not  owned  of  record,  586. 
by  vendee  under  C9ntract  of  purchase,  586. 
is  notice,  though  not  known  to  purchaser,   587. 
puts  purchaser  upon  inquiry,  587. 
not  necessarily  evidence  of  any  particular  title,  588. 
of  tenant  is  notice  of  his  interest,  589. 
is  notice  only  during  its  continuance,  590. 
must  be  visible,  open  and  exclusive,  591. 
the  cutting  of  wood  or  timber,  591. 
existence  of  a  railroad  over  the  land,  592. 
of  open  way  for  cattle  under  railroad,  592. 
occupation  of  an  easement,  592. 
equivocal,  occasional,  or  temporary,  593. 
possession  of  tenant,  593. 

under  contract  of  purchase,  593 
should   be   inconsistent   with  purchasers'   title,    594. 
of  part  of  premises  may  be  notice  as  to  entire  premises,  595. 
may  be  notice  of  homestead  rights,  596. 

993 


INDEX. 

References  are  to  Sections. 

NOTICE— conimiieJ. 

by  grantor  after  recorded  conveyance  not  notice  to  subsequent 
purchaser  of  any  right  reserved,  597. 

grantor's  possession  continued  for  a  long  period,  598. 

after  premises  have  been  sold  under  foreclosure,  599. 

after  absolute  deed  with  unrecorded  defeasance,   600. 

occupant  may  be  estopped  by  his  acts  from  claiming  that  his 
possession  is  notice,  601. 

what  affects  mortgagee,  723. 

assignees   should   give   notice   to   mortgagor,   791. 

of  payment  not  required,  890,   1071. 

to  quit  unnecessary  before  writ  of  entry,  1289. 

of  foreclosure  sale  under  decree  of  court,  1612. 

publishing  advertisement,   1612. 

contents  of  notice,   1612. 

change  of  name  of  newspaper,  1612. 

length   of  publication,   1612. 

personal  notice,   1612. 

want  of,  under  power,  no  ground  for  enjoining  sale,  1810. 
Personal,  of  sale  under  power.     (See  Power  of  Sale  Mortgages, 

Etc.,  1821-1827.) 
Under  power  of  sale,  publication  of,  1828-1839. 

what  notice  should  contain,  1839-1856. 
NOVATION.      (See  Renewal.) 

does  not  arise  from  mere  assumption  of  mortgage,  741. 
NUESERY  TREES,  whether  part  of  realty,  434. 

OHIO,  nature  of  a  mortgage  in,  46. 

mortgagee  has  legal  title,  46. 

written  authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  311. 

doctrine  of  notice  under  the  registry  laws,  539. 

usury  in,  633. 

assignment   of   debt  passes   mortgage   in,   817. 

entry  of  satisfaction  of  record,   1024. 

no  redemption  after  foreclosure,   1051. 

statutory  provisions   relating  to   foreclosure,   1353. 

strict  foreclosure  in,  1553. 

power  of  sale  mortgages  and  trust  deeds  in,  1753. 
OKLAHOMA  T.,  usury  in,  633. 

mortgage  creates  a  lien  only,  46a. 

statutory  provisions  as  to  foreclosure  and  redemption,  1353a. 
ONCE  A  MORTGAGE  ALWAYS  A  MORTGAGE,  7,  340. 
when  rule  not  applicable,  247. 

994 


INDEX. 

References  are  to  Sections. 

OPENING  BIDDINGS   at  foreclosure  sale,   1640. 
OPTION  to  purchase  land  may  be  mortgaged,  136. 

of  mortgagee  to  declare  default  of  whole  debt,   1179,   1182. 
provision  need  not  be  in  both  mortgage  and  note,  1179a. 
OEDEK  OF  SALE.     (See  Inverse  Order  of  Sale,  1091,  1092,  1620' 
1G32.) 
decree  should  provide  for,  1576. 
OKEGON,  nature  of  a  mortgage  in,  47, 

mortgage  not  a   title,  but  only   a   lien,  47. 
parol  evidence  to  show  a  mortgage,  311*<' 
record  of  assignment  not  notice  to  mortgagor,  473. 
usury  in,  633. 

entry  of  satisfaction  of  record,   1025. 
redemption   after   foreclosure,    1051,    1354. 
statutory   provisions   relating   to    foreclosure,    1354. 
power  of  sale  mortgages  and  trust  deeds  in,  1754. 
OVERPAYMENT,  by  mortgagor,  may  be  recovered,  903. 
of  interest,   903. 
to  prevent  foreclosure,  1085. 
judgment  for,  in  foreclosure  suit,   1496. 
PAECELS.      (See  Sale,  1616-1619,  and  Power  of   Sale,   1857-1860.) 
PAROL  AGREEMENT  to  vary  terms,  96. 
PAROL  AUTHORITY  to  fill  blanks,   90,  91. 
PAROL  EVIDENCE,  as  to  existence  of  vendors  lien,  196. 
to  connect  deed  and  separate  defeasance,  248. 
to  show  a  conditional  sale,  277. 
To  prove  an  absolute  deed  a  mortgage,  282-342. 
there   must   be   equitable   grounds,   283. 
the   doctrine   in   England,  284. 
the  doctrine  in  the  United  States  courts,  285. 
the  doctrine  in  the  several  States,  286-321. 
fraud,   accident  and  mistake   as  grounds  for  admission  of, 

321. 
intention   as   ground  for   admission   of,   321. 
the  statute  of  frauds  does  not  stand  in  way,  322. 
grantor  not  estopped  to  show  character  of  conveyance,  323. 
what  facts   are   considered,   324. 
evidence  of  continuance  of  debt,   325. 
when  there  was  a  preexisting  debt,  326. 
when   application   was   for   a   loan,   327. 
continued    possession    of   grantor,    328. 
inadequacy  of  price,   329. 
delay  in  claiming  absolute  title,  330. 

debtor  may  redeem  if  he  has  any  interest  in  the  property, 
331.  095 


INDEX. 

References  are  to  Sections. 

PAEOL  EVIDENCE-corih'nued 

purchaser  for  benefit  of  equitable  owner  may  redeem,  332. 

strict  proof  required,  335. 

burden  of  proof  upon  grantor,  335. 

grantor  must   fulfill  his   agreement,   336. 

judgment   creditor   may   take   advantage   of,   337. 

mortgagor  may  waive  his  rights  by  parol  agreement,  338. 

grantee  as  to  third  persons  has  rights  of  absolute  owner,  339. 

his   liability   for  mortgaged   land   sold   by  him,   341. 

to   identify  note  secured,   71,   352. 

debt  may  be  shown  by  any  competent  evidence,  352a. 

to   identify   future   advances,    367a. 

to  fix  amount  secured  by  indemnity  mortgage,  384. 

that  an  assigTiment  was  intended  as  a  discharge,  861. 

does  not  affect  mortgagee's  lien  upon  residue,  722. 

effect  of  as   to   subsequent  purchasers,  723. 
as  to  surety,  724,  726. 
PAETIAL' PAYMENTS,  provision  for,  79. 

application  of,  to  usurious  mortgage,   912. 
subrogation   does   not  arise   after,   885b. 
PAETIAL  EELEASE,  covenant  to  make,  effect  of,  79,  981. 
may  be  made  to  depend  upon  strict  performance,  79. 
when  mortgagee  has  notice  of  subsequent  incumbrances,  982. 
effect  on  parcels  not  included,   982. 
power  of  sale  not  affected  by,  982, 
PAETIES  to  a  mortgage,  description  of,  63. 
proper  contracting  parties,   101a. 
who  may  make  a  mortgage,   102. 

executor  or  administrator  cannot  make  without  license,  102. 
corporation  may  make,   102. 

devisee  may  make,  though  executing  as  executor,   102. 
mortgages  by  executors,  102a. 
authorized  by  will,   102a. 
mortgages  by  guardians,   102b. 

to  what  proceedings  mortgagee  an  essential  party,  709. 
to  bill  to  set  aside  sale,  1921. 
To  a  nil  to  redeem,  1097-1103. 
PAETIES    TO    AN   EQUITABLE    SUIT    EOE   FOEECLOSUEE, 
general  principles,   1367. 
executor,  administrator  or  trustee,  1367. 
Proper  parties  plainiiff,  1368-1393. 

all  interested  in  mortgage  should  be,   1368. 

joinder  of  plaintiffs,  1369. 

effect   of  separating  indebtedness,   1369,   1371. 

996 


INDEX. 


References  are  to  Sections. 


PAETIES    TO   AN   EQUITABLE    SUIT,   'ETC.— continued. 
real  party  in  interest,  1370. 
mortgage    to    cashier,    1370. 
subsequent  lien  on  redeeming,  1370. 
beneficiary  of  a  trust,   1370. 
must  have  some  interest,  1371. 
bill  by  junior  mortgagee,   1371. 
assignee   by   informal   assignment,   1372. 
after   absolute  assignmertt,   1373. 
after   assignment   as   collateral,    1374. 
assignee  for   collateral   security,   1375. 
assignee   of   mortgage,   1375a. 
given  for   indemnity,   1375a. 
trustee   appointed   in   another   State,   1375a. 
assignee  of  mortgage  without  bond  or  note,  1376. 
assignee  of  mortgage  note,   1377. 
assignee   of  mortgagee   in   bankruptcy,    1377a. 
receiver  appointed  by  order  of  court,  1377a. 
holder  of  one  of  several  notes  secured,   1378. 
holder  of  one  note   may   intervene,   1378. 
overdue  coupon   interest  notes,   1378. 
partner,   1379. 
surety,    1380. 
joint  mortgagee,  1381. 
mortgagee   of   undivided   interest,    1381. 
mortgagee  owning  equity  in  ofiicial  capacity,  1381, 
survivor   of  joint  mortgagees,   1382. 
nominal  trustee,  1383. 

trust   deed   securing   corporate   bonds,   1383. 
suit  by  receiver,  1383,  1383a. 
cestui   que   trust,   1384. 
bondholders,  1385. 
allowed  to  intervene,  1385. 
trustee  for  creditors,  1386. 

executor  or  administrator  of  mortgagee,   1387,  1388. 
affected   by   will   of  mortgagee,   1387,   1388. 
■guardian  of  minor  heirs,  1389. 
foreign    executor   or   administrator,    1389. 
mortgage   to   executor,   1390. 
mortgage   to   guardian,   1390. 
holder  of  two  or  more  mortgages,   1391. 
simultaneous  mortgagees,   1391. 
mortgage  to  person  in  official  capacity,   1392. 
bankruptcy,   1392. 

997 


INDEX, 

References  are  to  Sections. 

PAKTIES    TO   AN   EQUITABLE    SUIT,    ETC.— continued. 

wife   holding  mortgage   as   her   separate   property,   1393. 
Necessary  or  proper  parties  defendant,  1394-1442. 
second   action   to   foreclose   allowed,   1395. 
general  principles,   1394. 

omission  of  party  in  interest  does  not  make  sale  void,  1395. 
rights  of  junior  mortgagee,  1395. 
all  persons  in  interest  should  be  joined,  1396. 
default  by  one  having  p^rramount  title,  1396. 
trustees  and  beneficiaries,   1397. 
when    beneficiaries    are    numerous,    1398. 
trustee,    1399. 
equitable   interest,   1400. 
remaindermen,  1397,  1401. 
mortgagor   a   necessary   party,   1402. 
when  he  retains  any  interest,  1403. 
effect  of  binding  contract  to   sell,   1403. 
effect  of  giving  warranty  deed,   1403. 
grantor  in  absolute  deed,  1403. 
when  not   a  necessary  party,  104.    , 
sale  on  execution,  1404. 
effect   of  partition,   1404. 

when  he  has  conveyed  a  portion  of  the  premises,  1405. 
holder  of  equity  of  redemption  a  necessary  party,  1406. 
though  disclaiming  beneficial  interest,  1406. 
purchases  at  foreclosure  sale  nnder  junior  mortgage,  1406. 
indorser  of  mortgage  note,  1406. 
purchaser  who  has  assumed   a  mortgage,   1407. 
mesne  purchaser,  1408. 
tenants   in  common,   1409. 
jurisdiction   of  Federal  court,   1409. 
where   premises    are    sold   in   parcels,   1409. 
objection    to   non-joinder,    when   taken,    1410. 
suspending  judgment  when  ownership  is  in  doubt,  1410. 
purchaser   pendente   lite,    1411. 

commences  when,  1411. 
when  deed  to  purchaser  has  not  been  recorded,  1412. 
a  mere  occupant,  1413. 
lessee   for  years,   1413. 
necessity   for   joining   executor,   1414. 
heirs   of   mortgagor,   1414,   1417. 
heir   of   purchaser,   1415. 
heirs  of  partner,   1416. 
devisees,   1414,   1418. 
998 


INDEX. 


References  are  to  Sections. 


PAKTIES  TO  AN  EQUITABLE  SUIT,  ETC.-continued. 
legatees,  1419. 
mortgagor's   wife,    1420. 

personal    service   of   summons,    1420. 

widow   with   homestead,    1420. 

partnership  real  estate,  1420. 
w-hen  wife  did  not  join  in  mortgage,  1421. 
effect   of   subsequent   conveyance,    1421. 
when   there   is   no   dower,   1422. 
wife's  homestead,   1423. 
homestead  affected  by  bankruptcy,  1423. 
husband,    1424. 
community   property,    1424. 
all  subsequent  mortgagees,  1425. 
assignee  of  mechanic's   lien,   1425. 
mortgagee  who  has  assigned  without  the  note,  142G. 
assignee  of  note,  1427. 
where  several  notes  are  secured,  1427. 
Iowa   doctrine,   1427. 

negotiable  and  non-negotiable  securities,  1427. 
personal  representative  of  junior  mortgagee,   1428. 
parties   who   make   default  cannot   complain,   1429. 
junior  mortgagee  who  has  received  payment,  1430. 
redemption  only  remedy  of  one  not  made  a  party,  1431. 
joint   and  several  maker  of  note,   1431a. 
guarantor  not  a  proper  party,  1432,  1433. 
heirs   of  guarantors,   1433. 
indorser  of  note,   1434. 
deficiency  judgment  against,  1434. 
surety  paying  debt,  1434. 
cestui  que  trust  not  necessary  party  when  mortgage  given 

by  trustee,  1434a. 
joint  mortgagees,  1435. 
judgment  creditors,   1436. 
after  levy  on  growing  crops,  1436. 
general   creditor,    1436a. 
judgment  after  decree,  1437. 
bankruptcy   as   affecting,    1438. 
receiver  appointed  by  court,   1438a. 
prior  parties  in  interest,  1439. 
distribution   of  proceeds   of   sale,    1439. 
practice  when  wrongly  joined,  1439,  1442. 
adverse   claimants,   1440. 
rights  cannot  be  decided,  1440. 

999 


INDEX. 

References  are  to  Sections. 

PAKTIES  TO  AN  EQUITABLE  SUIT,  ETC -co7itinued. 
what  claims  are  adverse,  1440. 
cross-bill  not  allowed,  1440. 
priority  between  mortgages,  1441. 
new  parties,  1441,  1442. 
objection  to  parties,  how  raised,  1442. 
guardian  ad  litem  for  defendant  imder  disability,  1442a. 
sufficiency  of  service  on,  1442a. 
to  protect  persons  not  yet  in  being,  1442a. 
service   by   publication   on   unknown   mortgagor,   1442b. 
To   hill   for  strict   foreclosure,  1557. 

heirs  of  mortgagee  necessary  parties,  1559. 
PAETITION,  when  mortgagees  may  have,  705. 

between  mortgagors,  when  mortgagee  bound  by,  706. 
in  case  of  a  mortgage  of  parcels  held  in  common,  706. 
when  tenant  in  common  has  mortgage,  specific  part,  706a. 
PARTNEESHIP  EEAL  ESTATE,  mortgage  of,  44,  119-123. 
equities  of  partners,  120. 
mortgage  by  one  partner  of  his  interest,  120. 

for  partnership  debt,  ratification,   121. 
mortgage  of  private  property  for  partnership  debt,  122. 
partner's   interest   descends   to   heirs,   123. 
foreclosure  sale  by  partners  by  advertisement,  135. 
mortgage  to  partnership  without  naming  partners,  135,  166. 
assignment  of  mortgage  by,  800. 
PART-OWNER  of  equity  of  redemption  may  redeem,  1063. 

of  assumed  mortgage  from  personal  estate,  751. 
PATENT   for  public  lands  mortgage  before   issue  of,  176. 
PAYMENT,  produces  a  merger,  when,   848-869. 

by  one  who  has  assumed  the  mortgage,  865. 

by  one  who  has  warranted  against  incumbrances,  867. 

by  purchaser  of  equity  of  redemption,   869. 

by  one  not  under  obligation  to  make  it  operates  as  subrogation, 

877. 
by  mortgagee  for  his  own  protection  subrogates  him,  878. 
at  the  law-day  discharges  the  incumbrance,  886. 

and  revests  the  estate,  887. 
effect  of  payment  before  law-day,  886. 
cannot  be  enforced  before  the  law-day,  888. 
if  accepted  operates  to  discharge,  888. 
agreements  for  earlier  payment,  888. 
after  condition  broken  does  not  revest  the  estate,  889. 
notice  of,  required  by  custom  in  England,  890,  1071. 

1000 


INDEX. 

References  are  to  Sections. 

TAYME^^T— continued. 

but  not  in  this  country,  890. 
of  more  than  is  due  may  be  recovered,  903. 
Appropriation  of,  904-912. 

a  matter  of  intention,  904. 
essential   to   discharge   mortgage,   904. 
deposit  of  amount  without  appropriation,  905. 
debtor  may  appropriate  to  any  account,  906. 
right  lost  by  failure  to  exercise  it,  906. 
when  presumed  to  be  made  on  mortgage  debt,  907. 
cannot  retract  on  application,   907. 
or   made   by   law,    907. 

when  creditor  may  make  appropriation,  908. 
appropriation  binding  on  subsequent  incumbrancers,   908. 
what   is  a  sufficient  appropriation,   909. 
agreement  to  apply  in  discharge  of  portion  of  land,  909a. 
proceeds  of  sale  must  be  applied  to  mortgage,  909b. 
appropriation  of   insurance  money,   910. 
interest  to  be  paid  first,  911. 
upon  usurious  mortgage,  912. 
Presumption  and  evidence  of  payment,  913-918. 
from  possession  of  mortgage  note,  913. 
from  discharge  of  record,  913. 
from  conduct  of  mortgagee,  913. 
presumption  of  payment  of  interest,  914. 

from  lapse  of  time,  915. 
doctrine  of  equity  as  to  stale  demands,  915a. 

when  it  does  not  apply,  915. 
presumption  from  shorter  period  than  twenty  years,  916. 
is  a  question  of  fact,  917. 
,  what  tends  to  prove   it,   917. 

indorsements   are   admissions,   918. 
By  accounting   as  administrator,  919-923. 

when  mortgagor  comes  into  possession  of  mortgage,  919. 
suit  on  probate  bond,   919. 

crediting  debt  in   administration   account,   919. 
mortgagor's  dealing  with  the  mortgage,   920. 
conveyance  by  second  mortgage  or  deed,  920. 
purchase  in  individual  capacity,  920. 

of  mortgage  by  executor,   921. 

by   trustees,    922. 
construction   of   statute,   922. 
mortgagee   administrator   of  mortgagor's   estate,   922. 

right  to  foreclose,  922. 

1001 


INDEX. 


References  are  to  Sections. 


FAY  MEl^T— continued. 

payment  of  mortgage  on  devised  land,  923a. 
bond  by  heir  to  pay  debt,  923. 
Changes  in  form  of  debt,  924-942. 

no  change  in  form  discharges,  924. 

doctrine  that  note  is  prima  facie  pa^Tiient,  924. 
new  note  not  a  discharge  as  to  subsequent  purchaser,  925. 
rights  lost  by  laches,  925. 
intention  generally  controls,  926. 
burden  of  proof  is  on  mortgagor,  926. 
intention  a  question  of  fact,  926. 
substitution  of  another  note,  927. 
payment  by  acceptances  not  substitution  of  new  note,  927. 

for  unpaid  balance  remaining  due,  927. 
substitution  of  new  mortgage,  927a. 

effect  on  dower  and  homestead,  927a. 

effect  on  attaching  creditors,  927a. 

where  original  mortgage  is  left  undischarged,  927a. 
giving  up   of  bond  of  defeasance,   928. 
taking  further  security,   929. 
new  indorser  on  note,   929. 
changes  in  note,  929. 

incorporating  additional  loan  in  new  note,  930. 
note  for  different  amount  payable  at  a  different  time,  931. 
new  note  for  interest,  932. 
consideration  of  new  note,  933. 

renewal  of  note  for  which  mortgage  is  indemnity,  934. 
dishonored  check  or  bill  of  exchange,   935. 
merger  in  judgment  does  not  extinguish,  936. 

payment  of  judgment  a  redemption,  936. 

void  foreclosure,  936. 
judgment  for  a  portion  of  the  debt,  937. 

satisfaction  of  such  judgment,  937. 
judgment  under  trustee  process,  938. 
proceedings  against  mortgagor  personally,  939. 
release  of  judgment,  940. 

waiver  of  foreclosure  by  release  of  judgment,  940. 
failure  to  charge  in  dower,   941. 
extension  of  time   of  payment,  942. 

where  mortgagor  is  a  suretj^  942. 

effect  on  purchaser  of  one  lot,  942. 
Revivor  of  mortgage,  943-949. 

mortgage   becomes  functus   officio   after,   943. 
cannot  be  revived  against  intervening  lien,  943. 
1002 


INDEX. 

Referenced  are  to  Sections. 

:PAYME'NT— continued. 

one  of  several  notes  extinguished,  943. 

payment  must  be  to  creditor,  943. 

rule  where  security  has  not  been  issued,  943. 

when  the  rights  of  third  persons  have  not  intervened,  944, 

946. 
reissue   contravenes   statute   of   frauds,   944. 
when  mortgage  secures  future  advances,  944. 
assignment  to  third  person  at  request  of  mortgagor,  945. 

at   his   own    request,    945. 
effect  of  unconditional  payment,   945. 
redelivery  of  note,  946. 

same  formalities  necessary   as  in  first  instance,   946. 
verbal  agreement  to  continue  for  another  debt,   947. 
not  revived  as  to  i^artial  payments,  947. 
on  homestead,  not  revived  by  agreement  of  husband,  947. 

estoppel  to  show  payment,   948. 
as  against  other  parties   in  interest,   948. 
effect  of  failure  to  discharge  of  record,  948. 
as  against  wife  when  she  is  surety,  949. 
or  against  dower  interest  of  a  married  woman,   949. 
foreclosure  opened  by  accepting  interest,  949a. 
Foreclosure  does  not  constitute,  950-955. 

a  satisfaction   when   complete   to   the   amount   of  the  value 

of  the  property,   950. 
mortgagee  may  recover  any  balance,  950. 
whether  the  foreclosure  is  strict  or  not,  950. 
proceeds  must  be  received  by  mortgagee,  950. 
Connecticut   statute,   950. 

release  of  e.quity  of  redemption  to  mortgagee,  951. 
not  affected  by  usury  in  the  debt,  951. 
presumption  of  payment  from  deed  with  covenants,  951. 
effect  of  fraud,   951, 

by  agreement  foreclosure  may  be  satisfaction,  951a. 
when  foreclosure  is  by  entry  and  possession,  952. 
New  Hampshire  doctrine,   953. 
pledge  of  mortgage  as  collateral,   953. 
foreclosure  sale  is  paj'ment  pro  tanto,  953. 

discharges  the  lien   in  full,  953. 
when  the  sale  is  voidable,  953. 
defence  against  action  for  balance,  953. 
purchase  of  equity  by  mortgagee  on  execution,  954. 

from  one  who  has  assumed  mortgage,  954. 

1003 


INDEX. 

References  are  to  Sectionsi, 

PAYlIENT-conimuecZ. 

purchase  under  tax  sale  by  mortgagor,  955. 
Who  may  receive  payment,  956-965. 

the  person  to  whom  the'  debt  is  due,  956. 

note  or  bond  should  be  produced,  956. 

under  trust  deed,  956. 

married   woman,   956. 

mortgage  disregarding  trust,  956. 

whether   subsequent   purchaser   can   rely   upon   discliarge   of 

record,   956a. 
discharge  by  person  not  entitled  to  make,  957. 

by  guardian,  957,  959. 

by   administrator,    957. 

by   clerk   of  court,   957. 

by  trustee,  957. 

by  mortgagee,  957. 
till  binding  on  persons  with  notice,  957. 
when  mortgage  is  held  by  two  or  more  jointly,  958. 

separate  evidences  of  indebtedness,  958. 

effect  of  death,  958. 
one  of  two  executors  may  receive,  959. 
heir  or  next  of  kin  without  authority,  959. 
trustees  must  generally  act  jointly,  959. 
one  holding  mortgage  as  "trustee"  may  receive,  959. 
whether  foreign  executor  can  make  valid  discharge,  960. 
corporation   acts  how,   960a. 
an  assignee  of  mortgage  may  receive,  961. 
mortgagee  after  assignment  cannot  receive,  961. 
loss  of  right  by  assignee,  961. 
equitable  assignee  may  receive,  962. 
one  holding  mortgage  as  collateral  may  receive,  963. 
agency  inferred  from  possession  of  securities,  964. 
authority  to  receive  interest  but  not  principal,  964,  964d. 
what  constitutes  proof  of  authority,  964a. 
written  authority  unnecessary,  964b. 
when   attorney   is   authorized   to   receive,    964b. 
authority  of  agent  to  accept  payments,  964a. 
public  corporation  bound  by  discharge  made  by  proper  offi- 
cer, 964c. 
receiver  may   take  payment,   965. 
Discharge  hy  release  or  of  record,  970-991. 

after  payment  mortgagee  holds  title  in  trust,  973. 
general  release  from  all  claims,  976. 
release  may  be  limited,  980. 
1004 


INDEX. 

References  are  to  Sections. 

VAYMEl^T— continued. 

effect  of  partial  release,  982. 
personal  liability  may  be   released,   983. 

release  of  security  not  necessarily  a  release  of  the  debt,  984. 
release   wrongfully   obtained,   987. 
presumption  of  payment  after  twenty  years,  1192. 

repelled  how,   1196-1202. 
discharges  both  lien  and  debt,   1219. 

foreclosure  by  entry  and  possession  is  payment  pro  tanto,  1264, 
a  defence  to  foreclosure,  1298,  1512. 
discharges  receiver  of  mortgaged  property,  1537. 
strict  foreclosure  does  not  work,  1567. 
from  proceeds   of  foreclosure   sale,   1682-1708. 
at  time  of  sale  under  power,  "1866,  1867. 
PENALTY  as  ground  for  enjoining  sale  under  power,  1809. 
PENNSYLVANIA,  nature  of  a  mortgage  in,  48. 

mortgagee  has  title  and  right  of  possession,  48. 
authority  to   fill  blanks,   90. 
parol  evidence  to  show  a  mortgage,  312. 
mortgage   for    support,    how   regarded,    388. 
record  of  assignment  is  notice  in,  479. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1026. 
redemption  after  foreclosure,  1051,  1355. 
statute   of  limitations,   twenty-one   years,   1143. 
statutory  provisions  relating  to  foreclosure,  1355. 
no  strict  foreclosure  in,  1553a. 

power  of  sale  mortgages  and  trust  deeds  in,  1755. 
PLEADINGS  AND  PRACTICE,  in  bills  to  redeem,  1093,  1113. 
in  writ  of  entry  to  foreclose,  1293-1295. 
in  equitable  suit  to  foreclose,  1451-1515. 
POSSESSION  of  mortgagor,  how  far  notice,  255. 
In  general,  how  far  notice,  586-600. 

temporary  or  equivocal,  not  notice,  601. 
Mortgagor's  right  of,  80,  664. 

as   against  mortgagee,   667. 
may  be   implied,   668. 
modified  by  statute,  669. 
not   adverse   to   mortgagee,   672. 
remedy  to  recover  of  mortgagee,   673. 
when  mortgagee  entitled  to,   702,   703. 
mortgagee  cannot  before  payment  be  divested  of,  715. 
mortgagee   obtaining,   may   retain,   716. 

1005 


INDEX. 

References  are  to  Sections. 

VOSSESmOl^— continued. 

otherwise  iu  Michigan,  717. 
mortgagee  may  maintain  writ  of  entry  for,  718. 
of  mortgagor  does  not  prevent  assignment,  789. 
mortgagee  may  retain  till  debt  is  paid,  1205. 
of  mortgagor  presumed  to  be   subordinate,   1211. 
foreclosure  not  barred  when  not  of  wild  land,  1212. 
delivery  of  under  decree  of  strict  foreclosure,  1562. 
to    purchaser    under    foreclosure    sale,    1G63-1667. 
POSTING  NOTICES  of  trust  sale  not  equivalent  to  institution  of 
suit  to  stop  running  of  limitation,   12U7. 
sufficiency  of,  1837. 
POWER  OE   ATTORNEY  to  execute  a  mortgage,   129. 

whether  general  power  authorizes  power  of  sale  mortgage,  129. 
liow  exercised  in  making  a  mortgage,   130. 
requirement  that  power  be  recorded,  512. 
when  it  operates  as  an  assignment  of  mortgage,  816. 
power  of  sale  in  form  of  valid,  1777. 
POWER  OF  SALE  IN  MORTGAGES  AND  TRUST  DEEDS, 
may  be  conferred  by  statute,  61. 
in  infant's  mortgage  invalid,   104. 

vphether  authorized  under  a  general  power  to  mortgage,   129. 
passes  by  an  equitable  assignment  of  mortgage,  826. 
need  not  be  exercised  before  suit  for  debt,  1221. 
/Statutory  provisions  concerning,  1722-1763. 

statutory  power  of  sale  in  England,   1722. 

in   Virginia,   1722; 
provisions  in  the  several  States,  1723-1763. 
Nature  and  use  of  poivers  of  sale,  1764-1772. 

advantages  over  foreclosure   in   equity,   1764. 
validity  of,  questioned  in  early  cases,  1765. 
regarded  in  England  as  a  necessary  incident,  1766. 
trustee  under  will  authorized  to  confer,  1766. 
when  first  used  in  this  country,  1767. 
in  general  use  now,  1767. 

vphether  a  necessary  incident  of  a  mortgage,  1768. 
validity  of  when  mortgage   is   a   lieu,   1768. 
deeds  of   trust   in  legal  ettect  mortgages,   1769. 
same  effect  on  legal  title,   1769. 
entry   of   satisfaction,   how   made,    1769. 
authority  to  execute   one   includes  both,   1769. 
why  preferred  by   some,   1770. 
rights  and  duties  of  trustees,   1770,   1771. 
trustee  in,  is  agent  of  both  parties,  1771. 
1006 


INDEX. 

References  are  to  Sections. 

POWEE  OF  SALE  IN  MOETGAGES,  ETC.— continued. 

liability    of   slieritf   acting   as,    1771. 

what  constitutes  disability,  1771. 

unauthorized    conveyance    by    trustee,    1771a. 

debt   belongs   to   beneficiary,   1772. 

effect  of  ownership   by   trustee,   1772. 

reversal  of  parties,   1772. 

trustees'  right  to  compensation  when  no  sale,  1772. 
Power  of  sale  a  cumulative  remedy,  1773-177G. 

does  not  exclude  foreclosure  in  equity,  etc.,   1773. 
resort  to   equity,   when,   1773. 
court  of  equity  may  enforce  trust  deed,  1774. 
appointment   of  new   trustee,    1774. 

by   court,   1774. 

by   cestui   que   trust,   1774. 
power  conferred  by  special  provision,  1774. 
prescribed   mode   strictly   followed,   1774. 
provision  that  sheriff  shall  act,  1774. 
refusal  of  original  trustee  to  act,  1774. 

necessity   for,   1774. 

what    constitutes,    1774. 
administrator   of   trustee   cannot   act,    1774. 
conflict   of   laws,   1774a. 

sale  is  by  virtue  of  the  power,  not  of  the  decree,.  1775. 
even  when  made  by  substituted  trustee,   1775. 
after  reference  to  court  to  determine  amount  of  debt,  1775. 
when  debt  is  unliquidated,  1776. 
Construction  of  power,  1777-1791. 

power  may  be  in  form  of  power  of  attorney,  1777. 

conferred  on  third  persons,   1777. 

authority  to   confer,   1777a. 

what   constitutes   a   default   authorizing   sale,    1777b. 

instalment  notes,  1777b. 

non-payment   of   taxes,   1777c. 

provision  for  consent   of  grantor,  I777d. 

parties  may  make  such  regulations  as  they  desire,  1778. 

discretion    in    trustee,    1778. 

what  is  a  sufficient  power,   1779. 

legal  title  need  not  accompany  it,   1779. 

what  is  a  sufficient  power,   1779. 

acceptance  of  trust,   1780. 

obvious  error  on  face  of  power,   1781. 

prior   entry   when  necessary,   1782. 

prior   entry   does   not   prevent   sale,   1783. 

1007 


INDEX. 


References  are  to  Sections. 


POWEK  OF  SALE  IN  MOKTGAGES,  ^ETC— continued. 
record   of   mortgage   or   power,   1784. 
who   may   exercise   power,    1785. 
trustee  appointed  under  power  to  substitute,  1785. 
legal   capacity   to   contract   necessary,   1785. 
corporation,    1785. 
doctrine   in   Maryland,    1785. 
new  trustee  must  be  appointed,  1785. 
deed   to   sheriff   and   successors,    1785. 
mortgage  to  partnership,   1785.   • 

may  be  executed  by  administrator  of  mortgagee,  1786. 
foreign  executors,   1786. 
legal   assignment   of   mortgage   passes   the  power,   1787. 

otherwise  with  deed  of  trust,   1788. 
effect  of  assigmiient  pending  advertisement,  1787. 
effect  of  word  "assigns"  in  mortgage,   1787. 
assignee  of  part  of  debt,  1787. 
assignee  for  collection,  1787. 
equitable  assignee  cannot  execute  power,   1789. 
provision  allowing  assignee  to  execute  power  essential,  1789. 
where  debt  is  not  witnessed  by  assignable  instrument,  1789. 
power  to  two  or  more  jointly  must  be  executed  by  all,  1790. 
executed  by  all,   1790. 

power  to  two  or  more  jointly  and  severally,  1790. 
effect  of  death  on  rights  of  survivors,   1790. 
provision  that  sale  be  made  only  on  request  oi"  beneficiary, 

1790a. 
a  first  an4  second  mortgagee  may  concur  in  t-ale,  1791. 
mortgage  of  undivided  halves,  1791. 
Revocation  and  suspension  of  poiver,  1792-1800. 
death  of  mortgagor  does  not  revoke,  1792. 
power   is    coupled   with    an    interest,    1792. 
executed  in  name  of  grantee,  1792. 
exceptional    doctrine    in    Texas,    1792. 
statutory  modification  in  Colorado,  1792. 
insanity  of  mortgagor  does  not  revoke,  1793. 
effect  of  barring  action  on  debt,  1793a. 
former   Maryland   insolvency   law,   1793a. 
death  of  mortgagor  revokes  power  in  certain  States,  1794. 
rule  the  same  where  mortgage  a  mere  security,  1794. 
may  be  modified   and  extended  without   revoking,   1795. 
conveyance  by  mortgage   of  part   of  premises,   1796. 
entry  to  foreclose  waives  not  power,  1796. 
single   exercise  of  power  exhausts   it,   1796. 
1008 


INDEX. 


References  are  to  Sections, 


POWEE  OF  SALE  IN  MORTGAGES,  :ETC.— continued. 
pendency  of  bill  to  redeem  does  not  suspend,  1797. 
by   subsequent   incumbrances   suspends  not,   1797. 
injunction  against  assignment   till  hearing,   1797. 
garnishment   suspends   not,    1797. 
tender  after  breach  does  not  defeat,  1798. 
gives  right  to  redeem  against  purchasers  with  notice,  1798. 
redemption  after  sale  and  before  execution  of  deed,  1798. 
rule  in  English  court  as  to,  1799. 
rule  in  New  York  as  to,  1799. 
sale  stopped  on  tender  of  instalment,  1799. 

rule  in  England  as  to,   1799. 

rule  in  New  York  as  to,  1799. 
not  suspended  when  mortgagor  within  lines  of  enemy,  1800. 
When  the  exercise  of  the  power  may  be  enjoined^  1801-1820. 

a  legitimate  exercise  of  the  power  cannot  be  enjoined,  1801. 

loss  of  mortgage  deed  not  a  ground,  1801. 

pendency  of  trespass  to  try  title  not  a  ground,  1801. 

scope  of  action  after  equity  has  jurisdiction,   1801a. 

conflicting  liens,   1801a. 

sale  contrary  to  injunction  a  contempt,  1801a. 

exercise  of  power  at  request  of  mortgagor,   1802. 

use  of  the  power  to  obtain  an  unfair  advantage,  1803. 

grounds  of  interference  must  be  alleged,   180i. 

petitioner's  rights  must  be  clear,   1805. 

application   of   disputed   overpayment,    1805. 

notice  to  bidders  of  mortgagor's  claims,  1805. 

surety  who  has  not  paid  debt,  1805. 

party  to  injunction  suit,  1805a. 

payment   must    be    tendered,    1806. 

when  mortgage   was   void   in  its   inception,   1807. 

right  of  purchaser  from  mortgagor  to   complain,   1807. 

or  because  of  subsequent  circumstances,  1807a. 

insufficient  description  in  deed,  1807a. 

mortgage  in  hand  of  creditors,  1807b. 

notice  of  equitable  interest  necessary,  1807b. 

dual  capacity  of  mortgagee  and  of  guardian  of  mortgagor, 

1807b. 
insanity  of  mortgagor,  1807c. 

dispute  as  to  whether  there  has  been  a  default,  1807d. 
waiver  of  right  to  sell  for  non-payment  of  interest,  1807d. 
on   account  of  usury,   1808. 

of  unconscionable  penalty  or  interest,  1809. 
want  of  notice  of  sale  no  ground  for  enjoining,  ISIO. 

1009 


INDEX. 


References  are  to  Sections. 


POWEE  OF  SALE  IN  MOETGAGES,  ETC.— continued. 
not  to  allow  set-off,  1811. 

pending  settlement  of  partnership   accounts,   1811. 
not  to  allow  time  for  contribution  to  redeem,  1812. 
when  amount  of  debt  is  in  dispute,   1813. 
when  the  mortgage  has  been  satisfied,  1813. 
pending  suit  which  prevents  sale  for  fair  price,  1813a. 
lien  for  paving  tax,  1813a. 

purchaser  subject  to  mortgage  ignorant  of  power  in  it,  1814. 
clouding  title,  1815. 
insolvency  of  trustee  no  ground,   1816. 

scarcity  of  money  or  business  depression  no  ground,   1817. 
lumping  real  and  personal  covered  by  mortgage,   1817a. 
appointment  of  referee   to   act  with  mortgagee,   1818. 
recovery  of  money  paid  under  duress,  1819. 
mortgagee's  damages  and  costs  when  wrongly  enjoined,  1820. 
Mississippi   statute,   1820. 

bond  by  mortgagor  to  pay  interest  on  first  mortgage,  1820. 
Personal  notice  of  sale,  1821-1827. 

no  notice  necessary  unless  made  so  by  statute  or  deed,  1821. 

reference  to  power  in  deed,   1821. 

notice  not  necessary  to  charge  third  person  on  agreement  to 

purchase,   1821. 
on  agreement  to  purchase,  1821. 
junior  incumbrancer  not  entitled  to,  1821a. 
all  essential  requisites  of  power  must  be  complied  with,  1822. 
delay  after  default  in  corporate  mortgagees,  1822. 
failure  to  give  required  notice  does  not  bar  equity,  1822. 
notice  to  heirs-at-law  in  place  of  administrator,  1822. 
when   mortgagor   is   under   disability,    1823. 
mortgagor  cannot  waive  notice  for  others,  1824. 
promise  of  mortgagee,  not  to  sell  without  notice,  1825. 

ground    for    setting    aside    sale,    1826. 
burden  of  proof  as  to  notice,  1827. 
Publication  of  notice,  1827-1838. 

for  a  certain  time  in  newspaper  usually  required,  1828. 
conflict  between  requirements  of  statute  and  of  power,  1827. 
statutes  do  not  apply  beyond  the  States  enacting  them,  1829, 
fairness  in  giving  notice  required,  1830. 
where  mode  prescribed  is  impossible,  1829. 
burden  of  proof  as  to  notice,  1830. 
where  sale  is  twice  advertised,  1830. 
notice  published  before  default  ineffectual,  1831. 
when  weekly  paper  is  published,  1831. 
1010 


INDEX. 


References  are  to  Sections. 


POWEE  OF  SALE  IN  MOETGAGES,  ETC.— continued. 

assignment  of  mortgage  during  time  of  advertisement,  1832. 
change  of  statute  as  to  length  of  notice,  1833. 
how  long  after  publication  sale  may  be,  1834. 
selection  of  newspaper,   1835. 
what  is  a  newspaper  determined  by  jury,  1835. 
distinction   between   "printed"   and   "published,"   1835. 
change  in  name  of  paper,  1835, 
publication  in  two  counties,  1836. 
where  newspaper  is  published,  1836. 
error  in  record  as  to  place  of  publication,  1836. 
posting  in  public  places,  1837. 
length  of  time  of  publication,  1838. 
time  shortened  by  agreement,  1838. 
once  a  week  for  three  successive  weeks,  1838. 
What  the  notice  should  contain,  1839-1856. 

should  fully  comply  with  the  terms  of  power,  1839. 

allegation  of  record,  1839. 

statement  of  default,  1839. 

compliance   with   statutory   requirements,    1839. 

must   describe   the   premises,   1840. 

description   of   parcels,    1840. 

description  by  reference  to  plan,  1840. 

distinct  lots  should  be  described  separately,  1841. 

description  when  part  has  been  released,   1841. 

short  and  incomplete  description,   1842. 

must  show  who  orders  the  sale,  1843. 

by  reference  to  record,  1843. 

statutory  requirement  for  mortgagor's  signature,   1843. 

reassignment  not  set  forth,  1843. 

error    in   name,    1843. 

need  not  name  owners  of  equity  of  redemption,  1844. 

must  specify  time  and  place  of  sale,  1845. 

what  constitutes  appointed  hour,  1845. 

discretion  as  to  the  time,  place,  and  terms  of  sale,  1846, 

day  of  sale  fixed  for  Sunday,  1847. 

for    legal    holiday,    1847. 
sale  at  ruins  of  court-house,  1848. 
sale  at  temporary  court-house,  1849. 
where  term  court-house   is   ambiguous,   1849. 
where  court-house  has  two  doors,  1849. 
discretion   lodged    in   trustee,    1849. 
sale   in  newly  incorporated   town   or   county,   1849a. 
sale  at  city  hall,  1850. 

1011 


INDEX. 


References  are  to  Sections. 


POWEE  OF  SALE  IN  MORTGAGES,  KiC.—contiiiued. 

sale  outside  of  State,   1850. 

mistake  in  advertisement,   1851. 

misleading  notices,  1852. 

as  to  prior   incumbrances,   1852. 

as  to  day  of  sale,  1852. 

error  in  stating  attorney's  fee,   1852. 

change  in  time  appointed  for'  sale,  1852. 

sale  of  equity  of  redemption,  1853. 

alone  not  permitted,  1853. 

prior  incumbrances,   1853. 

unimportant  omissions,  1854. 

terms  of  sale,  1854. 

advertisement  not  dated,  1854. 

statement  of  default,   1854. 

unimportant  omissions,  1854. 

statement  of  the  amount  claimed,  1855. 

when  taxes   are   added,   1855. 

when    part    of    amount    was    garnished    in    hands    of    mort- 
gagee,  1855. 

amount  of  prior  mortgage  need  not  be  stated,   1856. 
Sale  in  parcels,  1857-1860. 

no    obligation    except    under    statutes    and    special    equities, 
1857. 

exceptions  to  general  rule,  1857. 

what  constitute  separate  lots,  1857. 

discretion   in   mortgage,    1857. 

sale  contrary  to  statute  void  or  avoidable,  1857. 

waiver   of  right  to   object,   1857. 

when  sale  of  property  entire  not  justified,  1858. 

when  trustee  should  sell  in  parcels,  1859. 

sale  of  whole  for  instalment  of  interest,  1859,  1860. 

sale  of  sufficient  only  to  pay  the  debt,  1860. 
Conduct  of  sale,  terms,  and  adjournment,  1861-1875. 

mortgagee  may  act  by  attorney,  1861. 

need  not  be  personally  present,  1861. 
sales  by  sheriff,  1861,  note. 

trustee  under  deed  of  trust  should  be  present,  1862. 

employment  of  auctioneer,  1862, 

deputy  marshall  cannot  act,  1862. 

one  of  two  trustees  may  act  when,  1862. 

public  auction  or  private  sale,  1863. 

memorandum  by  auctioneer,  1863. 
when  sale  may  be  had,  1863. 
1012 


INDEX. 

Refereaices  are  to  Sections. 

POWEK  OF  SALE  IN  MOKTGAGES,  'ETC.— con  I  in  ued. 
terms  of  sale,  1864. 
whether  for  cash  or  credit,  1864. 
mortgagee   responsible  if  he  gives  credit,   1864. 
acquiescence  of  mortgagor  in  conduct  of  sale,  1865. 
when  highest  bidder  repudiates,  1865,  1869. 
what  is  "highest  and  best  bid,"  1865. 
payment  at  time  of  sale,  1866. 
time  for  examination  of  title,  1867. 
giving  credit,   1868. 

scope  of  mortgagee's   authority,   1868,   1871. 
express  requirements,  1868. 

when  terms  of  sale  not  prescribed  by  i:»ower,  1869. 
when  mortgagee  may  use  his  discretion,  1870. 
not  liable  for  errors  of  judgment,  1870. 
mortgagee  may  give  credit,   taking  the  risk  himself,   1868, 

1871. 
when  mortgagee  authorized  to  sell  for  cash  or  credit,  1872. 
adjournment,   1873. 
sham  bidders,   1873. 
property  bid  in  by   auctioneer,   1873. 
notice  of  adjournment,   1874. 
publication  not  required,  1874. 
failure  to  give  indicates  bad  faith,  1874. 
announcement  at  sale,  1874. 
Illinois  doctrine,  1874. 

no   obligation   to   delay   sale  to   more   favorable  time,   1875. 
Who  may  purchase  at  sale,  1876-1888. 

mortgagee  not  allowed  to  purchase,  1876. 

sale  to  mortgagee  voidable  only,  1876. 

no  subsequent  sale  allowed,  1876. 

mortgagee  may  'apply  for  relief,  1876. 

pledgee  of  mortgage  cannot  purchase,  1876. 

partners  of  mortgagee  cannot  purchase,  1876. 

mortgagee  may  purchase  of  mortgagor,  1876. 

mortgagee  may  purchase   from   purchaser,   1876. 

sale  to  estate  of  A.  B.  void,  1876. 

mortgagor  electing  to   disaffirm  must  redeem,   1876a. 

right  to  disaffirm  not  transferable,  1876a. 

accountability  of  mortgagee,  1876a. 

not  necessary  to  show  fraud  in  mortgagor's  purchase.  1877. 

rvile  applies  to  mortgagee's  solicitor,  1878. 

mortgagee's  agent,  1879. 

authority  a  question  for  jury,  1879. 

1013 


INDEX. 


References  are  to  Sections. 


POWEE  OF  SALE  IN  MOKTGAGES,  ^TG.~continued. 
indirect  purchase  in  behalf  of  mortgagee,  1879. 
trustee  in  deed  of  trust  cannot  buy,  1880. 
indirect  purchase   by  trustee,   1880. 
trustee's  attorney  cannot  purchase,  1880. 
beneficiary    may    buy,    1880. 

corporation  as  separate  entity  in  purchasing,  1880. 
disability  on  trustee  after  appointment  of  substitute,  1880. 
less  strictness  in  case  of  mortgagee,  1881. 
no  restraint  when  sale  is  by  judicial  process,  1882. 
express  provision  that  mortgagee  may  purchase,  1883. 
rule  has   no   application   to   subsequent   mortgagee,    1884. 
right  to  avoid  sale  waived  by  delay,   1885. 
right  lost  after  transfer  to  bona  fide  purchaser,  1886. 
mortgagor  may  purchase,  1887. 
effect  of  such  purchase  on  levying  creditor,  1887. 
on  subsequent  mortgage,  1887. 

director  may  purchase  under  corporate  mortgage,  1887. 
purchaser  charged  as  trustee  when,  1887. 
mortgagor's   wife  may  purchaser,   1888. 
Deed  and  title,  1889-1903. 

holder  of  legal   title   should  make  deed,   1889. 

by   assigns,   executors   and  trustees,    1889. 

no  personal   warranty  of  title,   1889. 

only  one  sale  and  deed  can  be  made,  1889. 

proper  recitals  in  deed,  1889. 

m.ortgage   taken   in   capacity   of   administrator,    1889,    1891. 

auctioneer  may  be  authorized,  1891. 

married  woman  may  make  deed,  1890. 

deed  in  name  of  mortgagor  or  mortgagee,  1891. 

mortgagee  purchasing  may  deed  to  himself,  1892. 

no   deed  required   in   New  York,   1893. 

nor   in   Alabama,   1893. 
title  passes  by  delivery  of  deed,  1894. 
recovery  of  possession  by  grantee,  1894. 
deed  not  evidence  of  recitals  in  it,   1895. 
deed  to   person  other  than  purchaser,   1896. 
purchaser  takes  divested  of  subsequent  incumbrances,  1897. 
incumbrances,  1897. 
of   reservations   by   mortgagor,    1897. 
free  from  claims  for  improvements,  1897. 
free  from  mortgagor's  contract  to  sell,  1897. 
doctrine   of  notice   charging   purchaser   from   trustee,    1897. 
purchaser's  failure  to  record,   1897. 
1014 


INDEX. 


References  are  to  Sections. 


POWEE  OF  SALE  IN  MORTGAGES,  ETC.— continued. 

unpaid  taxes  a  valid  lien  against  purchaser,  1897a. 

application  of  surplus  to  pay  taxes,   1897a. 

bona  fide  purchaser  acquires  valid  title,   1898. 
though  mortgage  has  been  paid,  1898. 
in  spite  of  fraud  or  usury,  1898. 

title  not  affected  by  prior  agreements  of  parties,  1899. 

sale  after  payment  of  mortgage,   1899,   1902. 

usury  voids  sale  as  to  mortgage  purchasing,  1899. 

in  England  not  bound  to  inquire  as  to  regularity  of  sale, 
1900. 

mortgagor's   covenant   for   further   conveyance,    1901. 

invalid  sale  operates  as  assignment,  1902. 

although  sale  is  conducted  by  officer,  1902. 

no  estoppel  by  resale,  1902. 

except  where  mortgagee  purchases,  1902. 

sale   by   authorized   person,   1092. 

mortgagee   in  possession  liable   to   account,   1902. 

recovery  of  possession  by  purchaser,   1902a. 

remedy  against  purchaser  declining  to  complete  sale,  1903. 

complete  sale,  1903. 

justifies  a  second  sale,  1903. 

excuse  for  purchaser's  refusal,  1903. 

memorandum   necesary   to   bind,   1903. 
The  afUdavit,  1904,  1905. 

neglect  to  file  does  not  invalidate  sale,  1904. 

necessity  for,  1904. 

sufficiency    of,    1904. 

New  York  rule,  1904. 

what  is   requisite   to   make   it  presumptive  evidence,   1905. 

need   not   state  rendering  of   account,   1905. 
Setting  aside  and  waiving  sale,  1906-1922. 

fairness  in  the  exercise  of  the  power  required,  1906. 

who   may   impeach,   1906. 

general  grounds  for  relief,  1096. 

military  occupation  of  premises,  1906a. 

whether  sale  void  or  voidable,  1907. 

failure    to    comply   with    statute,    1907. 

unauthorized    substitute    trustee,    1907. 

exercise    of   fair    discretion,    1907. 

fraudulent  sale  by  mortgagee,  1907. 

reporting  sale  to  court,  1907. 

sale  of  undivided  interest,   1907. 

without   leave   of  bankrupt  court,   1908. 

1015 


INDEX. 


References  are  to  Sections. 


POWEK  OF  SALE  IN  MORTGAGES,  KrC— continued. 
allowing  property   to   be   sacrificed,   1909. 
mortgagor's   failure   to   attend   sale,   1909. 
liability  of  mortgagee  to  action  at  law,  1909, 
avoided  by  secret  arrangement  to  prevent  competition,  1910. 
fraud  or  deception  practiced  upon  owner,  1011. 
what  constitutes,   1911. 

fraud  or  deception  practiced  on  holder  of  note,  1911. 
conduct  of  purchaser  at  sale,  1912. 
combination  between  purchasers,  1912. 
burden  of  proof,  1912. 

purchaser   knowing    of   circumstances    invalidating,    1913. 
failure  to  mention  improvements  in  notice,  1913. 
right  of  mortgagee  purchasing  to  insist  on  invalidity,    1913. 
purchase  by  agent  without  authority,  1911. 
only    one   bidder    at    sale,    1914a. 

mere   inadequacy   of  price   not   alone   ground   for,    1915. 
as  evidence  of  fraud,  1915. 
who  may  take  advantage  of,  1915. 
when   objection   should   be   made,   1915. 
sale  by  unlicensed  auctioneer,   1915a. 
waived  by   extinguishing   time   of   redemption,    1916. 
promise  to  allow  mortgagor  to  purchase,  1917. 
suit  for  second  instalment  does  not  open,  1918. 
subsequent  entry  to  foreclose  does  not  open,  1919. 
waived  by  agreement,   1920. 

mortgagee  purchasing   bound   to   carry   out   purchase,   1920. 
mortgagor  estopped  by  receipt  of  surplus,   1920a. 
relief  must  be  sought  in  equity,  1921. 
by  bill  to  redeem  or  bill  to   set   aside,   1921. 
parties  to  bill,  1921. 
injunction  pending  bill,  1921. 
delay  in  seeking  relief,  1922. 
Costs  and  expenses,  1923-1926. 

mortgagee   or   trustee   not   generally   entitled   to   compensa- 
tion, 1923. 
express  agreement  allowing  when  no  sale,  1772. 
attorney's  fees,  1923a. 
auctioneer's  fees,  1924. 

reasonable  expenses   incurred  in  advertising,   1924. 
expense  for  legal  advice,   1925. 

costs  under  sale  by  order  of  court  in  bankruptcy,  1926. 
net  proceeds  applicable  to  mortgage  debt,  1926a. 
payment  of  prior  liens,   1926b. 
1016 


INDEX. 


References  are  to  Sections. 


POWER  OF  SALE  IN  MOETGAGES,  ETC.— continued. 
The  surplus,   1927-1939. 

generally  mortgage  provides  for  disposal  of,  1927. 

best  form  of  provision,  1927. 

effect  of  prior  and  subsequent  incumbrances,  1927. 

not   chargeable   with   interest   when    unproductive,    1928. 

must  be  applied  according  to   title,   1929. 

passes  to  grantee  of  equity  of  redemption,  1929. 

right   of  subsequent  mortgagee,    1929. 

not  applied  to  prior  incumbrances,  1929. 

notice  of  claims  to,  1930. 

suit  by  mortgagor  for  surplus,   1930. 

protection  for  attaching  creditor  of  mortgagor,  1930L 

whether  heir  or  administrator  entitled  to,  1931. 

in  case  of  bankruptcy,   1932. 

in  case   of  an  insolvent  estate,  1932. 

dower  in  surplus,  1933. 

when  equity  attached  or  sold  on  execution,  1934. 

mechanic's   lien   against   surplus,    1934. 

after  sale  under  junior  judgment,  1934. 

judgment  lien  upon,  1935. 

when  mortgagor  has  conveyed  part,  1935. 

when  mortgage  debt  charged  on  portion  of  premises,  1936. 

when  there  are  sureties  for  part  of  debt,  1936. 

when  whole  property  is  sold  to  satisfy  one  instalment,  1937. 

payment  of  whole  debt  on  sale  for  instalment,  1937. 

when  only  part  of  debt  has  matured,  1938. 

rights  determined  in  suit  for  money  had  and  received,  1939. 
Judgment  for  deficiency  after  sale,  1227. 
POWEE  TO  MORTGAGE,  a  power  to  sell  does  not  include,  129. 

power  by  will  or  deed,  129. 

includes  power  to  make  mortgage  in  usual  terms,  129. 

agent  cannot  execute  for  his  own  benefit,  129. 

mode  of  exercising,  130. 

executed  in  name  of  principal,  130. 
PRACTICE.     (See  Pleading  and  Practice.) 
PREeMPTOR  of  public  land  cannot  mortgage,  177,  618. 
PREEXISTING  DEBT,  mortgage  for,  whether  a  purchase,  460. 
PREFERENCE,  under  bankrupt  act,  627,  629. 
PRESUMPTION   OF  PAYMENT.      (See  Payment,  913-918.) 
PRIOR    INCUMBRANCERS    cannot    properly    be    made    parties    to 

foreclosure  suit,   1439,   1445,   1474,   1589. 
PRIORITY  ly  registration,  456-537. 

once  gained  cannot  be   lost,   525. 

1017 


INDEX. 


References  are  to  Sections. 


TBIOBITY— continued. 

though  record  be  destroyed,  526. 

As  affected  hy  notice,  538-542. 

doctrine  in  this  counry,  538,  539. 

As  affected  hy  fraudulent  concealment  of  incumbrance,  602. 
by  fraud  inducing  one  to  purchase  as  incumbered,  603. 

As  affected  ly  negligence,  604-606. 

as  between  holders   of   several  notes   secured,   606,   1699,   1939. 

as  between   individual  and  partnership   mortgages,    606. 

as  between  simultaneous  mortgages,   606. 

as  between  unrecorded  mortgages,  607. 

between  several  mortgages  executed  at  same  time,   007a. 

first  mortgagee  taking  new  mortgage   knowing  of   second,   608. 

agreements   fixing  priority,   608. 

over  mechanic's  lien,  487,  609. 

of  assignee  of  one  note,  822. 

between  mortgages  may  be  settled  in  foreclosure  suit,  1441. 

questions  of,  when  to  be  settled,  1611. 

Between  holders  of  several  notes,  1699-1707. 

note  first  maturing  entitled  to,  1699. 

effect  of  assignment  of  notes,  1699. 

provision  that  all  notes  mature  on  any  default,  1699,  1703. 

agreed  priority   on   assignment,   700. 

whether  priority  of  assignment  gives,  1701. 

rights  of  assignee  holding  mortgages,  701. 

competition  between   assignee  of  part  and  mortgagee,  701. 

pro  rata  division,  701a,  703. 

may  be  fixed  by  agreement,  1702. 

when  whole  debt  becomes  due  upon  any  default,  1703. 

effect  of  usury,  1706. 

guaranty  of  payment  of  interest,  1706. 

when  mortgage  secures  debts  due  to  different  persons,  1705. 

rights  of  sureties,  1706. 
PEOMISSOKY  NOTE,  not  subject  to  equities  in  hands  of  assignee, 
837. 

otherwise  when  overdue,   841. 
PEOOF  of  note  in  foreclosure  suit,  1470. 

of  debt  against  estate  does  not  bar  foreclosure,  1218,  1222. 
PUBLIC  LAND,  preemptor  cannot  mortgage,   177. 
PUBLICATION  of  notice  of  sale.     (See  Power  of   Sale  in  Mort- 
gages.) 
PURCHASE-MONEY,  eviction  necessary  before  defenses  will  avail, 

1500,  1502. 
PURCHASE-MONEY  MORTGAGE,  covenants  in,  68. 
1018 


INDEX. 


References  are  to  Sections. 


PUECHASE-MONEY  MORTGAGE— cowfinwecZ. 
priority  over  judgTnents,  408,  4G9. 
has  priority  of  dower  and  homestead  rights,  468-470. 
simultaneous  mortgages  for,  467,  468. 
defence  of  outstanding  title,   1500. 
defence  is  founded  on  the  covenants,  1501. 
lease  on  part  not  a  breach,   1501. 
implication  of  covenants,  1501. 

unauthorized  agreement  by  president  of  corporation,  1501. 
eviction  necessary  before  defence  will  avail,  1500,  1502. 
allowance  for  outstanding  incumbrances,  1502. 
what  constitutes  eviction,  1502. 
rights  of  purchaser  of  the  equity,  1502. 
exceptional  cases,  1503. 
where   vendor   is   insolvent,   1503. 
breach  of  covenant  of  seisin  in,  1504. 
what  constitutes  a  breach  of  such  covenant,  1504. 
mere  possession  of  third  person,  1504. 
tax  liens,  1504. 

breach  of  independent  covenant  in,  1505. 
when  sale  was  effected  by  vendor's  fraud,  1506. 
counter-claim  for  damages  caused  by  fraud,  1506. 
fraud  in  sale  of  one  of  several  tracts,  1506. 
mutual  mistake  as  to  quantity  of  land,  1506a. 
as  evidence  of  fraud,  1506a. 
must  be  specially  pleaded,  1506a. 

purchaser  assuming  mortgage  has  no  standing  to  complain,  1506a. 
assignee  before  due  not  subject  to  this  defence,  1507. 
validity  of  title  when  a  condition  precedent  to  enforcement  of 

debt,  1508.  ^  ^ 

questions  of  when  to  be  settled,  1611. 

reference  to  determine  between  claimants  to  surplus,  1685. 
lien  on  surplus  discharged  according  to,  1688. 
depends  upon  time  of  record,  1688. 
application  of  proceeds  to  prior  incumbrance,  1698. 
PUECHASER,  a  mortgagee  is,  within  recording  acts,  459,  710. 
a  mortgagee  for  antecedent  debt,  460. 
a  judgment  creditor  is  not,  462. 
may  rely  upon  title  as  it  appears  of  record,  514. 
of  timber  from  mortgagor  wrongfully  cut,  689. 
mortgagee  may  be,  of  equity  of  redemption,  711,  712. 

when  merger  follows  purchase,  870. 
Of  the  equity  of  redemption,  his  rights  and  UaUlities,  735-770. 

reference  to  mortgage,  importance  of,  735. 

necessity  for,  735.  1019 


INDEX. 

References  are  to  Sections. 

FJJBCIlASEJi— continued. 

suiiiciency  of,  7o9a. 

effect  of  deed  without  covenants,  T36. 

of  deed  with  covenants  of  warranty,  736a. 

expressly  subject  to  mortgage,  736,  736a. 

not  entitled  to  collateral  security,  737. 
no  personal  liability  for  debt,  738. 

nor  to  assume  payment  of  it,  738. 

effect  of  assumption  by  mistake  or  fraud,  738,  744,  752. 
liability  after  purchase  of  paramount  title,  739. 
assumption  of  mortgage  by,  740. 

what  constitutes,  740,  748,  749,  765. 

payment  by  him  discharges  mortgage,  740,  769a. 
identity  of  the  mortgage  assumed,  740a. 
trustee   assuming  mortgage,   740b. 
mortgagor  becomes  svirety  to,   741,   742a. 

relation  between  first  and  second  purchaser,  741. 
when  novation  takes  place,  741. 
extension,  when  discharges  mortgagor,  742. 

neglect    to    enforce    mortgage,    742. 

necessity  for  personal  decree  for  deficiency,  754. 
assumption  of  proportionate  part  by,  743. 
cannot  defend  against  mortgage  assumed,  744. 
cannot  set  up  usury,   745. 
when  purchaser  may  contest  mortgage,  •  746. 
purchase  under  execution,  736,  747. 

second  grantee's  agreement  to  assume,  736,  747a,  760a. 
Personal  liability  of  purchaser,  748-770. 

none  under  deed  merely  subject  to  mortgage,  748. 

under  agreement  to  pay  the  mortgage,  749. 

under  verbal  promise  to  assume,  750. 

when   bound   to    indemnify   mortgagor,    751. 

when  mortgage   debt  forms   part   of    consideration,    751. 

bound  by  accepting  deed,  imposing  obligation,  752. 

when  acceptance  implied,  752. 

married  woman  assuming,  753. 

what  will  avoid  liability,  754. 

how  mortgagee  may  take  advantage  of  agreement,  755,  755ac 

junior  mortgagee  assuming  not  liable,  756,  761. 

assumption  in  absolute  deed  which   is   in  fact  a  mortgage, 

757. 
when   action   allowed   on   promise   for   benefit   of  mortgage, 

758. 
mortgagee  may  sue  on  promise  without  foreclosure,  759. 

1020 


INDEX. 

References  are  to  Sections. 

PUKCHASER— con/mwed 

though  grantor  himself  not  liable  for  the  debt,  760. 

promise  must  be  expressly  for  mortgagee's   benefit,   761. 

a  doctrine  of  equity  not  of  law,  761a. 

doctrine  of  United  States  Supreme  Court,  761b.  ' 

mortgagee's  rights  are  in  equity  not  at  law,  761b. 

mortgagee  cannot  sue  in  name  of  mortgagor,  761c. 

Massaehusett's  doctrine,  761d. 

prevailing  rule  is  to  allow  suit  at  law,  against  purchaser,  762. 

whether  grantor  can  release  purchaser,  763-761. 

condition    that   grantee   pay   mortgage,    765. 

when  purchaser  of  part  entitled  to  a  release,  767. 

remedy  of  grantor  against,  768. 

doctrine  of  covenants  running  with  the  land  not  applicable, 
768a. 

contract  to  pay  mortgage  enforced  before  promisee  has  paid, 
769. 

payment  by  grantee  discharges  mortgage,  769,  769a. 

measure  of  damages  in  action  by  grantor  against,  770. 

may  redeem,  1061. 
assuming  mortgage  cannot  set  up   statute  of  limitations,   1201. 
has   no  greater  rights   against   mortgagee   than   mortgagor  had, 

1202. 
pendente  lite  need  not  be  made  party  to  foreclosure  suit,  1411. 
subject  to  mortgage  cannot  defend   against  it,  1491. 
right  to  have  sale  in  inverse  order,  1625. 
effect  of  agreement  in  mortgage,  1625. 
effect  of  assumption  of  mortgage,  1625. 
rights  under  foreclosure  sale,   1642-1681. 
EAILROAD  COMPANY,  limitation  of  power  to  mortgage,  124,  125. 
when   mortgage  covers   after-acquired   property   of,    152,    154. 
after-acquired  property  not  essential  to  its  business,  156. 

passes  without  special  mention,  157. 
mortgage  of  future  earnings  of,  159. 
mortgage  does  not  cover  corporate  existence,   161. 
rolling  stock  of,  whether  covered  by  mortgage,  452. 
RATIFICATION  of  mortgage  irregularly  executed,   93. 

by  infant  mortgagor  on  coming  of  age,  105. 

of  rents  provided  for  in  mortgage,  670. 
RECEIVER  may  discharge  mortgage,   956. 
as  party  to  foreclosure  suit,  1438a. 
When  a  receiver  will  he  appointed,  1516-1534. 

general  principles,  1516. 

inadequacy  of  security  and   insolvency  of  mortgagor,   1516. 

1021 


INDEX. 

References  are  to  Sections. 

EECEIYER— continued. 

a  matter  of  discretion  with  the  court,  1516. 

rights  of  second  mortgagee,  1516. 

analogy  to  attachment,  1516. 

effect  of  statute  declaring  mortgage  lien,  1516. 

when  appointed  on  application  of  mortgagor,  1517. 

grounds  for  appointment,  1517. 

not  appointed  to  enforce  vendor's  lien,  1517. 

appropriate   under   leasehold   mortgages,    1518. 

English  rule  as  to  appointment  of,  1519. 

rule  in  the  United  States,  1520. 

rule  in  New  York  and  other  States,  1521. 

allowing  to  security  to  diminish  in  value,  1521. 

failure  to  pay  interest,  1521. 

to  pay  taxes,  1521. 
provision  in  mortgage  as  to,  1521. 
statutory  provisions  as  to,  1521. 

in   several    States,    1522. 
when  subsequent  mortgagee  may  obtain  a::pointment,  1523. 
consent  of  prior  mortgagee,  1524. 
when  mortgaged  estate  is  a  leasehold,  1524. 
prior  mortgagee's  right  of  possession,  1525. 
when  application  may  be  made,  1526. 
after  filing  bill  to  foreclose,  1526. 
after  judgment  in  foreclosure  suit,  1526. 
notice  of  application  should  be  given,  1526. 
appointment  on  ex  parte  application,  1526. 
defences  to  application,  1527. 
improperly  raised  after  appointment,  1527. 
application  must  show  defendant  in  possession,  1528. 
tenant  should  attorn  to  receiver,  1528. 
no  appointment  after  bankruptcy,  1528. 
must  show  amount  of  mortgage  debt,  1529. 
mortgage  must  be  due,  1530. 
rule  when  instalment  notes  are  secured,  1530. 
when  mortgage  covers  separate  parcels,  1530. 
bill  must  be  pending,  1531. 
when  receiver  should  be  discharged,  1531. 
appointed  after  foreclosure  to  protect  rents,  1531a. 
security  must  be  inadequate  and  mortgagor  insolvent,  1532. 
additional  grounds,   1533. 
failure  to  pay  taxes,  1533. 
failure  to  insure,  1533. 
contest  as  to  property  included,  1533. 
1022 


INDEX. 

References  are  to  Sections. 

HECEIYER— continued. 

fraud  or   bad  faith,   in  management,   1533. 

appointment   pending   injunction,    1533. 

criterion  of  adequacy,   1534. 
Duties  and  power  of  receiver,  1536-1537. 

represents  all  parties  in  interest,  1535. 

of  bankrupt  corporation  represents  whom,  1537. 

must  act  with  sanction  of  court,  1537. 

liability  for  mistakes  made  in  good  faith,  1537. 

compensation,    1537. 

actions  against,  1537. 

fraud  of,  as  a  ground  for  setting  aside  sale,  1537. 

his  possession  is  that  of  the  court,  1535. 

his  claim  to  rents,  1536. 

against  assignee  in  bankruptcy,  1536. 

when   mortgagor  leases  property,    1536. 

attornment  by  tenant  may  be  compelled,  1536. 

action  for  rents  by,  1536. 

payment  discharges,  1537. 

whether  mortgagee  responsible  for  default  of  receiver,  1587a. 

right  of  claimants  to  fund  collected  by,   1688. 
KECITAL  in  other  instruments,  notice  by,  574. 
in  deed  ,notice  by,  575. 

in  mortgage,   of  mortgagor's   indebtedness,   effect   of,   677,   678. 
not  prima  facie  evidence,   1225. 
EECORDING  nature  and  application  of  laws  for,  456-487. 
of  separate  defeasance,  253. 

notice  furnished  by  the  record,  254. 
not  to  be  relied  upon  as  showing  merger,  872. 
of  conditional  judgment  in  foreclosure,  1306. 
of  lis  pendens,  1410. 
when  averment  of  necessary,  1465. 
statement  of  in  notice  of  sale,  1839. 
REDELIVERY  of  mortgage  for  a  new  obligation,  362. 
REDEMPTION,  provisions  restraining,  6. 

mortgagor  cannot  renounce  beforehand,  251. 
of  mortgage  in  form  of  absolute  deed,  342. 

though  grantee  has  conveyed  to  purchaser  in  good  faith,  342d. 
release  of  right  by  parol  when  mortgage  is  an  absolute  deed,  711. 
A  necessary  incident  of  a  mortgage,  1038,  1046. 

a  purely  equitable  doctrine,  1038. 

express  stipulation  not  to  redeem,  1039. 

time  of  may  be  postponed,   1040. 

how  long  depends  on  circumstance,  1040. 

1023 


INDEX. 


References  are  to  Sections. 


KEDE:MPTI0N— confi?iuecZ. 

agreement  to  confine  to  a  particular  person,  1041. 

any  agreement  which  is  an  evasion  of,  1042. 

agreement  not  to   redeem  after  a  certain  day,   1043. 

mortgagee  not  allowed  to  obtain  an  advantage,  1044. 

subsequent  agreement  against,   1045. 

after   release   improperly   obtained,   1046. 

parol  evidence  to   qualify  release,   1046. 
Circumstances  affecting,  1047-1051. 

barred  by  foreclosure  properly  made,  1047. 

compelling  junior  mortgagee  to  redeem  or  be  foreclosed,  1047. 

mortgagee  recognizing  mortgage  after  foreclosure,  1047a. 

after  imperfect  foreclosure,   1048,   1680. 

by  one  not  made  a  party  to  the  suit,  1048. 

form  of  decree,  1048. 

mortgagor  estopped  by  his  own  acts,  1049. 

of  one  only  of  several  mortgages,  1050. 

redemption  from  sale  on  execution,  1050. 

after  foreclosure  sale,   1051. 

given  by  statute  is  a  rule  of  property,  1051. 

what  law  governs,  1051. 

what  changes  are  constitutional,   1051. 

extension  of  time  not  allowed,  1051. 

by  consent  after  expiration  of  time  valid,  1051. 

right  given  by  statute  is  a  rule  of  property  in  United  States 
courts,   1051a. 

failure  to  provide  for  redemption  renders  duress     voidable, 
not  void,  1051a. 

no  redemption  after  foreclosure  of  property  of  a  public  cor- 
poration, 105 laa. 

right   of   possession   during   period    of   redemption   remains 
with  mortgagor,  1051b. 

rule  in  States  where  legal  title  passes  to  mortgagee,  1051b. 

rights  of  purchaser,  1051b. 

statutes  as  to  right  to  rent,  1051b. 

by  purchaser  of  the  equity  of  redemption,  1051c. 

mortgagee's  right  against  property  after  redemption,  1051c. 

when  judgment  for  deficiency  is  a  lien,  1051c. 
When  it  may  he  tnade,  1052-1054. 

not   till  mortgage   is   due,   1052, 

continues  till  lost  law,  1052. 

delivery  of  foreclosure  deed  essential,  1052, 


1024 


INDEX. 

References  are  to  Sections. 

REDEMPTION— con^inKetZ. 

extension   of   time  of,   1053. 
by  oral  agreement  not  valid,  1053. 
authority  of  trustee,  1053. 

not  extended  by  accident  and  misfortune,  1053. 
when  advantage  taken  of  irregular  foreclosure,  1054. 
promise   by   mortgagee   to   give   time,    1054. 
where  mortgagor  is  insane,   1054. 
not  affected  by  entry  by  heirs,  1054. 
Who  may  redeem,  1055-1069. 

any  party  in  interest,  1055. 

joint  claim,  1055- 

must  have  an  interest  derived  through  the  mortgagor,  1055a. 

by  purchaser,  heir  or   agent,   1055a. 

second  mortgagee  with  invalid  mortgage  cannot,  1055a. 

claiming   through   invalid   sale   can,    1055a. 

a  mortgagor  who  has  conveyed  the  equity,  1056. 

a  mortgagor  after  foreclosure  by  junior  mortgagee,  1057. 

under  a  mortgage  for  support,  1058. 

holder  of  mere  equitable  title,  1059. 

trustee  is  proper  party  to   redeem,   1059. 

grantor  by  an  absolute  deed,   1060. 

how  changed  from  mortgage   to   sale,   1060. 

allowance  for   improvements,   1060. 

right  of   redemption   in  money   after  transfer   to   bona  fide 

purchaser,   1060a. 
purchaser  of  equity  of  redemption,   1061. 
purchaser  not  forced  to  redeem,   1061. 
heir  at  law  or  devisee,  1062. 
legatee  under  some  circumstances,  1062. 
guardian,   1062. 

part  owner  of  equity  of  redemption,  1063. 
partial  redemption  not  allowed,  1063. 
no  right  to  force  co-tenants  to  join,  1063. 
subsequent  mortgagee,  1064. 
nature  of  right,  1064. 

when  not  made  a  party  to  foreclosure  proceedings,  1064. 
as  between  several  persons  entitled  to  redeem,  1064. 
tenant  for  life,  or  in  tail,  1065. 
remainder-man,  1065. 
tenant  for  years,   1066. 

dowress  who  has  released  in  the  deed,  1067. 
right  to  have  land  redeemed  out  of  husband's  estate,  1067. 
tenant  by  the   curtesy,   1067. 

1025 


INDEX. 


References  are  to  Sections. 


BEB'EMPTIO'N— continued. 

tenant  by  curtesy  may  redeem,  1067. 
jointress  may   redeem,   1067. 
holder  of  homestead  estate,  1067. 
a  surety  of  the  debt,  1068. 
a  judgment  creditor,  1069. 
general  creditors,   1069. 
an  attaching  creditor,  1069. 

purchaser  of  equity  of  redemption  on  execution  sale,  1069. 
Sum  payable   to  effect  it,  1070-1088. 

payment  of  the  amount  due,  a  condition,  1070. 
disbursements  by  mortgagee  to  be  added,  1070. 
conditions  other  than  for  payment  of  money,   1070. 
unconscionable  interest  contract  disregarded  in  equity,  1070. 
deductions   in  purchase-money   mortgage,    1070. 
statutory  right  of  redemption  from  sale,   1070. 
notice  of  payment,   1071. 
must  be  of  entire  debt,  1072. 
separate  estates  mortgaged  by  distinct  deeds  to  secure  same 

debt,  1072. 
after  bankruptcy,   1073. 

when  part  of  premises  has  been  foreclosed,  1074. 
foreclosure  against  several  parcels  invalid  as  to  some,  1074. 
after  a  foreclosure  sale,   1075. 

junior  incumbrancer  redeems  prior  mortgage  only,  1075. 
compensation  for  repairs  and  improvements,  1075. 
special  exceptions  to  allow  redemption  of  part,  1076. 
whole  sum  due  must  be  paid,  1077. 
when  part  only  of  debt  is  due,   1077. 
when  whole  debt  becomes  due  on  any  default,  1078. 
further   advances,   1079. 
present  loan  and  futvire  advances,  1079. 
prior  incumbrance  paid  by  mortgagee,  1080. 
taxes  paid  by  mortgagee,   1080. 
bidding  at  tax  sale  by  mortgagee,   1080. 
payment  of  other  claims  cannot  be  made  a  condition,  1081. 
oral  agreement  to  include  other  claims,  1081. 
allowance  for  improvements,  1081. 
effect  of  sale  under  third  mortgage,  1081. 
English    doctrine    of    tacking,    1082. 
consolidating   mortgages,    1083. 
costs  of  previous  foreclosure,  1084. 
agreement  of   mortgagor   binding   on   assignee,   1084. 
overpayment   to  prevent  foreclosure,  1085. 
1026 


INDEX. 

References  are  to  Sections. 

KEDEMPTION— con/ mued 

mortgagee  cannot  be  compelled  to  assign,  1086. 

otherwise  in  New  York,  1087. 

procedure   to   obtain   assignment,   1087. 
part  owner  redeeming  can  compel  contribution,  1086. 
tender  after  breach  of  condition,  1088. 
sufficiency,  1088. 
Contribution  to  redeem,  1089-1092. 

test  of  the  right  to  claim,  1089. 
mortgagor  cannot  claim  from  purchaser,  1089. 
tenants  in  common  jointly  liable  on  mortgage,  1089. 
form  of  remedy,  1089. 
the  general  rule  as  to,  1090. 
heir  of  mortgagor,    1090. 
grantee   neglecting  to   record   deed,   1090. 
when  the  mortgagor  retains  part  of  the  premises,   1091, 
when  mortgagee  purchases  equity  of  redemption,   1091. 
portions    sold    chargeable    in    inverse    order,    1092. 
how  notice  is  given,  1092. 
Pleadings  and  practice  on  hills  for,  1093-1113. 
only  remedy  is  by  will  to  redeem,  1093. 
when  right  to  bring  bill  is  lost,  1093. 

bill  should  conform  to  general  principles  of  pleading,  1094 
when  bill  multifarious,   1094. 
bill  must  tender   amount  due,   1095. 
tender  prevented  by  mortgagee,  1095. 
after  payment  in  full,  1096. 
the   parties,    1097. 

in  nature  of  bill  of  interpleader,  1097. 
proper  parties  plaintiff,  1098. 
heir  of  mortgagor,   1099. 
where  leasehold  is  mortgaged,  1099. 

mortgagor  who  has  assigned  equity  of  redemption,  1099. 
trustees  who  hold  equity  of  redemption,  1099. 
the  parties  defendant,  1100. 
after  death   of  morgagee,   1101. 

foreclosure  by  heirs   opened  tip  by  mortgagor,   1101. 
when  junior  mortgagee  seeks  to  redeem,  1102. 
when  junior  mortgage  debt  is  not  mature,  1102. 
holder  of  note  without  mortgage,  1103. 
reference  to  state  account,  1104. 
defences,  1105. 

waiver  of  defences,  1105. 
mortgagor's  lack  of  title  not  a,  1105. 

1027 


INDEX. 


References  are  to  Sections. 


BEB'EMPTJO'N— continued. 

fraudulent  second  mortgage  not  a,  1105. 
fraudulent   foreclosure  not  a,   1105. 
verbal  contract  to  sell  land  not  a,  1105. 
the  decree,  1106. 

need  not  direct  sale  on  failure  to  redeem,  1106. 
remedy  is  full  and  precludes  further  relief,  1106. 
decree  should  fcs  time  for  redemption,  1107. 
failure  to  pay  decree  works  foreclosure,   1108,   1566. 
decree  opened  by  mortgagee's  agreements  or  acts,  1108a, 
abandonment  of  suit,  1109. 
effect  of  redemption,   1110. 
general  rule  as  to  costs,   1111. 

costs  of  suit  brought  without  previous  tender,  1112. 
statutes  in  Massachusetts  and  Maine,  1112. 
costs  after  refusal  of  tender,  1113. 
When  right  of  is  harred,  1144-1173. 

statute  of  limitations  applies  by  analogy,  1144. 
disability   of  mortgagor  deducted,   1144. 
time  conforms  to  statute  in  force,  1145. 
synopsis  of  special  statutes,  1145. 
redemption  and  foreclosure  reciprocal,  1146. 
right  barred  in  ten  years  in  New  York  and  Wisconsin,  1147. 
in  Tennessee  statute  does  not  apply,  1148. 
mortgagee's  possession  must  be  adverse,  1149. 
coverture  no  protection,  1150. 
success  in  disabilities,  1151. 
When  the  statute  begins  to  run  against,  1152-1161. 

not  while  relation  of  mortgagor  and  mortgagee  exists,  1152. 
void  foreclosure  statute  does  not  run  till  notice  of,  1152. 
under  a  Welsh  mortgage,  1153. 
possession   runs   against   remaindermen,    1154. 
when  mortgagee  retains  possession  of  part,  1155. 
cause  of  action  accrues  when  mortgagee  enters,  1156. 
mortgage  entering  under  other  right,   1156. 
twenty  years'  possession  presumed  to  be  a  bar,  1157. 
under  de  facto  but  void  foreclosure,  1157. 
mere   constructive   possession   not    sufficient,    1158. 
effect  of  temporary  interruption,  1158. 
time  usually  allowed,  1107. 
alternate  practice  of  ordering  sale,  1107. 
when  notice  to  mortgagor  necessary,  1159, 
when  right  to  redeem  junior  mortgage  accrues,  1160. 
statute  runs  from  expiration  of  year  of  redemption,  1161. 
1028 


INDEX. 

References  are  to  Sections. 

REDEMPTION— con^inwed 

shorter  time  may  be  a  bar,  1161a. 
What  prevents  the  running  of  the  statute  against,  1162-1173. 
acknowledgment  of  right,   1162. 
after  twenty  years,  1163. 
to  third  person,  1164. 
binding  upon  all  under  mortgagee,  1165. 
rendering  an  account,   1166. 
acknowledgment  by  letter,  1167. 
assignment   of   mortgage,   1168. 
recital  of  mortgage  in  deed,  1169. 
proceedings  to  enforce  lien  or  debt,  1170. 
verbal  acknowledgment,   1171. 
statutes  on  topic,  1171. 

when   mortgagee  is   mortgagor's   attorney,    1171a. 
filing  of  bill  to  redeem  stops  running  of  statute,  1172. 
how  statute  may  be  pleaded,  1173. 
Statutory  provisions  regarding,  in  the  several  States,  1317-1366. 
Time  allowed  for,  after  decree  of  strict  foreclosure,  1563,  1565. 
none  allowed  after  decree  of  sale,  1563,   1586. 
dismissal  of  bill  to  redeem  works  foreclosure,  1566. 
from  irregular  foreclosure  sale,  1680. 
amount  payable,  1680. 
after  a  second  transfer,  1680. 
BEFEREE,  appointed  to  act  with  mortgagee  selling  power,  1818. 
BEFERENCE,  to  state  account  upon  redemption,  1104. 
to  state  amount  of  debt,  1467. 
as  to  title  of  premises  sold  under  decree,  1648. 
as  to  rights  of  claimants  to  surplus,  1685,  1686. 
proof  of  claims,  1685. 
costs  and  expenses,  1685. 
exception  of  referee's  report,   1686. 
amendment  to  report,  1686. 
BEFOEMATION  of  a  mortgage,  65,  66,  67,  97. 

court  of  equity  may  grant  as  between  parties,  97. 
mistake  must  be  clearly  shown,  97. 
mistake  in  description,  97. 
against  whom  it  may  be  had,  97. 
who  may  obtain,  98. 
against  whom  it  may  be  had,  99. 
relates  back  to  date,  99,  1464. 
of  description  in  foreclosure  suit,  1464. 
of  errors  in  the  mortgage   deed,   1464. 
RECORDING,  nature  and  application  of  laws  for,  456-487. 

1029 


INDEX. 

References  are  to  Sections. 

BECOBBING— continued. 

priority  of  record  gives  priority  of  title,  456. 
statutes  of  the  several  States,  45(5,  457. 
mortgages  in  soBie  States  recorded  in  separate  books,  457. 
record  to  be  made  within  specified   time,  458. 
record  then  relates   back,  458. 
such  provision   pernicious,   458. 
mortgagee  a  purchaser  vpithin  the  acts,  459. 

voluntary  mortgagee  not,  459. 
otherwise  in  some  States  when  mortgage  secures  preexisting  debt, 
460. 
mortgage  for  future  debt,  460. 
mortgage  for  antecedent  debt,  460. 
value  of  during  considertion  at  time,  460. 
giving  further  time  to  pay  preexisting  debt,  461. 
judgment  creditor  not  a  purchaser,  462. 
priority  as  between  mortgage  and  judgment,  463. 
unrecorded  mortgage  preferred  to  judgment.  464. 
reverse  rule  in  some  States,  465. 
States  vary  in  terms,  465. 
land  in  two  counties,  465. 
knowledge  of  unrecorded  mortgage  affects  creditor,  466. 
purchaser  at  execution  sale  without  notice  of  rights  of  others, 

467. 
whether  judgment  creditor  is  purchaser  for  value,  467. 
purchase-money  mortgage,  468. 

has  preference  over  all  judgments  and  liens,  468. 

over  prior  mortgage  for  a  loan  with  which  to  make  the 
purchase,  468. 
must  be  executed  simultaneously  with  deed,  469. 

has   priority   of   previous   judg-ment,   469. 
excludes  any  lien  arising  through  mortgagor,  470. 
such  as  dower,  homestead  or  judgment,  470. 

priority  lost  if  later  mortgage  first  recorded,  470. 
excludes    mortgage    made    by    purchaser    before    purchase-money 

conveyance,  471. 
purchase-money  mortgage  to  third  person,  471,  472. 
mortgage  for  loan  with  which  to.  purchase,  471. 
deed  and  mortgage  must  be  one  transaction,  473. 
purchase-money  mortgage  has  priority  of  mechanic's  lien,  473. 
recording  not  necessary  against  mortgagor  and  heirs,  474. 

of  creditors  other  than  judgment  creditors,  474. 
or   assignee  of  bankrupt,  475. 
equitable  mortgages  within  the  acts,  476,  477, 
1030. 


INDEX, 

References  are  to  Sections. 

miGOBDmO— continued. 

are  notice  to  subsequent  purchasers,  476. 
for  precedent  debt,  477. 
mortgages  of  leasehold  estates,  478. 
acts  apply  to  assignments,  479. 

statutory  provisions  as  to,  479. 

in  some  States  record  of  assignment  not  notice,  480. 
provisions  obviate  examination  of  record,  480. 
effect  of  recording  assignment,  481. 
prevents  wrongful  discharge,  481. 
purchaser  charged  with  notice,  481. 
rule   in  Massachusetts,   481. 
assignee  a  purchaser,  482.  ^ 

takes  all  rights  of  mortgagee,  482. 
priority   between   assignees,   483. 
manner  of  recording,  484. 
noting  on  margin  of  record  of  mortgage,  484. 
acts  apply  to  agreements  affecting  mortgagees,  485. 
agreement  to  release,  485. 
and  growing  trees,  485. 
acts  apply  to  mortgages  of  crops,  486. 
effect  of  mechanics'  liens  on  priority,  487. 
Requisites  as  to  execution  of  mortgages,  488-503. 
due  execution,  488. 
expenses  of  recording,  488. 
description  of  property,  489. 

mistake  in,  489. 
apparent  error  in  description,  490. 

as   affecting   subsequent  judgment   lien,   490. 
signing,  491. 

by  wrong  name,  491. 
sealing,  492. 

scroll  has  same  effect  in  many  States,  492. 
seal  not  to  be  copied,  493. 
witnessing,  494. 

statute   must  be   complied  with,   494. 
acknowledgment  or  proof,  495. 

certificates  must  follow  State,  495. 
qualification   of  ofiicer,  496.  • 
ministerial   act,   497. 
certificate  of  official  character,  498. 

personal  acquaintance,  499. 
certificate  not  conclusive,   500. 
effect  of  mistake  in,  500. 

1031 


INDEX. 


References  are  to  Sections. 


ViECOBDI'NG— continued. 

of  married  woman  releasing  homestead,  500. 
effect  of  fraud  in  same,  500. 
delivery   necessary,    501. 

recording  does  not  amount  to,  501. 

by  agent  when  effectual,   501. 
subsequent  delivery,  502. 
subsequent   acceptance,   501. 

when  subsequent  delivery  becomes  operative,  503. 
Requisites  as  to  time  and  manner  of,  504-514. 
notice  from  time  of  filing  deed,  505. 

presumption  in  favor  of,  504. 

by  depositing  with  person  in  charge  of  registration  office^ 
505. 

payment  of  recording  fees  not  a  prerequisite,   506. 

schedule,  memorandum   or  map   annexed,   507. 
certificate  of  register  conclusive  of  time  of,  508. 
two  mortgages  recorded  same  day,  508. 
one  first  entered  by  recorder  has  priority,  508. 
after  death  of  mortgagor,   509. 
after  bankruptcy   of  mortgagor,  509. 
must  be  made  in  the  proper  registry  district,  510. 
required   in   books   kept   for   mortgages,   511. 

when  made  in  form  of  absolute  deed,  511. 
requirement  of  as  to  power  of  attorney,  512. 
of  separate  defeasance,  513. 

purchaser  may  rely  upon  title  that  appears  of  record,  514. 
Errors  of,  515-522. 

defective,  not  notice,  515. 
clerical  error  does  not  invalidate,  515. 
record  is  notice  of  what  appears,  515. 
errors  in,  do  not  affect  third  persons,  516. 

exception  under  some  statutes,  517. 

(mistakes  which  put  upon  inquiry,  517. 
index  no  part  of,  518. 
notice  imparted  by  record,  518. 
neglect  of  recorder  to  make  reference,  518. 
damages  for  errors  in  index,  519. 
index  part  of   record   in   Iowa,   520. 
errors  in   descriptive   index,   520. 
register  may  correct  error  in  record,  521. 
mortgage  defectively  recorded  an  equitable  lien,  522. 
Effect  of  didy  made,  523-537. 

record  is  constructive  notice,   523. 

1032 


INDEX. 

References  are  to  Sections. 

HECOBDING— continued. 

not  notice   to   those  having  prior   rights,   523. 

or   contemporaneous   rights,   523. 
is  notice  of  all  the  contents  of  the  deed,  524. 
priority  once  gained  cannot  be  lost,  525. 

though   record   be   destroyed,   526. 
purchaser  without  notice  not  affected  by  unrecorded  mortgage,  527. 
after-acquired  title  by  one  who  has  conveyed  by  warranty,  528, 

529. 
deeds  recorded  subsequent  to  the  mortgage  not  notice,  530. 
is  notice  of  the  amount  specified  in  mortgage,  531. 
of  extension  of  mortgage,  532. 
is  notice  of  lien  at  rate  of  interest  specified,  533. 
acts  do  not  apply  to  simultaneous  mortgages,  534. 
of  simultaneous  mortgages  for  purchase-money,  534,  535,  536. 

in  case  one  is  for  purchase-money,  536. 
English  doctrine  of  tacking  does  not  apply,  537. 
Notice  as  affecting  priority  hy,  538-609. 
policy   of   admitting   notice   to   affect,   538. 
doctrine  of  notice  as  affecting,  538,   539. 
when  title  of  prior  mortgagee  affected  by  record,  540. 
examination  of  records,  541. 

no  allegation  of  necessary  for  foreclosure,  1465. 
whether  required  before  exercise  of  power  of  sale,  1784. 
RELEASE.     (See  Discharge.) 
provision  for  partial,  79. 
of  mortgagor's  equity   by   parol  when   mortgage   is   by   absolute 

deed,  711. 
of  mortgagor's  personal,  liability,  effect  on  mortgage,  983. 
of  part  primarily  liable  for  mortgage  debt,  1631. 
EELIGIOUS  CORPORATION,  power  to  mortgage,  126. 
REMAINDER,  nlortgage  of,  foreclosing  by  writ  of  entry,  1285. 
REMAINDERMEN  need  not  be  made  parties  to  foreclosure  suit,  1401. 
may  redeem,  1065. 

not  cut  off  by  foreclosure  when,  1589. 
exception  to  rule,   1397. 
REMEDIES  against  purchaser  who  has  assumed  a  mortgage,  768. 
for  removal  of  fixtures,  453-455. 
for   enforcing   a   mortgage,    1215-1236. 
are   concurrent,    72,    1215. 

debt  extinguished  without  affecting  mortgage,  1215. 
personal  judgment  for  deficiency,   1215. 
corporation   mortgage   securing  bonds,   1215. 
exception  to  general  rule  against  multiplicity  of  suits,  1216. 

1033 


INDEX. 


References  are  to  Sections. 


BEMEBIES— continued. 

creditor's  bill  may  be  maintained  at  same  time,  1217. 

stipulation  for  personal  remedy  first,  1218. 

personal  remedy  before  foreclosure,  1220. 

when  remedy  is  limited  to  property  alone,  1220. 

sale  of  equity  affects  not  general   rule,   1220. 

State  statutes  on  topic,  1220. 

power  of  sale  need  not  be  first  exercised,  1221. 

mortgage  by  deed  absolute  in  form,  right  to  judgment  for  debt, 
1221. 

suit  to  foreclose  and  suit  for  debt  at  same  time,  1222,  1224. 

rule  changed  by  statute  in  some  States,  1223. 

when  suit  at  law  is  pending,  1223. 

when  judgment  at  law  is  already  rendered,  1223. 

upon  express  covenant  in  mortgage,   1225. 

executed  by  cestui  on  mortgage  by  trustee,   1225. 

mere  recital  not  prima  facie  evidence  of  indebtedness,  1225. 

personal  liability  does  not  exist,  when,  1226. 

mortgagee  has  parted  with  i)roperty,  1226. 

one   assuming   has   been   released,    1226. 

mortgage  secures  debt  of  another,  1226. 

personal  remedy  after  foreclosure,  1227. 

application  of  payment  of  instalments  optional,  1227. 

suit   at   law   for  deficiency   after   sale,   1228. 

sale  of  mortgaged  premises   on  execution  for   same   debt,   1229. 

doctrine  of  allowing  sale  of  entire  estate,  1229. 

extent  of  satisfaction  of  mortgage  debt,   1229. 

execution  for  same  debt  may  be  levied  on  other  property,  1230. 

as  affected  by  bankruptcy,   1231-1^36. 

discharge  does  not  prevent  foreclosure,  1231. 

in  what  court  lien  may  be  enforced,   1232-1234. 
KENEWAL  of  note.      (See  Payment.) 

does  not  affect  the  mortgage,  335. 

a  sufficient  consideration  for  a  mortgage,  611. 

should  be  alleged  in  bill  to  foreclose,  1468. 

of  mortgage  does  not  destroy  right  of  subrogation,  885. 
RENTS  AND  PROFITS,  mortgagor's  right  to,  670,  771,   1120. 

after  entry  of  mortgagee,  671. 

mortgagee  before  entry  has  no  lien  upon,  772. 

mortgagee  in  possession  must  account  for,  1114-1120. 

what  chargeable  with,  1121-1125. 

accruing  at  time  of  foreclosure  sale,   1659. 

payment  in  advance,  1659. 

liability  of  judgment  debtor,  1659. 

liability  of  mortgagor  to  purchase  at  sale,  1661,  1666. 
1034 


INDEX. 


References  arc  to  Sections. 


REPAIKS  by  mortgagee  in  possession,  allowances  for,  1126-1131. 

allowed  in  decree  of  foreclosure,  1599. 
KEPLEVIN  by  mortgagee  for  fixtures  removed,  453. 

for  timber  removed,  688. 
RESALE  under  decree  of  foreclosure,  1639,  1669. 

applicant  holding  collateral  security,  1669. 

inchoate  dower  right,  1669. 

on  court's  own  motion,  1669. 

not  granted  to  wrongdoer,  1670. 
EEVIVOE  of  mortgage,  943-949. 

cannot  be  had  to  prejudice  of  third  persons,  944. 

assignment  to  third  person  at  request  of  mortgagor,  945. 

redelivery  of  mortgage  note,   946. 

verbal  agreement  to  continue  for  another  debt,  947. 

as  against  other  parties  having  interests  in  the  property,  948. 

as  against  wife  when  she  is  surety,  949. 
EHODE  ISLAND,  nature  of  a  mortgage  in,  49. 

mortgagee  has  title  and  right  of  possession,  49. 

parol  evidence  to  show  a  mortgage,  313. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1027. 

redemption  after  entry  to  foreclose,  1051,  1356. 

statute   of   limitations,   twenty   years,    1193. 

provisions  respecting  foreclosure  by  entry  and  possession,  1245. 

ejectment  to  foreclose  mortgage,  1279. 

statutory  provisions  relating  to  foreclosure,  1356. 

strict  foreclosure  allowed  in,   1553b. 

power  of  sale  mortgages  and  trust  deeds  in,  1756. 
EIGHT   OF  ACTION,  when  it  accrues,   1174-1191. 

bill  to  foreclose  must  show  it  has  accrued,  1471. 
EIPAEIAN  LAND,  right  to  settle  before  sale,  1611. 

EOLLING  STOCK  of  railroads,  whether  fixtures,  452. 

ROYALTIES  from  mines,  when  mortgagee  entitled  to,  670a. 

SALE  of  mortgage  at  discount  not  usury,  641. 
enforcement   of   against  the   purchaser. 
Sale,  setting  aside  of.     (See  Foreclosure  Sale,  1668-1681.) 
Sale  in  parcels,  under  decree  of  court,  1616-1619. 
required  in  Indiana,  1334,  n. 
may  be  required  by  statute  or  by  court,  1616. 
discretionary  with  court,  1616. 
when  wishes  of     mortgagor  to  be  followed,  1G17. 

1035 


INDEX. 

References  are  to  Sections. 

SALE — continued. 

allotting  homestead   to   mortgagor,   1617. 
sale  of  undivided  interest,  1617. 
when  property  may  be  sold  entire,  1618. 
determination  of  question,  1618. 
when  machinery  and  fixtures  are  included,  1618. 
sale  on  subsequent  default,   1619. 
Under  power  of  sale  mortgages  and  trust  deeds,  1857-1860^ 
generally  no   obligation,   1857. 
under  statutes  and  in  case  of  special  equity,  1857. 
when  sale  of  property  entire  not  justified,  1858. 
when  trustee  should  sell  in  parcels,  1859. 
sale  of  sufficient  only  to  pay  debt,  1860. 
SANITY,  presumed,  103. 

SCIEE   FACIAS,  foreclosure  by   in   Colorado,   1325. 
in  Illinois,  1333. 
in   Pennsylvania,   1355. 
SEAL,  requisite  to  a  mortgage,  81. 
8CE0LL  has  same  effect  as  seal  in  many  States,  492. 
scroll  in  place  of,  81. 
by  corporation  necessary,  128. 
provisions  of  the  several  States  regarding,  493. 
implies   consideration,   613. 
SERVICE,  by  publication  on  unknown  mortgagor,  1442b. 
want  of,  or  ineffectual,  1514. 
right  of  surety  to  object  to,  1514. 
cured  by  defendant's  appearance,  1514. 
SERVICES  OF  MORTGAGEE,  allowance  for,  1132,  1133. 
SET-OFF,  when  may  be  availed  of  in  foreclosure  suit,  1496-1498. 
effect  on  priorities,  1704. 

no  ground  for  enjoining  sale  under  power,  1811. 
when  allowed  in  conditional  judgment,  1313. 
joint  bond,  1496. 

against  prior  holder  of  mortgage,  1496. 
for  breach  of  covenant  of  seisin,  1496. 
claims   for  shortage,   1496. 
claims  for  unliquidated  damages,  1496. 
overpayment  by  mistake,  1496. 
partnership  debts,   1496. 

when  suit  not  brought  in  name  of  real  owner,  1497. 
foreclosure  regarded  as  proceeding  in  rem,  1498. 
for  failure  to  make  future  advances,  1498. 
of  illegal  interest  previously  paid,  1499. 
SETTING  ASIDE  OF  SALE.    (See  Foreclosure  Sale.) 
1036 


INDEX. 


References  are  to  Sections. 


SIIEItlFF,  execution  of  power  of  sale  by,  1774. 

power  of  sale  to,  and  successors,   1785. 
SIGNING,  a  requisite,  81,  491. 

by  another  in  grantor's  presence,  81. 

adopting  another's  signature,  81. 

forged  signature  may   be   ratified,   81. 
SIMULTANEOUS  MOKTGAGES,  recording  acts  do  not  apply,  634. 

for  purchase-money,  535,  536. 

several  notes  secured  by  one  mortgage,  GOG. 

surplus   under,   1689. 
SOLICITOR'S  FEES.     (See  Attorney.) 
•  SOUTH  CAKOLINA,  nature  of  mortgage  in,  50. 

mortgage  merely  a  lien,  50. 

parol  evidence  to  show  a  mortgage,  314. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,   1028. 

no  redemption  after  foreclosure,  1051,  1357. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1357. 

power  of  sale  mortgages  and     trust  deeds  in,  1757. 
SOUTH  DAKOTA,  nature  of  a  mortgage  in,  45a. 

mortgagor   entitled   to  possession,   45a. 

form  of  mortgage,   61. 

parol  evidence  to  show  a  mortgage,  310a. 

usury  in,  633. 

entering  discharge  of  record,  1028a. 

statute  of  limitations  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1352a. 

power  of  sale  mortgages  and  trust  deeds  in,  1752a. 
SPECIAL  STATUTE  to  foreclose  mortgage  not  allowed,  1320. 
STATUTE  OF  LIMITATIONS.     (See  Limitations,  Statute  of.) 
STATUTOEY  FORMS  of  mortgages,  61. 
STATUTORY  MORTGAGE,  what  is,  178. 
STATUTORY  PROVISIONS  FOR  ENTERING  SATISFACTION 

of  record.     (  See  Discharge.) 
STAY  of  foreclosure  proceedings,   when   improperly  used,   1447. 

on   account   of   controversy   between   subsequent    incumbrancers, 
1601. 
STREET,   mortgagor   cannot  dedicate  to  public  use,   676. 
STRICT  FORECLOSURE.     (See  Foreclosure  without  Sale,  1538- 

1570.) 
SUBJECT-MATTER  of  a  mortgage,  136-161. 
SUBROGATION  arises  by  operation  of  law,  when,  874. 

1037 


INDEX. 

References  are  to  Sections. 

SUBEOGATION— con^inwed. 

of  purchaser  under  a  void  foreclosure  sale,  874. 

applies  generally  in  favor  of  one  paying  a  debt  for  another,  874. 

of  stranger  to  interest  of  a  mortgagee,  874a. 

may  arise  by  agreement,  874b. 

of  one  loaning  on  a  defective  mortgage  to  discharge  a  prior,  874c. 

rights  of  intervening  incumbrancers,  874c,   877a. 
of  one  failing  to  receive  mortgage  to  secure  loan  to  pay  ofi  prior 

one,  874c. 
not  granted  as  a  reward  for  negligence,  874d. 
test  of  the  right,  876. 

mortgage  paid  by  one  not  under  obligation  to  pay  it,  877 
not  allowed  where  rights  of  innocent  purchasers  have  intervened, 

877a. 
mortgagee  paying  prior  incumbrance,  878,  1080,  1137. 
mortgagor  purchasing  his  own  mortgage,  879. 

after  sale  of  equity  of  redemption,  879. 

when  there  are  two  mortgages,  879. 
when  mortgage  is  enforced  upon  other  property,  880. 
indorser  or  surety  paying  the  debt,  881. 
where  surety  on  face  of  the  papers  appears  to  be  principal  debtor, 

881a. 
whether  surety  subrogated  to  debt  as  well  as  security,  882. 
of  surety  to  securities  given  subsequently,  883. 
of  principal  creditor  to  mortgage  given  to  surety,  883a. 
when  creditor  has  made  further  advances,  884. 
not  lost  by  renewal  of  mortgage,  885. 
lost  by  delay,  885a. 
does  not  arise  upon  part  payment  of  a  debt,  885b. 

by  dividends  in  bankruptcy,  885b. 
when  secured  by  compelling  an  assignment,  1087. 
substitution  of  other  securities  for  mortgage,  927. 
SUNDAY,  validity  of  mortgage  executed  on,  623. 

agreement  for  extension  made  on,   1190. 
SUPPORT,  mortgage  for,  whether  strictly  a  mortgage,  388. 
when  jnortgagor's  right  of  possession  implied,  389. 
alternative  condition  for,  390. 
where  to  be  furnished,  391. 
who  may  perform  condition  for,  392. 
who   may  foreclose  mortgage   for,   393. 
agreement  for  arbitration   in   mortgage  for,   394. 
mortgage  for  may  be  redeemed,   395. 
performance   of   condition   for,   887. 

when  it  implies  the  mortgagor    may  remain  in  possession,  668. 
1038 


INDEX. 


References  are  to  Sections. 


SUEETY,  wife  mortgaging  her  property  for  her  husband's  debt,  114. 
when  principal  creditor  is  entitled  to  security  given  to,  385. 
whether  he  may  release  security,  386. 
cannot  release  after  liability  is  fixed,  387. 
mortgagee  should  not  release  security  to   prejudice  of,   724. 
principal  creditor  entitled  to  security  to,  726. 
when     mortgagor  becomes,  as  to  purchaser,  741. 
relation  of,  doe's  not  affect  mortgagee,  742a. 
paying  debt,  subrogated  to  security,  881. 

whether  subrogated  to   debt,   882. 

subrogated  to  securities  given  after  original  contract,  883. 
released  by  forbearance  of  debt,  942. 
may  redeem  mortgage,  1068. 

when  may  foreclose  mortgage  in  his  own  name,  1380. 
wife  estopped  to  set  up  suretyship,  1484. 

husband  estopped  to  dispute  surety  mortgage  given  by  wife,  1484^ 
given  by  wife,  1484. 
right  of  in  surplus  proceeds,  1706. 
right  to  object  to  insufficient  service  on  parties  to  foreclosure 

suit,  1514. 
right  to  have  his  land  exonerated,  1629,  1630. 
right  of  in  surplus  proceeds,  1706. 
enjoined  from  selling  under  power,  1805. 
SURPLUS,  from  foreclosure  sale  under  decree,  1684-1698. 
usually  paid  into  court,  1684. 

court  may  appoint  referee  to  settle  claims  to,  1685. 
exceptions  may  be  taken  on  filing  of  report,  1686. 
only  absolute  liens  considered,  1687. 
when  there  are  several  liens  on  the  premises,  1688. 
simultaneous  mortgages,  1689. 
mortgagee  may  make   claim   to,  1690. 
equities  of  subsequent  incumbrancers  of  part,   1691. 
prior  unrecorded  mortgage  preferred  to  judgment,  1692. 
dower  in  surplus,   1693,   1694. 
of  sale  made   after   death   of  mortgagor,   1695. 
lessee  for  years  not  entitled  to,  1696. 
attachment  of,  1697. 
upon  sale  under  junior  mortgage,  1698. 
holder  of  notes  not  due  not  entitled,  1705. 
From  sale  under  power,  1927-1939. 

deed  generally  provides  for  disposal  of,   1927. 

best  form  of  provision,  1927. 

effect  of  prior  and  subsequent  incumbrances,  1927. 

iinproductive,  not  chargeable  with  interest,  1928. 

1039 


INDEX. 

References  are  to  Sections. 

SVyiPLUS— continued. 

must  be  applied  according  to  title,  1929. 

passes  to  grantee  of  equity  of  redemption,  1929. 

right  of  subsequent  mortgagee,  1929, 

husband  and  wife  holding  in  entirety,  1929. 

not  applied   to   prior   incumbrance,    1929. 

notice  of  claims  to  by  junior  incumbrancer,  1930. 

suit  by  mortgagor  for  surplus,  1930. 

protection  for   attaching  creditor   of  mortgagor,   1930. 

whether  administrator  or  heir  entitled  to,  1931. 

in  case  of  bankruptcy,  1932. 

in  case  of  insolvent  estate,  1932. 

dower  in,  1933. 

when  equity  attached  or  sold  under  execution,  1934. 

mechanic's  lien  against  surplus,  1934. 

after  sale  under  junior  judgment,   1934. 

judgment  lien,  1935. 

when  mortgagor  has  conveyed  part,  1936. 

when  there  are  sureties  for  part  of  debt,  1936, 

from  sale  for  instalment,   1937,   1938,   1939. 

right  determined  by  suit  for  money  had  and  received,  1939 
SUKPRISE  as  ground  for  setting  aside  sale,  1675. 
TACKING  other  debts  to  mortgage,  360. 

English  doctrine  of,  537,  1082. 
TAXES,  provision  for  payment  of,  77. 

provision  that  debt  shall  become  due  upon  failure  to  pay,  77. 

are  generally  secured  by  mortgage,  358. 

claim  for  taxes  paid  barred  when  debt  is  barred,  358, 

on  mortgage  debt,  agreement  to  pay,  636. 

where  he  is  not   in  possession,   713. 
tax  title  acquired  by  mortgagor,  680. 

passes  by  foreclosure   sale,   1658. 

may  be  acquired  by  mortgagee,  713. 

and  it  is  not  his  duty  to  pay  the  taxes,  714. 

mortgagee  may  redeem  from  tax  sale,  714. 

acquired  by  loan  company  acting  as  mortgagee's  agent,  714ac 
mortgagee   paying   is    subrogated   to    lien    of,    1080. 
paid  by  mortgagee  allowed  in  account,  1134. 
failure  to  pay,  when  a  breach  of  the  condition,  1175. 
Payment  of  hy  mortgagor  does  not  make  his  possession  hostile,  1200. 
holder  of  tax  title  not  proper  party  to  foreclosure  suit,  1440. 
decree  of  sale  should  include,  1597. 

when  an  incumbrance  which  excuses  from  completing  sale,  1649. 
non-payment  a  default  authorizing  sale,  1777c. 
1040 


INDEX. 

References  are  to  Secj;ions. 

TAXES— continued. 

lien  for  no  ground  for  enjoining  sale,  1813a. 
TENANT  AT  SUFFERANCE  mortgagor  becomes  after,  1246.' 
TENANT  FOR  LIFE  may  make  a  mortgage,  137. 

may  redeem,   10G5. 
TENANT  FOR  YEARS  may  redeem,  106G. 
TENANT  IN  COMMON,  of  partnership  real  estate,  119-123. 

joint  mortgagee  after  foreclosure  is,  135. 

mortgage  to  two,  to  secure  debt  to  one,  170,  704. 

mortgage  by,  141,  1314,  1630. 

partition  in  case  of  mortgage  of  one  parcel  held  in  common,  706. 

mortgaging  specific  part  of  common  property,  706a. 

may  redeem,  1063.  , 

parties  defendant  in  foreclosure  suit,  1409. 

order  of  sale  under  mortgage  by,  1630. 
TENDER  before  and  after  default,  886-903. 

before  or  at  the  day  revests  the  estate,  891. 
but  the  debt  still  subsists,  891. 
though  a  gift  is  lost  with  the  estate,  891,  893. 

after  breach  does  not  amount  to  a  discharge,  892. 
rule  otherwise  in  some  States,  893. 
though  not  kept  good,  debt  discharged,  893. 

questions  as  to  sufficiency  of,  894. 

of  whole  debt  necessary,  894. 

who  may  make,  895. 

must  be  made  to  a  person  authorized  to  receive,  896. 

when  may  be  made  to  mortgagee  after  assignment  of  mortgage, 
896. 

place  of  tender,  897. 

when  mortgagee  avoids  it,  897. 

may  be  made  at  any  time  of  day,  898. 

interest  ceases  to  run  from  the  time  of,  899. 

must  be  absolute  and  unconditional,  900. 

mortgagee's   acceptance  how  far  binding,  900. 

in  what  money  it  may  be  made,  901. 

in  legal  tender  notes  of  the  United  States,  901. 

must  cover  costs,  901a. 

costs  incurred  by  refusal  of,  902,  1113. 

for  purpose  of  redemption,  1088. 
what   is   sufficient,   1088. 

should  be  made  in  bill  to  redeem,  1095. 

not  accepted  does  not  prevent  foreclosure,  1450. 

necessity  of  including  attorney's  fee,  1607. 


1041 


INDEX. 

Refej-ences  are  to  Sections. 

TENDEK— con^^n^ied 

after  breach  does  not  defeat  power  of  sale,  1798. 

necessary  on  bill  to  enjoin  sale  under  power,  1806. 
otherwise  held,  where,  1799. 
TENNESSEE,  nature  of  a  mortgage  in,  51. 

legal  title  vests  in  mortgagee,  51. 

form  of  mortgage,  61. 

written  authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  315. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1029. 

redemption   after  foreclosure,   1051,   1358. 

statute  of  limitations  does  not  apply  to  redemption  in,  1148. 
seven  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1358. 

strict  foreclosure  in,  1554. 

power  of  sale  mortgages  and  trust  deeds  in,  1758. 
TEEMS  OF  SALE  under  decree  of  foreclosure,  1613-1615. 
TEXAS,  nature  of  a  mortgage  in,  52. 

legal  title  is  in  mortgagor,  52. 

mortgage  of  homestead  void,  83a. 

parol  evidence  to  show  a  mortgage,  316. 

usury  in,  663. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1030. 

no  redemption  after  foreclosure,  1051,  1359. 

statute  of  limitations,  ten  years,  1193. 

mortgage   barred   when   debt   barred,   1207. 

statutory  provisions  relating  to  foreclosure,  1359. 

power  of  sale  mortgages  and  trust  deeds,  1759. 

death  of  mortgagor  suspends  power,  1792. 
TIMBER,  mortgagor's  right  to  cut,  692. 
niTLE  BOND,  legal  effect  of,  226. 

may  be  foreclosed  as  a  mortgage,  1449. 

right  of  assignee  of  note,  1449. 

a  strict  foreclosure  proper,  1541. 
TITLE  DEED,  mortgage  by  deposit  of,  179. 
,  doctrine  in  England,  180. 

legal  effect  of  the  deposit,  181. 

omission  of  part  of  the  deeds,  182. 

presumption  of  purpose  of  deposit,  183. 

law  of  place  of  contract  governs  deposit,  184. 

American  doctrine,  185,  186, 

memorandum  of  deposit,  187. 

1042 


INDEX. 

References  are  to  Sections. 

TITLE   DEED — continued. 

how  such  mortgage  is  enforced,  188. 

for   security   of   grantor's    creditors    foreclosed    in   equity,    1448. 
TKEES  in  nursery,  whether  part  of  realty,  4:34. 

growing,  sold  to  be  cut,  486. 
TEESPxiSS,    mortgagor    cannot   maintain    against    mortgagee,    674. 

mortgagee  may  maintain  for  mesne  profits,  721. 

against  mortgagor  for  waste,  687,  696. 
TEOVER  mortgagee  may  maintain  for  turf  from  mortgaged  land,  689. 
TKUST,  distinguished  from  mortgage,  281,  332. 

notice  of  a  secret,  577. 

parol,  does  not  attach  to  mortgage,  846. 
TEUST  DEED.     (See  Deed  of  Trust.) 

TEUSTEE  PEOCESS,  mortgagor  may  be  held  to  answer  to,  938. 
TEUSTEES,  mortgages  by,  102. 

one  of  several  cannot  assign,  795. 

when  one  may  receive  payment,  959. 

foreclosure  suit  by  nominal,  1383,  1384. 

for  creditors  may  maintain  foreclosure  suit,  1386. 

when  proper  party  to  foreclosure  suit,   1399. 

under  deed  of  trust  original  or  substituted  may  sell,  1785. 
UNDUE  INFLUENCE  in  obtaining  a  mortgage,  103. 
UNLIQUIDATED  DEBT  effect  on  power  of  sale,  1776. 
USE  AND  OCCUPATION,  whether  mortgagor  liable  for,  671. 
USUEY,  as  affecting  mortgages,  633-663. 

statutes  of  the  several  States,  633. 

under  the  National  Banking  Act,  633. 

intent  to  take,  634, 

mortgage  securing  preexisting  usurious  debt,  634. 

verbal  agreement  for  additional  advantage,  634. 

commission  for  storage,  &c.,  634. 

whether  payment  of  attorney's  fees  constitutes,  635. 
of  taxes  on  debt  constitutes,  636. 
of  exchange  constitutes,  637. 
building  and  loan  association  mortgages,  638. 
of  fines,  etc.,   constitutes,  638. 

whether  agreement  for   repurchase  is,   639,   640. 

sale  of  land  as  a  device  to  cover  usury,  639. 

whether  sale  of  mortgage  constitutes,  641. 

commission  taken  by  agent  does  not  make  loan  usurious,  642. 

attorney  charging  for  examining  title,  642. 

when  agent  is  lender's  general  agent,   642a. 

when  broker  is  not  the  agent   of  lender,   642b. 

burden  of  proof,  643. 

who  may  set  up  defence  of,  644.  -\QAZ 


INDEX. 

References  are  to  Sections. 

USURY — continued. 

voluntary  payment  destroys  claim  of  usury,  644. 
mortgagor  estopped  by  certificate  of  validity,  645,  1495-, 
cannot  be  set  up  after  foreclosure,  646. 
bonus  paid  to  secure  extension,  647,   648. 
when  it  avoids  agreement  for  extension,  649. 
Compound  interest,  whether  it  constitutes,   650. 

executory  agreement  for  cannot  be  enforced,  651. 

otherwise  where  usury  laws  have  been  abolished,  651, 

accrued  interest  a  debt,  652. 

taking  interest  in  advance,   652a. 

interest  coupons,  653. 

computation  of  interest,  654. 

the  Massachusetts  rule,  655. 
Conflict  of  laws  as  to,  656-663. 
what  law  governs,  657. 
laws  of  another  State  not  implied,  658. 
when  law  of  place  of  contract  prevails,  659. 

contract  made  in  one   State  to  be  performed  in  another,  659a. 
lex  rei  sitge  does  not  control,  660. 

governs  as  to  title  and  enforcement  of  lien,  661, 

governs  form  and  validity  of  mortgage,  662. 
laws  of  another  State  must  be  pleaded,  663. 
cannot  be  set  up  by  purchaser  who  has  assumed  mortgage,  745. 
in  assignment  of  mortgage,  832. 

partial  payments  not  applied  on  usurious  interest,  912. 
used  to  protect  wife's  dower  interest,  1493. 
how  pleaded,  1493, 
whether  a  personal  privilege,  1493. 
availed  of  by  judgment  creditor,  1493. 
no  ground  for  setting  aside  conveyance  of  equity  to  mortgage, 

951. 
no  ground  for  redemption  after  sale,  1105. 
defence  to  foreclosure,  1300,  1493,  1499. 
purchaser  subject  to  mortgage  cannot  set  up,   745,  1494. 
what  constitutes,  1494. 
previously  paid  may  be  offset,  1499. 
effect  on  rights  of  surety,  1706. 
reasonable   attorney's   fee  not  bad  for,   1606b. 
not  an  issue  on  confirmation  of  sale,  1637. 
as  ground  for  enjoining  sale  vmder  power,  1808,  1809. 
in  mortgage  affects  purchaser  under  power  how.  1899- 
UTAII,  T.,  nature  of  a  mortgage  in,  53. 
m.ortgagor  entitled  to  possession,  53. 

1044 


INDEX. 

References  are  to  Sections. 

UTAH  T.,— continued. 

parol  evidence  to  show  a  mortgage,  316a. 

usury  in,  663. 

entry  of  satisfaction  of  record,  1031. 

statutory  provisions  relating  to  foreclosure,  1360. 
VADIUM,  mortuum  and  vivum,  2,  4. 
VALIDITY  OF  TITLE  when  a  condition  precedent  to  enforcement  of 

purchase-money  mortgage,   1508. 
VENDOR'S  LIEN,  189. 
VENUE  of  suits  to  foreclose  mortgages,  1444. 

railroad  passing  through  two  States,  1444. 
VERMONT,  nature  of  a  mortgage  in,  54. 

mortgage  has  legal  title,  54. 

parol  evidence  to,  show  a  mortgage,  317. 

rule  as  to  fixtures  in,  442. 

statutory  provisions  as  to  fixtures,  443. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1033. 

redemption   after   foreclosure,   1051,   1361. 

statute  of  limitations,   fifteen  years,   1193. 

statutory  provisions  relating  to  foreclosure,  1361. 

strict  foreclosure  is  the  form  in  use,  1555. 

period  for  redemption  after  strict  foreclosure,  1563. 

power  of  sale  mortgages .  and  trust  deeds  in,  1760. 
VIRGINIA,  nature  of  a  mortgage  in,  55. 

mortgagee  has  legal  estate,  55. 

written  authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  318. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1032. 

no  redemption  after  foreclosure,   1051,  1362. 

statute  of  limitations,  fifteen  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1362. 

power  of  sale  mortgages  and  trust  deeds  in,  1761. 
VIVUM  VADIUM,  2. 
VOID  AND  VOIDABLE  MORTGAGES,  610-632. 

for  want  of  consideration,  610,  612, 

money  consideration  not  necessary,  610. 

if  valuable  need  not  be  adequate,   610. 

affidavit  that  true  consideration  is  set  forth,  610. 

not  necessary   that   consideration   pass   at   the   time,   611. 
mortgages  made  to  be  sold,  611. 
want  or  failure  of,  612. 

when  given  to  receive  future  advances,  612. 

1045 


INDEX. 

References  are  to  Sections. 

VOID  AND  VOIDABLE  MORTGAGES— coniinued. 

misappropriation  by  agent,  612a. 

seal  implies  consideration,  613. 

mortgage  by  way  of  gift,  614. 

mortgage  for  accommodation,  615. 

mortgagor  estopped  to  deny,  616. 
for   illegality   of   consideration,   617. 

wagering   contracts,   617. 

Confederate  notes,  617. 
as   contrary   to  public  policy,   618. 
who  may  take  advantage  of  illegality,  619. 
gaming  contracts,  619. 
contracts  prohibited   by   law,   619. 
when  illegal  consideration  can  be  separated,  620. 
mortgage  may  be  valid  in  i)art  and  void  in  part,  621. 
burden  of  proof  upon  party  contesting,  622. 
Executed  on  Sunday,  623. 

debt  contracted  on  Sunday,  623. 
For  fraud  on  part  of  mortgagee,  624. 

mortgage  executed  on  Sunday  without  knowledge  of  mortgagee, 

623. 
mortgage  upon  land  situated  in  more  than  one  county,  623a. 
knowledge  that  mortgage  was  obtained  by  fraud,  624. 
mortgage  to  secure  forged  notes,  624. 

fraudulent  intent,  625. 

mortgagee  acting  on  his  own  judgment,  625. 
mortgage  obtained  by  duress  is,  626. 

duress  not  known  by  mortgagee,  626. 
duress  by  unlawful  imprisonment,  626. 
by  criminal  prosecution,   626. 
mortgage  made  to  defraud  creditors,  627. 
preference  under  bankrupt  laws,  627. 
made  to  cover  up  mortgagor's  property,  627. 
made  by  debtor  in  failing  circumstances,  627. 
fraud  as  to  a  particular  creditor,  628. 
for   fraudulent   preference    in    bankruptcy,    629. 
who  may  take  advantage  of,  630. 
when  mortgagor  estopped  to  claim  invalidity,  631. 

or  that  the  mortgage  was  made  to  defraud  creditor,  632. 
VOID  AND  VOIDABLE  SALES  under  power  in  mortgage,  1907. 
WAIVER,  of  vendor's  lien,  207-210. 
of  lien  by  contract,  232. 
of  default  of  credit,  1186. 
of  entry  and  foreclosure,  1265-1275. 

1046 


INDEX, 

References  are  to  Sections. 

WAIVER — continued. 

made  conditionally,  127^. 
of  strict  foreclosure,  1509,  1570. 
of  power  of  sale,  1792-1800. 
of  sale  made  under  power,  1906-1922. 
WASHINGTON,  nature  of  a  mortgage  in  55a. 
mortgagor  entitled  to  possession,  55a. 
usury  in,  6G3. 

entry  of  satisfaction  of  record,  1034. 
statutory   provisions   relating   to   foreclosure,   1363. 
WASTE  by  stranger,  mortgagor  may  recover  for,  664. 
mortgagee  may   recover   for,   695a. 
By  mortgagor,  084-698. 

may  be  restrained  by  injunction,  684. 
removal  of  timber  already  cut,  685. 
no  obligation  on  part  of  mortgagee  to  enjoin,  686. 
mortgagee  may  maintain  trespass  for,  687. 
mortgagee  may  maintain  replevin  for,  688. 
liability  of  purchaser  of  timber,  689. 
by  mortgagee  in  possession,  1123a. 
liability  for  tq  purchase  at  sale,  1661,  1666. 
WELSH  MORTGAGE,  3. 

mortgagee's  possession  does  not  bar  redemption,  1153. 
WEST  VIRGINIA,  nature  of  a  mortgage  in,  50. 
mortgagee  has  legal  estate,  56. 
parol  evidence  to  show  a  mortgage,  319. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1035. 
no  redemption  after  foreclosure,  1051,  1364. 
statute  of  limitations,  ten  years,  1193. 
statutory  provisions   relating   to   foreclosure,   1364. 
power  of  sale  mortgages  and  trust  deeds  in,  1762. 
WIFE,  not  bound  by  additions  or  blanks  filled  without  consent,  91,  95. 
of  mortgagee  giving  second  mortgage  on  equity  of  redemption, 

981. 
owning  mortgage  should  sue  alone,  1393. 

of  mortgagor  when  made  a  party  to  foreclosure  suit,  1420-1422. 
writ  of  assistance  against,  1665. 
deficiency  judgment  against,  1718. 
joint  note  by  husband  and,  1718. 
WILD  LANDS,  foreclosure  as  to,  not  barred  when,  1202. 
WISCONSIN,  nature  of  a  mortgage  in,  57. 
mortgagor  has  right  of  possession,  57. 
deed  of  trust  not  allowed  in,  62. 

1047 


INDEX. 


References  are  to  Sections. 


WISCONSIN— coniinuec/. 

authority  to  fill  blanks,  90. 

parol  evidence  to  show  a  mortgage,  320. 

record  of  assignment  not  notice  to  mortgagor,  539. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1036. 

no   redemption   after   foreclosure,   1051,   1365. 

redemption  barred  in  ten  years  in,   1147. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1365. 

strict  foreclosure  in,  1556. 

power  of  sale  mortgages  and  trust  deeds  in,  1763. 
WITNESSES,  requirements  as  to,  82,  532. 
WOOD,  growing,  subject  of  mortgage,  145. 

abuse  of  privilege  of  cutting,  693. 

mortgagor  may  cut  for  his  fires,  694. 
WKIT  OF  ASSISTANCE,  1663. 
WEIT  OF  ENTKY,  mortgagee  may  recover  possession  by,  718. 

by  mortgagee  no  waiver  of  foreclosure,  1273. 
WYOMING,  record  of  assignment  not  notice  to  mortgagor,  473. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1037. 

statute  of  limitations,  twenty-one  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1366. 


Two  volumes,  whole  number  of  pages,  2314. 


1048 


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